Cuba’s economic freedom score is 29.6, making its economy one of the world’s least free. Its overall score is 0.9 point higher than last year, with a slight deterioration in monetary freedom outweighed by improvements in three of the 10 economic freedoms, including trade freedom, fiscal freedom, and freedom from corruption. Cuba is ranked least free of 29 countries in the South and Central America/Caribbean region, and its overall score is significantly lower than the regional average.
In recent years, the government has made measured concessions to encourage more entrepreneurship and private-sector growth. Communist Party–endorsed reforms to cut government payrolls and expand approved professions have not been broad enough to ensure any meaningful advancement in overall economic freedom. The state continues to interfere in most economic activity. Price controls are pervasive, and the two-tiered exchange rate regime continues to distort prices.
Despite membership in the World Trade Organization, the economy remains relatively cut off from the international marketplace. Only state enterprises are allowed to engage in international trade and investment. The state uses an oppressive regulatory environment to suppress entrepreneurial activity and controls most means of production. Shallow credit markets impede access to credit for business activities.
Cuba is demanding the return of Guantanamo Base, stating it is illegally occupied. The military base goes far beyond being a detention center since 1907. It should be noted that many Cubans not only work at Base Guantanamo but live there as well, under the American flag.
U.S. Cuba Policy: Where Things Stand Now
WSJ:
President Barack Obama announced in December that the U.S. was moving to normalize relations with Cuba after over 50 years of Cold War enmity. That moment was both symbolic and practical, as he took steps to begin removing restrictions on travel and trade. On Wednesday, Mr. Obama announced that the U.S. will formally restore diplomatic ties and reopen its embassy in Havana.
What exactly has changed since December and where are we now? The Wall Street Journal explains:
Can I travel to Cuba now?
That depends. Traveling to Cuba from the U.S. as a tourist is still illegal. But 12 categories of people, including close relatives of Cubans, academics, journalists, people participating in educational programs, and people on humanitarian or religious missions can go to the island provided they say their trip falls within one of those categories. Airlines can fly to Cuba without obtaining special licenses, but flights to Cuba are charters—not yet commercial flights. Several U.S. ferry companies have received licenses to operate routes between ports in Florida and Cuba, but the proposed ferry services must receive Havana’s approval.
Can U.S. companies do business there?
Mr. Obama also took steps to loosen financial restrictions, but most trade remains illegal and will require congressional action before changing. Mr. Obama eased some rules to permit increased exports of U.S. telecommunications and other technological goods to the island, as well as building materials. Mr. Obama also made it easier for exports of agricultural and medical supplies and goods to Cuba’s nascent private sector.
U.S. banks are allowed to establish correspondent accounts in Cuba, and U.S. citizens now can use credit and debit cards there. But activity under Mr. Obama’s measures are slow-going, in part due to a lack of clarity about the regulations. U.S. officials have said they’re likely to be updated as more people try to use them.
What have been the big milestones so far?
The first big moments, of course, were the announcements by Mr. Obama and Cuban President Raul Castro in December that the former Cold War foes would renew relations, the culmination of 18 months of secret talks.
Then, in January, loosened travel and trade regulations went into effect, and the U.S. and Cuba began negotiating reopening embassies and restoring diplomatic ties.
In April, Messrs. Obama and Castro met at the Summit of the Americas, the first substantive discussion between U.S. and Cuban presidents since 1956.
In May, the Obama administration lifted Cuba’s designation as a state sponsor of terrorism. That was a critical step toward restoring diplomatic relations, but didn’t have much practical effect, as Congressional sanctions still ban Cuba from arms exports and sales, from receiving U.S. economic assistance and from conducting most trade.
Wednesday’s announcement that the two countries are formally restoring diplomatic ties was another big step.
The next milestones will be reopening ceremonies for embassies in both countries. Cuba announced it would host its event in Washington on July 20 and its delegation will be led by Foreign Minister Bruno Rodriguez. The U.S. hasn’t set a date for its flag raising, but said Secretary of State John Kerry will be there to do the honors.
Now what?
The U.S. and Cuba will begin lots of bilateral talks and efforts to cooperate in areas including law enforcement, development, human rights, counterterrorism and antinarcotics. Talks will also begin on property claims and the Cuban government’s claims against the U.S. The U.S. has also said Cuba has agreed to talks about extraditing fugitives, though it’s unclear what will happen with some of the higher-profile ones, including JoAnne Chesimard, now known as Assata Shakur, who is on the FBI’s Most Wanted Terrorists list for killing a New Jersey state trooper in 1973. Cuba granted her asylum after she escaped from prison in 1979.
The spotlight moves to Congress now, where lawmakers must act to lift bans on travel and trade. Church groups, agricultural groups, business groups and others are supportive of lifting the ban. The White House is counting on these independent stakeholders to pressure Congress to act. It’s likely to be a long battle, with supporters of normalization taking a piecemeal approach to chipping away at the embargo.
The White House backs that strategy, and a move to lift the travel ban is likely to be the first step in the process.
