Cuba: Beyond the Embargo
Cuba: Beyond the Embargo
AS/COA’s Christopher Sabatini comments on the barriers beyond the embargo for Cuba that threaten its market and financial sustainability.
Since 1960, the U.S. embargo on Cuba has crippled the island nation in more ways than one. However, the embargo is not the only reason for Cuba’s economic tribulations. Internal politics and economic barriers have led to significant challenges for the country....
However, the transformation that Cuba is trying to achieve and the new market incentives that are being offered to foreign investors do not seem to be working. “No additional company has invested in Cuba as a result of these reforms,” says Christopher Sabatini, senior director of policy at the Americas Society and Council of the Americas. The country faces internal barriers that go beyond the embargo and threaten the viability of the government and its financial sustainability.
Among this list of challenges, the government oversees hiring and firing of employees, eliminating meritocracy and replacing it with old school cronyism. This consequently negatively impacts the overall productivity of the country. “This is a way the government keeps control of its population,” added Sabatini.
Another barrier involves the export processing zones. According to Sabatini, two things need to exist for these zones to operate efficiently: a cheap labor force and a market to export the processed goods. Without the ability to export to the United States, one of the largest markets in the world, the effectiveness of the zone is irrelevant and has very low impact on productivity....
