Cuba’s private sector faces a new challenge

Donald Trump announced that he would change the conditions of the deal between the United States and Cuba. The consequences will run deep.

Cuba economy

Donald Trump’s decision to take a step back on Barack Obama’s policies with Cuba will go beyond the mere idea of hurting the Cuban regime and protecting human rights. Trump’s actions –regardless of the intentions he declared in Miami on June 16th– will affect both the United States’ and the Caribbean country’s economy. Despite the North American president’s efforts to make a political stand, this is, once again, a careless measure that will have unexpected consequences.

The two main goals of Trump’s declaration about Cuba are to decline U.S. tourism to the island and to diminish commercial transactions with its army. Both measures, even though they’re supposed to be in favor of American citizens, will also hurt the U.S. economy. Furthermore, they will impair the relations of the North American nation with the rest of Latin America.

To restrict travels of Americans to the Caribbean nation has the clear potential of decreasing Cuban economic growth. It’s not a surprise that, since Barack Obama signed the deal with Cuba’s president Raúl Castro, Cuba’s tourism has thrived. The numbers are impressive: while the revenue of tourism in 2015 was US$2.6 billion, in 2016 it increased to more than US$3 billion. Even though Jose Alonso –the Cuban Tourism Ministry's business director– declared that 2017 would see this number become even bigger, there’s no doubt that it won’t be as easy as it has been for the last two years.

Aside from tourism –one of the biggest industries in the Cuban economy–, Trump wants to weaken the Cuban army. He intends to do it by restricting transactions between companies and the infantry. However, let’s not forget that the Cuban political, economic, and commercial structure depends on the troops itself. As The Economist noted, the corps conglomerate GAESA “is thought to control up to 60% of the economy”.

But, as it was previously stated, these measures will also hurt the U.S. economy. Although the Cuban army has control over a big percentage of the island’s industries, these businesses are linked to American firms. By hurting the Caribbean country’s economy, the North American nation is hurting itself. Hence, to try to close the relations between the two countries is, evidently, a misleading and negligent action.

While we can’t argue that Trump’s intentions were not directed towards political and social change, we can state that his decisions will affect the development of the Cuban private sector. At first sight, these sorts of declarations appear irresponsible and shortsighted. By neglecting Cuba’s future, Trump could be damaging –even more– the relationship between the U.S. and Latin America.


LatinAmerican Post | Juan Sebastián Torres
Copy edited by Susana Cicchetto

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