Cuba calling… but are we listening?

By: Deepak Bhojwani, Senior Research Fellow at the Council on Hemispheric Affairs, and India’s Ambassador to Cuba (2010-12)

This article was originally published in The Tribune (India) on April 2, 2015 and is being republished with permission from the author. The original publication can be found here: http://www.tribuneindia.com/news/comment/cuba-calling-but-are-we-listening/61574.html.

The visit of the First Vice President of Cuba was an opportunity for India to get to know Cuba’s world view. India should focus its leadership on a country and region that has been low priority for too long.

INDIA’S diplomatic agenda recently included an important but low-key visitor. On March 23, the First Vice President of Cuba, Miguel Diaz-Canel met India’s President and Prime Minister, apart from holding talks with his counterpart, Vice President M H Ansari, who had visited Cuba in September 2013.

In a region that evokes exotic images, Cuba stands out as a serious political example. Fidel Castro ranks with the best- known global leaders. Popular Indian familiarity with the largest nation-state in the Caribbean ends there, or perhaps extends to Cuban cigars. Indian historians and analysts recall Fidel Castro’s visit to Delhi for the Non-Aligned Summit in 1983 and his embarrassing bear hug of Indira Gandhi; Rajiv Gandhi’s visit there in 1985; Manmohan Singh’s visit (for the Non-Aligned Summit in 2006); perhaps even Jawaharlal Nehru’s call on Fidel in Harlem, New York in 1961. Then there is the recent thaw in Cuba’s relations with the US, marked by a historic telephone conversation between US President Obama and Cuban President Raul Castro in December 2014, when they agreed to work on the normalisation of bilateral relations.

Cuba became — and stayed — communist not because of external pressure, as in Europe, but through an internal process. The Cold War rivalry between the US and the USSR enabled it to stand off the former with extensive support and aid from the latter. With the Soviet Union gone, Cuba got a lifeline from Venezuelan President Hugo Chavez, a soulmate of Fidel. The geopolitical scenario has since undergone radical transformation. Today China, Russia, Brazil have a growing presence on the island. The European Union is probably seeking a figleaf to jettison its 1996 “Common Position” that calls for more gestures on human rights by Cuba before full normalisation of relations. François Hollande travels to Cuba in May, the first- ever visit by a French President. Fumio Kishida will make the first-ever visit by a Japanese Foreign Minister to Cuba in late April. To be fair to President Obama, he had reached out early in his term to the Left-wing regimes in the region. He has had to contend with entrenched US political opposition to the New Left in Latin America, personified by Hugo Chavez — and his nominee Nicholas Maduro — in Venezuela, Evo Morales in Bolivia, Rafael Correa in Ecuador, and others.

Cuba poses even bigger issues. Full normalisation of relations would require the repeal of the Helms-Burton Act of 1996, which extended the territorial application of the initial US embargo (Cuba calls it a blockade) to apply to foreign companies trading with Cuba, and penalised foreign companies that allegedly “trafficked” in property formerly owned by American citizens but confiscated by Cuba in the 1960s. Obama expects to meet Raúl Castro at the VIIth Summit of the Americas in Panama on April 10-11, the first Summit of the Americas — which commenced in 1994 — that Cuba will attend. Cuba is trying to untangle its economy. It has set up a special economic zone around the Mariel port, 45 km west of Havana, will modernise Havana airport and several industrial plants, and has permitted small private businesses. Cuba’s offshore reportedly stores several billion barrels of hydrocarbon deposits, a potential bonanza. Prospecting has been slow and unsuccessful, complicated by the embargo. Tourist arrivals, to this island of 10 million, went up to one million in the first quarter of 2015. US companies have been allowed to provide telecom services, the luxury cruise industry is waiting in the wings, and hotel chains are gearing up for the boom. Miguel Mario Diaz-Canel Bermúdez, a university professor, became a member of the political bureau of the Cuban Communist Party in 1997, long after Cuba left the Soviet orbit. At 53, he belongs to the post-revolution generation of Cuban leaders. Minister of higher education (2009-12), he became one of the five Vice Presidents of the Council of Ministers in 2012 . In February 2013, the Cuban National Assembly, which elected him First Vice President, also ratified Raúl Castro in his post as President of Cuba for a second five-year term. Castro declared he will not continue beyond 2018. This quelled speculation over the leadership transition to the next generation.

Diaz-Canel is clearly a lead player in the transition from a closed economy to a more flexible system that recognises the need for foreign involvement. Cuba’s Foreign Minister Bruno Rodríguez, on a visit to India in May 2013, outlined his government’s strategy. Cuba is determined to overhaul archaic laws on taxation and salaries; eliminate dual currency; redistribute idle lands for cooperative and private farming; and attract foreign investment in key sectors of the economy. Sugar, rum and cigars will continue to be produced and exported. Tourism, biotechnology/medicine, information technology will be the primary focus. India has been invited to participate in these areas.

India’s relations with Cuba were close during the Cold War. Thereafter the Cuban establishment, which emphasises solidarity, looked askance at India’s moves to integrate with an increasingly globalising world. India wrote off Cuba’s debt of approximately $68 million in 2008. Trade has been abysmally low ($37.93 million in 2013-14), economic cooperation restricted to the extension of a few lines of credit to modernise some Cuban industrial plants. Offers of further credits, dating back almost a decade, have still to be availed by the Cuban bureaucracy.

India financed a Centre for Excellence in Information Technology in Havana. ONGC (Videsh) Ltd. was allotted sizeable tracts in Cuba’s offshore in 2006, but exploration was hampered by the US embargo, and financial constraints. The company shut down its office in Havana in early 2014. The lack of engagement has much to do with the lack of economic substance, partly due to the embargo, but also restrictive and dilatory Cuban regulations. Diaz-Canel’s visit yielded an agreement to exempt diplomats and officials from visas and talks touched upon India’s strengths in IT, nanotechnology, biotechnology, sports medicine and training, and human resource development. Cuban scientists have been working at Biocon’s facilities in Bangalore for several years. The easing, and eventual abolition of restrictions on dollar transfers to Cuba, shipping connections, etc. under the US embargo, a psychological dampener for Indian business, will make a huge difference. Deeper involvement with Cuba will also require government financing. In its classification of June 1, 2014, the Export Credit and Guarantee Corporation (ECGC) upgraded Cuba from B2 (Moderate Risk) to B1 (Moderately Low Risk). Cuba will be a more reliable creditor than Venezuela, where hundreds of millions of India’s petrodollars are held by a government in crisis. An admiration for Fidel Castro’s undisputed heroism should not conceal the fact that Cuba needs to ensure that India will enjoy the special status it is entitled to for its consistent support.

By: Deepak Bhojwani, Senior Research Fellow at the Council on Hemispheric Affairs, and India’s Ambassador to Cuba (2010-12)

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Featured Image: Retrieved from the original publication in The Tribune, published April 2, 2015 at http://www.tribuneindia.com/news/comment/cuba-calling-but-are-we-listening/61574.html.