In February 1962, the United States under Democratic president J. F. Kennedy imposed a general embargo on all trade with the Caribbean country of Cuba. The ultimate goal was the fall of the revolutionary regime. Sixty years later, the anachronistic US sanctions policy is still in place, with the same goal in mind.
A month ago, on November 3, 2022, a resolution demanding the lifting of the US blockade against Cuba was approved by an overwhelming majority in the United Nations General Assembly. 185 countries voted in favor and 2 abstained (Bolsonaro’s Brazil and Ukraine, which probably did not want to jeopardize the generous US military support for the war against Russia). Only the United States itself and eternal ally Israel voted against. This scenario has been repeated for 30 years in a row within the UN.
At the end of 1959, less than a year after the Cuban socialist revolution, the US intelligence agency CIA already started organizing sabotage and terrorist actions against the new regime. The Cuba of the ousted dictator Fulgencio Batista was a client state of the USA, and the revolutionary government immediately began dismantling the existing economic and political institutions. Foreign companies were nationalized. The US, which had by far the largest economic interests on the island, was the main victim of this revolutionary policy, especially the oil refineries and the many American sugar plantations.
In July 1960, president Dwight D. Eisenhower responded by restricting Cuban sugar exports to the U.S. European and Canadian banks were pressured to cancel and refuse loans to the Cuban government. In October 1960, the US imposed a partial trade embargo on the island state, and on January 3, 1961, Washington severed all diplomatic relations with the Cuban government. An attempt by right-wing Cuban exiles – financially and logistically backed by the US-to militarily defeat the new government led by Fidel Castro was repulsed by the revolutionaries in April 1961. After this invasion of the Bay of pigs turned out to be a failure, Washington resolutely chose to push the economic war further.
The underlying mechanism of an economic blockade is simple: the creation of scarcity and hunger, which should drive a disgruntled and desperate population to rebel against their own government. Because Cuba was heavily dependent on the U.S. for trade, investment, and loans, the early sanctions could have brought the revolution to its knees. It was the Soviet Union that assigned the Cubans a lifeline in 1960. The switch to trade with the USSR and the socialist bloc mitigated the potentially devastating consequences of the US blockade and guaranteed the survival of the Cuban revolution.
In the decades that followed, a whole range of US laws were introduced that had to tighten the thumbscrews. In addition, provisions were amended and added to the existing laws. The result is a complex web of overlapping legislation, affecting all aspects of life on the island. Sanctions were specifically directed against the important economic and strategic areas of development in Cuba: the export of sugar and nickel, tourism, hydrocarbons, infrastructure projects and, more recently, biotechnology. Cuba became financially isolated by freezing assets and blocking bank payments, which hampered trade in goods and services, as well as remittances and donations. For example, by imposing pressure and even sanctions on third-country entities that maintained economic and financial ties with Havana, an attempt was made to close the island as much as possible from any form of international trade.
The fall of the Eastern Bloc in the late 1990s generated a massive economic crisis in Cuba, which lost 87% of its trade and investment. Cuban Gross Domestic Product (GDP) declined by 35%, while agricultural production, construction and manufacturing capacity plummeted by 47%, 70% and 90%, respectively. Power outages and scarcity were the result. During this’ special period’, the US stepped up its efforts to end the regime in Cuba with additional sanctions.
For example, in 1992, the Cuba Democracy Act was voted that prohibits foreign-based subsidiaries of U.S. companies from trading with Cuba or with Cuban nationals, prohibits foreign ships docking in Cuba from calling at U.S. ports for 6 months, prohibits U.S. citizens from traveling to Cuba, denies foreign aid and debt relief to countries that support Cuba, and so on. Humanitarian goods, such as medicines, could henceforth be exported to Cuba only with the personal permission of the US president and the verification of their use on the spot. Democratic Congressman Robert Torricelli, who introduced the bill, stated that it was intended to “wreak havoc on that island.”
In 1996, the Helms-Burton Act specifically threatened companies, banks, and other entities in third countries with legal action and sanctions if they transact with Cuba. Importantly, this bill takes the power to end the U.S. blockade away from the president and puts it in the hands of Congress.
The socio-economic impact of all this on the fished island was devastating. After a year of Investigation, the American Association for World Health concluded in 1997 that the blockade had “dramatically damaged the health and nutrition of large numbers of ordinary Cuban citizens” and had caused “a significant increase in suffering – and even death – in Cuba” due to “critical shortages of even the most basic medicines and medical equipment”. The lack of fuel and power outages prevented ambulances and health care facilities from functioning properly. The report noted an increase in anemia, iron deficiency and malnutrition. The number of diseases had also increased, partly because there was more untreated water and less soap.
