Cuba, post-Castro: What happens now?

5 minute read
28 November 2016

It's no surprise that the death of Fidel Castro has been heralded as an enormously political event with deep historic symbolism. However, it's not reasonable to expect this event to be a watershed moment that will throw Cuba off its course of liberalization of trade and investment that has been the hallmark of the government's plan over the past 10 years.

Some in the international press have described the passing of Castro as "plunging the country into a time of great uncertainty." However, from my perspective, as a Canadian lawyer with Gowling WLG who's been living and working in Havana for over two decades, I don't believe this to be the case.

While Castro's death is indeed of historical significance, and a cathartic moment for both those Cubans who support the revolution and those who are opposed to it, it won't lead to radical change or a weakening of the Cuban government. In fact, what will continue to characterize Cuba is political stability, and a continued process of economic reform and opening the country up to foreign investment.

A political transition 10 years in the making

The Cuban government has been preparing for the death of Fidel Castro for the past 10 years, ever since he almost died in 2006. And in reality, a political transition has long since taken place.

Raul Castro and an inner circle of leaders have been running the country for over a decade now. Although Fidel Castro had an indirect influence on decision-making in Cuba during that time, he had long since allowed his brother and the rest of the Cuban leadership to make the country's decisions autonomously.

Reforms not in doubt - just the pace

The Cuban leadership comprises differing points of view when it comes to reform, from those who want to speed up and deepen economic reform, to those who would be more comfortable with a slower pace of reform.

However, the collective leadership (and it is indeed a collective leadership, as Raul Castro's style of governing is based on broad consultation and institutionalization) has shown remarkable cohesion and resiliency. A focus on consensus-building and internal negotiation has ensured unity within the ranks. The result has been a balanced economic opening that has been accepted by all.

The future of Cuba-U.S. relations under Trump

It's important to recognize that - notwithstanding the uncertainty created by the election in the United States of Donald Trump and other international events over the past year - the Cuban leadership will continue to set its own priorities, strategies and tactics with a significant degree of planning and self-determination.

While the Cuban government is not immune to external pressures and developments (such as the crises in Venezuela and Brazil), it's typically not overly reactive to international events, let alone exhortations by foreign powers.

The Cuban government takes the position that they survived two terms of George W. Bush, along with previous Republican presidents, and they will do the same with Trump, even if he steps back from the Obama rapprochement.

Even during the Bush years, foreign investors were doing business in Cuba, some very successfully. A Republican presidency may make business a bit more difficult, but not impossible, and certainly not unprofitable.

There are a number of constants that will not change in Cuba:

  • First, the Cuban government will continue its reform process, and most likely accelerate it.
  • Second, the country will maintain political stability and control.
  • And third, there will be a growing number of voices in the U.S. Congress, from both Democrats and Republicans, along with the U.S. business community, decrying the U.S. embargo as anachronistic and not in line with U.S. commercial interests. It's likely only a matter of time - counted in terms of two to five years - that the embargo will be lifted, and the Cuban economy will begin to prosper by opening up attractive investment and trade opportunities to foreign companies.

In summary, stable, slow and steady economic change in Cuba is what's most likely to occur. Incidentally, that's also what's best for the Cuban people and for foreign investors who are focusing on the future by acting early to enter the Cuban market. 

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