Cuban Tourism: Trump’s Effect
January 19th, 2017
Team Leader: Mary Peplinski
Author: Adele Brawley
Keywords: Trump, American Investment, Embargo, Cuba.
Since the Obama Administration began warming its diplomatic and economic ties with Cuba in December 2014, many were hopeful that a new prosperous era would emerge between the two countries. However, the current transition from a democratic to an ‘Alt-Right’, and in many respects, already inconsistent presidential administration, has left several unanswered questions on the issue of Cuban-American relations. If Trump's twitter is any indication of his feelings towards American investment opportunities in the Cuban economy, Americans should not remain hopeful. In the days immediately following Fidel Castro's death, the President-elect took to twitter, calling Castro a "brutal dictator", leaving behind a legacy of "unimaginable suffering, poverty and the denial of fundamental human rights". Like with so much of the President-elect's policy talk, however, his comments on Cuba have been inconsistent. Later that same weekend Mr. Trump tweeted "our administration will do all it can to ensure the Cuban people can finally begin their journey toward prosperity and liberty". Cuban officials, in turn, have remained silent in response to President-elect Trump and his team.
President Obama’s reopening of Cuba after 53 years of economic and political isolation has led to a boom in U.S. investment in Cuba’s tourism industry. With a record high of 3.5 million tourists visiting in 2015, the island offers rich new investment opportunities and an untapped market many corporations are eager to dive into. Select American companies like JetBlue, Starwood, and AirBnB (which now has over 1, 000 listings in Havana) have already begun investing millions with the U.S. government’s blessing. International airlines and cruise-lines have also started to increase their ports-of-call in Cuba. In turn, local business owners have benefited from the the influx of foreign investment and visitors.
This U.S. investment in Cuba’s tourism industry and the economic benefits it has accrued for local restaurant, hotel and shop owners has not been without its drawbacks. Access to food has become a particularly pressing issue issue for Cubans. The growing tourism industry, recently flooded with U.S. money, has caused the demand for food to sharply increase, while supply remains strained thanks to decades of poor economic planning. Traditional foods, like peppers, onions and avocados are becoming too expensive for the average Cuban to afford. A pound of tomatoes, for example, costs about 10% of the average government monthly salary of $25/ month. Thus, the growing tourism industry has caused a disconnect between food prices and salaries. Private industry is now in direct competition with the average citizen for fresh produce, and winning.
Many in the U.S. also criticize Obama’s loosening of the trade embargo, saying he’s giving the still communist nation too much too fast, without first demanding serious liberal-democratic and human rights reforms. This has fostered the basis of conservative and pro-embargo arguments.
While much of President Obama’s work with Cuba was done through executive action, undoing it might not be as simple as it seams, or even entirely possible. Several million-dollar trade deals are already underway between the Cuban government and American corporations, the divestment of which could take take much longer than Trump supporters hope. President-elect Trump has recently appointed Mauricio Claver-Carone, a prominent pro-embargo lobbyist and executive director of U.S.-Cuba Democracy PAC, to his transition team at the Treasury Department.
While it is still too early to know for sure what Trump's policy towards Cuba will look like, If his twitter account and his appointment of Claver-Carone is any indication of his future plans, the world should prepare for a renewed American attempt at Cuban isolation. That being said, there is still a possibility that the businessman in Trump will instead opt for a moderate, more timid approach, allowing some form of U.S. investment in Cuba thanks to the demonstrated high levels of corporate interest in the nation. At best, one can hope for the status quo, which seems unlikely, and at worst one can prepare for a new era of open hostility and aggression between Cuba and the U.S. For now, however, Cubans and Americans must remain on the edge of their seats, sifting through vitriol and awaiting the Trump administration’s actions.
