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The Craziness of the Cuban Economic Blockade

by ROBERT SANDELS

A Cuban official recently brought up a point that is seldom remarked in the foreign media, to wit, that the economic blockade — the centerpiece of US Cuba policy — is bad for the Cuban economy.  Who could have known?

During a session in Geneva of the Working Group on the Right to Development, Cuban representative Juan Antonio Quintanilla said that by a conservative estimate losses caused by the blockade as of 2010 were $104 billion. [1]

He didn’t say whether the figure included damages from other sources, but Cuban courts in 1999 and 2000 assessed the United States $302.1 billion for losses both from the economic blockade and from US-sponsored raids, sabotage and invasion, as well as civil liabilities for 3,478 lives lost and 2,099 persons disabled by US attacks of all kinds. [2] The United States is delinquent in payment.

These estimates come to mind upon reading that a Washington, DC law firm is calling for Congress to impose a 10% tax (“user fee”) on family remittances to Cuba and on business transactions between the United States and Cuba to pay some $7 billion in claims for property expropriated by the Cuban revolutionary government in 1959 and 1960.

Mauricio Tamargo, one of the lawyers, views the proposed fees as fair compensation for “stolen property.” He thinks it would yield up to $200 million per year.[3]

Unlike all the other countries with claims, the United States refused Cuba’s offer to settle its claims through a bond issue secured by sugar sales to the United States, which had been a market guaranteed by the sugar quota system in effect since 1934. Eisenhower reduced and Kennedy banned all sugar imports from Cuba effectively eliminating its ability to pay the full and immediate compensation the United States demanded.

In 1972 the Justice Department’s Foreign Claims Settlement Commission settled on a final list of nearly 6,000 certified claims; they have remained unpaid for 40 years.

The tax idea is unlikely to prosper in Congress if for no other reason than the outrage it would likely cause among two important political constituencies: the thousands of Cuban-Americans concentrated in the Florida electoral jackpot who send the bulk of family remittances to Cuba; and the big agribusinesses that export to Cuba.

Imagine that you were Alice Steinhart de la Llama (or her heirs), who has a certified claim of $130,000 for land in pre-revolutionary Cuba. [4] And suppose you now find that you must help pay for your own claim with a 10% “fee” whenever you wire money to a relative in Cuba! [4] And by the way, exactly what are the senders of family remittances “using” for which they must pay a fee?

Besides, the user fee gimmick rather misses the point. The United States never really wanted the claims to be paid but to be kept as an irritant. Expropriation claims are a government-to government matter usually settled through negotiation.  Tamargo and his firm would have the claims privatized and paid off by tapping into cash transactions unrelated to any direct use of the expropriated property or from any internationally recognized protocol for reaching a negotiated settlement.

Frozen Fund Piñata

The US government has access to Cuban funds frozen in US financial institutions and elsewhere but has not made them available for claims settlement. The amount has never been accurately calculated and varies over time according to how much in newly discovered or sequestered funds there are. However, in 2011 the Treasury Department reported that the amount was $245 million. This sum included Cuban government funds as well as funds belonging to Cuban nationals but did not include real property. (The US has blocked six Cuban properties in New York City and Washington, DC.)  [5]

Tamargo’s law firm apparently turned to the user fee as a way to pay compensation because little if any of the frozen funds still exist. Much of it has been periodically raided to pay court ordered judgments to settle civil lawsuits. These include payments to families of American mercenaries killed in raids against Cuba and during the Bay of Pigs invasion of 1961. These were politically motivated decisions, some by Bill Clinton and some by George W. Bush that put Miami court judgments ahead of the Justice Department’s list of certified claimants.

Take It Out of What You Owe Us 

Even though Cuban funds that might have gone to claimants are mostly exhausted, Cuba and the United States could negotiate a settlement. What would such an unlikely negotiation look like?  Simple math suggests the Cubans could agree to subtract the $7 billion in US private claims from the $302.1 billion in Cuban claims against the United States. If we leave out accrued interest and the decline in the dollar, the United States would only have to pay Cuba $224.1 billion.  Sounds fair enough.

