​​​​​What you should know

• Nicaragua: On February 9, the Ortega-Murillo regime released and expelled 222 political leaders, priests, students, and other dissidents to the United States.
• US-Brazil relations: Presidents Biden and Lula da Silva met on February 10, during which they underscored the importance of strengthening democracy, promoting respect for human rights, and addressing the climate crisis.
• Ecuador: Ecuadorians rejected all eight items on a constitutional referendum backed by President Lasso, signaling anti-incumbent sentiments and the clout of pro-Correísmo opposition political forces.

Monitoring economic headwinds and tailwinds in the region

• Argentina: Annual inflation reached 98.8 percent, while activities in the construction and manufacturing sectors continued to decline.  
• Brazil: The government met with Mexico, Germany, Colombia, Chile, the World Bank, and the Inter-American Development Bank (IDB) to explore issuing green bonds this year. 
• Belize: The government launched two new projects in cooperation with Taiwan, a business support program focused on women and micro, small, medium-sized enterprises (MSMEs), and a flood warning system for disaster prevention.  
• Colombia: 2022 GDP growth is estimated to be 7.9 percent, down from 2021’s 10.8 percent growth. In 2023, growth is expected to further decline to 1.05 percent. 
• Peru: Continuing protests and supply shortages have led several mines to suspend or reduce operations, threatening copper production.  
• Suriname: President Santokhi expressed willingness to collaborate with neighboring Guyana on oil and gas exploration and development to position the Caribbean as an energy hub. 

In focus: Inflation and infighting

As regional inflation continues, political pressures are leading to criticism of central bank policy in Brazil and Colombia. Recently-elected presidents Lula and Petro have both questioned rate hikes as a method to tackle inflation, suggesting more flexible targets and alternative policies. The governor of Colombia’s Central Bank, Leonardo Villar, expects the region to require continuing tight monetary policy, which critics argue may complicate other policy goals such as growth. Roberto Campos Neto, president of the Central Bank of Brazil, has expressed his willingness to coordinate with the Lula administration to achieve growth and control inflation. 

Despite the public clashes, central bank policy in both countries remains independent. In Brazil, a 2021 law protects central bank autonomy and is unlikely to be repealed. In Colombia, the central bank has maintained a course independent of presidential advice for two decades. 

Health + Innovation

• Colombia: President Petro presented a health reform to Congress that seeks to improve primary care, expand access to treatment, raise healthcare worker salaries, and fight corruption by eliminating private sector management of payments.
• Brazil: Nearly three years since COVID-19 claimed the life of its first victim, the country has for the first time registered zero pandemic-related deaths in a day on February 12.
• Jamaica: The Bureau of Standards launched the Jamaican Standard Specification for Telemedicine, which provides the framework through which telemedicine may be safely practiced while upholding the integrity of the medical profession.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 18, 2023 appeared first on Atlantic Council.

​​​​​What you should know

• PAHO: Dr. Jarbas Barbosa took office on February 1 as the health organization’s new director, pledging to work in partnership with member states to end the pandemic and ensure that the region’s health systems recover stronger than before.
• IMF: The organization raised its global growth forecast to 2.9 percent, up from its original 2.7 percent. The outlook is also better for the region’s two major economies: up 0.2 percent for Brazil, to 1.2 percent, and a half point for Mexico, to 1.7 percent.
• Migration: The 250,000 migrants that irregularly crossed into Panama through the Darien Gap in 2022 represents a record high that is nearly double the 133,000 entries recorded in 2021.

Monitoring economic headwinds and tailwinds in the region

• Mexico: The national statistics agency reported that the economy grew 0.4 percent in Q4 of 2022 compared to the previous quarter.
• Argentina: The government will leverage new gas exports to Chile, and potentially Brazil, to improve its trade balance and pay down debt.  
• Brazil: Alongside Argentina, the government is floating the development of a common currency linking the two countries to facilitate trade. 
• Colombia: The Minister of Mines and Energy Irene Velez announced at Davos that the country will no longer approve new oil and gas exploration contracts.
• Jamaica: Third-quarter GDP grew by 5.9 percent over 2022 due to a resurgent tourism sector, which has boosted hotels, restaurants, and services, among other sectors.  
• Peru: Ongoing protests and road blockades have cost the country $550 million since the ousting of President Pedro Castillo last December. 
• Transatlantic ties: German Chancellor Olaf Scholz visited Argentina, Brazil, and Chile, to discuss the EU-Mercosur trade agreement and support for Ukraine. 

In focus: Energy expansion in Trinidad and Tobago

On January 24, the United States licensed Trinidad and Tobago to develop a natural gas project off the coast of Venezuela in the Dragon field region. The project will support overall Caribbean energy security, with a requirement that some of the produced gas must be exported to Jamaica and the Dominican Republic. To comply with US sanctions, Trinidad will pay for the gas with humanitarian aid. 

Atlantic Council experts reacted immediately, emphasizing the importance of this move towards meeting Caribbean energy demand. You can read more here. 

Health + Innovation

• Haiti: As of January 17, the Ministry of Public Health and Population has reported over 24,400 suspected cholera cases.
• Education: A World Bank study shows that by 2045, nearly 5 million people across LAC would fall into poverty due to pandemic-induced learning losses.
• Brazil: The Health Ministry announced that it will roll out bivalent COVID-19 booster shots as early as February 27.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 6, 2023 appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: The Supreme Court will investigate whether former President Jair Bolsonaro incited the January 8 attack on Congress and other government buildings in Brasilia.
• Peru: People—mainly from remote Andean regions—descended on the nation’s capital to protest against President Dina Boluarte in support of her predecessor and demand elections and structural change in the country.
• Trade: The value of goods exported from Latin America and the Caribbean (LAC) increased at an estimated rate of 18.8 percent in 2022, a downward trend from 27.8 percent in 2021, due to higher prices and low volumes.

Monitoring economic headwinds and tailwinds in the region

• Argentina: The government will buy back overseas bonds equivalent to over $1 billion to improve its debt profile, looking to send a positive signal to markets despite low reserves levels.
• Brazil: Vice President Alckmin said that Lula’s administration wants to remove a key tax on manufacturing and importing, the IPI, as part of a broader tax reform package. 
• Guyana: The government announced $43.4 billion in funding for a new natural gas power plant, alongside distribution infrastructure improvements, to promote business and development. 
• Multilaterals: During his inauguration, new Inter-American Development Bank (IDB) president Ilan Goldfajn announced three key priorities for the bank: social issues, climate change, and sustainable infrastructure. 
• Mexico: The 2023 North American Leaders Summit concluded with new agreements to promote sustainability, strengthen supply chains, and respond to migration. 
• Peru: The national statistics institute (INEI) said the economy expanded 1.7 percent year-on-year in November, marking a slight slowdown from the rise of 2.0 percent in October.

In focus: LAC in Davos

Latin American and Caribbean public- and private-sector leaders gathered alongside their counterparts from across the world in Davos, Switzerland, for this year’s Global Economic Forum. Colombia’s finance minister Jose Antonio Ocampo used the opportunity to push for a stronger agreement on minimum taxes for multinational companies. Brazil’s finance minister, Fernando Haddad, and environmental minister, Marina Silva, discussed Brazil’s positive economic outlook, environmental stewardship, and desire for regional integration. 

Spanish prime minister Pedro Sánchez also delivered a speech, in which he emphasized Spain’s role in building ties between Europe and Latin America, as Spain prepares to take over the Presidency of the Council of the European Union later this year. 

Health + Innovation

• Vaccines: The Canadian government will donate $33.4 million to the Pan American Health Organization (PAHO) to increase access to COVID-19 immunizations for populations across the region. This donation is in addition to a prior contribution of $40 million in 2021.
• Belize: The country will celebrate 34 years of relations with Taiwan through the construction of a new general hospital in San Pedro.
• Nutrition: A new United Nations report found that 22.5 percent—or 131.3 million people—of the region’s population cannot afford a healthy diet, citing a country’s income level, the incidence of poverty, and level of inequality as contributing factors.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 21, 2023 appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: On January 1, Luiz Inácio Lula da Silva was sworn in as president for a third term after defeating incumbent Jair Bolsonaro.
• Outlook: According to the Economic Commission for Latin America and the Caribbean (ECLAC), economic growth will continue to slow in 2023 and reach 1.3 percent.
• Venezuela: The opposition-led legislature dissolved the interim government led by Juan Guaidó. The vote signaled that members of the opposition had lost faith in Guaidó’s ability to oust Maduro. The United States will continue recognizing the 2015 National Assembly as the last remaining democratic institution in Venezuela.

Monitoring economic headwinds and tailwinds in the region

•  Brazil: In 2022, trade surplus reached a record high of $62.3 billion. Total exports also reached a 335 billion high, helped by a boost in prices in the agriculture and livestock sector.
• Argentina: The IMF disbursed a tranche of $6 billion from its $44 billion program with Argentina, citing positive indicators including falling inflation, a better trade balance, and foreign reserves. 
• Colombia: Minimum wage will increase by 16 percent this year, to $242.7 per month. President Petro said the move would boost an economy slowed by inflation. 
• Dominican Republic: The S&P upgraded the country’s credit rating from “BB-“ to “BB,” highlighting its strong recovery from the pandemic and long-term growth potential. 
• El Salvador: The government will receive a $150 million loan from the CAF development bank, designed to strengthen its education system in the wake of the pandemic.  
• Peru: The government launched a $1.6 billion plan to increase welfare and investment in regions gripped by protests following the ouster of former president Pedro Castillo. 

In focus: Nearshoring opportunities in the Americas

With the next North American Leaders Summit (NALS) set for this incoming week (January 9 and 10), nearshoring – the relocation of supply chains closer to the United States – is rising in importance.

Rising costs of and delays during shipping, coupled with the pandemic, have made businesses in the United States wary of relying on supply chains across the Pacific. As a result, some 400 companies explored reshoring to Mexico from Asia in 2022. Mexico’s manufacturing sector is now larger than it was before the pandemic, and Mexican exports to the United States have rapidly increased. Firms such as Walmart have already relocated some business to Mexico, while Tesla is planning a new factory in northern Mexico. NALS will pay particular attention to the electric vehicle production chain in North America.

Health + Innovation

• Chile: In an effort to curb the spread of the BF.7 COVID-19 subvariant, travelers coming from China are now required to show a negative PCR test.
• Haiti: Over 14,700 suspected cholera cases have been reported since December. Nine in every ten cases are from areas hit hard by food insecurity.
• PAHO: Most countries in LAC invest less than the minimum 6 percent of GDP in health and allocate less than 30 percent of the health budget to the first level of care as recommended by the regional health organization.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 7, 2022 appeared first on Atlantic Council.

1. Why did Biden expand the parole program to Cuba, Nicaragua, and Haiti?

Putting in place the tools for a more orderly asylum process at the US-Mexico border is pivotal with the surge in encounters. Today’s announcement of an expansion of the Venezuela parole program to Cubans, Nicaraguans, and Haitians will hopefully help to dissuade asylum seekers from risking their lives to make the trek north. 

In October and November 2022, more Cubans (sixty-five thousand) and Nicaraguans (fifty-five thousand) arrived at the southwest border than in fiscal years 2020 and 2021 combined. The twelve thousand Haitian arrivals in those two months amount to one fifth of their total fiscal 2022 arrivals. 

But people won’t stop leaving while they have little hope for a better life in their own countries. That is the case in Cuba (where inflation is soaring and repression escalating), Daniel Ortega’s Nicaragua (where democratic freedoms no longer exist), Nicolás Maduro’s Venezuela (with its own soaring inflation and repression), and gang-controlled Haiti. So border policies must be accompanied by new US and partner country strategies to improve livelihoods in these migrants’ countries of origin. And the United States must hold those like Ortega accountable for his actions to weaponize migration by doing things such as lifting the visa requirement for Cubans in order to more easily facilitate passage to the United States. 

But the border is about more than migration. It is a vital source of commerce that promotes the creation of US jobs. Our recent work shows that just a ten-minute reduction in border wait times could have a $5.4 million annual impact on the US economy and create nearly nineteen thousand jobs in Mexico. Greater commerce translates into greater security as well. Economic growth creates jobs, making it less desirable to leave home. It is absolutely achievable to have a border that is more secure and more efficiently promotes commerce. That should be the goal.

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

2. What impact will this have at the border?

Biden’s visit to the border ahead of the North American Leaders Summit next week is an important step toward the amelioration of a crisis that has long afflicted the US-Mexico border. Smart border policies that streamline crossing processes not only benefit issues around migration, but also help decongest communities that are regularly choked by vehicular and pedestrian traffic.

Initiatives such as the New Migration Enforcement Process for Venezuelans have already decreased the percentage of attempted migrant crossings by nearly 90 percent. The expansion of such programs to additional groups could have similar effects, thus alleviating burdens on the health care and sanitation industries, among others.

Additionally, as border agencies utilize their resources to confront surges in pedestrian traffic, wait times for vehicles exponentially increase. Subsequent carbon emissions deteriorate the air quality around ports of entry, directly affecting the health outcomes of local communities. Further, vehicles waiting in line for miles constrict local mobility, hindering residents’ ability to travel back and forth between school, work, hospitals, and more.

It is important to keep people at the center of border policy, and initiatives that aim to enhance secure and efficient crossings should be celebrated by not only the United States and Mexico but the region as a whole.

—Ignacia Ulloa Peters is an assistant director at the Adrienne Arsht Latin America Center.

3. Will Biden’s plan work?

The Biden administration’s announcement that it will surge resources to the southwest US border and speed up processing for asylum applicants is a most welcome response to the extraordinary surge of people from troubled countries such as Cuba, Nicaragua, and Venezuela. Nothing will satisfy some critics, but those who support security, economic prosperity, values, and the US history of welcoming refugees from troubled lands should see today’s announcement as good news.

One absolute essential is the need for additional resources and personnel to make this plan work. The administration needs to send Congress an urgent supplemental budget request and to invoke some of the president’s extraordinary authorities to get additional personnel at the border to achieve the goal of making definitive, binding determinations of asylum eligibility in days, not weeks. The administration needs additional resources to (1) integrate legitimate asylees and their families to make important social and economic contributions to US society or (2) return ineligible people to a place of safety under existing laws. The administration and Congress now need to put forward the resources needed to satisfy US values, security, and prosperity. This would be historic, and it is achievable.

—Thomas Warrick is a nonresident senior fellow at the Scowcroft Center for Strategy and Security’s Forward Defense practice and a former deputy assistant secretary for counterterrorism policy at the US Department of Homeland Security.

4. What should happen next?

The American people have a right to expect secure borders. Crucial to this is a fair, orderly, and efficient process for those seeking to come and for determining who may stay. Unfortunately, the United States’ current system is utterly broken, and this is particularly true of the asylum system—weighed down by a 1.6 million-case backlog, with each case taking years to resolve. This has encouraged thousands with marginal claims to make dangerous journeys to the US border every month, expecting that the United States will not only let them in but also allow them to stay and work during the years it will take for their asylum claims to be resolved.

The measures announced today by Biden are the latest in a series of efforts aimed at gaining control over this untenable situation—establishing orderly processes for those with legitimate asylum claims; providing opportunity for those desiring to escape repressive or criminal regimes in Venezuela, Cuba, Nicaragua, or Haiti; and working with Mexico and other nations to strengthen enforcement against those choosing not to use these legal processes and, instead, trying to sneak in.  

These are excellent steps, but band-aids. Congress needs to get involved—not only to provide the resources and legal fixes needed to expedite the resolution of asylum claims and better secure the border, but also to reform the immigration system more broadly, giving lawful status to those who have been here a while, expanding lawful channels for those wanting to come, and creating more efficient mechanisms for employers to hire the workers the US economy needs. Biden and Department of Homeland Security Secretary Alejandro Mayorkas deserve great credit for muddling through with the limited tools they have, but to truly get control of the border, Congress needs to put politics aside and fix the broken system.

—Seth Stodder is a nonresident senior fellow in the Scowcroft Center’s Forward Defense practice and a former assistant US secretary of homeland security for borders, immigration, and trade policy.

The post Biden just tightened US migration policy. Can he calm the surge at the border? appeared first on Atlantic Council.

​​​​​What you should know

• Peru: President Castillo was ousted by lawmakers after he sought to dissolve Congress ahead of an impeachment vote.
• Brazil: The Economy Ministry rejected assertions by President-elect Lula’s transition team that Bolsonaro’s outgoing administration was leaving government finances “bankrupt.”
• Social outlook: A recent Economic Commission for Latin America and the Caribbean (ECLAC) report projects that by the end of 2022, LAC will have 201 million people living in poverty – an increase of 15 million compared to the pre-pandemic situation.
• ICYMI: On December 7, the Atlantic Council launched a paper on improving tax policy in LAC. Read it here.

Monitoring economic headwinds and tailwinds in the region

• Argentina: signed a new information-sharing agreement with the US designed to root out tax evasion. It could increase tax revenue for Argentina by $1 billion US.
• Barbados: concluded new funding arrangements with the IMF, $113 million US to continue its fiscal reform package and $189 million US towards its climate change response.
• Brazil: President-elect Lula announced that Fernando Haddad, former minister of education and mayor of São Paulo, would be his finance minister.
• Mexico: announced that additional consultations on the USMCA energy dispute would be held through early January, to ensure continued investment and confidence.
• Peru: was placed under a state of emergency after protests gripped the country. Political upheaval led S&P to lower the country’s economic outlook to “negative.”
• Transatlantic relations: Argentina called for reviewing the potential EU-Mercosur trade agreement, highlighting threats to local auto industry and barriers to agricultural exports.
• Uruguay: criticized Mercosur’s inaction on trade agreements with large economies, drawing criticism for its own independent negotiations with China and to join the TPP.

In focus: Guyana’s carbon credits

Guyana is the first country to issue carbon credits designed to prevent forest loss and the first under the ART’s REDD+ Environmental Excellence Standard to ensure integrity and independent verification. The Hess Corporation, which is a partner in an oil consortium led by ExxonMobil that operates in Guyana, will purchase $750 million US of these credits. This move reflects how resilient growth, balancing between the opportunities in the energy sector and protecting its valuable environment, has become a priority in light of climate change and stresses like the COVID-19 pandemic.

These credits will support Guyana’s Low Carbon Development Strategy, with 15 percent of the revenues set aside for indigenous communities. With some 18 million hectares of forest, Guyana is a major carbon sink, and has previously worked with Norway to protect this resource. The new credits reflect Guyana’s status as a “High Forest, Low Deforestation” country, another first.

Health + Innovation

• Argentina: Transport Ministry officials recommended all passengers travelling on public transportation to return to wearing face-masks amid a spike in COVID-19 cases.
• Universal Health Day: The Pan American Health Organization (PAHO) director called on the region to redouble efforts towards achieving universal health as they begin to rebuild from the pandemic.
• Mexico: The state of Nuevo Leon reintroduced the mandatory use of face masks in closed public spaces as the number of COVID-19 infections and other respiratory diseases rise.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: December 17, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• Economic outlook: The head of the UN Economic Commission on Latin America and the Caribbean (ECLAC) said that the region’s stagnation is ”worse than the 1980s” due to weak investment, low productivity, and inadequate education.
• Mexico: Remittances sent from workers abroad surpassed $5.35 billion in October, beating economists’ forecast on US job strength.
• #ProactiveLAC: On Wednesday, December 7, the Atlantic Council will host a virtual conversation on LAC’s economic outlook, fiscal policy, and small and medium-sized enterprises in uncertain times. Register here.

