Cuba
Cuba Country Brief
Introduction
Australia and Cuba have maintained diplomatic relations since January 1989. Australia has non-resident accreditation to Cuba from its Embassy in Mexico City. Cuba opened its Embassy in Canberra on 24 October 2008. Cuba has a Consulate-General in Sydney.
In April 1999, the then Environment Minister Senator Robert Hill visited Cuba. A Parliamentary delegation visited Cuba in April 2001 for an annual Inter-Parliamentary Union conference. The most recent official visit to Cuba was a brief study tour in April 2007 by two members of the then Trade Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) as part of an Inquiry into Australia's Trade Relations with Mexico and the Region.
Cuba has been subject to a US economic, financial and trade embargo since 1962, codified into law under the Cuban Liberty and Democratic Solidarity Act (also known as the Helms-Burton Act) of 1996. This is the subject of a resolution each year in the United Nations General Assembly. Since 1996, Australia has voted in favour of Cuba's resolution in the United Nations General Assembly calling for an end to the US embargo, as Australia believes that confrontation and isolation are not productive policies in relation to Cuba. Australia has consistently supported similar resolutions on the issue each year since 1996.
Australia is nonetheless concerned by the human rights record of the Castro regime, one of the main reasons cited by the United States for the continuation of its 47 year old trade embargo.
In September 2008, Australia provided Cuba, Haiti and other Caribbean communities hit by Hurricanes Gustav, Hanna, and Ike with a total of A$1 million in emergency assistance. The funds were delivered through the International Federation of Red Cross and Red Crescent Societies.
Political Overview
Background
Cuba obtained independence on 20 May 1902 following a war over the island between the United States and Spain. Pro-independence fighters had been involved in a 50 year struggle with the island's colonial rulers from Spain. Cuba was the last major Spanish colony to gain independence. Cuba was, until 1959, often ruled by military figures who obtained or remained in power by force. However, during this period, the influence of Marxist revolutionary thought was sweeping across Latin America.
On 1 January 1959, following a three-year guerrilla campaign, a young lawyer, Fidel Castro, flanked by military leaders Ernesto 'Che' Guevara and Camilo Cienfuegos, overthrew the dictatorship of General Fulgencio Batista. President Castro declared Cuba a socialist state on 16 April 1961. This move caused relations between Cuba and the West, especially the United States, to deteriorate. For the next 30 years, President Castro pursued close relations with the Soviet Union. During that time Cuba received substantial economic and military assistance from the USSR, estimated at US$5.6 billion annually, which kept Cuba's economy afloat and enabled it to maintain a large military establishment.
Political Outlook
Cuba remains an authoritarian state, with considerable limits on political freedoms, including freedom of expression and the media. President Fidel Castro dominated Cuban politics as the head of the one-party system of ‘Cuban Socialism' from 1959-2006. In contrast to other nominally communist regimes (such as China and Vietnam), President Castro resisted making large-scale economic reforms.
However, a serious illness saw Fidel Castro nominally transfer power to his brother (and designated successor) Raúl on a temporary basis in August 2006. President Castro underwent surgery for intestinal bleeding in August, and television footage of him recovering in hospital was released shortly thereafter. He has since made infrequent radio and television appearances and has been photographed periodically in meetings with visiting Heads of State. Fidel Castro's temporary hand-over of power to Raúl Castro was a smooth process and did not provoke political upheaval. On 24 February 2008 Raúl Castro was elected as President following the resignation of his brother.
President Raúl Castro has made some modest reforms. In April 2008, his first decree as President was to allow Cubans to hold the titles of state-owned homes in which they were currently renting; restrictions on property sales remained. On 18 July 2008, during his first National Assembly address since his election, Castro announced future changes to Cuba's pension plan, measures to encourage private farming, the intention to scale back Cuba's welfare state, and the establishment of a taxation system to support social programs and regulate economic behaviour. These reforms are expected to be implemented gradually.
On 2 March 2009, Cuba's Political Bureau of the Council of State announced it had approved President Raúl Castro's proposed a reshuffle of his cabinet, reportedly the biggest shake-up in at least 30 years. President Raúl Castro dismissed ten Ministers, including Foreign Minister Perez Roque and Minister for Foreign Trade Raul de la Nuez Ramirez, replacing them with the current First Vice Foreign Minister Bruno Rodriguez Parrilla and Rodrigo Malmierca Diaz respectively.