But do not expect the United States to pay reparations in any scenario. The former slaves did not get their forty acres and a mule after the Civil War and Vietnam got none of the $3.3 billion in reconstruction aid Richard Nixon promised on his way out of that war.

But for Cuba there is a new universe of unmolested national advancement theoretically attainable through the UN’s Right to Development.  Of course, simply to mention it invites the ridicule reserved for fools and innocents who believed in the Truce of God or the Kellogg-Briand Pact. Nevertheless, to note even the existence of such a concept is to underscore how blockades and other imperial mechanisms are at base the denial of the right to national development and not, as commonly said, a matter of nation building or  democracy promotion.

Weaker and poorer countries have tried to turn the Right to Development into international law since the UN General Assembly adopted it (with US opposition) in 1986 and reaffirmed it in the 1993 Vienna Declaration. The General Assembly declaration said in part,   “The right to development is an inalienable human right by virtue of which every human person and all peoples are entitled to participate in, contribute to, and enjoy economic, social, cultural and political development, in which all human rights and fundamental freedoms can be fully realized.” [6]

Essentially, the Right to Development is asserted as the prerequisite for the realization of individual economic, social and political rights. What the United States wants for Cuba is first strangulation then development.

The United States and other rich nations have blocked efforts to recognize the validity of the concept. US diplomats often recognize the right as a rhetorical flourish in speeches or as the restricted right of individuals to seek personal wealth or advancement. But to recognize it as a sovereign right, it is feared, could lead to demands from poor countries that rich ones pay to help them achieve vague or unlimited measures of advancement in healthcare, education or even material wealth.

The UN Millennium Development Goals for 2015 incorporate the Right to Development concept and offer a role for developed nations in a “global partnership for development.” [7]

If the United States were to take Millennium development goals as a guide it would support fair trade with Cuba, debt relief, development aid, access to pharmaceuticals at fair prices and meaningful technical transfers to Cuba. [8]

So your see, no one has to pay anyone’s claims. Cuba need only express its willingness to stop being strangled and the United States need only get over its fear of a communist state in the throes of development.

Robert Sandels writes for CounterPunch and Cuba-L Direct.

Notes

[1] Prensa Latina, 05/08/12, http://www.prensa-latina.cu/index.php?option=com_content&task=view&id=504683 &Itemid=1.

[2] Inter Press Service (IPS), 06/02/99, http://ipsnews.net/news.asp?idnews=79414;  Ministerio de Relaciones Exteriores (MINREX) Website, http://www.cubaminrex.cu/english/Terrorism/Articulos/CubaDenounces/Claims.ht ml.

[3] Miami New Times, 03/16/12, http://blogs.miaminewtimes.com/riptide/2012/03/cuba_owes_us_7_billion_for_fo r.php. Tamargo was a George W. Bush appointee to the Foreign Claims Settlement Commission and before that had worked on the staff of anti-Castro Rep. Ileana Ros-Lehtinen (R-FL).)

[4]The list of claimants is at Foreign Claims Settlement Commission, http://www.justice.gov/fcsc/readingroom/ccp-listofclaims.pdf.

[5] Terrorist Assets Report, 2011, Office of Foreign Assets Control (OFAC), http://www.treasury.gov/resource-center/sanctions/Programs/Documents/tar2011 .pdf.

[6] Dialogue on Globalization, Friedrich-Ebert-Stiftung, 07/23/06, http://www.fes-globalization.org/publicationsGeneva/FESOccPapers23.pdf.

[7] UN Development Program, Millennium Development Goals, http://www.undp.org/content/undp/en/home/mdgoverview/.

[8] These are part of goal #8, see Millennium Project, http://www.unmillenniumproject.org/goals/gti.htm#goal8.

 

 

ROBERT SANDELS is an analyst and writer for Cuba-L Direct. This article was written for CounterPunch and Cuba-L Direct.

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