Monitoring economic headwinds and tailwinds in the region

• Argentina: Upcoming legislation is set to encourage investment in its liquified natural gas sector, as demand, driven by the war in Ukraine, continues to grow. 
• Bolivia: The country lowered its 2023 growth forecast from 5.1 to 4.8 percent, as an ongoing strike in Santa Cruz has led to over $780 million in losses.  
• Chile: During the recent high-level dialogue with the United States covering migration and sustainable development, both parties agreed to relaunch their bilateral Science, Technology, and Innovation Council. 
• Dominican Republic: The United States will block sugar imports from Central Romana, the Caribbean nation’s largest employer, accusing it of using forced labor. 
• Ecuador: The government is considering a new financing deal with the International Monetary Fund (IMF) for 2023, as its current agreement is set to expire at the end of 2022.  
• Guyana: According to new ECLAC data, the country recorded the highest FDI growth in the Caribbean in 2021, and now accounts for half of all Caribbean FDI, thanks to its booming hydrocarbon sector.  
• Peru: Farmers and truckers set up roadblocks to protest rising gas and fertilizer prices, driven up by the war in Ukraine.  
• FDI: In a 2022 ECLAC report, Foreign Direct Investment (FDI) in Latin America and the Caribbean (LAC) rose by 40.7 percent in 2021 but fell short to achieve pre-pandemic levels.

In focus: Venezuelan thaw

Last weekend, the United States granted Chevron a six-month license to expand operations in Venezuela after the Maduro government agreed to resume talks in Mexico City with the country’s opposition. The two sides signed an agreement to use frozen Venezuelan assets for humanitarian relief as well.  

The United States has framed this policy shift as a “targeted” response to promote “concrete steps” forward by the parties meeting in Mexico City. At the same time, the energy crisis driven by Russia’s war in Ukraine has elevated Maduro’s–-and Venezuela’s –-importance in a time of rising oil demand.  

Health + Innovation

• ICYMI: On November 16, the Atlantic Council launched a report with actionable recommendations for improving immunization program outcomes and financing in the region. Read it here.
• Uruguay: Health authorities issued a recommendation that immunocompromised patients and over 50 year-olds should take their fifth dose of the COVID-19 vaccine.
• Food insecurity: An ECLAC report found that 56.5 million people in LAC are impacted by hunger.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: December 3, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• Regional recovery: Of the 20 million people in Latin America who fell into pandemic-induced poverty, only 7 million have escaped it during the recovery.
• Nicaragua: The United States announced new sanctions on its mining industry in response to continued repression, targeting its largest export, gold.
• Brazil: Incumbent President Bolsonaro and former President Lula de Silva will face off in a second-round run-off election this Sunday. Join us Monday for post-election analysis.

Monitoring economic headwinds and tailwinds in the region

• Brazil: The government nominated its former central bank director, Ilan Goldfajn, for the presidency of the Inter-American Development Bank. Also nominated is Alicia Bárcena, former head of ECLAC, by Mexico.  
• Cuba: The United States granted $2 million in humanitarian assistance to assist in the country’s  recovery from Hurricane Ian last month. 
• Ecuador: The government secured joint IDB-EU funding for an energy interconnection project with Peru, estimated to save $61 million annually through reduced fossil fuel use. 
• Jamaica: The country welcomed a $300 million investment by Huawei in an effort to double down on its goal of digital transformation.
• Peru: Ongoing political instability prompted a new negative rating for its credit outlook, attributed to cabinet reshuffling and impeachment attempts against President Pedro Castillo. 
• ECLAC: This week, the Economic Commission for Latin America and the Caribbean (ECLAC) redoubled its commitment to transform development models for productive regional transformation during its thirty-ninth session.

In focus: Transatlantic ties

A recent report highlights the potential for strengthening European investment and connections with LAC, focusing on three main pillars: digital connectivity, cybersecurity, and digital rights. Emphasizing the key opportunity of Spanish leadership through Spain’s upcoming presidency of the EU, the report also explores the potential of the EU-LAC Digital Alliance planned for 2023. 

At the same time, the EU High Representative for Foreign Affairs, Josep Borrell, attended the fourth EU Investment Forum in Montevideo this week. He used the opportunity to reaffirm European commitment to a free trade agreement with Mercosur.  

Health + Innovation

• Ecuador: The latest country to drop all travel restrictions and return to pre-pandemic entry policies for foreigners.
• Brazil: Brazilians paid tribute in São Paulo to COVID-19 victims. To date, Brazil has lost 680,000 lives to the pandemic.
• Recovery: The World Bank granted Guatemala a recovery loan for healthcare and social services in the wake of the COVID-19 pandemic.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: October 30, 2022 appeared first on Atlantic Council.

On November 4, the Harvard Kennedy School’s Belfer Center for Science and International Affairs published a report based on a discussion between Forward Defense nonresident senior fellow Marc Polymeropoulos and Adam Entous of the New Yorker. The report, titled “Havana Syndrome: American Officials Under Attack,” explored the geopolitical impact of the so-called “Havana Syndrome,” in which dozens of US officials stationed abroad have experienced “anomalous health incidents” due to suspected attacks by Russian military intelligence, and argued for a more robust US response.

Fellow

Marc Polymeropoulos

Nonresident Senior Fellow

Forward Defense Scowcroft Center for Strategy and Security

Afghanistan Europe & Eurasia

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

Learn more

The post Polymeropoulos in Belfer Center on Havana Syndrome appeared first on Atlantic Council.

The post O’Toole quoted in VOA Russian on Russia’s response to Cuba protests appeared first on Atlantic Council.

Prior to the protests, Cuba’s economy was in severe decline. The economy contracted by 11 percent due to the pandemic, as tourism, a main source of revenue, came to a halt. The struggling economy, on top of persistent economic mismanagement by the Cuban authorities, contributed to widespread food and medicine shortages. All this occurred as the Cuban government grappled with addressing COVID-19 infections while simultaneously using its meager resources to develop its own vaccine. The effects of the pandemic exacerbated the already-growing calls by the Cuban people for economic and political reforms on the island. The result was that Cubans—in particular Afro-Cubans, who suffer from structural racism—had almost no access to basic public goods and social services.

Fast-forward to today: A month after the massive demonstrations began, more than five hundred people are still detained for their roles in the protests—with more Cubans under constant threat that they could be next. Although the headline-grabbing activity in the streets has subsided, the people’s demands persist. Cuban President Miguel Díaz-Canel, who became the coveted head of the Communist Party in April, is using the same repressive tactics as his Castro predecessors. Reports from the Miami Herald have indicated that many of the detained protesters are being held in a maximum-security prison, with family members unable to reach them.

The protesters have the backing of many Cubans—both on the island and in South Florida—which has spurred a tough, new resolve from the US government. After the protests, the Biden administration quickly moved to impose sanctions again those responsible for recent crackdowns. In addition, Biden’s team is assessing new ways to extend internet access across the island, aiming to increase staff at the US embassy in Havana, and exploring methods to allow remittances to flow to the country without lining the pockets of the Cuban government. These efforts by the Biden administration appear directed toward increasing pressure on the Cuban government to accelerate long-overdue private-sector reforms and an eventual push for a democratic transition.

US policy toward Cuba has implications beyond the two nations. Countries in the region, where US-Cuba policy has long been a divisive topic, are playing close attention to the American response to the protests. Many Caribbean and Latin American governments regularly criticize the US trade embargo and are supportive of Cuba, while others raise concerns about the island’s approach to human rights. This division plays out in multilateral forums like the United Nations, where in June the United States and Israel were again the only two countries to vote against a resolution calling for an end to the embargo. At a regional level, the chair of the Organization of American States Permanent Council recently had to postpone a meeting about the situation in Cuba after several participating countries objected because Cuba has long refused to join the group so such a meeting “would serve no useful purpose.”

Meanwhile, the United States will increasingly have to contend with Cuba’s problems arriving on its own shores. As conditions on the island deteriorate, with Cuba now the worst COVID-19 hot spot in the Americas, more Cubans are likely to come to US borders. Reports are already pointing to an uptick in Cubans risking their lives on boats to reach Florida or traveling to Central America to make their way to the southwestern US border.

US resolve to stand with the Cuban protesters, which the Biden administration has already demonstrated, must remain strong long after the news cycle moves on; America’s political divisions and attempts to score political points on Cuba policy must not come at the cost of the Cuban people. The protesters will be further emboldened by continued US shows of support—from targeted sanctions to efforts to increase internet access—and Díaz-Canel will slowly run out of options as a result. That, in turn, might move him to loosen economic restrictions, which would empower people when the government cannot satisfy their basic needs—an important step toward greater political freedoms.

The Cuban people are hungry and sick, and violent repression will not fill stomachs. Detentions will not slow the spread of the pandemic. That’s why the frustration and exasperation expressed through these protests should scare the Cuban authorities. It’s one thing to repress calls for liberty and freedom, but it’s another to repress them alongside a call for basic survival.

Change will not happen overnight. But strong US backing for Cuba’s protesters can make a real difference as the country enters a new period of uncertainty—an uncertainty that could force the hands of the Cuban authorities.

Jason Marczak is the director of the Adrienne Arsht Latin America Center. Follow him on Twitter at @jmarczak.

Wazim Mowla is the assistant director for the Caribbean Initiative at the Adrienne Arsht Latin America Center. Follow him on Twitter at @WMowla.

Further reading

Issue briefs and reports May 12, 2021

COVID-19 vaccine tracker: Latin America and the Caribbean

Our interactive maps track the percentage of the population of each Latin American and Caribbean country covered by current vaccine agreements; the total number of doses secured by each country and breakdown by supplier/vaccine; where each vaccine is being used across the region; and how many vaccines flow from each major producing country to regional destinations.

Caribbean Coronavirus

New Atlanticist Apr 30, 2021

Raising ambitions: How Latin America and the Caribbean is tackling the climate crisis

By Valentina Sader

The Americas are a crucial player in coordinated efforts to tackle global climate change, so we asked experts from the Atlantic Council and elsewhere to lay out what’s next.

Brazil Caribbean

New Atlanticist Apr 1, 2020

Reconciling sanctions and humanitarian need during COVID-19

By Brian O’Toole

As the world economy shuts down to try to contain the COVID-19 outbreak, the humanitarian collateral effects of sanctions become more pronounced and potentially deadly. But the argument that the United States should unilaterally roll back sanctions draws a false dichotomy; sanctions do not have to be suspended or rolled back for the United States to better address humanitarian concerns.

Cuba Economic Sanctions

The post Cuba’s protests have ebbed. But the forces that fueled them are as powerful as ever. appeared first on Atlantic Council.

On July 23, Foreign Policy published a biweekly column featuring Scowcroft Center deputy director Matthew Kroenig and New American Engagement Initiative senior fellow Emma Ashford discussing the latest news in international affairs.

In this column, they discuss the future commercialization and militarization of space, calling for cooperation and international standards to help guide future space exploration and technology development. They further considered the exportation of the Israeli surveillance software Pegasus to authoritarian leaders and its implications; China’s state-sponsored hacking and the need to bolster U.S. cyber defense capabilities; and the prospect of providing internet access to protesting Cubans.

Fellow

Marc Polymeropoulos

Nonresident Senior Fellow

Forward Defense Scowcroft Center for Strategy and Security

Afghanistan Europe & Eurasia

The post Kroenig and Ashford consider the future of war in outer space and cyber space appeared first on Atlantic Council.

The post O’Toole quoted in VOA Russian on Russia’s response to Cuba protests appeared first on Atlantic Council.

As we approach one year since the first COVID-19 case in Latin America and the Caribbean, we look ahead at what might or might not be on the horizon for the region over the next year.

Join us as we look at some of the key questions that may shape the region, then take our informal poll and see how your opinions shape up against our analysis.

Will the region see mass vaccinations? How will regional economies fare? What might be on the agenda for the US relationship with Brazil and Mexico? US President Joe Biden’s administration has entered office with a full inbox: how will developing trends in the region affect the new administration’s agenda?

Here are the eleven questions that the Adrienne Arsht Latin America Center is answering to map the rest of the year.

Question #1: COVID – Will Latin America and the Caribbean achieve widespread vaccination in 2021?

Question #2: Economy – Will regional economies outpace growth forecasts in 2021?

Question #3: Central America – Given the extent of damage from the 2020 hurricanes in Central America, will the region see more climate migrants?

Question #4: Mexico – Will joint security challenges top the list of priorities in the US-Mexico relationship under Biden?

Question #5: Stability – Latin America has faced sporadic, but massive, waves of protests and national strikes prior to and during the pandemic. Will 2021 be a year of even greater social unrest?

Question #6: Venezuela-EU – Will the European Union (EU) resume conversations with Nicolás Maduro’s regime to monitor Venezuela’s regional elections in 2021?

Chapter #7: Brazil – Will the Biden administration and that of Brazilian President Jair Bolsonaro find ways to cooperate on a climate agenda?

Question #8: Colombia – Will the United States and Colombia reform the underlying premises of their anti-narcotics policies?

Question #9: China and the Caribbean – Will the five Caribbean nations and two Central American countries that still recognize Taiwan shift to recognizing the People’s Republic of China (PRC)?

Question #10: Caribbean – Will the Caribbean Community and Common Market (CARICOM) achieve its goal of a Caribbean Single Market and Economy (CSME) in 2021?

BONUS QUESTION: In the 2016 Summer Olympics in Rio de Janeiro, Brazil (#13), Jamaica (#22), and Cuba (#23) were the only Latin American and Caribbean countries to finish in the top twenty-five in the medal count. Assuming the Olympics are held, will more countries from the region finish in the top twenty-five this summer?

OUR ANSWER TO QUESTION #1: NO

The first case of COVID-19 in Latin America and the Caribbean was reported in Brazil on February 26, 2020. Since then, the region has reported nearly 17.5 million cases and more than 550,000 COVID-19-related deaths, accounting for one third of global deaths. Countries have actively worked to secure vaccines through bilateral and multilateral arrangements, including agreements with Pfizer, Moderna, AstraZeneca, Russia’s Sputnik V, and China’s CoronaVac. Nevertheless, widespread vaccination requires not only adequate planning for vaccine acquisition, but efficient and equitable distribution. Recent incidents in Germany and the United States show that even more resourceful countries are experiencing hiccups in massive vaccine rollouts, such as logistical challenges (especially the required temperature-controlled supply chain), personnel shortages, and vaccine hesitancy. Latin American and Caribbean nations may face these hurdles at a greater scale, due to resource and capacity constraints.

As of January 19, 2021, eleven Latin American and Caribbean countries have authorized emergency use of COVID-19 vaccines: Argentina, Brazil, Bolivia, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Panama, and Venezuela.  On December 24, 2020, Mexico, Chile, and Costa Rica became the first countries in Latin America to begin mass vaccination. Despite moving quicker than most others in the region, Mexico aims to inoculate only 75 percent of its population by March 2022. For most countries in Latin America and the Caribbean, definitive delivery and mass vaccination timeframes remain unclear, and could be delayed over time.

Some low-income countries in the region may be able to vaccinate, at most, 20 percent of their populations in 2021, a figure considerably lower than the 65-percent theoretical threshold for herd immunity. Of added concern, the COVAX initiative—a key global initiative launched to secure vaccine doses for poor countries—currently faces a $4.9-billion funding gap. This could potentially complicate the initiative’s goal of helping inoculate 20 percent of each low-income country’s population against COVID-19 by the end of 2021. With stark disparities in vaccine access across and within countries, widespread vaccination is a distant prospect for Latin America and the Caribbean in 2021.

OUR ANSWER TO QUESTION #2: YES

In July 2020, a month after Latin America and the Caribbean became the global epicenter of the coronavirus pandemic, Alicia Bárcena, head of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), cautioned that the region should brace for a “lost decade.” By the end of 2020, the economic contraction in Latin America reached 7.7 percent—its steepest contraction ever, albeit 1.4 percent less than ECLAC’s earlier forecast. Can the region rebound in 2021 and exceed current growth forecasts?

After experiencing its worst economic crisis ever in 2020, the regional economy is expected to grow 3.7 percent in 2021. But, it’s also possible that the region can outpace this forecast, if it can manage a strategic balancing of expanded fiscal support for social-protection programs and small businesses, investment in job-generating productive sectors, and structural reforms to tackle long-standing challenges in the rule of law, equality, productivity, and climate. To accelerate economic reactivation, the region must leverage international investment and cooperation from global institutions such as the World Bank and the International Monetary Fund (IMF), as well as from regional organizations such as the Inter-American Development Bank. The private sector, at the national and international levels, must also play a central role in revamping growth, but will require strong incentives from local governments and risk-mitigated business climates.

Eyes will be on Brazil, Mexico, and Argentina (the region’s three largest economies) as well as Peru, which has had one of the best developing-world growth rates in the past decade, to recover from their 2020 economic downturns. In comparison to these four countries, Chile and Colombia suffered less devastating declines and could be positioned for stable growth over the year, but the migration crisis in Venezuela will continue to pose a heavy burden on neighboring countries’ already-strained public resources.

OUR ANSWER TO QUESTION #3: YES

This year will almost certainly see a surge in Central American migrants and refugees trekking north to the US southern border, due to a unique confluence of the devastation caused by Hurricanes Eta and Iota, as well as the myriad effects of the coronavirus pandemic and other long-standing migration pressures. Days before Biden’s inauguration, a caravan of more than nine thousand Hondurans created international headlines. The caravan was fueled, in part, by the promise of a revamped immigration policy in the United States.

The back-to-back hurricanes—which made landfall in Central America less than two weeks apart—wreaked havoc across Nicaragua and the Northern Triangle (Guatemala, Honduras, and El Salvador), affecting more than five million people and forcing at least 350,000 Hondurans and Guatemalans into emergency shelters. With hundreds of thousands of Central Americans internally displaced, shelters lacking basic services and sanitation quickly became new ground for rapid coronavirus infection. The destruction to essential infrastructure—such as bridges, roads, buildings—and entire communities was a heavy blow to a region that saw a 6.5-percent economic decline in 2020.

Food insecurity in Nicaragua, Guatemala, and Honduras is expected to rise significantly, due to the destruction of large swaths of agricultural lands, livestock, and infrastructure. In a region with long-standing pre-pandemic challenges around rule of law, insecurity, and economic opportunity, the most likely outcome from these push forces is a novel wave of “new” climate refugees seeking better livelihoods in the United States.

In 1998, Hurricane Mitch, the second-deadliest Atlantic hurricane, caused a massive surge in Central American migration to the United States. If history is any indication of the future, Hurricanes Eta and Iota—Category 4 and 5, respectively—can trigger a similar scenario in 2021.

OUR ANSWER TO QUESTION #4: NO

Security cooperation will be an important, though complicated, part of the US-Mexico relationship. In the days leading up to Biden’s inauguration, Mexican President Andrés Manuel López Obrador’s (AMLO) administration decided to stop investigations into former Mexican Secretary of National Defense General Salvador Cienfuegos—who was arrested in Los Angeles at the end of last year, and then sent for prosecution to Mexico. AMLO then released more than seven hundred pages of confidential evidence and intelligence, prompting an unusual rebuke by the US Department of Justice. The General Cienfuegos saga is just the latest example of a strained US-Mexico security relationship.

The Mexican Congress passed a new law in December 2020 that limits and deters the work of foreign enforcement agents in Mexico. Under the law, all communications—at all levels—with foreign enforcement agents will need to be reported, meetings with foreign agents must be approved in advance, and senior federal officials will need to be present at said meetings. Failure to do any of the above may result in expulsion of foreign agents. The law has prompted serious concerns that international cooperation with Mexico on the security front will be henceforth paralyzed. Most of the intelligence on criminal groups and illicit activities comes the United States.

AMLO has sought to double down on addressing the root socioeconomic causes of crime, and has moved away from the drug-kingpin strategy of past administrations. These actions also reflect a desire to move away from a “war” with cartels and other powerful criminal organizations in Mexico. But, security cooperation goes beyond reduction of homicides and combating drug trafficking—a stable security climate is a requisite for business and commerce to thrive. The Biden administration will have to navigate this complex scenario in Mexico.

