On Sunday 20 March, President Obama became the first US President to visit Cuba since 1928.

 

During his visit he had been expected to use the occasion to speak about issues that the US believes will bring about political change in Cuba:  entrepreneurship, opening up the internet, freedom of speech, and a free media. He will also be critical of Cuba’s record on dissidence and human rights. As his Deputy National Security Advisor, Ben Rhodes, recently observed, President Obama hopes that by doing so he will empower new economic actors, encourage confidence and pluralism, and more generally foster a more normal relationship between the US and the Cuba and their people.

 

In response, President Castro, while welcoming his visitor is likely to be clear that Cuba will not compromise its hard fought for independence and political and social approach.

 

In a lengthy commentary on March 9, the official Communist Party newspaper, Granma, set out Cuba’s red lines for the visit and more generally in its relations with the US. It reaffirmed Cuba’s willingness to advance, but also made clear that in doing so it would not renounce its principles. 

 

Noting that the visit was a part of a complex process of normalisation ‘which has barely begun’ it went on to say that no one can presume that in seeking a better relationship, Cuba will abandon what its socialist constitution says.

 

It observed that, for Cuba to fully normalise relations with the US, a range of conditions must be met and all aspects of the embargo lifted. It noted too that although the US had eased some of its restrictions on trade and finance, in practice these measures had proved difficult to implement because of other US regulations, and the embargo’s ‘intimidating effect’.

 

The commentary concluded by noting that profound conceptual differences between Cuba and the US will persist. 

 

What this suggests is that despite the historic nature of the visit and the extensive global media coverage, for both sides the high level encounter is likely to be as much about perception and ideas, as practical outcomes.

 

Undoubtedly there will be signals about the future, announcements about US private sector engagement in tourism and telecommunications, and positive indications about further functional co-operation between the US and Cuban Administrations. However, it should be clear to any US business person willing to take the time to understand official Cuban thinking, that corporate dreams of rapid and deep engagement are wide of the mark.

 

As the Director General for Foreign Investment at the Ministry of Foreign Trade and Investment, Déborah Rivas, recently told the Cuban media, in an interview designed to explain to a Cuban audience the slow pace at which new investment agreements are being signed: “It’s not about undertaking whatever project might interest a foreign investor. It’s about attracting foreign investors whose projects are in tune with our public policy. We are not undertaking an accelerated process of privatisation of the Cuban economy,”

 

For these reasons, President Obama’s visit, while welcome and important, needs to be seen in the context of other international and domestic developments that are likely to have a more immediate and significant effect on change in Cuba.

 

After two years of negotiations, and following a final meeting between Federica Mogherini, the EU’s High Representative for Foreign Affairs and Security Policy, and Bruno Rodriguez, Cuba’s Foreign Minister, the text of a Political Dialogue and Co-operation Agreement between Europe and Cuba was initialled on March 11 in Havana.

 

It creates a basis for advancing trade and economic ties, discussing political issues including human rights, and provides for funded development support and co-operation. It effectively brings to an end Europe’s 1996 common position that linked engagement with Cuba to conditionalities relating to human rights and democracy; a position largely ignored in recent years by EU many member states following indications from late 2013 on that the US was considering re-establishing diplomatic relations with Cuba. 

 

The agreement followed another reached last December by an ad hoc Paris Club working group on Cuba which resolved the issue of the country’s last remaining major debt to international creditors. Then a basis was agreed on how to resolve the issue through a mix of debt repayments, debt forgiveness and the translation of significant parts of the remainder into development projects in Cuba.

 

Since that time, the UK, France, Germany Spain, Austria, the Netherlands and the other nations involved have moved rapidly to formalise agreements that will enable their companies to obtain a strong long-term foothold through investment in the Cuban market.

 

While EU engagement would not have occurred unless Washington had signalled a change in policy, the reality is, as European diplomats observe, the Paris Club agreement and the new relationship with Europe mean that EU companies can now obtain financing and a foothold before, they suggest, the next  US President lifts the embargo. 

 

The implication is that a race has begun involving Europe and the US, as well as China, Japan, Russia, Mexico, Brazil and others who are also moving rapidly to deepen relations, for economic advantage and influence, not least because of Cuba’s significant influence in the Latin American and Caribbean region and internationally.

 

It is a process in which Cuba - if it is able to invigorate its economic restructuring and speed up decision making and delivery -  is potentially in good position to take advantage of; not least by being able to govern the relative speed at which it engages with each of its private and public sector suitors.

 

That said, much depends on the outcome of the 7th Party Congress on April 16. This will endorse the country’s future economic approach, is likely to make clear the process of change after 2018 when power is handed to a new generation, and is expected to addresses fundamental issues such as the slow pace of decentralisation, individual responsibility, the engagement of youth, and the role of the internet.

 

Central to Cuba’s future development will be how the Cuban Communist Party and its government intend adapting economic strategy in ways that enable a less constrained approach to growth and decision making, offers more in the way of material incentives to enterprise and workers, and ends the hemorrhaging abroad of increasing numbers of its brightest young people. The challenge in doing so will be finding a basis on which a new balance can be struck between flexibility, the offer of new freedoms and more materially, and the retention of Cuba’s unique sense of social cohesiveness, commitment and solidarity.