In March 2014, hoping to attract new investments, Cuba adopted a new foreign-investment law it described as “strategic and transcendental.” As of this writing — two years later — only a handful of new investments have been reported as approved. The law, part of Chieftain Castro’s economic reforms, is based on the idea that one can influence something based on its resemblance to another thing — a delusion social scientists call a “cargo cult.”
The Cargo Cult of Pacific Melanesia.
A cargo cult involves the performance of various ritualistic acts that practitioners believe will lead to the appearance of an abundance of material wealth (cargo). Cargo cults often emerge and develop under conditions of social stress and usually involve leadership with a new myth-dream.
The cargo cult of Pacific Melanesia offers the most widely known real-life example. During World War II, the Melanesian islanders — many of whom had never seen outsiders before — saw the prodigious amounts of war material, canned food, clothing, and other goods that were air-dropped and landed to supply US military bases.
The islanders were astounded by the wondrous possessions of the US visitors who, incredibly to the islanders, enjoyed these belongings without making them themselves. The goods simply arrived from airdrops and aircraft that descended from the sky. No US visitor was ever seen making them. This observation confirmed for the islanders the metaphysical nature of the goods. They learned that this abundance from the sky was known to the Americans as “cargo.”
When the war ended, the military bases were abandoned, thus ending the miraculous and seemingly effortless flow of goods from the sky. To summon the cargo back the islanders mimicked the rituals they had observed US servicemen use. They cleared their own landing strips, and erected control towers with rope and bamboo, carved headphones from wood, lit torches to light up the runways, and even waved the landing signals while standing on the runways.
Renowned physicist Richard Feynman popularized the metaphorical use of “cargo cult” to describe attempts to recreate successful outcomes by replicating circumstances associated with those outcomes when the circumstances are either unrelated or insufficient.
In the Caribbean island of Cuba, using effigies for correspondence — not unlike the sympathetic magic (sorcery) of the Melanesian islanders — Chieftain Raul Castro hopes to attract the material goods that flow from US investments with his version of metaphorically fabricated airstrips and control towers. The general, poorly mimicking a few random characteristics of a free market, seeks the landing of the US cargo. He will be as unsuccessful as the Melanesian islanders.
Investors will be intrigued by the Cuban fabrications, but after taking a closer look they will reject the chieftain’s simulated runways. On paper, the new Cuban investment law purports to allow 100 percent foreign ownership of a project. But this has rarely been permitted, and foreign investors have been reduced to being minority shareholders in partnership with the Cuban military as the controlling shareholder.
The law also stipulates that the foreign investors’ assets may be expropriated for reasons of public utility or social value. All this, in an environment of systemic corruption, where there is no independent judiciary to adjudicate any claims by a foreign investor.
The Cuban foreign investment law also imposes an Orwellian staffing process in violation of international labor protocols. Foreign companies are not allowed to hire their own employees. Instead, they must request whatever staff they require from a Cuban government agency.
The agency will provide the employees and will invoice the foreign company for the employees’ salary to be paid to the government agency in convertible currency. In this “worker’s paradise,” the government agency will then pay employees in Cuban pesos, retaining, for the state, approximately 92 percent of the employees’ salary.
This exploitative practice is "slavery by another name,” to borrow the title of Douglas Blackmon’s book, which explores the forced labor of imprisoned black men and women through the convict lease system used by state governments, white farmers, and corporations in the southern United States after the Civil War.
No responsible US Company— particularly one publicly traded and subject to governmental oversight and investor scrutiny — is going to be enticed to invest under these conditions to serve a relatively small and impoverished market of 11 million with an average monthly income of US$20.
The Cuban chieftain may believe he has recreated, with his voodoo doll replica of economic reforms, the correspondent conditions to attract foreign investments. But, puncture, pinch, and squeeze as he might, the US cargo will not be forthcoming.
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This article was originally published in English in the PanAm Post and in Spanish in El Nuevo Herald.
José Azel, Ph.D.
José Azel left Cuba in 1961 as a 13 year-old political exile in what has been dubbed Operation Pedro Pan - the largest unaccompanied child refugee movement in the history of the Western Hemisphere.
He is currently dedicated to the in-depth analyses of Cuba's economic, social and political state, with a keen interest in post-Castro-Cuba strategies as a Senior Scholar at the Institute for Cuban and Cuban-American Studies (ICCAS) at the University of Miami and has published extensively on Cuba related topics.
In 2012 and 2015, Dr. Azel testified in the U.S. Congress on U.S.-Cuba Policy, and U.S. National Security. He is a frequent speaker and commentator on these and related topics on local, national and international media. He holds undergraduate and masters degrees in business administration and a Ph.D. in International Affairs from the University of Miami.
Dr. Azel is author ofMañana in Cuba: The Legacy of Castroism and Transitional Challenges for Cuba, published in March 2010 and of Pedazos y Vacios, a collection of poems he wrote as a young exile in the 1960's.
