Benefits and Drawbacks of The Us Embargo on The Cuban Business and Economy

Introduction

It is undeniable. Cuba is changing, and quickly. It seems as each month passes by, the Cuban government keeps inching towards a more free-market economy and abandoning its socialist principles. I found this week's readings and class discussion to be particularly interesting. The Hufbauer and Kotschwar article on economic normalization and the Kirk article on Cuba’s impressive healthcare system both piqued my interest, especially since my portfolio is focusing on Cuban business and the economy. Relations between the United States and Cuba have come a long way in the past 60 years. We are in an era where we will likely see the U.S. trade embargo lifted and increases in American tourists to the island. As we discussed in class, Cuba has a lot to gain from the embargo being removed; however, they also have a lot to lose if they are not cautious during the transition.

Benefits and Drawbacks of The U.S. Embargo on The Cuban Business and Economy

In the article "Economic Normalization with Cuba: A Roadmap for U.S. Policymakers" (Hufbauer & Kotschwar, 2015), there are many examples outlined on how the trade embargo sanctions are negatively impacting different areas of business. Take, for example, the impact of sanctions on air travel. In 2013, the Cuban Civil Aviation sector conducted a study to see the effects the sanctions had on the country. The ban on Cuban airline companies from operating in the U.S. has had a substantial economic impact. It is estimated that nearly $4 billion in revenue was lost for Cuban airlines from 1960 to 2012. Not only that, but it has also hindered the modernization of automatic check-in and baggage systems. According to the U.S. Department of Transportation, in 2012, over “6 million Americans traveled to the Caribbean with an average travel expenditure (excluding airfare) of $1,000 per person” (U.S. Department of Transportation, 2012). In the wake of complete normalization between the two nations, an additional one million Americans could visit Cuba each year, translating to an increase of $1 billion into Cuba’s tourist economy. That alone should be cause for celebration. Obviously, there are many factors at play and complexities that could cause issues down the road. Regardless, though, it seems like Cuba would have a lot to benefit in this market. Moreover, the potential for collaborative ventures between Cuban and American companies could foster an innovative environment that benefits both nations economically and culturally.

Cuba's Healthcare System and Internationalism

In the second reading we discussed, "Cuban Medical Internationalism Under Castro" by John Mirk (2016), I was astonished by the humanitarian and healthcare efforts the Cuban government has made in the past decades. What amazed me the most was the fact that Cuba has accomplished so much in healthcare, even though they lack the resources of a large country. Or the fact that the Latin America Medical School (ELAM) located in Havana has nearly 10,000 medical students from all around the world and is sponsoring the Polyclinic project. Cuba itself still suffers from poverty, yet they still want to provide other Latin American countries that are less fortunate than themselves, such as in Kingston, Jamaica, where Operation Miracle is underway. Operation Miracle is a vision restoration program that has already restored the visions of over 61,000 Jamaicans since 2010. To this day, the program continues to flourish. Should the U.S. embargo be lifted, Cuba also has much to gain from exporting their pharmaceutical products to the U.S. and European countries. The 32-page government document, Lineamientos (2011), outlines suggested plans for the restructuring of Cuba’s political economy, as well as for the expansion of pharmaceutical production. Furthermore, the potential for medical collaborations could be a significant avenue for Cuba to enhance its healthcare infrastructure while sharing its expertise globally.

Conclusion

Overall, I must say that I was surprised and impressed with Cuba’s healthcare system. Not only are they providing good service to their citizens, but they are also aiding other less fortunate Latin American countries. It would appear that Cuba has a lot to gain from the U.S. embargo being lifted, especially when it comes to pharmaceutical production and even the airline industry. With that being said, Cuba is probably going to be cautious entering these markets, since they do not want to make any rash decisions that could put their economy in jeopardy. It will be crucial for Cuba to balance its economic ambitions with its social principles to ensure sustainable growth and development in the new economic landscape.

References

• Hufbauer, G. C., & Kotschwar, B. (2015). Economic Normalization with Cuba: A Roadmap for U.S. Policymakers. Peterson Institute for International Economics.
• Mirk, J. (2016). Cuban Medical Internationalism Under Castro. Monthly Review.
• U.S. Department of Transportation. (2012). Air Travel Consumer Report.
• Lineamientos de la Política Económica y Social del Partido y la Revolución. (2011). Government of Cuba.