New chill enters US-Cuba relations after Obama's brief thaw

President Obama has made several goodwill gestures toward Havana, giving US businesses the hope that Cuba relations could improve. But the Castro regime appears unwilling to compromise.

US business is setting its sights on Cuba, but the interest comes just as President Obama is stepping back from his policy of engagement with the Castro regime.

With more Cuban-Americans traveling to the island country as a result of loosened US travel restrictions aimed at improving Cuba relations, Cuban oil, agriculture, and infrastructure are beckoning as promising markets for American investors and farmers.

But the opening of Cuba’s totalitarian political system – the sine qua non of increased American ties – is nowhere in sight, Cuba economic experts say, meaning the perennial hopes of US business are likely to be dashed once again.

“The Cubans are being very clear that they will accept absolutely no conditions in terms of normalization with the United States – none,” says Anna Szterenfeld, Latin America editor of the Economist Intelligence Unit.

Mr. Obama seems to have come to the same conclusion. Last week he released a statement suggesting disappointment in the Cuban regime’s response to the gestures he made last year as part of what he envisioned as a mutual warming.

“Instead of embracing an opportunity to enter a new era, Cuban authorities continue to respond to the aspirations of the Cuban people with a clenched fist,” Obama said.

Cuban crackdown

The immediate cause of the presidential statement was the very public repression in Havana days earlier of a protest by the so-called Ladies in White, the relatives of Cuba’s political prisoners. Video circled the globe of government-affiliated counterdemonstrators heckling and attacking the marchers, who included the mother of Orlando Zapata Tamayo, an imprisoned dissident who died in February after a prolonged hunger strike.

Mr. Zapata’s death set off a round of hunger strikes by other political prisoners that have evoked strong condemnation from other normally friendly governments, such as Mexico and Spain. “I join my voice with brave individuals across Cuba and a growing chorus around the world in calling for an end to the repression,” Obama said.

It is in this unlikely atmosphere that signs of interest in US investment in Cuba have blossomed. Proposals await in Congress for ending the travel ban on Cuba – the Obama administration last year eased restrictions on Cuban-Americans returning to visit family. US farmers would like to see further easing of conditions on food sales to Cuba. Last week, US business representatives met with Cuban officials in Cancun, Mexico, to discuss investment opportunities on the island.

So why the interest?

US and Cuba need each other

The US and Cuba have mutual economic interests, Cuba experts say. The US is attracted to the very sectors Cuba is interested in developing, like the island’s significant offshore oil deposits and other raw materials like nickel. And, ironically, Cuba now finds itself overly dependent on one patron government – Venezuela – much as it was dependent on the Soviet Union before its fall.

“Cuba is in a desperate situation so I think they will be required to introduce more market reforms,” says Teo Babún, president of Cuba-Caribbean Development and author of The Business Guide to Cuba. At the same time, he adds, “Many of their products are needed in the US.” And as a result, he says, “[Eventually] we’re going to find the right formula between the two.”

Mr. Babún was participating in a panel discussion, sponsored by the Americas Society/Council of the Americas in New York, that drew more than 100 participants either on site or via webcast Tuesday.

The turnout suggested, as Americas Society senior director of policy Christopher Sabatini noted, “There’s a lot of interest in Cuba.”

The question is whether that perennial interest will meet the conditions for a real relationship any time soon.