OUR ANSWER TO QUESTION #5: YES

Protests in Bolivia, Chile, Colombia, Ecuador, Peru, and Haiti that began in 2019 were expected to continue into 2020, but extended lockdowns to control the spread of the pandemic led to the suspension of protests in the first half of 2020. Despite the lockdowns and the inherent risk of public gatherings, citizens gathered in large numbers last fall in Argentina, Chile, Colombia, Costa Rica, Guatemala, and Peru for reasons ranging from a rejection of government austerity plans to calls for racial equality, better social and economic protections, increased transparency, and free elections.

As vaccines become available and social activities resume, protests will most likely resume in 2021 as citizens will air new grievances. The pandemic has increased inequality in the region, pushing an additional forty-five million people below the poverty line. As governments struggle to fund social-protection programs, discontent with ruling governments will rise. Costa Rica will likely see protests as President Carlos Alvarado Quesada’s administration resumes negotiations with the IMF to secure a much-needed loan. In 2020, the Costa Rican government quickly retracted proposed tax measures after protestors blocked major roads. Colombia may also continue to see protests as long as marginalized groups, including Colombia’s indigenous and Afro-Caribbean groups, feel the government has failed to address their demands.

Finally, as Nicaragua heads toward an election in November in which the opposition will be unable to run, protestors against Nicaraguan President Daniel Ortega’s regime should be expected to return to the streets. Protests may also gain momentum in Chile, Ecuador, Honduras, and Peru, as they also head toward elections.

OUR ANSWER TO QUESTION #6: YES

The EU will continue to promote a democratic transition in Venezuela. In September 2020, a European mission was sent to Venezuela in a failed attempt to promote minimum democratic conditions ahead of legislative elections. High Representative of the EU for Foreign Affairs and Security Policy Josep Borrell, who announced the EU’s rejection of Venezuelan election results, asked Maduro to “chart a path towards national reconciliation.” Borrell also reiterated the EU’s commitment to supporting Venezuela’s transition to democracy.

In 2021, municipal and regional elections are set to occur according to the Venezuelan Constitution. This will open a new opportunity for the EU and a multilateral coalition to continue engaging in close dialogue with the Maduro regime, the opposition, academia, non-governmental organizations, and other civil organizations to seek to promote conditions that allow for the participation of all political parties in a competitive electoral process. However, conversations aside, the Maduro regime is unlikely to see any upside in allowing elections that are transparent or fair.

OUR ANSWER TO QUESTION #7: MAYBE

In past years, the synergy between the United States and Brazil has led to the signing of the Alcântara Technological Safeguards Agreement, advancing scientific and technological cooperation; support from the United States for Brazil to join the Organisation for Economic Co-operation and Development (OECD); and, at the end of 2020, the signing of a protocol to facilitate trade and investment between the two largest economies in the Western Hemisphere. Despite some diverging views at the presidential level, stronger bilateral relations between Brazil and the United States are mutually beneficial, and opportunities could still exist for advancing on a common agenda.

Brazil has been criticized for recurrent fires in the Amazon rainforest and Pantanal wetlands, environmental disasters such as the Brumadinho dam collapse, and high levels of deforestation, heightening pressures on the Brazilian government to take action to protect its environment.

For Bolsonaro, the economy and structural reforms are top priorities. The government has pursued trade agreements with the EU, South Korea, and Canada, as well as the United States. However, with increasing pressure from the EU, and now the United States, failing to advocate for strong democratic principles and a concrete plan for sustainable development can isolate Brazil in the global arena, undermining possibilities for cooperation with the United States and other countries. To advance on the trade and investment fronts, which are priorities for the Bolsonaro administration, Brazil will need to double down on its efforts to reconstruct its image and role abroad, particularly regarding the climate agenda.

OUR ANSWER TO QUESTION #8: YES

In December 2020, the Congressional Western Hemisphere Drug Policy Commission (WHDPC) unveiled a bipartisan report recommending that the United States rethink many of its historical anti-narcotics policies. The report found that while Colombia has made remarkable progress in strengthening state authority in marginalized areas, the United States’ $11.6-billion Plan Colombia was unsuccessful in meaningfully curbing coca cultivation. Despite having significantly increased manual eradication efforts in Colombia, coca cultivation and cocaine production remain high; it is unlikely the current strategy will allow the United States and Colombia to reach their joint objective of decreasing coca cultivation and cocaine production to half of 2017 levels. As discussed in the report “The Untapped Potential of the US-Colombia Partnership,’’ the United States and Colombia must take measures to reduce coca cultivation and also target other stages of the drug market, including cocaine production, trafficking, and consumption.

Entering office with a profound understanding of the Americas and a track record of advancing policies fundamental to the region’s prosperity, Biden will prioritize strengthening the United States’ ties to the region—particularly the US-Colombia partnership, which he has referred to as the keystone of US foreign policy in the region. In light of the WHDPC report, the new administration has new thinking on how to reorient the US counter-narcotics policy in Colombia away from mass eradication and toward a more holistic approach, placing renewed emphasis on providing physical and economic security to rural Colombians and demobilized rebels. There is also new momentum for the United States to develop a whole-of-government strategy to counter transnational criminal organizations (TCOs) and the international drug trade, per the report’s recommendations.

OUR ANSWER TO QUESTION #9: NO

It is unlikely that all five Caribbean countries that currently recognize Taiwan—Belize, Haiti, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines—will instead recognize the PRC in 2021. However, the Dominican Republic’s switch to establish diplomatic ties with the PRC in 2018 puts significant pressure on Haiti, with whom it shares the island of Hispaniola. In its overtures to Haiti, the PRC recognizes the country’s extreme poverty and holds out a promise of building the kind of capacity that allowed China to lift 850 million of its citizens out of extreme poverty, but only if Haiti recognizes the “One-China” policy. The other Caribbean countries have long, and sometimes ethno-cultural, histories with Taiwan, which has been a loyal and generous partner. Nevertheless, the geopolitics playing out between Washington and Beijing will put pressure on these small island nations to choose—not necessarily in their own developmental interests, but in the interest of alignment with one great power.

For Guatemala, Honduras, and Nicaragua—the three Central American countries that still recognize Taiwan—pressing domestic issues around the pandemic, natural disasters, citizen and food insecurity, and the economic downturn will prevail over the diplomatic issue of recognition. In addition, the new administration in the United States will move away from a bilateral and mostly stick approach to the isthmus, and toward a more regional and balanced carrot-and-stick approach, in which the question of China can be a powerful bargaining chip. A ramping up of conditionality on foreign aid and support to the region from the United States can be highly persuasive, and can discourage Central American leaders from switching sides.

Caribbean and Central American recognition of China versus Taiwan also hinges on the intensity of Chinese outreach efforts. This, in turn, is often dictated by the state of play in cross-strait relations between China and Taiwan. Since 2016, Taiwan under Tsai Ing-wen’s leadership—in alignment with former US President Donald Trump’s administration—has shifted to a more explicitly competitive stance vis-à-vis Beijing. As cross-strait relations soured, both sides became more aggressive in maintaining or courting new diplomatic allies (e.g., the Dominican Republic, El Salvador, and Panama). In this context, China will likely continue its soft-power diplomacy in the region. The PRC’s staunch verbal support for multilateralism also has the potential to tilt more Caribbean countries toward its orbit. However, much of this could change in the next four years, contingent upon new dynamics in the US-China-Taiwan triangle, as well as Biden’s promised return to global, non-transactional cooperation and a renewed focus on the Americas.

OUR ANSWER TO QUESTION #10: NO

Although the CARICOM has operationalized the single market, the prospect of a single economy remains unlikely. A little history will help. CARIFTA was formed in 1965, shortly after anglophone Caribbean countries achieved independence. CARIFTA removed tariffs and other non-tariff barriers to regional trade. CARICOM was formed in 1973 to implement the Treaty of Chaguaramas, which replaced the free-trade area with a single market. The intended free movement of people, goods, and capital is still not a reality because there is not a “regional body with powers and accountability that can help transform community decisions to binding laws in individual jurisdictions is a key impediment,” according to a 2020 report from the IMF.

In 1989, the CARICOM heads decided that further economic integration was required in an era of globalization. The Treaty of Chaguaramas was revised in 2001 to accelerate the implementation of the CSME, which started in 2006. The 2008 global financial crisis further delayed what former Managing Director of the London-based Caribbean Council David Jessop called “a process plagued by rhetoric and inaction.”

COVID-19, however, may have done what neither of the two best-known analyses of the Caribbean’s challenges, the Golding Report and the Ramphal Commission, could: show the fragmented Caribbean nations the real benefits of integrated, unified coordination when faced with externalities. As she relinquished the CARICOM chair In June 2020, Barbadian Prime Minister Mia Mottley praised the regional architecture for its sterling performance in organizing and supporting the region during the pandemic.

Current Chairman of CARICOM and Prime Minister of Trinidad and Tobago Keith Rowley called for 2021 to be “the year of CARICOM,” and challenged the region to live up to its promise: “Let this be the year that we make CARICOM work for us and construct the resilient society that will provide a safe, prosperous and viable community for all of us.” He boldly called for the CSME to become the principal framework for recovery. Despite the real obstacle of establishing a single currency and its attendant institutions, CSME got a shot of energy from the COVID-19 crisis.

BONUS QUESTION ANSWER

Assume the Olympics occur this summer. Several factors contribute to a country’s medal-count prospects—population size, the promotion of women in sports, national investment in sports, etc. While no single factor explains a country’s success or failure, decisions and investments made by Latin American nations over the past four years could be an indication of a strong Olympic showing.

Brazil has made the strategic decision not to prioritize one sport, and has instead sought to be in the competition for as many Olympic slots as possible, securing one hundred and eighty so far. Cuba, in comparison, has focused on boxing and baseball to achieve its Olympic medal goals. Mexico’s Olympic team is also looking promising, with a fairly gender-balanced team (forty-nine men and thirty-seven women). AMLO also announced a financial stimulus for athletes who participated in the 2019 Pan American Games and are now preparing for Tokyo 2020+1 amid the COVID-19 pandemic. Jamaica is also investing in its Olympic athletes, despite the economic constraints of the pandemic, providing $40 million in funding for its athletes’ preparation and qualification.

With all eyes hopefully on the Summer Olympics, the authors predict that countries that provided the most comprehensive support to their athletes during the pandemic will come out on top in the upcoming games. 

The post Spotlight: 10 Questions for Latin America and the Caribbean appeared first on Atlantic Council.

It is no surprise that the Trump administration’s sanctions policy has been under fire since the outbreak of the global pandemic of novel coronavirus (COVID-19), accused of doing unjustified humanitarian damage. After all, the maximum pressure sanctions campaigns had already been the target of significant push back from allies and foes alike, and the administration did not seem terribly concerned with humanitarian impact in its previous actions. Those sanctions campaigns, however, came amidst a decade of economic expansion and relative stability. As the world economy shuts down to try to contain the COVID-19 outbreak, the humanitarian collateral effects of sanctions become more pronounced and potentially deadly.

Michelle Bachelet, the UN High Commissioner for Human Rights, last week called on the Trump administration to ease or suspend sanctions, one of several such pleas. She was joined in her call by UN Secretary General Antonio Guterres, academics, and the Washington Post Editorial Board, among others.

US Secretary of State Mike Pompeo’s dismissed this criticism, asserting that “sanctions do not target imports of food, medicine, and medical equipment, or other humanitarian goods.” That is true in a narrow technical sense, but is not an adequate answer. Broad-based sanctions on a jurisdiction disrupt all trade, even that, like humanitarian trade, which is technically carved out. This is a reality that all administrations must contend with when considering whether to impose significant sanctions. Policymakers habitually look for options that are all gain without difficult trade-offs; they seldom exist.

The humanitarian crisis in Iraq in the 1990s under the UN Oil-for-Food program—Iraqis starving because of the embargo while Saddam Hussein and his cronies got rich through massive international bribery—dealt a significant blow to the use of sanctions as a foreign policy tool. Today, Congress mandates that all jurisdictional sanctions programs contain carve-outs for the export of food, medicine, and medical devices, but just because those exemptions are there does not mean that exporters are able or willing to make use of them.

But the argument that the United States should unilaterally roll back sanctions draws a false dichotomy; sanctions do not have to be suspended or rolled back for the United States to better address humanitarian concerns. Several members of the House of Representatives have hit closer to the mark in letters to Secretary Pompeo that advocate for expanded access to humanitarian goods and a pause in new sanctions. That is a better approach: to deal with humanitarian problems, address the specific problem directly.

First, the United States should not wrap itself in guilt over imposing sanctions. Iran, North Korea, Syria, and other sanctioned jurisdictions were sanctioned for good reasons. Their actions make them a continued threat to the United States and the global community even in a global pandemic, and it is not practical, and even less wise, to formally lift sanctions that constrain bad behavior. I have little doubt that North Korea, for example, would take advantage of any broader reprieve to advance its weapons program while letting its citizens bear the brunt of the disease. Is it credible to believe that Venezuela’s Nicolas Maduro would respond to a unilateral lifting of sanctions by standing down from internal repression, leaving power, and moving back toward democracy?

Instead, sanctions should be held steady while the United States eases the ability to conduct humanitarian transactions, facilitates such transactions itself, and encourages the world to use those conduits. Good sanctions policy (that can sustain broad international support) does not include letting people die because their governments are ill-prepared, corrupt, or repressive.

One can debate the Trump administration’s approach to Iranian sanctions. But even here there is room to open up space for humanitarian support. Esfandyar Batmanghelidj of Bourse & Bazaar, gets most of the main points right vis-à-vis  Iran in calling for expanded medical device carve-outs, US government comfort letters to foreign banks processing such transactions, and easing access to Iran’s foreign exchange for the express purpose of facilitating humanitarian trade.

Expanding medical device carve-outs is probably the most critical because important items for the fight against COVID-19 may not be included in the current exemptions; respirators require separate, specific authorization from the US Government, which can take months to get, if not longer. Beyond just issuing more comfort letters, the Trump administration should roll back the draconian requirements for providing them that were put into place in October 2019. The requirements for US government comfort letters are excessive and overly burdensome, especially for goods that are not sanctionable; they serve to do little more than inhibit such trade. The United States should also pledge not to veto an Iranian loan from the International Monetary Fund to purchase humanitarian goods (assuming sufficient oversight to prevent diversion) and assist the country in trying to combat the pandemic that has overwhelmed the nation.

Finally, the Trump administration needs to stop imposing new sanctions on Iranian networks of marginal strategic value and thus minimal actual impact. The give with one hand and take away with the other approach it employed in offering humanitarian support to Iran and then following up with several rounds of new sanctions does not improve the humanitarian atmosphere, especially for a jittery financial sector that is critical to facilitating such trade. A pause on new designations will not lead to Iran procuring more hard currency with which to conduct nefarious activity, especially when the bottom has dropped out of oil prices. A pause instead would help pave the way for greater humanitarian trade with Iran and could help build credibility with EU allies and others who are furious with the Trump administration’s actions on Iran.

The above Iran-specific recommendations reflect some broad themes for facilitating humanitarian trade with other jurisdictions with significant sanctions, although the specifics of each situation will vary. The one other consistent issue these jurisdictions will face are challenges with remittances, which are authorized in all programs but subject to certain restrictions that may impact individuals who need funds to pay for medical treatment.

A country famous for its doctors, Cuba likely has some available expertise to deal with the COVID-19 pandemic. But nearly sixty years of orthodox communist economics and embargo by the United States has laid waste to Cuba’s infrastructure, and it is likely that the country will need external supplies of items like respirators. Unlike some of the other jurisdictions, the ability of the United States to help supply such items (when the United States finally starts making enough) may be critical, given the proximity of the two nations. Finding funds for such purchases may also be a challenge, and the United States should be proactive in working with International Financial Institutions like the Inter-American Development Bank to support Cuba, if needed. In addition, the US government should move quickly to remove the overly strict limits on personal remittances for COVID-19 related transactions, as those caps could harm ordinary Cubans during this outbreak and do little to pressure the regime.

The Kremlin claims Ukraine’s Crimea region as its own territory, placing Crimea in a different category than the other sanctioned jurisdictions. Russia is likely to have some struggles with COVID-19 given its poor infrastructure, and these may extend to the Ukrainian territories it currently occupies— including the Donbas region in eastern Ukraine, which is not currently subject to jurisdictional sanctions, but where the de facto “governments” are themselves sanctioned. It should not prove too difficult to support humanitarian shipments to Russia should it request them. However, ordinary people in Crimea may face challenges, as most banks operating solely on the peninsula are sanctioned and cannot receive otherwise authorized remittances.

We may never know the actual toll that COVID-19 takes in North Korea, given the isolationist regime’s secretive and repressive policies. Reports indicate that US President Donald J. Trump sent North Korean leader Kim Jong-un a letter offering cooperation on the pandemic. Setting aside the wisdom of doing so before the United States was prepared to deal with the virus, Trump’s gesture was the right one. It may be very difficult to figure out how to get critical equipment to a country that routinely rejects food aid during famines, but the US government should be proactive and look for opportunities to help the North Korean people if they exist. Similar to Cuba, the Trump administration should consider removing the cap on remittances to North Korea for COVID-19 transactions.

Sadly, it is hard to see how help could be readily delivered to the neediest parts of Syria, even if the United States were to be more proactive. A war zone is simply a poor environment for health care, even without factoring in that the Bashar al-Assad regime and its Russian enablers have targeted hospitals in rebel-controlled areas of the country. The United States should stand ready to help should Assad request such, nonetheless.

Finally, the Trump administration faces a quandary in Venezuela. Sanctions target the majority of the revenue-producing economy via a blocking of all state-owned enterprises, which has exacerbated an already precarious humanitarian situation. Venezuela is ill-equipped, to put it mildly, to handle a COVID-19 outbreak, primarily due to years of mismanagement and corruption. The Trump administration’s initiative announced March 31 to ease sanctions as part of a political transition in that country from the Maduro appears to reflect recognition of the need to respond to the humanitarian challenge and is a much more constructive approach than its recent consideration of designating the country as a state sponsor of terrorism. But the administration should de-link humanitarian support from the conditional sanctions easing it has in mind. Allowing the unfreezing of some state-owned assets for humanitarian purchases and a pledge to refrain from additional sanctions while the crisis is ongoing would be good first steps. 

I hold out little hope, however, that this State Department will be the leader on actions like these, as this administration seems to know little other than adversarial and pressure tactics in foreign relations. The US Congress can to some degree hold the State Department and the Trump administration’s feet to the fire, but little is likely to happen without the State Department taking the lead. The coronavirus challenge should provide space for creative thinking. 

Brian O’Toole is a nonresident senior fellow with the Atlantic Council’s Global Business and Economics Program. He is a former senior adviser to the director of the Office of Foreign Assets Control (OFAC) at the US Department of the Treasury. Follow him on Twitter @brianoftoole.

Further reading:

IranSource Feb 24, 2020

FATF blacklists Iran, but does it matter?

By Brian O’Toole

The decision to impose counter-measures by the Paris-based body signals something of an end to the group’s patience with Iran, especially by the European Union, after Tehran failed to follow through on the action plan it agreed upon with the FATF to address its deficiencies.

Economic Sanctions Iran

Feature Sep 22, 2019

Sanctions explained: How a foreign policy problem becomes a sanctions program

By Brian O’Toole and Samantha Sultoon

Sanctions allow a US president to exercise power unilaterally and often expeditiously. They are often one of the few middle grounds between war and words.

Economic Sanctions

IranSource Feb 28, 2020

Trump fights Iran’s ‘Axis of Resistance’ in Latin America

By Giorgio Cafiero

With President Donald Trump in the White House and Mike Pompeo as his Secretary of State, the US is determined to eject Iranian influence from Latin America.