The right-wing conservative American think tank The ‘Heritage Foundation’, among others, welcomed these developments. Almost triumphantly, in 1994, there were reports of families living on one meal a day and of the return of diseases such as malaria. The think tank noted that U.S. policy was likely to lead to more repression of the Cuban people and potentially end in “bloodshed, armed conflict and chaos.” Then, without any irony, it was concluded that “the United States must not abandon the Cuban people by relaxing or lifting the trade embargo,” until Castro’s government has collapsed.
However, the consequences of the economic blockade could have been much worse. The only reason a humanitarian catastrophe has been avoided so far, the American Association for World Health concluded in 1997, is because the “Cuban government has maintained a high level of budget support for a health system designed to provide primary and preventive health care to all its citizens.”In other words, the socialist state has used its welfare-based, centrally planned economy to protect the population as much as possible.
Obama and Trump
Democrats and Republicans have proven equally fanatical over the decades in pursuing the fall of the Cuban regime through a severe blockade.
However, in December 2014, president Barack Obama announced a relaxation of US policy. In 2015, the Obama administration restored diplomatic relations with the Caribbean island. Embassies were opened, and Cuba was removed from the list of state sponsors of terrorism. Bilateral commissions were established, regular flights and postal services were restored after decades, and restrictions on travel to the island for US citizens were relaxed.
In March 2016, Obama became the first sitting U.S. president since Calvin Coolidge in 1928 to set foot on Cuban soil-a hugely symbolic step. In January 2017, during his last days as president, Obama also abolished the “wet foot, dry foot” policy that, since 1995, automatically gave the chance to any Cuban who managed to reach the US mainland, to stay there and eventually acquire US citizenship. (Anyone intercepted in the territorial waters between the two nations was sent back or to a third country.)
However, the relaxation implemented at the diplomatic level did not receive a substantial extension at the economic level. In september 2015 and 2016, Obama signed the annual extension of the “Trading with the Enemy Act” (TWEA) against Cuba – legislation that, as the name suggests, gives the president the power to define, regulate, and punish trade with ” the enemy.” In this case, that power was needed to circumvent the Republican-controlled Congress that opposed any easing of relations with Cuba, but the law continued to formally label the island state an enemy. Cuba also remained on the list of countries subject to U.S. sanctions and Cuban goods still could not be exported to the U.S. Through presidential executive orders, outside of Congress, permits were granted to a handful of U.S. companies to export to and operate in Cuba. But Havana still could not use the dollar in the international economy, nor make deposits with international banks without risking fines. During the first 6 years of Obama’s presidency, The Office of Foreign Assets Control (OFAC) imposed 56 fines-totaling nearly $ 14.3 billion – on foreign entities that engaged in commercial and financial transactions with Cuba. Even after the easing of relations with Havana, OFAC fines of $ 2.8 billion were handed out, mainly to European banks, including ING and BNP Paribas.
As soon as Donald Trump took over the US presidency, the opening towards Cuba was reversed and hostility was even increased with 243 new economic sanctions and coercive measures. This provoked a serious economic crisis on the island, similar to that of the 1990s and characterized by the scarcity of basic goods (fuel, food, household items and medicines). The Cuban government used its control over distribution to ration products rather than enforce the market mechanism. That led to long queues every day to obtain these basic goods.
Among other things, Trump’s sanctions targeted money transfers (all Western Union offices in Cuba were closed), which had a major impact on hundreds of thousands of Cuban families. And after a resurgence in tourism in the Obama era, several new travel restrictions led to a significant drop in the number of tourists for the first time in 10 years. COVID-19 and the strict Cuban measures to prevent the spread of the virus, dealt an additional blow to the tourism sector. Both private foreign remittances and tourism are important sources of hard-to-obtain foreign currency for the Cuban government, much needed to be able to import food products, among other things.
A few days before his term came to an end, Trump also put Cuba back on the list of state sponsors of terrorism, something that the country itself re-qualified as completely avoidable by international banks and investors, with all the consequences for the Cuban people. Although the United Kingdom, the European Union and Canada had meanwhile voted legislation to protect their own entities from the US’s Cuba sanctions, it is not being implemented consistently. Third countries remain cautious in their economic and financial dealings with Havana out of fear of facing US anger and retaliation. Moreover, because the vast majority of financial transactions in the world take place in U.S. dollars, Washington continues to have exceptional power over global trade.
About the author: Christy Olsen
Christy Olsen, a young author who followed in her father's footsteps and took up journalism at school. She often introduces a lot of subjective things into his texts, always tries to state the essence and give a proper assessment.