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Council of the Americas, USA, February 19, 2008

Cuba After Fidel
Carin Zissis
February 19, 2008

Fidel Castro's decision to step down raises questions about Cuba's economic future. (AP Images)
After nearly fifty years in power, ailing Cuban leader Fidel Castro announced his resignation.  “I will neither aspire to nor accept the positions of President of the State Council and Commander in Chief,” wrote Castro in a letter published by state-run newspaper Granma. The announcement comes before Cuba’s State Council elects a president on February 24.

In 2006, following emergency stomach surgery, Castro temporarily delivered power into the hands of his younger brother, Raul. The octogenarian never resumed full power but, even as his illness inspired rumors, Castro continued to play an active government role. His decision to step down permanently—like his previous “temporary” power handover—raises questions about the Communist island’s future and the decades-old embargo against Cuba maintained by the United States.

President George W. Bush, on a stop in Rwanda during a diplomatic tour of Africa, greeted the news of Castro’s resignation by urging democratization, saying, “The United States will help the people of Cuba realize the blessings of liberty.” (PDF) However, Deputy Secretary of State John Negroponte told reporters he could not imagine that Washington would lift the trade ban “anytime soon.” With Raul as Fidel’s likely heir, a sudden shift to democracy remains unlikely in Cuba’s near future. The Miami Herald’s Pablo Bachelet takes a look at six possible Castro successors

But other U.S. leaders see the change as an opportunity to crack the door open on warming relations. Senate Foreign Relations Committee Joseph Biden (D-DE), in line with the Helms-Burton Act of 1996, said the United States should not lift the embargo before Havana frees political prisoners. But he also said “[W]e should not sit back and wait for the successor to act,” and proposed easing restrictions on travel and remittances for Cuban Americans and for U.S. companies supporting small Cuban businesses.

Although Washington may not lift the embargo in the short term, U.S.-Cuban economic ties have already experienced a thaw in recent years. In 2000, the United States passed the Trade Sanctions Reform and Export Enhancement Act,  facilitating the export of U.S. agricultural and food products to Cuba. The U.S.-Cuba Trade and Economic Council offers a report (PDF) on U.S. exports to Cuba from 2001 through 2006. As Latin Business Chronicle reports, “trade trumps political tensions” when it comes to relations between Washington and Havana; U.S. exports rose by over 30 percent in 2007 and, even though Cuban exports to the United States remain small, they grew by 200 percent during the same period. U.S. Census Bureau trade statistics show how quickly U.S. exports to the island have grown over the past decade. With Raul at the helm, this trend is unlikely to reverse. He is widely recognized as favoring a Chinese style of governing—a looser economy under one-party rule.

Within hours of Castro’s announcement, companies with Cuban business prospects saw their stocks surge. The Wall Street Journal’s “Environmental Capital” blog suggests that Cuba could become a “baby Brazil”  by producing ethanol from sugarcane, particularly if foreign investment restrictions are eased to allow modernization of the island’s sugar industry.

With a well-educated, economically-motivated population, Cuba could become the “Singapore of the Caribbean,” writes Venezuelan journalist and playwright Ibsen Martinez in Newsweek’s PostGlobal. The Economist’s Bill Emmott’s argues the United States will find itself facing Venezuelan President Hugo Chavez in “a battle for influence” over a Cuba without Fidel.

Read AS/COA coverage of foreign investment in Cuba’s offshore oil reserves and Brazil’s recent pledge to invest $1 billion in development funds in Cuba.

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