Iran Latin America

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Congress passed the LIBERTAD Act—also known as the Helms-Burton Act—in 1996, to bolster the US embargo against Cuba. President Clinton signed the LIBERTAD Act into law that same year but decided to waive the law’s Title III following strong pushback by the European Union (EU), Canada, and others. Title III enables US citizens whose property was confiscated by the Castro regime to file lawsuits against entities or individuals that currently use these properties. The EU, Canada, and others consider Title III to be an unlawful extraterritorial application of US law. In response, the EU also created a “Blocking Statute” that prohibits enforcement of related US legal decisions within the EU, allowing EU companies sued in the US to recover any damages incurred. Partly because of this strong opposition from key US allies, administrations to-date have decided to waive Title III—until the policy reversal last April. Immediately following the decision, EU foreign policy chief Federica Mogherini voiced “serious concerns”, announcing the EU would consider making use of its Blocking Statute to protect European businesses from US lawsuits. Spain’s Foreign Ministry further argued that “the extraterritorial application of the legislation is contrary to International Law (…) without giving rise to any advantage either for the US claimants or for the Cuban population as a whole”. Both the EU and Canada intend to pursue action through the World Trade Organization to protect their exposed firms, mostly those in the tourism and mining sectors.

Since 2014, Cuba has begun to gradually open its economy to foreign investors, due in part to its Law No.118 (known as the “Foreign Investment Law”). Foreign companies subsequently flowed in rapidly with investments in the island, typically through joint enterprises and International Economic Partnership Agreements. Today, the EU is Cuba’s main export partner and its biggest foreign investor. Spain in particular has deep economic ties with Cuba, especially in the tourism industry—one of the main sources of revenue for the island. Spain ranks as Cuba’s second largest trade partner, below only China. Likewise, Canadian firms have been longstanding active investors in Cuba, specifically in the energy and mining sectors, and are also facing potential ripple effects from Title III activation. Canada’s bilateral trade with Cuba reached a five-year high of C$1.17 billion in 2018. While the overall risk to these countries’ economies is relatively small, the potential costs for the exposed firms are high.

By attempting to isolate Cuba from foreign capital and investment, the Trump Administration hopes to squeeze its economy and pressure the regime in Havana. Whether this policy will bring about the desired change in the human rights situation on the island remains to be seen. The activation of Title III alone is unlikely to bring regime change in Cuba. Evidence from the half-century embargo shows that unilateral sanctions as a means of driving political change have proved insufficient on their own, while simultaneously alienating economic allies.

Furthermore, activating Title III may undercut other important US policy goals in the region, such as putting an end to Maduro’s rule in Venezuela. The success of the US-led pressure campaign there depends upon unity among the anti-Maduro coalition, of which Canada and the EU are vital members. Both have imposed sanctions, export embargos and travel bans against Maduro officials alongside the United States. Notably, Spain plays an important role in Venezuelan affairs, given its close economic, cultural, and diplomatic ties, granting Spain and outsized influence on the EU position in the matter. Spain could play a central role, for instance, in hardening visa restrictions on Maduro’s associates and family. Penalizing Spanish firms operating in Cuba therefore risks undermining US-Spanish relations at a time when cooperation is necessary. By straining already tense relations with its allies over Cuba, the United States risks distracting itself and partners from objectives at hand in Venezuela, while failing to make any progress in Cuba.

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For the first time since enactment of the 1996 Cuban Liberty and Democratic Solidarity (Libertad) Act, the Trump administration is allowing lawsuits to be brought in US courts under Title III of this law. Title III allows US nationals whose property in Cuba was confiscated by the Castro regime following the 1959 Cuban revolution to bring federal court actions against foreign entities “trafficking” in (i.e. using) those properties. Title III has never been used, as every president since the law’s passage has suspended it. The main rationale for this consistently bipartisan approach was that it would have negative repercussions on allies and partners.

For now, claims under Title III are restricted to a defined list of Cuban entities and the ban on lawsuits against foreign firms operating in Cuba remains suspended until at least April 17. The Trump administration indicated that it would use the coming month to review the impact of its decision on US national interests and expediting a return to democracy in Cuba. If there are any lessons to be learned from US sanctions on the Maduro regime, a key takeaway is that ratcheting up sanctions is unlikely to facilitate such timely and tangible results.

The Ripple Effect

Since the lifting of EU sanctions on Cuba just over a decade ago, European firms have capitalized on the opportunity to pursue business ties with the island. Canada, which has maintained uninterrupted diplomatic relations with Cuba since 1945, has also seen its companies expand their economic ties to the island.

Following US Secretary of State Mike Pompeo’s announcement of a reduced scope suspension of Title III and the likelihood of further Cuba policy changes, US and foreign firms operating in Cuba should immediately be assessing whether the shift in policy may impact them. The potential ripple effect on foreign firms, particularly European and Canadian firms, is substantial. Such firms include hoteliers, airlines, cruise companies, and mining companies.

Although the current scope of Title III does not apply to such firms, this could change as early as April, should the Trump administration choose, and would then implicate both domestic and foreign companies. Such a decision would likely prompt further friction between the Trump administration and Europe and Canada. In addition to the possible litigation by US claimants, there will also likely be legal challenges over the legitimacy of the Libertad Act itself and the way it is being applied, which could take years to resolve.

The EU originally introduced blocking legislation in 1996 to shield its companies from the extraterritorial effects of Title III and is likely to invoke it again if the full suspension of Title III is lifted.  (This is the same legislation that the EU recently amended in an effort to mitigate the extraterritorial impacts of US sanctions on Iran following Trump’s unilateral withdrawal from the Iran nuclear deal.) When the blocking statute was introduced, the EU accompanied it with a dispute process against the United States at the World Trade Organization (WTO). The dispute was eventually resolved bilaterally, with then US President Bill Clinton agreeing not to enforce the extraterritorial aspects of the Libertad Act and the EU agreeing to toughen its stance on Havana and withdrawal its WTO claim.

Bilateral relations between Washington and Brussels—already strained due to differences in policy toward Iran, trade, and other issues—are not as well poised for such bilateral negotiations. Further, the Trump administration’s view of the WTO and its role in resolving such disputes (should that be necessary) has also shifted, complicating a negotiated settlement to the heightened tensions. 

Outlook

The United States has maintained sanctions on Cuba longer than any other country. While sanctions often take time before they facilitate their intended policy objective, there is no evidence over the past half century of Cuba sanctions that further ratcheting up the embargo is likely to bring about the shift to democracy and respect for human rights that the Trump administration is rightfully seeking. There is a sound argument that those with recognized, legitimate claims to confiscated property be compensated; however, this is most effectively managed through a negotiated process, with which the US government has had some success in other contexts.

While the Trump administration is right to support human rights and shifts to democracy in both Cuba and Venezuela, this is a shortsighted, ineffective way to achieve such laudable policy objectives. Exacerbating tensions with European and Canadian allies through activating Title III will quell any appetite for coordination on Cuba policy and threatens to weaken an otherwise strong alliance on Venezuela policy. Instead, renewing the suspension of Title III is a strategic way to maintain coordinated pressure on Maduro and avoid another angle to the simmering conflicts with key allies.

Samantha Sultoon is a senior fellow with the Atlantic Council’s Global Business and Economics Program and the Scowcroft Center for Strategy and Security.

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Bolton’s speech in a critical swing state for both the US Senate and the US House of Representatives just six days before the midterm elections can be seen as an attempt to shore up Republican Party support among the politically powerful Cuban-American community in southern Florida.

Cuba, Nicaragua, and Venezuela have taken part in “the same oppressive behavior of unjust imprisonment, torture, and murder,” according to Bolton. This “triangle of terror,” Bolton argued, “is the cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere,” he added.

“John Bolton made it clear today where the administration is headed on Venezuela, Cuba, and Nicaragua,” Jason Marczak, director of the Atlantic Council’s Adrienne Arsht Latin America Center, said.

“His forceful stance is no surprise,” said Marczak. “The US government has increasingly sought to ramp up pressure on all three countries. Bolton has long favored a stronger position.”

While scathing in his criticism of Cuba, Nicaragua, and Venezuela, Bolton welcomed the election on October 28 of far-right candidate Jair Bolsonaro as Brazil’s next president. Bolton described Bolsonaro as a “like-minded” partner. Bolsonaro has a history of making incendiary remarks about women, minorities, and gays. The president-elect has also promised to get tough on crime and corruption.

Cuba

Bolton’s harshest rhetoric was reserved for the regime in Havana, which he accused of silencing “dissidents and suppressing every kind of freedom know to man.” Bolton promised that the Trump administration would “not glamourize Marxist guerillas to promote a delusion of our own glory. Our concern is with sanctions not selfies.”

Many of Bolton’s comments were highly critical of the Obama administration, which in December 2014 restored full diplomatic relations with Cuba and opened an embassy in Havana for the first time since the Cold War. “Members of this administration will never take a picture in front of an image of Che Guevara like Barack Obama did,” Bolton said in reference to Obama’s trip to Havana in March 2016.

Last June, Trump—a longtime critic of Obama’s rapprochement with Havana—announced that he was “cancelling the last administration’s completely one-sided deal with Cuba.” Despite these words, the embassy remained open and only restrictions on American travel to Cuba were reimplemented.

Bolton explained that “the United States is enforcing US law to maintain sanctions until among other things, all political prisoners are freed, freedom of assembly and expression are respected, all political parties are legalized, and free and internationally supervised elections are scheduled.”

Bolton also assured the audience that the administration has “scaled back our embassy personnel in Cuba,” and amid reports of potential microwave strikes on US Embassy personnel in Havana, that the United States “will not allow our diplomats to be targeted with impunity.”

Venezuela

Bolton also took aim at Venezuelan President Nicolás Maduro for “using the same oppressive tactics that have been employed in Cuba for decades.”

Maduro has presided over an economic and societal collapse in the country, which has worsened in the last two years. Bolton stated that “more than two million desperate Venezuelans have fled Maduro’s oppressive rule since 2015.”

Hundreds of thousands of protesters flooded the country’s streets throughout 2017, clashing with soldiers and police officers throughout the summer months. At least 125 people died, and thousands were injured in these clashes. On July 31, 2017, the US Treasury Department froze Maduro’s assets in retaliation for his attempt to replace the opposition-led National Assembly with an illegitimate National Constituent Assembly.

An Atlantic Council poll in April 2018 found that 81 percent of Venezuelans believe the country is an humanitarian crisis and 77 percent disapproved of Maduro’s job performance. In May 2018, Maduro won re-election in a landslide amid widespread allegations of fraud.

Bolton stated that the “United States will not tolerate Maduro’s undermining of democratic institutions and ruthless violence against innocent civilians.” He detailed existing sanctions the Trump administration has placed on more than seventy Venezuelan individuals and entities, including Maduro, and announced that Trump has just signed a new executive order targeting Venezuela’s gold trade.

Marczak welcomed the new sanctions as “in Venezuela, illicit flows of money that benefit the Maduro regime to the detriment of the Venezuelan people must be stopped.” Marczak added that pressure must continue so that there can be a restoration of “democracy, human rights, and the conditions so that millions of Venezuelans are no longer forced to flee.”

Nicaragua

Bolton also condemned the Nicaraguan government for its “violence and repression against its citizens and opposition members.”

The US government slapped sanctions on three Nicaraguan officials in July for their role in violence against protesters in the Latin American nation. Nicaraguans have been protesting the decision by President Daniel Ortega’s government to change social security and other internal repression measures. A United Nations human rights delegation was kicked out of the country on August 30 after it released a report criticizing the Ortega government for human rights abuses against demonstrators.

The United States has been in vocal opposition to Ortega’s government since the former Cold War leader returned to power in 2007. Ortega has been openly supportive of both Iran and neighbor Venezuela.

“Ortega and his allies have completely eroded democratic institutions, stifled free speech and impose a policy of jail, exile, or death for political opponents,” Bolton said, adding that “free, fair, and early elections must be held in Nicaragua and democracy must be restored to the Nicaraguan people.”

Bolton’s comments make it “very clear that these sanctions were just the beginning,” María Fernanda Pérez Arguello, an associate director in the Adrienne Arsht Latin America Center, said. With his speech, she argued, “John Bolton and the administration are sending clear signals that they are committed to helping the Nicaraguan people restore their long-lost democracy.”

David A. Wemer is assistant director, editorial at the Atlantic Council. Follow him on Twitter @DavidAWemer.

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The US Senate on April 26 confirmed former Director of the Central Intelligence Agency Mike Pompeo as the new US Secretary of State.

US President Donald J. Trump picked Pompeo, a known foreign policy hawk on issues from Russia to Iran to North Korea, to replace Rex Tillerson at the State Department on March 13.

Tillerson officially stepped down on April 1. Pompeo assumed the post on April 26. This replacement is one of many that have taken place in the first fifteen months of the Trump administration. The White House has now seen two secretaries of state, three national security advisors, and two chiefs of staff. Whether Pompeo can help chart a steady course for US policy remains to be seen.  

Pompeo’s past rhetoric on many of the most pressing challenges facing the United States have raised questions as to what the confirmation of Trump’s second secretary of state may mean for the future of US foreign policy.

Atlantic Council experts share their views on the significance of Pompeo’s confirmation and his potential impact on the myriad issues he will have to address as the United States’ top diplomat:

Frederick Kempe, president and chief executive officer of the Atlantic Council: 

“Mike Pompeo’s confirmation as secretary of state can be a trade up for the administration, and perhaps for US foreign policy, if foreign leaders can assume he speaks and acts for the president, if he relatively quickly fills top jobs at State that are necessary to the president’s agenda, and if he has more of a public presence as diplomat-in-chief.

“The fact that he wasted no time and will be attending the NATO foreign ministers meeting in Brussels tomorrow is an important sign to our transatlantic allies that the United States remains committed to the peace and security in Europe.

“The fact that he will fly from there to visit our closest partners in the Mideast underscores his understanding of the urgency of Syria and Iran-related issues.”

Rachel Brandenburg, director of the Middle East Security Initiative in the Scowcroft Center for Strategy and Security:

“Secretary Pompeo has not been shy about his disdain for the Iran nuclear deal. We also know he has been perceived as very loyal to the president. It is worth considering, however, that while today he takes on a new position in Trump’s cabinet, he is not new to the Trump administration or cabinet-level deliberations therein. As director of the CIA, Pompeo was among Trump’s advisers on key national security decisions, including those presumably related to Iran.  While we can assume Pompeo will retain the ear of the president and we can expect to see him take on a more publicly diplomatic role than he had as CIA director, we shouldn’t assume he will automatically shift the balance of the debate on key national security decisions, this one included. Ultimately, what happens on May 12 will be up to the president. From what we’ve seen and heard to date, including over the past few days, Trump wants to keep us guessing until he alone has made up his mind. I expect Pompeo will fall in line to support the president’s decision wherever it ends up.”

Graham Brookie, director of the Digital Forensic Research Lab:

“Mike Pompeo is now confirmed as the secretary of state, and among the many policy challenges he will face, there are overarching questions of management and record. While department-wide reform is needed,Pompeo has an opportunity distinguish himself from his predecessor and prove that he is not inherently pitted against the career experts, foreign service officers, and civil servants representing the United States around the world. He proved generally adept at this in the work place at the CIA, and he will need the same skills in Foggy Bottom. The main tool available to the secretary of state is engagement, and that engagement will need to focus internally and externally.”

Jeffrey Gedmin, nonresident senior fellow in the Future Europe Initative:

“We can quibble and quarrel about this or that foreign policy pick—the new secretary of state is no exception. Mike Pompeo has friends and foes. No one disputes, though, that he promises to be a steady hand. The same applies to new National Security Advisor John Bolton, incidentally. Policy matters aside, this may be the last decent chance to stabilize a largely unstable president, and steady US ties around the world.” 

John Herbst, director of the Eurasia Center:

“The Senate did the right thing in promptly confirming Mike Pompeo as secretary of state. The country needs an active and strong secretary of state. The looming negotiations with North Korea, which Mr. Pompeo advanced during a secret trip to Pyongyang, is the most immediate reason to get him to Foggy Bottom. However, a host of other issues, including a rambunctious Kremlin and the Iranian nuclear deal, await his attention. During his recent trip to Ukraine as director of the CIA, Pompeo impressed Ukrainian President Petro Poroshenko with his strong understanding of Moscow’s revisionist policies. With him at Foggy Bottom, the Trump administration’s strong pushback against Kremlin aggression and support for Ukraine should continue and perhaps improve.  Pompeo has already indicated that he will reverse Rex Tillerson’s disastrous personnel policies at state and fill senior positions.” 

Matthew Kroenig, deputy director for strategy in the Scowcroft Center for Strategy and Security:

“Now that he is confirmed, Pompeo can begin leveraging his experience and relationships to reinvigorate the Department of State. It is disappointing that the US Senate couldn’t muster stronger bipartisan support for such a qualified candidate. Compare his fifty-seven to forty-two vote to the vote tallies of recent secretaries of state: John Kerry (ninety-four to three); Hillary Clinton (ninety-four to two); Condolezza Rice (eighty-five to thirteen); and Colin Powell (unanimous voice vote).”

Robert A. Manning, senior fellow at the Asia Security Initiative in the Scowcroft Center for Strategy and Security:

“Mike Pompeo’s confirmation as secretary of state comes at a critical moment for key global flashpoints—the Korean Peninsula, Iran deal, the Syria crisis. He will be especially critical to the success of the Trump-Kim summit and tough US diplomacy afterward to resolve the Korean question. Most urgent, however, is his challenge of choosing the best senior people to repopulate what is almost a ghost town at Foggy Bottom into a dynamic force in pursuit of US interests at an inflection point for the global order.”

Jason Marczak, director of the Adrienne Arsht Latin America Center: 

“Secretary Pompeo’s close relationship with the president means that the State Department will now have a leader who speaks directly for the White House on Latin American issues. He will continue Trump’s push for a democratic solution to the crisis in Venezuela and be a vocal supporter of stronger actions to punish the Maduro regime. In particular, he has long been concerned with the presence of foreign actors, like Russia, taking advantage of the fluid security environment in Venezuela. Another area to watch is Secretary Pompeo’s position on Cuba. Expect him to not only continue the president’s policies but to perhaps use the leadership transition to enact tougher actions if reforms are not made.”

Jamie Metzl, senior fellow at the Asia Security Initiative in the Scowcroft Center for Strategy and Security:

“It’s certainly good news that the United States has a secretary of state in place when potentially starting critical presidential meetings with North Korea. But Mike Pompeo will need to lead a strategic revolution inside the Trump administration at home to make it even remotely possible for the United States to succeed in its diplomatic efforts abroad. Unless the chaos, corruption, and strategic incoherence of the Trump administration is fixed, very little can be accomplished abroad. The United States is in a deep state of crisis. Helping fix that would be Mike Pompeo’s greatest potential contribution as secretary of state.”

Richard Morningstar, chairman of the Global Energy Center: 

“When it comes to US policy on energy, the confirmation of Secretary Pompeo does not necessarily mean major changes, although I certainly hope he revives the Department’s crucial role both in diplomacy more broadly and in energy diplomacy more specifically. I expect the administration to continue to hold the line on Nord Stream II, and remain firm on the threat Russia poses to Europe’s energy security and continue to support Ukraine’s role as a valuable transit country.”

David Mortlock, nonresident senior fellow in the Global Energy Center: 

“An imminent test for Pompeo will be the looming May 12 deadline for a waiver of key Iran sanctions to continue US implementation of the JCPOA.  While he was noncommittal during his confirmation testimony, his past opposition to the deal is well documented, and he must advise the president whether to renew the waiver on May 12 or renege on the US obligations. If the president does refuse to renew that waiver, the sanctions could force other governments to choose whether to reduce their oil purchases from Iran or have their banks cut off from the United States for dealing with Iran’s Central Bank. Pompeo could face a confrontation with Europe, Russia, and China over the JCPOA within his first couple of weeks on the job, which will only get more challenging as critical sanctions waiver renewals are due in early July.”

