Crony capitalism and Marxist generals
BY JIM DEMINT HERITAGE.ORG
02/05/2015 7:02 PM 02/05/2015 7:02 PM
As Congress holds hearings on President Obama’s change in Cuba policy,
we are seeing the question of who in Havana will benefit from U.S. trade
come up repeatedly. This focus is right on point. Unless Congress acts
to stop it, the normalization of ties with Cuba would soon see crony
capitalists here striking deals with Marxist generals there — all
financed by the U.S. taxpayer.
Cubans will pay, too — by seeing their nightmare prolonged for many
years. Some of the generals involved are members of the Castro family,
which means that U.S. consumers and taxpayers could end up helping the
regime transition into a North Korean-style communist dynasty just 90
miles from our shores.
Americans who use Cuban golf courses will meanwhile be dealing with a
state entity called CubaGolf. It belongs to the Palmares holding
company, which in turn is owned by the Interior Ministry. The ministry
runs the repressive state security apparatus that keeps millions of
Cubans in fear.
Lobbyists, of course, will make a killing. Large corporations like
Cargill are poised to spend millions of dollars lobbying Congress to
drop the embargo. One thing this will accomplish is to force U.S.
taxpayers to subsidize their exports via the Export-Import Bank, the
federal agency that “facilitates” U.S. exports by doling out loans and
The mega-corporations have joined with a host of trade associations such
as the American Farm Bureau Federation and the National Corn Growers
Association to form a mega-lobbyist group named the U.S. Agriculture
Coalition for Cuba.
But is Cuba a fit business partner for the American taxpayer?
A half century of communism has bankrupted Cuba. While members of the
Castros’ military oligarchy are personally rich, the state has no money.
To exploit American trading opportunities, the regime needs to get
financing in advance, use the money to make purchases from U.S.
companies, and then resell the products to repay the bank. If the
generals renege on paying, the bank will be left holding the bag. In the
case of Ex-Im, that would be the taxpayer.
The Castros are well-known deadbeat borrowers who routinely get out of
paying what they owe. Put aside the $7 billion in U.S. assets they
expropriated in the 1960s — still the largest theft of U.S. property in
history. Let’s look at more recent history.
Just last year, Russia had to write off 90 percent of its $32 billion
debt to Cuba. Within the last five years, Cuba has also defaulted on
billions owed to Mexico, China and Japan. Before that it defaulted to
practically all of Western Europe. Now this lending disaster may be
headed our way, courtesy of Barack Obama.
The decision to normalize relations with this abnormal regime is purely
ideological. The Castros and their hand-picked elite have not changed
That’s made clear even in November’s Portfolio of Opportunities for
Foreign Investment — the Cuban government’s appeal for $8 billion in
international investment — that was so ballyhooed by the regime’s
overseas cheerleaders. The portfolio makes clear that state enterprises
will not be privatized and there will be no deals with Cuba’s very small
“self-employed” sector. Translation: This is still a classic
Marxist-Leninist regime intent on owning the means of production.
Public companies that must abide by our laws would have to explain to
their shareholders and boards — and to a future administration — why
they are doing business with the likes of Generals Alejandro Castro and
Luis Alberto Rodríguez, Raúl Castro’s son and son-in-law respectively.
They control GAESA, the Ministry of Defense holding company that owns
most major sectors of the economy.
They will have to explain, too, why its Cuban workers will receive only
10 percent of their wages. Answer: In Cuba’s system, the generals and
their children — the “juniors” — keep the rest. They will also have to
explain why they are complicit in repressive tactics such as installing
surveillance cameras in tourist destinations and selling the generals
the IT infrastructure they will need to raise firewalls and spy on Cubans.
We don’t need to soil our hands this way, as Sen. Marco Rubio has made
clear in the congressional hearings that began this week. President
Obama may delight in calling Raúl Castro “Mr. President,” a deferential
practice he has recently adopted. But in reality, Raúl remains a bloody
military dictator running a corrupt, failed economy. We should want
nothing to do with him or it.
JIM DEMINT, A FORMER SENATOR FROM SOUTH CAROLINA, IS PRESIDENT OF THE
Source: Crony capitalism and Marxist generals | The Miami Herald The
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