Cuba — A growing threat to the Caribbean?

Cuba — A growing threat to the Caribbean?
By Anton E Edmunds
Monday, February 17, 2014 16 Comments

Outputs from the recent Community of Latin American and Caribbean States
(CELAC) Summit in Cuba included calls for equality, the creation of a
zone of peace, and for the US embargo on Cuba to be lifted. This call by
one Caribbean leader after another masks a serious issue for a Caribbean
too often focused on statements of regional solidarity versus
implementing policy that would exemplify such statements -- Cuba is a
growing threat to the region.

To be clear, Cuba is no longer the cold war proxy, challenging
socio-political stability, but rather the country has emerged as a
growing threat as a location for foreign direct investment and
development inputs from the outside world. The unveiling of a mega-port
in Mariel -- that famous hub for the export of Cubans to the United
States -- should serve notice to Jamaica, The Bahamas and the Dominican
Republic that in their midst is a trans-shipment hub that may one day
soon directly compete with them for one of the few industries in which
they have an advantage, which is the movement of goods to and from the US.

For Jamaica, Cuba's Mariel may make it that much more difficult to find
the financing and shipping partners necessary for that country to
position itself as a major hub, though Panama Canal delays may be
helpful in buying time to address environmental issues and funding needs
for the locations currently under consideration.

More critically, however, is the interest by entities such as the
European Union (EU) and others in determining ways to work with Cuba.
The fact that the EU now seeks to deepen relations with Cuba on trade
and investment should be worrying to Caribbean governments and
organisations. This, especially considering the increasingly fractious
relationship that exists between many countries and the EU.

A relationship that brings new capital and technical assistance to Cuba
should not be ignored, as Cuba's efforts at free market reform offer the
EU and others an opportunity to position their companies for future
market openings while the wider Caribbean region continues to stagnate
and lose ground as a place to do business. As it relates to the
improving of EU relations with Cuba, the lifting of sanctions in 2008,
visits by various EU government officials, and a push to recalibrate the
relationship with the country all highlight an EU interest in expanding
its role as Cuba's biggest foreign investor. A large market in need of
infrastructure and private sector investment, Cuba remains largely
untapped and it is opportunities for investment rather than trade that
drives the EU agenda. Much like with the rest of the Caribbean, Cuba
exports little to the EU.

For the Caribbean, there is the perception that the region is weak in
executing initiatives and, further, that it is a space seen as
increasingly leaning towards mendicancy. Efforts by some countries to
sue for reparations do little to position the region as friendly to an
EU which, in its own evolution, now includes countries with no shared
history with the region, and who are increasingly likely to view the
Caribbean as hostile. Sadly, all of the above can only serve to allow EU
policymakers to see Cuba as an easier partner to deal with -- even with
its human rights issues -- than, in particular, the English-speaking
Caribbean countries that make up Caricom.

A lack of responsiveness to outreach by the United States Government on
issues like trade and energy, a weakness in security vis-à-vis the
supply chain, and dalliances with economic structures proposed by
Venezuela can further position the region as a difficult neighbour and
friend. Turning a blind eye to the jailing of dissidents in Cuba and the
weakening of institutions that may allow the development of de facto
leaders for life in the wider Latin America region are also challenges
that Caribbean countries have to face -- all while they claim to be a
bastion of political fairness. The inability of Caricom countries to
negotiate with Canada, a trade agreement that largely mirrors what was
negotiated with the EU, is also not positive.

The harsh reality for the wider Caribbean is that any improved
relationship between Cuba and the US would mean an increased focus by US
agencies and the Congress to direct funding towards that country's
development. Fundamentally, this means the appropriation of resources to
support infrastructure and agriculture development, capacity building
and energy, all areas where Caribbean countries need support to meet
their own stated regional goals.

From a private sector standpoint, a Caribbean region still fragmented
despite its best efforts at integration will see investment flow to a
market that is new and larger, and one that would operate under one
framework, however underdeveloped. While a private sector rush to Cuba
may not be immediate, the reality is that foreign direct investment in
the Caribbean has slowed, and in some instances the region has lost
ground as a place where it is easy to do business. Any shift of interest
to Cuba would hurt.

With the EU poised to seek out ways to partner with Cuba, and with
Canada, Brazil, and China already geared up to move in, there should be
an awareness by Caribbean leaders that there is probably a back room
plan being developed in the US to do the same. The writing on the wall
is clear: Cuba is a threat for development support as well as investment
from many who were once bullish on the Caribbean's development and
integration agenda.

The times for speeches on solidarity need to be replaced with actionable
items and tangible efforts that the external community can commit to
supporting before it is too late.

Anton Edmunds is the head of The Edmunds Group, a business and
government advisory service firm that focuses on emerging markets. Anton
is also a senior associate at the Centre for Strategic & International
Studies (CSIS). Comments: www.cisis.org; www.onthecaribbean.com;
@theedmundsgroup; anton@theedmundsgroup.com.

Source: Cuba — A growing threat to the Caribbean? - Columns -
JamaicaObserver.com -
http://www.jamaicaobserver.com/columns/Cuba---A-growing-threat-to-the-Caribbean_16037419