Miyeon Oh, senior fellow at the Asia Security Initiative in the Scowcroft Center for Strategy and Security:

“As secretary of state, Pompeo will be able to play a more active and significant role in guiding Trump’s foreign policy on North Korea than when he was the director of the Central Intelligence Agency. He made a private trip to Pyongyang over Easter to meet with North Korean leader Kim Jong-un, ahead of the planned meeting between Trump and Kim that is expected to happen in late May or June. Such a secret trip was possible only with Trump’s full support. That continued support has enabled Pompeo to make an unprecedented move from ‘maximum pressure first and then engagement’ to ‘maximum pressure and engagement at the same time.’ Pompeo no longer needs to be the behind-the-scenes architect of Trump’s North Korea policy—instead, now that he is sitting at the negotiation table, through firmness and persistence he can hopefully accomplish the ultimate goal of total denuclearization.”  

Todd Rosenblum, nonresident senior fellow in the Scowcroft Center for Strategy and Security: 

“All presidents deserve a wide degree of deference in their choices for Senate-confirmed positions. Pompeo may not have checked enough political impulses while CIA director but he obviously has the president’s confidence and has no evident disqualifiers in his background. 

“His confirmation provides a much-needed opportunity for reinvigorating the role and place of the State Department in the making of foreign policy, which suffered terribly under Secretary Tillerson.  

“There is, of course, risk that Pompeo, along with new National Security Advisor John Bolton, will enable the president’s impulses, instead of offering up to him measured, realistic options that credibly advance the national interest.”

Barbara Slavin, director of the Future of Iran Initiative:

“As a congressman and CIA director, Mike Pompeo has been extremely critical of the Iran nuclear deal. However, I believe his perspective may change as secretary of state. He has allowed Policy Planning Director Brian Hook to continue conversations with Europeans about a supplemental understanding on the Iran nuclear deal. And Pompeo will be meeting, starting tomorrow in Brussels, with US allies that are firmly committed to the landmark non-proliferation accord.

“During his confirmation hearings, Pompeo expressed support for diplomacy on the Iran issue. He should build on the Joint Comprehensive Plan of Action and join with Defense Secretary James Mattis to convince Trump to stick with the deal and renew US nuclear-related sanctions on May 12.”

Rachel Ansley is assistant director of editorial content at the Atlantic Council.

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“The Trump administration is not going to be refining its Cuba strategy. If anything, it is going to be putting more pressure on Cuba” because of Havana’s support for Nicolás Maduro’s regime in Venezuela, said Marczak, director of the Adrienne Arsht Latin America Center at the Atlantic Council.

Miguel Díaz-Canel, the fifty-seven-year-old vice president of Cuba, was elected president, unopposed, on April 19. He succeeds Raúl Castro, eighty-six, who, while no longer president, will remain a powerful force in Cuba as head of the Communist Party.

Castro groomed Díaz-Canel to be his successor, said Marczak. It was then unsurprising that the new president has promised not to stray from the policies of his predecessors—brothers Raúl and Fidel Castro before him.

Raúl Castro presided over a historic diplomatic opening with the United States in partnership with then US President Barack Obama, and pushed through economic reforms. Trump has rolled back much of those diplomatic gains recalling US diplomats from Havana after they suffered mysterious “health attacks.” The Trump administration also expelled Cuban diplomats from the United States and has made it more difficult for US citizens to travel to Cuba.

With Díaz-Canel at the helm, the prospects for change in Cuba are bleak, said Marczak.

“Some of the reforms that Raúl Castro was able to implement were only possible because his last name was Castro,” said Marczak.

“Miguel Díaz-Canel doesn’t have that advantage with the Communist Party’s old guard when things get tough,” he added.

Jason Marczak discussed what’s next for Cuba in an interview with the New Atlanticist. Here are excerpts from that interview.

Q: What is known about Cuba’s next president, Miguel Díaz-Canel?

Marczak: Miguel Díaz-Canel is somebody who Raúl Castro has groomed to be the next president of Cuba. He was born after the revolution. After college he began in the local Communist Party and has steadily risen through the ranks. He is somebody who is seen as ideologically firm to the Castros’ project.

Q: Díaz-Canel has promised to stick to the line followed by the Castro brothers. So, what will be different? What does Díaz-Canel stepping into the role of president of Cuba mean for the country?

Marczak: Miguel Díaz-Canel as president means very little change for Cuba. Raúl Castro will remain in an influential position in the Communist Party through 2021. At the same time, there is great concern in Cuba about where the country is going. The economy is in quite a predicament.

Miguel Díaz-Canel stepping into the role of president means that there is no longer a Castro at the head of government for the first time in sixty years, but it also means that there is probably less of a chance for change.

Some of the reforms that Raúl Castro was able to implement were only possible because his last name is Castro and many of the old guard in the Communist Party gave him the leeway to implement policies that were necessary to right the economy—and maybe were in contradiction to the most pure form of the Communist ideology.

Miguel Díaz-Canel doesn’t have that advantage with the Communist Party’s old guard when things get tough.

Q: How should Díaz-Canel manage the top two foreign policy crises facing Cuba’s next leader—an antagonistic United States and a collapsing Venezuela, Cuba’s main economic lifeline?

Marczak: I expect that the US position vis-a-vis Cuba will not let up anytime soon. Even though the country is no longer led by a Castro I don’t expect President Trump to give Cuba a free pass. In fact, quite the contrary.

Secretary of State designate Mike Pompeo and National Security Advisor John Bolton both have a history of comments and actions that have a harder line approach with regard to Cuba. Two of the president’s closest advisers in key positions are in lock step with a harder line approach to Cuba. I think that the president’s actions will not let up.

At the same time, there are obviously still the reverberations of the sonic attacks [on US diplomats in Cuba], what was the source of those attacks, and the US response. This will be challenging. President Trump is already looking to the 2020 campaign and he believes that a harder stance on Cuba will win him more votes in Florida.

The Venezuelan economy is heading into an abyss. The country is in an economic decline that has never been seen before in this hemisphere. This poses great challenges for Cuba because of the dependence that Cuba has on Venezuela—specifically Venezuelan oil exports that Cuba uses for its own energy needs, but more importantly sells for hard currency on the international market.

The Cubans are well aware of the downfall in Venezuela partly because Cuban intelligence are part of the inner circles in Venezuela. The decline of their main benefactor is something that worries the Cubans who remember very vividly what happened when the Soviet Union, Cuba’s main benefactor at the time, declined. There has been a real push [by the Cuban government] to court additional countries to invest in Cuba.

Q: Does the change of guard in Havana provide an opportunity for the Trump administration to refine its Cuba strategy? If so, what should be done?

Marczak: The Trump administration is not going to be refining its Cuba strategy. If anything, it is going to be putting more pressure on Cuba.

Rightfully so, the Trump administration’s main concern in the hemisphere is Venezuela. The Cubans are deeply involved with perpetuating the crisis in Venezuela. As the situation continues to deteriorate in Venezuela the United States may put additional pressure on the Cubans because of the role that Cuba is playing in helping to prop up the Venezuelan regime.

This is not a relationship that is going to be better just because you no longer have a Castro at the head of government. The broader regional concerns and President Trump’s own domestic politics make it such that any type of lessening of the harder-line approach that the Trump administration has taken is a very unlikely possibility.

Q: What will be Castro’s legacy?

Marczak: Raúl Castro took over from his ailing brother, Fidel, at a time of great uncertainty in Cuba. Up to that moment, Raúl had contented himself to live in Fidel’s shadow. Unlike Fidel, Raúl was not a prominent leader of the revolution. He was elected president in 2008 amid questions about his ability to lead. But he managed to maintain the continuity that many in the Communist Party’s old guard wanted.

As president, Raúl presided over some important developments, most notably the rapprochement with the United States. He also took steps to push economic reform. Both issues were a significant break with his brother’s agenda.

However, just like his brother, Raúl leaves behind a grim legacy when it comes to human rights. Under Raúl, there was no letup in political repression, human rights violations, or the rate at which political prisoners were detained. In fact, political repression continued at a breakneck speed.

Ashish Kumar Sen is deputy director of communications, editorial, at the Atlantic Council. Follow him on Twitter @AshishSen.

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This article is part of a series that reflects on one year of the Trump administration.

US President Donald J. Trump scaled back the Obama-era rapprochement with Cuba, placing restrictions on US travel to Cuba and business with Cuban entities linked to military, security, and intelligence agencies; recalling US diplomats from Havana; and expelling many Cuban diplomats from the United States.

What was US policy prior to Trump? In 2015, President Barack Obama reestablished diplomatic relations with Cuba ending five decades of a US policy of isolationism. Striving to normalize relations and aid economic integration, Obama began lifting both travel and trade restrictions. The economic embargo on Cuba, however, remained intact. Wrapping up his time in office, Obama also ended the “wet foot, dry foot” immigration policy that allowed Cuban migrants who reached US soil to stay in the country.

What has Trump said?

“The outcome of the last administration’s executive action has been only more repression and a move to crush the peaceful, democratic movement. Therefore, effective immediately, I am canceling the last administration’s completely one-sided deal with Cuba.”

—    US President Donald J. Trump in remarks at the Manuel Artime Theater on June 16, 2017.

What has changed? Despite his rhetoric, Trump’s measures were not a hard-hitting reversal of the Obama-era policies. Trump did place new limitations on Obama’s travel openings and tightened restrictions on how Americans can spend their money on the island. This was done to “channel funds” away from the Cuban military.

Relations between the United States and Cuba have been strained under Trump. In his first year, Trump withdrew all non-essential US diplomats from Havana after they reported mysterious ailments and expelled fifteen Cuban diplomats from the United States.

Roberta Braga is an assistant director in the Atlantic Council’s Adrienne Arsht Latin America Center. Follow her on Twitter @RobertaSBraga.

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Further measures which have ratcheted up tensions between Washington and Havana in recent weeks include the withdrawal of all non-essential US diplomats from Havana after they reported mysterious ailments, the expulsion of fifteen Cuban diplomats from the United States, and the vote against the United Nations (UN) annual resolution condemning the US embargo.

There is a very real danger that US disengagement from Cuba will allow international players like Russia and Venezuela to once again become the dominant foreign powers in Cuba, and promote foreign policy agendas counter to US interests. Further, this retreat from former US President Barack Obama’s policy of renewing US relations with Cuba could also severely unbalance the flow of resources to the island, thereby deepening social and economic gaps, and ultimately reinforcing the revolutionary government’s claims that inequalities are exclusively caused by capitalist systems. Such an outcome would leave Cuba vulnerable to alternative influences, which is especially dangerous with Havana’s upcoming leadership transitions in municipal legislatures, the National Assembly, and the presidency over the next four months.  

Antagonism within Cuba for the latest snubs from the White House may push the Cuban Communist Party to elect a less moderate, hard-liner as president less willing to compromise with the United States.

In his first address to the United Nations General Assembly in September, Trump reaffirmed his administration’s commitment to maintaining economic and political pressure on the communist regime in Cuba until “fundamental reforms,” thus far unidentified, are undertaken. This message was once again echoed by US Ambassador to the United Nations Nikki Haley following the UN vote to condemn the embargo, and again in the imposition of new US restrictions on Cuba. Although none truly enumerated the reforms that the Trump administration wants to see, they reiterated that the ultimate goal in pursuing a harder policy toward Cuba is to restore democracy and ensure a prosperous future for the Cuban people.

As laudable as the goal may be, the administration’s apparent preference for disengagement and isolation works against its ultimate purpose—a free Cuba. This is not just because such methods have proven unsuccessful over the last half century, but also because they overlook the deep existing financial connections between Cuban and Cuban-American families that perpetuate social divisions in Cuban society and bolster the communist party. Furthermore, the absence of a US presence on the island has left an economic gap that Russia—and to a much smaller extent, China and Venezuela, who have maintained their existing trade levels—have already begun to fill. Neither of these outcomes is good for US interests or US national security as Cuba prepares for its presidential elections on February 24, 2018. If Cuba senses that its economic future lies away from the United States, then the Communist Party may appoint a president who is all too willing to embrace other partners.

In the case of remittances from Cuban-Americans to their families in Cuba, for example, which are currently estimated at about $3 billion a year, those funds have been central to financing Cuba’s burgeoning private sector. They provide the capital needed to start restaurants, casas particulares, and other ventures that are permitted by the Cuban government, allowing these Cubans the opportunities that a democratic, capitalist society offers. However, this capital is not evenly distributed to all Cubans who wish to enter the private sector, since the money largely comes from the wealthy, white Cuban families that live in Florida and its recipients tend to be white family members back in on the island.

Meanwhile, black and poor Cubans without access to remittances continue to depend on either the Cuban government or the extremely limited opportunities that exist for Cubans of color in the island’s relatively lucrative tourism industry.

It is true that anyone in Cuba can open his or her own business if they have the means. However, access to the “means” of starting an independent business creates a tall barrier for black Cubans whose only source of income is typically just enough to live on.

This pattern has created inequalities that the Cuban revolution had initially promised to address. Over the past decade, as Cuban President Raúl Castro has allowed greater privatization and entrepreneurship, new class differences have emerged between those able to take part in the private economy and those who continue to work in government-supported industries, such as education and health. This divide has only sharpened as the private sector continues to grow.

If this inequality gap worsens, poorer Cubans will turn back to the communist regime for assistance, hurting the chances that public demand will spur change. At the very least and albeit imperfectly, communism made progress in balancing the scales for women and Cubans of color.

However, in larger terms, the disappearance of the small, but growing US economic presence on the island due to the renewed travel restrictions is driving Cuban officials to look elsewhere to stimulate economic growth. Countries like Russia, who see the strategic value of the island nation less than one hundred miles off the United States’ southern coast as an ally not politically aligned with the United States, have already strengthened ties. Just in the last two weeks, the Russian steel giant, YUMZ, signed a $30 million steel production deal with the Cuban state-owned steel company, ACINOX. In addition, earlier this year, Rosneft, the largest Russian energy company, was granted drilling rights in Cuban territory. In total, Russia’s trade with Cuba increased 73 percent in the first six months of 2017 alone.

Meanwhile, the new restrictions outlined on November 8 prohibit US companies from getting involved on the ground floor of Cuba’s growing private economy. US businesses are now prohibited from investing in the special development zone in the Port of Mariel where non-US, multi-national companies find substantial opportunities. Restricting US economic activity in Cuba hurts both US economic and geopolitical interests by leaving the door open for key competitors to establish strong presences right off the US coast.

Thus, by allowing US citizens and companies to invest in Cuba—regardless of personal affiliation—and by permitting US citizens to travel to Cuba and spend their tourist dollars at entrepreneur-owned businesses, a broader swath of Cuban society could shift into a more privatized economy. This would direct the income flow to entrepreneurs, countering the influence of US adversaries in the country, and realizing the potential of a free, democratic Cuba.

If the Trump administration truly seeks a free, democratic Cuba, only a policy promoting engagement that allows all Cubans the opportunity to build new, more prosperous lives will be effective in showing Cubans the promise of change.

Nicole M. Wadley is an intern with the Adrienne Arsht Latin America Center with the Atlantic Council. You can follow her on Twitter @nikkiwadley4.

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Dr. Emily Morris spoke on a potential rollback’s implication on business and economics, stating that while the economic advantages of increased openness have led to a rapidly expanding private sector, other sectors of the Cuban economy have been negatively impacted by the crisis in Venezuela, resulting in a decline of the nation’s GDP overall. “The economy is doing two different things at the same time. There is one that is in stagnation, and there is one that is very dynamic,” explained Morris.

Noting that a US rollback of relations could be done in the name of human rights, José Miguel Vivanco pointed out the United States’ policy of isolation has been rejected by the rest of the world and has rather isolated Washington, rather than Cuba. “To expect different results from a policy that is not having any impact in terms of serious improvement in human rights and democracy in Cuba is highly unrealistic,” he said. As an alternative, he suggested the United States seek a strategy that applies multilateral pressure on Cuba to address the country’s, as he called it, “deplorable” human rights record.

Returning to security, Brigadier General McGinnis affirmed that the United States should engage Cuba to achieve mutually shared objectives of stability, prosperity, and peace in the hemisphere, and stressed that this “is the principal reason why we need to stay engaged and increase engagement with Cuba.” From his perspective, the trade embargo has failed to isolate Cuba, but rather “they’re engaged around the world with everybody but us.” He stressed that imposing American values on any nation, whether it be Cuba or Afghanistan, detracts from the United States’ goal of establishing peace and security.

Importantly, the United States has already established four distinct working groups with the Cuban government to address nine areas of strategic focus, ranging from counterterrorism to human trafficking. Should the US take a stronger stance against Cuba, these working groups would fall apart. “It is long overdue that the United States ceases unilaterally dictating who rules and how they rule,” said the Brigadier General.

Emily Morris then discussed how a shift in policy could cause a “ripple effect in the rest of the economy,” in addition to severely impacting Cuba’s private sector. Not only would entrepreneurs lose out, a more restrictive policy would also impact investors’ confidence in the island nation. Should the United States reduce its business with the island, Russia and China will eagerly fill the void. Cuba has an “enormous web of diplomatic contacts they are trying to convert into economic partners,” she stated.

Closing out the conversation, José Miguel Vivanco affirmed that a change in US policy would shift the focus away from Cuba’s human rights abuses, rather than toward it. “Restoring restrictions on travel and commerce are unlikely to lead to improvements in Cuba because these types of unilateral actions by Washington are perceived by everybody else as imposing indiscriminate hardship on the Cuban population as a whole,” said Vivanco.

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Trump is expected to announce changes to the United States’ Cuba policy on June 16. He is reportedly considering prohibiting business with Cuban companies that have ties to the military and tightening travel restrictions.

Under Trump’s predecessor, Barack Obama, historic progress was made in the US-Cuba relationship, which had been frozen for more than fifty years. A diplomatic détente in the summer of 2015 was followed by both countries opening embassies in their respective capitals and a visit by Obama to Havana in March of 2016.

Now, that progress hangs in the balance.

Jason Marczak spoke in an interview with the New Atlanticist’s Ashish Kumar Sen. Here are excerpts from our interview.

Q: What changes should we expect to the United States’ Cuba policy?

Marczak: We won’t know what Trump will announce until he actually makes an announcement. What is expected is a partial rollback in the policies that have been implemented since the beginning of normalization in December of 2014, specifically travel restrictions and business interactions.

On the business side, there is a strong momentum toward further restricting the ability of US business entities from engaging in any type of transactions that would have ties to the Cuban state or the Cuban military.

Q: What impact will such changes have on Americans and US businesses such as Google and Airbnb?

Marczak: US businesses—in the technology, tourism, and agriculture sector—have ramped up their investment in Cuba as a result of the regulatory openings. Cuba is not a large market, but companies have decided that it is worth the risk to invest there because of the potential for long-term rewards. Up to 14,000 US jobs are now dependent upon business engagement with Cuba, according to an analysis by Engage Cuba. Those openings for US business and US workers will be potentially threatened if business interactions are limited.

It’s critical to realize that US Cuba policy has consistently been inconsistent over the years. Many businesses decided post-December 2014 that there was a clear shift in momentum of engagement. They decided they were going to make an investment in Cuba.

Rolling back some of the new policies could create an overall chill on US business interest in Cuba moving forward. Even though new restrictions will likely still allow for a number of transactions, albeit at a reduced level, as a business owner you would be less inclined to invest in Cuba now because you don’t know what is going to happen next; you don’t know the long-term trajectory of US policy.

In the two years that Arbnb has been operating in Cuba nearly $40 million has been paid to Cuban hosts. So, the impact is just not on US business, but also on self-employed Cubans, who now number a little over half a million. This nascent Cuban private sector is a growing bulwark against the economic shackles that the Castro regime has consistently placed on its people. US business engagement, as well as unlimited remittances to the island, have been critical to helping these small businesses thrive. By scaling that back, yes, it is harmful to US business, but it is comparatively much more harmful to the privately employed Cubans who are just trying to eke out a life of economic dignity.