Foreign Policy Outlook
Cuba's relations with the United States continue to dominate its foreign policy. The United States maintains an economic embargo on Cuba, under the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 (also known as the Helms-Burton Act). Since the end of the Cold War, Cuba has sought to gain further international support for the lifting of the US economic embargo. The European Union, Canada and Mexico have enacted 'antidote' laws barring compliance with and neutralising the effects of the United States' secondary boycott by their corporations. Australia does not support the embargo and has consistently supported the UN General Assembly resolution introduced by Cuba each year calling for its removal.
The United States military base, which has operated at Guantanamo Bay since 1903, continues to be a point of contention. US policy towards Cuba has focused on the lack of political and economic freedom and on the outstanding claims for compensation for property expropriated from US citizens and Cuban Americans in the 1960s. Former US President George W. Bush's Initiative for a New Cuba challenged the Cuban Government to undertake political and economic reforms and to maintain multilateral and international momentum on human rights issues generally, through institutions such as the UN Human Rights Commission.
The White House announced on 13 April 2009 a series of changes in US policy towards Cuba. President Obama directed that restrictions on family travel and remittances to family in Cuba be lifted. He also authorised greater telecommunications links between the two countries and expanded the scope for delivery of humanitarian items directly to the Cuban people. These actions fulfil campaign promises made during the 2008 US Presidential Campaign.
Prior to that on 23 February 2009, the ranking Republican on the Senate Foreign Relations Committee, Senator Richard Lugar (R-Indiana), released a draft report calling for the easing of US restrictions on Cuba. The recommendations called for regular bilateral meetings between United States and Cuban officials with a view to first ease, then eliminate, restrictions on the trade of agricultural goods, medical supplies, and other items. The report noted that the US embargo on Cuba has failed to achieve its stated purpose of bringing democracy to the Cuban people. The US Obama Administration plans an overall review of the US-Cuba policy but has not advised a specific timeframe.
Economic Overview
Background
The collapse of the Soviet Union in 1991 deprived Cuba of its main economic and political benefactor. Cuba underwent a 35 per cent decline in GDP in the period 1989-93 as a result of the loss of Soviet subsidies. Limited reforms since then, as well as increasing levels of tourism and investment from the EU and Canada (in spite of the US embargo) have seen the economy make some recovery. Cuba's strong economic ties with leftist states have also helped fuel its growth. China is an important market for Cuban commodities, and Venezuela provides oil in exchange for Cuban health services.
Economic Outlook
Cuba's GDP for 2008 was US$54.7 billion, up from US$51.3 billion in 2007 and US$46.6 billion in 2006. GDP growth was 4.3 per cent in 2008 and economists predict growth of around 3 per cent in 2009. Growth is mainly the result of a recovery in tourism and increased activity in the mining, energy, telecommunications and manufacturing sectors. Growth in tourism, energy, and nickel exports, combined with better terms of trade, will ease the constraints on external financing brought about by United States' economic sanctions.
Growth in the global tourism market will create increasingly favourable conditions for Cuba's economy. However, because of Cuba's heavy reliance on hard currency tourism, the continuing recovery of its economy remains highly vulnerable to external shocks, and Cuba's tourism income has suffered as world economic growth has declined in the fora of the global economic crisis.
Bilateral Economic and Trade Relationship
Commercially, Australia has relatively little trade with Cuba.
Total trade between Australia and Cuba in 2008 totalled almost A$13 million. Australia's exports to Cuba in 2008 totalled approximately A$6 million, comprised primarily of electrical circuit equipment and heating and cooling equipment and parts. Australia's imports from Cuba, mainly tobacco, crustaceans and fruit juices, totalled approximately A$7 million.
The potential for expanding Australian trade with Cuba is limited because of the existence of the US Helms-Burton legislation, which offers a disincentive to overseas businesses considering trade with both Cuba and the United States. Limited exceptions to the Helms-Burton legislation exist, covering some food and medical products.
A running issue of some concern for our relations with Cuba has been the non-payment of loans. During the mid-1980s, Australia's export credit agency, the Export Finance and Insurance Corporation (EFIC), made a number of loans to the Cuban Central Bank, on behalf of the Australian Government, for the purchase of sugar cultivation and harvesting equipment from Australia by Cuba. In May 1986, Cuba defaulted on loan repayments, leaving debts of approximately A$14.5 million. The full amount of the loan is yet to be repaid; currently outstanding is A$9.7 million in principal plus additional accrued and late interest. The Australian Government has been seeking to recover this debt through the Group of Creditors to Cuba, an informal group of creditor nations which meets on an ad hoc basis in Paris.
Updated 29 May 2009