José along with his wife Lily are avid skiers and adventure travelers. In recent years they have climbed Grand Teton in Wyoming, trekked Mt. Kilimanjaro in Tanzania and Machu Pichu in Peru. They have also hiked in Tibet and in the Himalayas to Mt. Everest Base Camp.
They cycled St. James Way (El Camino de Santiago de Compostela) and cycled alongside the Danube from Germany to Hungary. They have scuba dived in the Bay Islands off the Honduran coast.
Their adventurers are normally dedicated to raise funds for causes that are dear to them.
Argentinean writer and poet Jorge Luis Borges was once invited to deliver a speech at a conference at the University of San Marcos de Lima. By then he was elderly and blind, and Peru was under a “progressive” military dictatorship. Borges, a classical liberal, was outspoken against the Peruvian military authoritarianism just as some of us are uncompromising against the Cuban totalitarian dictatorship.
At the University’s conference hall, Borges was accosted by strident “progressive” students harshly protesting his attendance. When the impudent students, tired of insulting him, finally became silent, Borges was asked by one of them: “How is it possible for an intelligent person like you to hold unpopular positions that go against the course of history?”
Borges calmly replied: “Listen, young man, don’t you know that only gentlemen and ladies defend lost causes?”
This Borges anecdote came vividly to mind as I reflected on President Obama’s trip to Cuba, and how standing up for freedom and democracy there has become a quixotic fight.
General Raul Castro has masterfully set an anchoring trap for the United States.
For nearly six decades, Cubans opposing the Castro regime have anchored their struggle on the fundamental principle of a free Cuba. Freedom was always the guiding conceptual anchor. That anchor, however, has now been replaced by a new anchor of diplomatic and economic ties with the Castro dictatorship. The change in U.S. policy is not presented by supporters as an abandonment of the principle of freedom. Instead, they defend the new policy as more realistic given that a free Cuba appears to be a lost cause.
To fully understand the damage to the aspiration for freedom inflicted by this re-anchoring of U. S. policy, it is necessary to apprehend the powerful role anchoring plays in negotiations. As any experienced business negotiator knows, an anchor establishes a reference point around which a negotiation will revolve.
Nobel Peace Prize recipient Professor Daniel Kahneman was one of the first researches to study anchoring. He explains that anchoring is a cognitive bias that describes our tendency to rely heavily on the first piece of information offered. Once an anchor is set, we use it to make most subsequent judgments. For example, the offering prize for a house anchors the house value (real or not) and most purchasing offers use it as a starting point. We have a bias toward interpreting offers around the anchor.
Studies show that once a negotiating anchor is set, the process of offers and counteroffers tends to revolve only around the anchor. That is, a deliberate starting point strongly affects the range of possible counteroffers. General Raul Castro has masterfully set an anchoring trap for the United States by forcefully and repeatedly anchoring Cuba’s position on the elimination of U.S. economic sanctions, the return of the Guantanamo Naval Base, and on billions of dollars of reparation to Cuba for the supposed damages caused by the U.S. embargo.
Notice how the discourse of the new U.S. Cuba policy revolves exclusively on negotiations around trade and diplomatic issues and we hear no discussions about political freedoms. At most, we hear the Unites States will continue to bring up the topic of human rights. General Castro set his anchor and our policymakers have failed to understand the trap they are in, or to adjust accordingly.
Professor Kahneman’s advice is as follows: “…if you think the other side has made an outrageous proposal, you should not come back with an equally outrageous counteroffer … Instead you should make a scene, storm out or threaten to do so, and make it clear — to yourself and to the other side — that you will not continue the negotiations with that number on the table.”
I see no evidence that U.S. negotiators are prepared to follow Professor Kahneman’s advice and return to the anchor of freedom so that all discussions revolve around that topic. In fact, U.S. negotiators seem determined to accommodate General Castro at every step. Freedom cannot emerge from a process that avoids mentioning freedom.
**Previously published in the PanAm Post on May 23, 2016.
*José Azelis a Senior Scholar at the Institute for Cuban and Cuban-American Studies, University of Miami and the author of the bookMañana in Cuba. Follow José Azel on Twitter @JoseAzel
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Cuba: From Columbus to Castro and Beyond, by Jaime Suchlicki, provides a detailed and sophisticated understanding of the Cuba of yesterday, today, and tomorrow.
Mañana in Cuba, by Jose Azel, is a comprehensive analysis of contemporary Cuba with an incisive perspective of the Cuban frame of mind and its relevancy for Cuba's future.
Death of a Dream: History of Cuba Elusive Quest for Freedom, the twenty one chapters are explicitly historical, strongly analytical, concisely written and closely argued; the result is a brilliant narrative that spanned over five centuries of Cuba's history.
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