Q: Why is this policy shift being considered in the first place?

Marczak: Over three years ago, an Atlantic Council poll found that 56 percent of Americans favor changing US policy toward Cuba. Now after the increased normalization, a recent Morning Consult poll finds that 65 percent support maintaining the policy changes.

In Miami-Dade County, specifically, Cuban-Americans want the embargo to be lifted according to work by [Florida International University] FIU. Politically, some see a rollback in policy as being welcomed by core voters in the swing state of Florida. I do not think that’s the case. Cuban-American voters are increasingly changing their opinion about what is the best way to influence policy in Cuba and that’s through engagement.

Q: Russia seeks to regain influence in Cuba. Do you see Russia, and perhaps even China, benefiting from a strain in the US-Cuba relationship?

Marczak: Russia looks to opportunistic ways to be a thorn in US interests, whether it is the increased Russian involvement in Venezuela or whether it is in Cuba. Cuba was incredibly dependent on the Soviet Union and felt the effects of their reliance when the Soviet Union collapsed. The Cubans largely have tried to learn the lesson that their long-term economic survival means that the economy needs to be diversified. That’s why the economic debt Venezuela is in right now is worrisome to the Castro government.

Any moves by the United States to take a step back in relations with Cuba will not only aggravate tensions with the island, it will also give rise to a new moment of anti-Americanism in Cuba, which has subsided substantially over the last couple of years. Cuba will look to see who can help it fill some of its economic needs. If you have US businesses and US remittances being pulled back and, at the same time, less and less Venezuelan largesse, Cuba will have no other choice than to look more and more to other partners. And the Russians are more than willing to take a larger stake in an island just ninety miles off US shores.

Q: What have been the tangible benefits of the US-Cuba rapprochement thus far for Americans as well as for Cubans?

Marczak: First, Americans are freely able to travel for purposeful reasons to a country in the Caribbean. Another tangible benefit are the business opportunities in tourism, technology, and agriculture. From the US government side, it has opened up avenues for dialogue with the Cuban government on issues of mutual interest ranging from preventing drug trafficking to cooperation on health issues such as Zika to discussions on how to prevent natural disasters.

Cuba has long been a thorn in the side of US relations with the rest of Latin America. Across the region there had been a growing frustration with US policy. Engaging in steps toward normalization has made it much easier for our friends and partners across the Americas to be able to speak on behalf of US interests. But it goes beyond the Americas. Cuba plays an outsized role in global foreign policy because of the historic tension it has had with the United States.

On the Cuban side, rapprochement has resulted in an incredible increase in the number of foreign visitors to Cuba. This has provided a much-needed infusion of cash that helps self-employed Cubans to be able to make ends meet and grow their businesses. The influx of travelers has exposed Cubans to ideas and values that go beyond what is permitted under strict government controls.

The human rights situation in Cuba is atrocious. Cuba has largely moved away from longer-term detentions, but what has increased is short-term arbitrary detentions. People are not allowed to express themselves. There is a constant pervasion of the state into every aspect of an individual’s life. At the same time, economic liberty is also important and the US opening with Cuba has given many Cubans access to economic liberty.

Q: Do you expect wider regional ramifications from a shift in US policy?

Marczak: I expect governments across the region to condemn policies that significantly roll back progress in the US-Cuba relationship.

Q: Secretary of State Rex Tillerson recently stated that the rapprochement had not produced a positive change in the Castro government’s behavior. Do you agree?

Marczak: The US rapprochement is not about trying to extract concessions from the Castro government. It is about trying to empower the Cuban people and the Cuban private sector to have a greater voice. The more the citizenry of a country has a voice the more they will demand change. That’s what this is about. It’s not about extracting concessions from the state itself but about being an influential player in helping to shape the future of a country whose geographic proximity makes it so vital to US national security interests.

Ashish Kumar Sen is deputy director of communications at the Atlantic Council. You can follow him on Twitter @AshishSen.

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Question: What should the White House do when a strategic surprise has occurred?

Definition: For the purpose of this paper, a strategic surprise is an unanticipated development that erodes if not ends our prevailing strategic assumptions, undermines one or more existing policy lines, and demands a policy response.

Three tasks

In the event of a strategic surprise, the President and his administration face three tasks. They should pursue these tasks concurrently, not sequentially:

1. Expand the Circle to Gain Perspective. In the event of a true strategic shift in the international environment, the president and his advisors will benefit from a greater diversity of advisors, in and out of government. Expanding the circle of advisors to gain fresh thinking can help identify when a strategic shift has truly occurred and put the strategic shift in perspective. This could take the form of outreach to scholars, think tanks, and the opposition party; commissioning “red team” studies by the intelligence community; consulting with allies and Congress; and involving lower levels of the policymaking bureaucracy in deliberations.
2. Abide By a Structured Decision-Making Process. Because a strategic surprise is likely to require a time-sensitive response, decision-makers are often compelled to forgo normal interagency processes and use ad hoc or improvised structures. Such improvisation can be more responsive to crises, but it has significant disadvantages: it can exclude important stakeholders, narrow the range of discussion, neglect important staff work, and generate insufficient options. When a strategic shift has made normal decision-making processes infeasible, the assistant to the president for national security affairs (APNSA) should still insist on and guide a modified version of the interagency process that a) involves some of the extended circle of advisors (as discussed above), b) adheres to some form of predictable structure, but also c) moves quickly to meet the needs of the moment.
3. Look Backwards. All levels of the U.S. Government (and future historians) will benefit from a hindsight analysis that examines how a strategic shift came about and why it was a surprise. This is not time-sensitive—but it is no less important in responding to strategic surprise. Without an effort to learn 2 from past events and adapt the intelligence and policymaking process, strategic surprises are likely to recur, especially unnecessary ones. Analysts and policymakers are likely to be surprised by situations that could have been anticipated, or mishandle events for which they might have prepared.

Expand the circle to gain perspective

Use Outsiders’ Time

By its nature, a strategic surprise challenges existing beliefs and presuppositions about the international environment. Meeting these challenges requires substantial intellectual work to identify beliefs about the world that are no longer valid; get out of the mindset shaped by those beliefs; and sketch the shape of the emerging environment.

Crucially, this kind of intellectual work is unique to situations of strategic surprise; during normal business, policymakers can usually rely on their accumulated experience and on the expertise and knowledge of the professional staff in the agencies and departments. Unfortunately, policymakers are often least well positioned for the unique intellectual work required of them during strategic shifts because of constraints on their time and demands on their attention. Policymakers can benefit from those who have more time and fewer distractions, including scholars and former policymakers.

• Some formal channels exist to link policymakers with outside experts, such as the intelligence community’s (former) “IC Associate” program, the President’s Intelligence Advisory Board, the Defense Policy Board, and federally-funded research and development centers (such as the Center for Naval Analysis and several units within the RAND Corporation and the Institute for Defense Analysis).
• But past administrations have also invested in informal channels, such as the George W. Bush administration’s regular meetings with “responsible critics” of the Iraq War. And most presidents have consulted their predecessors and other former senior officials, such as former Secretary of State Henry Kissinger.

Use Critics’ Opposition

Policymakers are not limited only by time: they can face cognitive barriers to effective decision-making. If policymakers continue to deliberate without reexamining their beliefs in light of a strategic shift, they are prone to groupthink, straight-line projections, or confirmation bias—leading to faulty decision-making regardless of how much time they devote to it. This was almost certainly one of the challenges in the Johnson Administration, for example, in its deliberations over the war in Vietnam.

• During strategic surprise, policymakers can benefit from those who start from different presuppositions, including members of the opposition party in Congress, allied governments, and intelligence analysts commissioned to play devil’s advocate or a “red team.”
• Including a selection of these outsiders can provoke a healthy debate over bedrock presuppositions. Such a debate need not occupy much time—the president and his advisors are unlikely to have much time to give—but forgoing it entirely leaves the administration vulnerable to cognitive traps that will not serve them well during strategic shifts in the international environment.

Abide by a structured decision-making process

The President and his advisors face two opposing challenges when deliberating their response to a strategic surprise: too much deliberation, and too little.

• The pressure of time can cut discussion short before options have been fully explored; and it can pressure policymakers to adopt an unstructured decisionmaking process that leaves key stakeholders excluded, as may have been the case with Kennedy’s decision-making before the Bay of Pigs operation.
• On the other hand, some policymakers can become paralyzed by the strategic implications of their decisions, leading to counterproductively prolonged and over-structured deliberations—as, for example, seems to have characterized the Obama administration’s three-month-long Afghanistan-Pakistan strategy review from September to early December, 2009.

The APNSA must walk a fine line to manage a structured and thorough process that involves relevant stakeholders and, as appropriate, trusted outsiders—but must also retain enough flexibility and speed to deliver a timely decision.

• For routine business, something akin to Eisenhower’s NSC system, with its bifurcation into a Planning Board and an Oversight and Implementation Committee, would provide a structured and thorough process that could be a model for future administrations.
• In times of strategic surprise or international crisis, some adaptation is likely necessary. Despite the lack of structure in Kennedy’s initial decision-making process, his NSC seems to have found a successful mix of thoroughness, structure, and speed during the Cuban Missile Crisis. The NSC formally met three times, and its Executive Committee (consisting of the NSC and a selection of advisors and deputies) met at least ten times between October 20 and 28, 1962—not counting informal meetings and ongoing sidebar deliberations— 4 helping Kennedy make a series of decisions and respond to unfolding events over a very short time frame.
• Similarly, the ideas behind the Iraq surge and counterinsurgency strategy in President George W. Bush’s administration came partly from sources other than the conventional interagency process, such as external advisors, scholars, and midlevel staff in early 2006. They were then folded into a more formal interagency review, and more fully developed, later in the year—a prime example of a White House using formal and informal processes, meshing innovation with conventional structure.

Regardless of the specific structure or process, policymakers will still need to do much the same work responding to strategic surprise as they do for any foreign policy situation. In their deliberations, they will need to identify the United States’ national security interests at stake; define a clear goal and measurable objectives; take stock of the U.S.’s relevant resources and capabilities; identify other actors, rivals, and stakeholders and anticipate their courses of actions; and develop policy options for the president.

Look backwards

Finally, the President and his advisors should ensure that some retrospective analysis is conducted. Such analysis serves several purposes.

• A retrospective analysis will help unearth the roots of a strategic surprise, helping policymakers understand the depth and implications of the event more fully. Such understanding will, in turn, ensure subsequent policy responses are appropriately calibrated.
• A retrospective analysis will help illuminate how and if policymakers should have been better prepared: in particular, it will help clarify if the strategic surprise could have been anticipated. This will help policymakers adapt going forward and cultivate the habits of mind necessary for thinking about the future.  Senior policymakers will not have the time to conduct such a retrospective analysis themselves. It could be delegated to a body such as a Council of Historical Advisors, as recently proposed by a pair of prominent historians, perhaps with support from intelligence community detailees. A group of trained historians with clearance and access to senior policymakers’ deliberation would be well-positioned to trace the history of how a strategic surprise happened, how it was perceived by policymakers, and how they responded to it.

Prerequisites

There are two prerequisites for these tasks that the administration—the APNSA in particular—should focus on before a strategic surprise occurs.

1. Existing relationships. The President and his advisors will be well served if they have already established trusted relationships with a wide circle of advisors in and out of government. They are unlikely to initiate such relationships during a fast-moving crisis. Identifying and investing in trusted scholars, former policymakers, members of the opposition, specific members of allied governments, and junior staffers before a crisis happens will payoff when the administration is able to call on them for fresh perspective without having to start from scratch.
2. Message discipline and confidentiality. It is especially important during a strategic surprise that the President and his advisors be able to deliberate in confidence and speak with one voice in their public messaging. But the habits an administration develops before a strategic surprise will be the habits they rely on during a strategic surprise. The APNSA should work to cultivate strong norms of confidentiality and message discipline as a matter of course to ensure they are especially respected during moments of strategic surprise.

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White House ends policy that allowed Cubans reaching US soil to automatically apply for asylum

US President Barack Obama’s decision to end the “wet foot, dry foot” policy that allowed any Cuban migrant who reached US soil to stay in the country will slow the number of Cuban immigrants rushing to the United States, but is unlikely to deter US President-elect Donald Trump from reversing some of the recent progress in the bilateral relationship, according to two Atlantic Council Latin America analysts.

Trump has said that he will dismantle the progress made in the US-Cuba relationship—a progress marked by a historic diplomatic détente in the summer of 2015 and US President Barack Obama’s visit to Havana in March of 2016—unless he gets a better deal.

A wholesale reversal of the advancement in the bilateral relationship would give China unchallenged access to Cuba, said Jason Marczak, director of the Latin America Economic Growth Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center.

“By disengaging from Cuba, what the administration would be doing is giving China a beachhead ninety miles off our shores,” he said.

Peter Schechter, director of the Atlantic Council’s Adrienne Arsht Latin America Center, said Trump should preserve an “overwhelming majority” of Obama’s initiatives, including diplomatic relations with Havana, the ability of Americans to travel to Cuba, and US airline and hotel investments in the island.  

Ending the “wet foot, dry foot” policy puts the finishing touches on the Obama administration’s attempts to normalize the US relationship with Cuba. Obama reestablished diplomatic relations with Cuba in July of 2015, ending five decades of failed US policy. He then visited Havana in March of 2016.

In recent years, Cubans have come to the United States in record numbers taking advantage of the twenty-two-year-old “wet foot, dry foot” policy. Along with the Cuban Adjustment Act, the policy has allowed Cubans who reach US territory to get permanent residency and green cards after they’ve been in the United States for a year and a day.

The White House announced on January 12 that it had also ended the Cuban Medical Professional Parole Program, which gave preferential treatment to Cuban medical professionals who want to come to the United States.

“By taking this step, we are treating Cuban migrants the same way we treat migrants from other countries,” US President Barack Obama said in a statement.

However, an immigration lottery that allows at least 20,000 Cubans to emigrate to the United States legally each year remains in effect as does the Cuban family reunification program, which allows legal residents in the United States to apply for relatives to join them.

“In a way, I wish President Obama would have done it earlier,” Schechter said, referring to the end of the “wet foot, dry foot” policy.

Noting that the policy favored Cubans over other immigrants fleeing hardship, he added: “We have to ask ourselves today, what is the difference between Cubans and Venezuelans who are also living under an authoritarian regime, which is foisting hurricane-like ineptitude and difficulties on them? What is the difference between Cubans and Hondurans or Salvadorans?”

Commenting on the timing of the White House decision, Marczak said that for political reasons, “it would have been very difficult for Obama to put forward this policy prior to the elections because in Miami, whether you are a Cuban who favors more engagement or favors hardline policies you generally favor the special status that Cubans get.”

As a result, announcing this policy change before the election on November 8 could have cost the Democrats additional votes in Florida, he added. Hillary Clinton, the Democratic presidential nominee, lost Florida and the election.

Peter Schechter and Jason Marczak spoke in an interview with the New Atlanticist’s Ashish Kumar Sen. Here are excerpts from our interview.

Q: What are your thoughts on the Obama administration’s decision to end the “wet foot, dry foot” policy?

Schechter: I wish President Obama would have done it earlier. This policy is an anachronism that is part of the anachronism of the Cuba embargo. It dates back to a Cold War era where we were, for political reasons, accepting Cubans because they were refugees from an authoritarian regime. We have to ask ourselves today, what is the difference between Cubans and Venezuelans who are also living under an authoritarian regime, which is foisting hurricane-like difficulties on them? What is the difference between Cubans and Hondurans or Salvadorans? We must decide if we want to open our country up to people suffering hardships everywhere:  this means Syrians, Hondurans, or Cubans must be treated equally. 

Marczak: The sweet spot between November and January of this year was the time to implement this change. For political reasons, it would have been very difficult for Obama to put forward this policy prior to the elections because in Miami, whether you are a Cuban who favors more engagement or hardline policies you generally favor the special status that Cubans get. Putting this policy before the election could have lost additional votes for the Democrats in Florida.

The wet foot, dry foot policy came about in the mid-1990s. The Clinton administration at the time agreed to change policy so that those caught at sea would be sent back to Cuba and those who physically could come to US soil would be able to stay. But it is a policy that runs completely contrary to the normalization of the relations that we have seen with Cuba over the past two years.

It is also a policy change that would be very difficult for the incoming Trump administration to reverse. Even though the next administration has stated its desire to review all the executive orders with regard to Cuba and there are many who are coming into the administration who favor a tougher approach with Cuba, the now previous immigration policy encouraged an unorderly migration flow; it encouraged chaos at the borders; it encouraged chaos on the shores of South Florida. The policy put in place now fosters a more orderly migration, it discourages Cubans from trying to make the boat trip across the Florida Straits or from going to Ecuador or Central America and trying to enter the United States through the southern border. We have seen a dramatic increase in the number of Cubans presenting themselves at the US border over the last couple of years; over 50,000 just last year. This policy change will put a lid on Cuban migration as we enter into a new administration that has reducing migration as one of its flagship goals.

Q: Why would an earlier announcement of this policy change have hurt Democrats any more in Florida than the normalization of the US-Cuba relationship?

Marczak: You are going to find more Cuban-Americans, even those in favor of normalization, who support the wet foot, dry foot policy because it is the only group in the world that gets that kind of special status.

Schechter: The fact is that Miami-Dade County and Broward County, which the overwhelming majority of Cubans live in, have now repeatedly voted Democratic. The anti-normalization Cubans are losing their majority. There is a counterintuitive angle to this that each new Cuban that arrives here is actually a probable Democratic voter because these are mostly not political refugees, but rather economic refugees similar to other Latin Americans seeking better economic opportunities. These new Cuban refugees often turn into Democratic voters and not Republican voters. There will certainly be voices against Obama for making this [policy change], but it will be interesting to see just how long and how loud those voices will scream.

Q: As Donald Trump prepares to take office, does the “wet foot, dry foot” policy change—tackling immigration as it does—safeguard the progress made in the US-Cuba relationship under President Obama?

Schechter: I would hope that President Trump will keep the progress—perhaps he will roll back a couple of things symbolically—but I would hope that he will keep a majority of things, including diplomatic relations, the ability for Americans to travel, the ability of American airlines and hotel companies to preserve the investments they have already made in Cuba. I would hope that upon reflection, the overwhelming majority of the decisions made by the Obama administration are preserved.  It is important for US relations with both Cuba and the rest of the region.

Marczak: The Trump administration is likely going to reverse some of our Cuba policies, but the result of a wholesale reversal will be that you are disengaging the United States from Cuba and are opening Cuba to unfettered access by any other country but the United States. And who has some of the largest interest in Cuba right now? It’s the Chinese.

President-elect Trump has voiced a number of concerns about the Chinese economy and the Chinese military. By disengaging from Cuba, what the administration would be doing is giving China a beachhead ninety miles off our shores. That is something very important for the next administration to consider.

Q: What impact did the wet foot, dry foot policy have on the Cuban government?

Schechter: It is a policy that encouraged a brain drain in Cuba. Of course, the Cuban government hates it. Any country would hate it. That a neighboring country specifically targets a country to extract the best and brightest—it is a highly aggressive policy. Ending this does not mean that we love the Cuba government or that we should be friends with Raúl Castro or that we cease working for greater freedoms in Cuba. It only means we are ending a policy that is seen by other Latin Americans as a policy as profoundly unfair.

Marczak: The Cuban government detests the policy. It has been working closely with the [Obama] administration to reverse it. This is why the Cuban government is now accepting nearly 3,000 [Cuban] criminals that were in the United States for decades as part of the deal to reverse wet foot, dry foot.

Q: Cubans have arrived in the United States in record numbers over the past couple of years. Will ending the wet foot, dry foot policy deter them from trying to get to the United States? And what does this policy change mean for Cubans who were on their way to the United States?

Marczak: The Cuban government has said it will increase the amount of time that it will allow Cuban migrants to return home. It used to be two years, now it will be four years. Cubans who have been in transit for a number of years can go back to Cuba.

The policy will significantly diminish the number of Cubans who are trying to come to the United States because they are now going to be treated like any other migrant group when they show up at the US border.

Ashish Kumar Sen is deputy director of communications at the Atlantic Council. You can follow him on Twitter @AshishSen.

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Working with US partners in the Caribbean to strengthen their energy security will serve US interests. Geopolitically, the move will help improve relations with a region that has looked more favorably toward Caracas and Havana for political and financial support than toward Washington. Others argue that without a concerted effort to boost Caribbean energy security, future spikes in fuel costs could further hurt island economies, exacerbate migrant flows, and lead to a major humanitarian crisis. The region’s renewable energy transition, however, also provides energy storage companies with the opportunity to showcase their emerging technologies and develop new regulatory schemes that best fit the disruptive force of batteries on the grid.  

The Caribbean’s natural geographic features—small, disconnected island communities—and generation systems—inflexible power sources, weak interconnections—create a challenging set of circumstances for policymakers and industry leaders. Modest population levels and sluggish macroeconomic growth make capital-intensive investments in island energy infrastructure like liquefied natural gas facilities (LNG) largely unattractive to outside investors. While LNG terminals are viable for larger states, the US government has acknowledged that natural gas is not a one-size-fits-all solution for the region. Conversely, funneling too much capital into intermittent renewables would subject Caribbean nations to more volatile electricity markets and intensify their reliance on dirty and expensive diesel plants.

Batteries have long been heralded as an elusive holy grail for clean energy systems, but the reality is that solid state batteries are currently in a position to begin competing with, or in some cases complement, existing energy technologies. Over the last five years, the rapid rate of innovation throughout the storage industry has allowed utility scale batteries to become increasingly viable on the open market. Since 2014, market prices for Lithium-ion batteries have almost halved to approximately 300 dollars per kilowatt hour, and companies like Tesla and AES will begin to benefit from economies of scale. Studies have estimated that when used in the appropriate settings, batteries can be cash positive even without tax credits or other subsidies.

Energy storage is not the sole remedy to all of the Caribbean’s energy issues, but it must play an important role in solving them. By efficiently storing kilowatts, batteries can improve renewable energy integration into island grids, alleviate peak demand ramping, and even offer basic ancillary support like frequency control. Reducing Caribbean utilities reliance on expensive and inefficient diesel powered generators free them to offer ratepayers affordable rates and thus invest more in solar and wind power. Through CEFF-CCA funding, renewables will constitute an increasingly larger share of the power generation pie in the Caribbean, but most would insist that battery storage will be essential to achieving roughly 28 percent renewable penetration by 2022.

While the US government and CARICOM have pledged to not advocate for one specific energy technology, battery storage is too fundamental to the Caribbean’s energy transition and US battery companies’ business development to not encourage. The US is already at the forefront of battery deployment, but regulatory uncertainty over the future of the grid, however, is the one inhibitor of future growth. The question for policymakers around the world is not whether battery storage is a viable energy source, but rather how regulatory bodies can best adapt the grid to the changing relationship between utilities and ratepayers. By facilitating battery deployment in the Caribbean, the region can drive innovative regulatory change and renewable energy implementation that can be replicated around the world. Battery storage will have an enormous impact on Caribbean energy security and the development of the future regulatory schemes across global power markets.

Nathaniel Sizemore is an intern with the Atlantic Council’s Global Energy Center.

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Obama administration has done almost all it can to loosen embargo, now the ball is in Congress’ court, say Atlantic Council analysts

US President Barack Obama and his Cuban counterpart, Raúl Castro, agree on at least one thing: the US trade and travel embargo on Cuba has to go. That is easier said than done.

In this highly charged election year, the current US Congress is unlikely to lift the embargo, according to two Latin America analysts at the Atlantic Council.

“To a large extent, the Obama administration has taken almost all of the measures that it could take in order to loosen, free up, and make null a lot of the important portions of the embargo,” said Peter Schechter, Director of the Atlantic Council’s Adrienne Arsht Latin America Center.

However, there are still some things that Congress can do.

“There is momentum for fully lifting travel restrictions,” said Jason Marczak, Director of the Latin America Economic Growth Initiative at the Adrienne Arsht Latin America Center. This would mean permitting US tourists to visit Cuba.

Congress could also lift restrictions on financing agricultural exports to Cuba, he added.

Obama arrived in Havana on March 20 becoming the first US President to visit Cuba since Calvin Coolidge made the trip in 1928. Obama met Castro on March 21 and was scheduled to meet dissidents and civil society leaders on March 22.

Peter Schechter and Jason Marczak spoke in an interview with the New Atlanticist’s Ashish Kumar Sen. Here are excerpts from our interview.

Q: What is the likelihood that the US Congress will lift the embargo on Cuba? Are there any parts of the embargo that can be lifted?

Schechter: There is very little chance that the Congress will lift the trade and travel embargo in what remains of this very contentious election year. To a large extent, the Obama administration has taken almost all of the measures that it could take in order to loosen, free up, and make null a lot of the important portions of the embargo. But there are some that just cannot be undone without congressional action and that is not going to happen this year.

Marczak: The embargo will not be lifted by this Congress. This Congress is focused on just keeping the lights on and not doing much beyond that. But there are certain opportunities for  Congress to eventually chip away at the embargo. There is momentum for fully lifting travel restrictions. President Obama announced in additional executive actions last week that people can go to Cuba on an individual basis, so travel has been expanded as far as it can be by executive action. But only Congress can allow for tourism to Cuba, which is currently prohibited by the embargo.

Congress can also lift the restrictions on financing of agricultural exports to Cuba. The administration, through its most recent executive action, has allowed for the financing of exports to Cuba in a number of different categories, but financing of agricultural exports remain prohibited due to current legislation. That is something where there is broad bipartisan support in Congress to do whatever is necessary to make sure that our agricultural producers can compete with those from across the world to make the United States, once again, the number one agricultural exporter to Cuba.

Q: Are there steps the Cuban government can take to facilitate the lifting of the trade embargo?

Schechter: If the Cuban government suddenly got religion and defended democracy, upheld human rights, and liberated political prisoners, I am sure that many Republicans would agree to undo the embargo. But let’s be honest, that is not going to happen. Cuba is an authoritarian state and it has shown itself to be very unwilling to take any actions that it feels would undo the Communist Party’s hegemony in Cuba. We have relations with lots of countries that are just like that. Vietnam is our foremost ally in Southeast Asia and it, too, is an authoritarian state with a Communist government. 

Where the work needs to be done is in continuing to prod the Cubans to provide as many economic freedoms as possible. These are the freedom for a person to work where he wants and to gain an income so he can improve the lives of his family and buy a house. Those are freedoms that Cubans don’t have today, and I think that it is very important that we work on those freedoms as well. That doesn’t mean that we should abandon political freedoms because those are of the utmost importance, it only means that it is very, very critical to try to pry as much from the Cuban government as possible, and I suspect it will be more in the realm of economics than political freedoms in the near term.

Marczak: The Cuban government could provide for greater human rights and political liberties for its people. That would give momentum to lifting the embargo. It would help to counter the message of those who say that only the embargo is the right policy to promote greater liberties. But I am not sure that the Cuban government wants the embargo to be lifted. President Castro called on the US Congress to once again lift the embargo in the press conference with President Obama, but the embargo is the gift that keeps on giving to the Castro regime. It is their crutch and answer to why they are unable to manage their economy and to why they are consistently facing shortages. The embargo has been for fifty years the answer to all of the problems in Cuba. Once you take away the embargo, the Cuban government loses the ability to have an outside force to blame for its own economic ills.

Q: What are your thoughts on President Castro’s implication that Cuba does not have political prisoners, and that he would release any if he is given a list?

Schechter: There are numerous human rights organizations that would disagree with that. Only yesterday, a number of dissidents were arrested—many were released very quickly—in a show of force, including some of the leaders of the Ladies in White.  I think President Castro is being less than perfectly honest when he says there are no political prisoners.

Marczak: Cuba certainly does have a number of political prisoners. In Cuba in 2015 there were over 8,600 detentions. Just in January and February this year there were over over 2,500 detentions. According to the Cuban Commission for Human Rights and National Reconciliation, there are currently eighty political prisoners in Cuban jails.

What has happened is that the Cuban government has shifted its tactics with regards to political prisoners. Rather than holding them for long-term detentions, they have moved toward a catch- and-release policy. People are brought in for questioning, intimidated, and let out in a couple of hours. The point of that is to intimidate any dissenters.

Q: What implications could President Obama’s visit to Cuba have for President Castro?

Schechter: There are three main implications: symbolic, political, and economic.

For fifty years, the United States has had a regime change policy in Cuba. That policy has not worked. Now the President of the United States has recognized the Cuban government through new diplomatic relations and has visited the President of Cuba whose name remains Castro. This is an enormous political victory for a government of a relatively small country that has made a name for itself in resisting what in hindsight turned out to be a very misguided policy of regime change in Cuba. So from a symbolic point of view it is very important for Castro.

From a political point of view, Obama’s visit strengthens the reformers in Cuba. This is very, very important. Like any government, but particularly an authoritarian one, the Castro government is far from monolithic. Hardliners and reformers coexist in an often very tense kabuki dance. What we have here is an opportunity for reformers to take the upper hand in the upcoming meeting of the Communist Party of Cuba, which will take place in April, and hopefully lock in some of the reforms that continue to be missing from the panoply of things that need to be done in Cuba.

On the economic front, the island is in very difficult economic shape. That private sector has to be strengthened. Clearly trade and investment with and from the United States is going to be an opportunity for the private sector.

The Obama administration has already taken many measures that will help the Cuban people economically, without necessarily helping the Cuban government. The Cuban leaders know that if they don’t improve the economic situation there will be increasing and everyday more widespread dissatisfaction with the government.

Marczak: I think President Castro might be surprised by the reverberation created across Cuban society by President Obama’s trip. Just watching the press conference this afternoon, it was revolutionary to see President Castro responding to questions from the media. He was clearly uncomfortable when pressed by media on political prisoners.

President Obama is going to make a public speech [on March 22] live to the Cuban people. Hearing from President Obama directly, seeing him walk through the streets will give great hope and inspiration to the Cuban people that they too can be in charge of their own destiny.

Ashish Kumar Sen is a staff writer at the Atlantic Council.

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President Obama has implemented sweeping changes in the US-Cuba relationship since December 17, 2014. From alleviating certain restrictions on trade and travel to raising the remittance cap, the President has paved the way for a more normalized relationship. As he prepares for his historic visit to Cuba this fact sheet highlights the most crucial changes implemented in the past 15 months.

Read the Publication (PDF)

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President will make historic visit to Havana on March 20

Human rights and democratic reform will be at the top of US President Barack Obama’s agenda when he visits Cuba next week and meets with Cuban President Raúl Castro as well as civil society leaders of his choosing, and not those handpicked by Havana, according to US National Security Advisor Susan Rice.

“Our unwavering commitment to democracy and human rights will be plain,” Rice said.

“The message President Obama will deliver, privately and publicly, is simple: We believe the Cuban people, like people everywhere, are best served by genuine democracy when they are free to choose their leaders, express their ideas, and practice their faith,” she added.

Rice spoke at the Atlantic Council on March 17 at an event the Council co-hosted with the Brookings Institution, the Inter-American Dialogue, and the Woodrow Wilson International Center for Scholars.

When Obama arrives in Havana on March 20 he will become the first US President to visit Cuba since Calvin Coolidge made the trip in 1928.

“On Sunday, Air Force One will depart Andrews Air Force Base en route to Havana, Cuba. No National Security Advisor has ever said that before,” Rice joked. Coolidge made the trip to Cuba on a battleship.

The United States and Cuba restored diplomatic ties and opened embassies in each other’s capitals in July of 2015 ending more than five decades of estrangement between the two countries. The two countries have since taken a number of steps to build on this rapprochement, including easing travel restrictions and a restoration by the United States of commercial flights to Cuba.

In Cuba, apart from a bilateral meeting with Castro, Obama will attend a state dinner hosted by the Cuban leader, meet with human rights activists, deliver a speech at the National Theater, and watch a baseball game between the Tampa Bay Rays and the Cuban national team.

From Cuba, Obama will travel to Argentina where the election of a new President—Mauricio Macri—has provided an opportunity for Washington to mend ties with Buenos Aires that frayed under Macri’s predecessor, Cristina Fernández de Kirchner.

Rice said the Obama administration has been impressed by many of the reforms initiated by the Macri administration. “We believe Argentina can be a strong global partner on a range of issues, from counternarcotics to climate change,” she said.

In Buenos Aires, Obama and Macri will announce a number of new partnerships, including efforts to combat crime and drug trafficking, promote sustainable energy development, and fight climate change.

Obama’s visit to Argentina coincides with the fortieth anniversary of the “dirty war,” which lasted from 1976 to 1983, and during which US officials encouraged a regime crackdown that left tens of thousands dead.

The United States has already released more than 4,000 documents from that period. At the request of the Argentine government, Obama will announce a comprehensive effort to declassify even more documents, including for the first time, military and intelligence records, said Rice.

“On this anniversary and beyond we are determined to do our part as Argentina continues to heal and move forward as one nation,” she added.

A ‘transformational moment’

In his remarks welcoming Rice, Atlantic Council President and CEO, Frederick Kempe, said Obama’s visit to Cuba is a “historic turning point for the United States’ relations with Cuba, and with Latin America broadly.”

The United States’ relationships across Latin America have been transformed under Obama. Besides the historic opening with Cuba, the United States has helped facilitate the end to a more than fifty-year war with leftist Revolutionary Armed Forces of Colombia (FARC) guerrillas in Colombia. It is also negotiating a transformational Trans-Pacific Partnership (TPP) trade agreement that includes three Latin American countries—Mexico, Chile, and Peru.

The year 2016 “is an especially significant, perhaps historic year” for Latin America, said Rice, noting that the United States’ relationships across the region are at a “transformational moment.”

“President Obama and all of us throughout his administration intend to make the most of it,” she added.

Rice said this transformation has been mirrored in a change in the United States’ approach to the region. Before Obama came to office, the United States’ standing in Latin America had suffered. “If you asked some neighbors about the Yankees, you would have gotten roughly the same answer you’d get from a Red Sox fan,” she joked.

Three areas to build on

Rice laid out three areas where the United States can make further progress across Latin America: the economy, security, and democracy and human rights.

On the economic front, since Obama took office US exports to Latin America have grown by more than forty percent. The TPP provides an opportunity to further deepen the United States’ trade and investment ties in Latin America. “This is a good deal with strong labor and environmental standards, and we are committed to working with Congress to ratify it,” Rice said of the TPP.

The United States also seeks to build clean energy partnerships in Latin America, create new opportunities for farmers and entrepreneurs, and give more US students the opportunity to study in Latin America, and more Latin American students to study in the United States.

However, Rice observed, economic growth is dependent on security.

Noting the threat posed by narcotraffickers in Latin America, Rice said, “The frontlines of this fight are in Central America—in the Northern Triangle of El Salvador, Guatemala, and Honduras.” The violence in this region forced around 68,000 children to flee to the United States in 2014.

The United States is providing law enforcement in some Latin American countries with the training and technology needed to confront the challenge of narcoterrorism, while protecting human rights. It is also expanding regional coordination, cracking down on the flow of guns across its southern border, squeezing cartel finances, working to reduce the demand for drugs in the United States, and stepping up partnerships to combat mosquito-borne diseases such as Zika, dengue, and chikungunya.

Democracy and human rights, Rice said, are central to the US foreign policy. In Venezuela, where the opposition made big gains in parliamentary elections in December, the National Security Advisor said the Obama administration was heartened by the fact that the election results were initially respected. “But we remain deeply concerned by the marginalization of the legislature and the jailing of dissenters,” she said while calling for a dialogue between the government of President Nicolás Maduro and the opposition.

In Brazil, where President Dilma Rousseff is facing an impeachment process and massive anti-government protests, Rice said Brazilians must rely on the strength of their democratic institutions.  

Ashish Kumar Sen is a staff writer at the Atlantic Council.

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The complete report and the recommendations are available online: http://publications.atlanticcouncil.org/grow-cuba/
The report can also be read in Spanish at: http://publications.atlanticcouncil.org/cuba-avanza

Five Steps to Grow the Cuban Economy: What the US and Cuba Can Do in Obama’s Final Year sets a path to developing a working financial system in Havana and bringing Cuba into the global fold. The report, authored by former Cuban Central Bank analyst and scholar Pavel Vidal-Alejandro and former chief economist at the US Department of the Treasury Michael Klein, shows that economic changes are clearly already underway in Havana. President Obama will see these development first-hand in March. Still, Cuba desperately needs a functional financial system and access to funds, which IDB membership can facilitate.

In addition to removing obstacles to Cuban accession to international financial institutions, the report lists other recommendations for the US government to help grow the Cuban economy:
• Remove financing restrictions for agricultural commodities and items
• Liberalize banking rules to allow accounts for Cuban nationals that can be used both when in Cuba and abroad and enable US banks to operate within Cuba
• Allow the US dollar to be used for transactions with Cuba;
• Signal to foreign banks that they will not be prosecuted for operating in Cuba

The report states that, for its part, the Cuban government must integrate with the international financial system by seeking membership in international financial institutions and taking the following steps:
• Begin gradual financial liberalization that includes appropriate oversight of financial institutions and the development of an interbank market in government securities
• Open the door to foreign bank branching in Cuba to jumpstart the provision of finance
• Set the stage for a successful move to dia cero, when the currencies are unified, which includes determining and clearly signaling the unified exchange rate for the new currency
• Allow international microfinance providers and NGOs to offer microfinance in Cuba
• Foster the expansion of online banking services and mobile banking to improve retail banking and customer access to finance

Read the Publication – English (PDF)
Read the Publication – Spanish (PDF)

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Most Americans, including Cuban-Americans, favor normalization of ties between the United States and Cuba, say Atlantic Council analysts

US President Barack Obama’s decision to make an historic visit to Cuba in March will have a negligible impact on the presidential election in the United States; if anything, it has succeeded in exposing just how out of touch critics of this engagement—particularly Republican presidential candidates Ted Cruz and Marco Rubio, both Cuban-Americans—are, according to the Atlantic Council’s two top Latin America analysts.

“Poll after poll that we have done, and that others have done, have shown that support for normalization crosses party, age, racial, demographic, and income lines,” said Peter Schechter, Director of the Atlantic Council’s Adrienne Arsht Latin America Center.

“Americans are way ahead of some of the hardliners in the Republican Party on this issue,” he added. “Senators Cruz and Rubio are both Cuban-Americans and so I fully understand their emotional connection to this issue, but politically it has no traction.”

Jason Marczak, Director of the Council’s Latin America Economic Growth Initiative, said what Obama’s trip—planned for March 21-22—has done is expose the “outdated viewpoints” of candidates like Cruz and Rubio.

“What polls have shown is that even Cuban-Americans increasingly want a new beginning,” he said.

Obama will become the first US President to visit Cuba since Calvin Coolidge made the trip in 1928. Rubio and Cruz have criticized the President’s decision.

The trip announcement came in the same week that the United States restored commercial flights to Cuba.

The United States and Cuba restored diplomatic ties and opened embassies in each other’s capitals in July of 2015. This rapprochement ended more than five decades of estrangement between the two countries.

Peter Schechter and Jason Marczak discussed Obama’s Cuba trip in an interview with the New Atlanticist’s Ashish Kumar Sen. Here are excerpts from the interview.

Q: What changes have you seen in the Castro government’s behavior since the normalization of diplomatic ties with the United States? Is that change irreversible?

Schechter: The historic normalization of ties between the United States and Cuba comes within the context of a slow, but very clear and purposeful reform in Cuba’s economy. That didn’t happen because of the normalization, but one hopes that because of the normalization it will accelerate. There are increasing private sector jobs—somewhere between 13 to 15 percent of the economy is now private sector jobs. These are limited in growth, capacity, and certainly in access to capital. These are usually small businesses called cuentapropistas.

One of the objectives of normalization, and what we certainly hope should exist on President Obama’s trip, is that private sector jobs expand. But we are not going to graduate from millions of dollars of investment to billions of dollars of investment until Cuba reforms its economy.

Marczak: The growth of the private sector is a positive change. The lifting of the cap on remittances has allowed Cuban entrepreneurs to have greater access to capital. The announcement this week of possibly over 100 daily flights from the United States to Cuba will flood Cuba with US tourists, which will only result in more cuentapropistas having opportunities to start their own businesses, including bed and breakfasts now possible with Airbnb on the island. There will be more restaurants to serve tourists, and hopefully Cubans, and more small businesses to provide services to the Cuban population.

What we have seen from the Cuban government is a sign of interest in providing greater telecommunications opportunities to the Cuban people. You now have Cubans congregating on corners in Havana to access Wi-Fi hotspots. Minister of Trade Rodrigo Malmierca, when he was in Washington this week, recognized that businesses need Internet access, too. As you give businesses more Internet access it will give Cuban workers more access to free information. This is one of the best tools that we can give to the Cuban people that they have been denied for fifty years.

Q: On the issue of human rights, there has been an uptick in the number of arrests in Cuba. Why is that?

Schechter: Cuba is a police state. Unfortunately, the world is full of police states. There is no doubt that within the Communist Party of Cuba there are reformers and there are hardliners. We have to help strengthen the reformers. The reformers are the ones that advocate change, certainly economic change, and greater ties with the United States. The hardliners are advocating greater clamping down in light of more access to foreign money, tourists, and information. With greater opening, you are clearly going to get more opinions expressed, not just by dissidents, but by writers, artists, academics, and each of those points of view are going to come at some point into friction with those that have the hardest line in the Communist Party. What worries me is that the uptick in arrests is evidence that President [Raúl] Castro still has not sufficiently made his own objectives crystal clear so both sides feel that they can still coexist.

Q: Are the reformers on the ascendant as a result of this rapprochement with the United States?

Marczak: Cuba is undergoing profound change. This is a country that literally has changed at molasses speed for the last fifty years. All of a sudden you have this unprecedented opening. You are seeing this division among those who are very scared of change and those who recognize that change is critical for the survival of the Cuban state. For the Cuban system to continue there must be change because economically they are out of luck if they don’t change. That interplay between those two different sectors is playing out on the streets.

At the same time, Raúl Castro needs to show to his party and his people that he is still the man in charge and that even with these openings the government is the ultimate authority. That’s why we have had these continuing arrests. We should look toward the Cuban Communist Party congress in April to see how it is viewing the changes that have been undertaken in the last couple of years. That party congress will be instrumental in gauging the degree of change that the government will undergo in the next few years.

Q: In the US Congress, what are the prospects for ending the embargo? If the embargo is not lifted, what are the other areas where the United States can open up space to grow this relationship?

Schechter: In this year, the chances of Congress lifting the embargo are nil. We feel very strongly that the areas in which the President can still have a margin of operation to work with, with executive orders and within the law, are some of the financial aspects.

Cuba is highly limited in its access to capital for two main reasons. One is because very few private sector lenders are willing to lend to Cuba given the lack of economic reforms on the island. The second reason is because it is still unclear what transactions are permitted in dollars. Therefore, third-party non-American dollarized transactions are still in this hazy zone of legality or illegality.

We strongly believe that the Cubans and the Americans have a unique opportunity to try to give Cuba access to the best possible technical advice on how to reform its economy. The international financial institutions that are based down the street have done this with innumerable countries, bringing in countries that were previously isolated back into the global economic system.

The Inter-American Development Bank (IDB) is the largest of the regional banks and could be a politically palatable mid-term solution because the United States does not have a majority share in the bank. That might be the place where Cubans and Americans might start by finding a way to get membership and providing Cuban central bankers and economists with the technical knowledge of how to make some of the deep reforms to the economy that would give Cuba access to information.

Marczak: Cuban economists and others in the Cuban government have access to some outside advice right now, but it is not necessarily the right advice. Friends, like the Venezuelans, are clearly not doing it right. What the Cuban economy needs is the help of an impartial, multilateral institution that can give the kind of financial advice that Cuba needs to deal with some of the pressing economic changes.

Over the next ten months, before President Obama’s term ends, we need to think about what are the other things that he can do that would be irreversible under the next administration. Things like opening up flights. It will be very difficult to cut those flight routes. Also, you can’t kick Cuba out of the IDB once they become a member. This should be part of the fourth-quarter push that is so critical to solidify the historic actions that the President has taken over the last fifteen months

Q: What impact do you expect the Cuba trip to have on the US presidential race where some candidates—Ted Cruz and Marco Rubio, in particular—are opposed to warming ties?

Schechter: I expect the trip to have a negligible impact on the race. Poll after poll that we have done, and that others have done, have shown that support for normalization crosses party, age, racial, demographic, and income lines. This is a non-issue. Americans are way ahead of some of the hardliners in the Republican Party on this issue. Senators Cruz and Rubio are both Cuban-Americans and so I fully understand their emotional connection to this issue, but politically it has no traction.

Marczak: The trip is exposing the outdated viewpoints that certain candidates like Senators Cruz and Rubio have on Cuba. This is important not just for Cuba; our interactions with Cuba have broad implications for our relations with Latin America and the rest of the world.

We can’t look at this trip in isolation; it’s not just about Cuba and its eleven million people. It is a trip that shows a new positioning of US foreign policy and how it is important to engage with those with whom you may not agree on everything.

What the trip will definitely do is elevate Cuba to be an issue on the campaign trail. But few will vote for or against a candidate based on their Cuba position. What polls have shown is that even Cuban-Americans increasingly want a new beginning.

Q: How will President Obama’s visit to Cuba play out in Venezuela?

Marczak: The Venezuelans have already seen the writing on the wall over the last sixteen months: that Cuba is doing everything it can to diversify beyond Venezuela. The trip is a blow to [Venezuelan President] Nicolás Maduro and others in the Venezuelan regime that have tried their best to keep Cuba in Venezuela’s orbit. This means discouraging any type of engagement with the United States.

The more Cuba engages with the United States, the less it is dependent on Venezuela. Venezuela needs the Cuban doctors to whom it pays horrifically low wages. The Venezuelans have become reliant on Cuban services at a time when there has been a brain drain from Venezuela itself.

Schechter: There is no sign that the Cubans coordinated or even communicated with the Venezuelans before making the decision on President Obama’s trip. This will indeed isolate the Venezuelan regime even more. This is not necessarily good news. Venezuela is on the brink of a serious social calamity and a paranoid regime that feels itself encircled is going to react in ways that are unpredictable and potentially dangerous to any increasing opposition. I am very concerned with how this will impact the psychology of leaders in Venezuela who will feel themselves increasingly in a corner and may see violence as a way to get out of that corner.  

Ashish Kumar Sen is a staff writer at the Atlantic Council.

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Rapprochement has gone a long way to open up the debate about Cuba, says Atlantic Council’s Peter Schechter

As 2015 draws to a close, our experts take a look back at the year that was and look ahead to 2016.

This interview is the first in a series.

Peter Schechter is the Director of the Atlantic Council’s Adrienne Arsht Latin America Center.

Q: What was the one big story in Latin America in 2015?

Schechter: The most important thing to have happened in the Western Hemisphere region is the opening of diplomatic relations between the United States and Cuba, which occurred in the summer of 2015.  The importance of that is manifold. It is certainly important from the point of view of Cuban-American relations. While this far from resolves everything on the plate of Cuba-American tensions, it goes a long way to normalize the relationship between the two countries. Now these two countries can meet and talk about issues that many country meets and talks about: terrorism, cooperation on drug trafficking issues, transportation agreements, environmental protection of coastlines, emergency management issues. These are all particularly important with countries that are our neighbors. It is very important that we have normalized relationships on a plethora of issues that were previously left silent.

But, the importance of raising the Cuban flag at the embassy in Washington and the US flag at the embassy in Havana goes way beyond Cuban-American relations. It is also hugely important for relations between the United States and the rest of Latin America. I have always described Cuba as the boulder-sized pebble in the shoe of US-Latin American relations. To a large extent what this rapprochement has done is it has enabled Latins to criticize Cuba without necessarily being accused of being “puppets of imperialism” or the “voices of colonialism.” It has gone a long way to open up the debate on Cuba and taken the US out of the issue.

Q: What will you be watching in Latin America in 2016?

Schechter: There are a lot of very big stories in Latin America in 2016. How does Brazil get out of recession? How does Argentine President Mauricio Macri’s new direction consolidate a new era of politics in Argentina and beyond? How does Central America fight against increasing violence? How will El Niño affect ecologically sensitive parts of the continent?

But perhaps the biggest story to watch in Latin America is what will happen in Venezuela. The good news of the opposition’s victory in the elections in early December 2015 could well degenerate into a crisis of ungovernability in Venezuela. There, a highly embattled executive, with no money to invest in social programs, could well resort to either verbal or real violence to maintain power. Similarly, the newly engaged Congress could to take on economic and social issues that have historically been the purview of the executive.  All this could exacerbate tensions and result in a full-scale crisis in Venezuela.

Follow Peter Schechter on Twitter @PDSchechter.

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A majority of voters in four states considered to be leaning Republican are in favor of abolishing restrictions in trade, travel, and investment in Cuba, including lifting the embargo against Cuba, according to a poll released Tuesday by theAtlantic Council.

Tennessee, Ohio, Indiana and Iowa, located in the South and Midwest are considered to be more favorable to a Republican ticket for the November 2016, presidential election.

[…]

In the U.S., industries related to agriculture can see an impact from trade with the island. Of those polled, 60 percent were convinced lifting the trade embargo would be beneficial to the agricultural industry.

“U.S. agriculture will benefit from a further opening in US-Cuba relations and that is central to the economies of states like Iowa and Indiana,” according to Jason Marczak, Deputy Director of the Atlantic Council’s Latin America Center.

Read the full article here.

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Atlantic Council poll finds Republicans and Democrats want travel restrictions lifted

A majority of Americans in the heartland states — Iowa, Indiana, Ohio, and Tennessee — support US President Barack Obama’s decision to restore diplomatic ties with Cuba and are in favor of lifting all restrictions on travel to the island, according to a new poll commissioned by the Atlantic Council’s Adrienne Arsht Latin America Center.

The poll found that while 70 percent of the respondents believe that the United States is on the wrong track, 68 percent support the restoration of diplomatic ties with Cuba, and 67 percent (54 percent among Republicans and 83 percent among Democrats) support the removal of travel restrictions. 

“These changes in policy are broadly supported and they are no longer third-rail issues among Republican voters and conservative voters,” Glen Bolger, a Republican pollster and partner in Public Opinion Strategies who conducted the poll, said at the Atlantic Council on Nov. 17.

Obama’s decision in June to take Cuba off the State Department’s list of state sponsors of terrorism cleared the way for the restoration of diplomatic ties between Washington and Havana that were severed in 1961. The United States and Cuba reopened their embassies in each other’s capitals over the summer ending fifty-four years of diplomatic isolation.

While diplomatic ties have been restored, restrictions on travel, trade, and investment remain. The Obama administration eased some of these restrictions in September, but lifting them completely will be largely up to Congress.

“We are at a moment of huge change,” said Peter Schechter, Director of the Atlantic Council’s Adrienne Arsht Latin America Center. Schechter moderated a conversation that included Bolger; Major Garrett, Chief White House Correspondent for CBS News; Steven Law, President and CEO of American Crossroads and a Senior Advisor at Engage Cuba; and Bill Lane, Senior Director for Global Government and Corporate Affairs at Caterpillar Inc.

The Atlantic Council poll is important because it shows members of Congress that people back in their home districts think that change needs to happen in the US-Cuba relationship, said Law.

‘Home-field advantage’

Some Republican members of Congress are reluctant to lift the travel ban and trade embargo, but Cuba doesn’t come up on the campaign trail, said Garrett.

“If Marco Rubio thought that it was a vote-getter in Iowa, New Hampshire or anywhere else you can be certain that he would talk about it. He does not,” said Garrett referring to the Florida Republican Senator and presidential candidate.

“Republicans are doing their best to avoid eye contact on this issue… but let me just tell you right now, they are hearing from constituents” who want to visit and do business with Cuba, said Lane.

Caterpillar is eager to do trade with Cuba. “We want to export to Cuba, we want to trade with Cuba, and we think by doing so a lot of positive things will happen,” said Lane, noting that American businesses have a “home-field advantage” in Cuba. 

“All this time we thought we were isolating Cuba, we were the ones who were isolated,” Lane added, noting that the Europeans, Japanese, and Chinese have been “fully engaged” in Cuba.

Republican opposition

Much of the congressional Republican opposition to easing restrictions on the US-Cuba relationship boils down to the fact that this is Obama’s policy, said Law. “If you get down to more substantive terms, it is the notion that this administration, when it conducts foreign policy, gets nothing in return… over time being able to show something in return whittles away that argument,” he added.

While the Obama administration is working to remove the remaining restrictions, Cuban President Raúl Castro’s government, too, has its work cut out.

US officials are reportedly frustrated at the slow pace of Cuban engagement with US businesses. The Obama administration is also looking to Cuba to take concrete steps toward protecting human rights.

What Cuba does with this new opportunity created by the thaw in relations with the United States is just as important as what the US Congress does, said Garrett.

In order to facilitate investments, the Cuban government will need invite capital and  undertake market reforms, said Lane. “They don’t need to rebuild their infrastructure, they need to build their infrastructure,” he added.

The tipping point?

In Washington, where the onus is on Congress to lift the remaining restrictions on the US-Cuba relationship, there is very little scope for such action given the legislative logjam on Capitol Hill and the fact that an election year is looming. However, said Law, 

things could change if either a presidential contender emerges who indicates to Congress that this issue should be addressed or there is greater advocacy.

“It will take an effort to make members [of Congress] take a position on an issue that otherwise they might want to put in their drawer and not think about, even though they probably know that it is not a dangerous issue for them politically,” said Law.

US businesses, especially the hospitality industry, could serve as another driver for change if they see other countries stepping ahead of them and scooping up opportunities in Cuba. “Even on a very large island like Cuba, there are only so many great beachfront locations to put nice hotels,” he added.

At the end of the day, Lane said, “it’s time for us to put this foolishness behind us and see what the real power of engagement is all about.”

Ashish Kumar Sen is a staff writer at the Atlantic Council.

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Highlights from the Atlantic Council’s heartland poll include:

• Republicans’ View: Despite a negative view of Cuba, the majority of Republicans favor the restoration of diplomatic relations and lifting the travel ban.
• Trade Embargo: 58 percent of heartland voters—a majority in all four states including 70 percent in Ohio—favor lifting the trade embargo entirely, with 60 percent convinced this would be beneficial to the agricultural industry.
• Travel Restrictions: Nearly seven in ten Heartland voters (67 percent) want all travel restrictions to be lifted, including 66 percent of Independents and a majority of Republicans
• Engagement – the Best Option: Over six in ten voters in each state—and 68 percent of overall Heartland poll respondents—agree that the United States did the right thing in re-establishing relations in July. This support came despite only a 30 percent favorability of Cuba.

Though sweeping changes to US-Cuba policy have been implemented by President Obama, the remaining restrictions on trade, investment, and travel lie mostly in the hands of Congress. A small group of elected officials have long lobbied in favor of keeping the embargo on Cuba, but support for lifting the sanctions has grown exponentially in the last twelve months with new bills targeted at lifting many of the remaining obstacles.

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“That number is a marker for the Cubans to basically say, ‘We’re not going to pay $7 billion and here’s why,’ ” said Jason Marczak, deputy director of the Adrienne Arsht Latin America Center at the Washington-based Atlantic Council.
Cuban officials have said removing the embargo is just one necessary step toward normalizing relations between the U.S. and the Communist nation. Other conditions include returning Guantanamo Bay and staying out of the island’s affairs.

[…]

The Atlantic Council’s Marczak said any resolution would probably involve “privileged market access” for U.S. companies in Cuba.

“It’s not politically feasible for the Cuban government to pay corporations and individuals for the property that was seized; that won’t fly domestically to do that,” he told Bloomberg BNA. “What is more probable is that there will be some type of deal worked out where Cuba grants corporations some kind of privileged access into the Cuban market, and that ends up being a win-win.”

How the claims from individuals and families—as opposed to companies—might be resolved is a much more difficult issue because these claimants or their successors simply want to get paid, Marczak said.

Read the full article here.

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“He was incredibly guarded and he needs to be. The church is playing the critical role of being an interlocutor in Cuba today,” said Jason Marczak, deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center.

[…]

In his remarks, the pope “hinted that this could be a moment, an opportunity for change in Cuba,” Marczak said in a telephone interview from Washington, D.C.

Read the full article here.

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“The U.S.-Cuba diplomatic opening is quickly morphing into commercial normalization,” said Peter Schechter, head of the Atlantic Council think tank in Washington. Obama, he added, “is boldly skating to the very edge of what is permissible under the still-standing sanctions regime.”

Read the full article here.

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“Now it is incumbent on the Cuban government to provide the investment environment and legal certainty that U.S. companies need,” said Jason Marczak, deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center.

Read the full article here.

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But with election year politics already in full drive, further advancing the normalization in relations may very well continue to hang on the executive. For that, President Barack Obama can still do a few things without Congress: allow Americans to travel as individuals (though still under one of the twelve licensed categories); work with the Cuban authorities to permit regularly scheduled, non-charter air service; and loosen credit for transactions. Could these changes be enacted before a possible Obama trip to Cuba in 2016?

Beyond the United States, the international spotlight will be on Cuba when Pope Francis visits the island from September 19-22. The Pope was instrumental in helping to move along the secret talks that led to the President’s executive actions. What message will he bring to Cuba? How will Cuban President Raúl Castro respond to his likely message of greater openness and freedoms for the Cuban people? The four-day visit will shed new light on how the Cuban government may—or may not—be changing with the implications stretching all the way to the US business community.

These important questions will be explored at two marquee events in New York on October 7-8: the 2nd U.S.-Cuba Corporate Counsel Summit  will inform organizations about how to remain fully apprised of a constantly changing political and regulatory landscape; and the Cuba Finance, Infrastructure & Investment Summit will explore why Cuba—with more than 12 million inhabitants and a GDP of $68 billion, but also aging infrastructure—is an intriguing prospect for the international investing community. The Atlantic Council is partnering in each event with the recognition that now is the time for a deeper dive in exploring many of the unanswered questions lingering from the business community.

The reopening of the US and Cuban embassies is the most visible product of the new direction in US-Cuba relations. But this by no means signals mission accomplished. Instead, it begs the question: how can the business and finance community step up their engagement?

Jason Marczak is Deputy Director of the Atlantic Council’s Adrienne Arsht Latin America Center.

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“We have a situation where there is a normalization of diplomatic relations but we don’t have a normalized relationship. It’s unusual, a very unique relationship in foreign policy,” said Peter Schechter, director of the Atlantic Council’s Adrienne Arsht Latin America Center.

Read the full article here.

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“There are a lot of incredibly contentious issues that remain on the agenda between the United States and Cuba,” says Jason Marczak, Deputy Director of the Adrienne Arscht Latin American Center at the Atlantic Council. “The embassy opening tomorrow is a momentous occasion, but we shouldn’t lose sight of the many things that still have yet to be done not just on the US-Cuba side, but also how the United States can help to facilitate Cuba’s broader global economic reintegration.”

Read the full article here.

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