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Cubans Take to the Streets: Will It Matter?
GCaM Greater Caribbean Monitor
March 22, 2024
Dear all,
We welcome you to the Greater Caribbean Monitor (GCaM). Due to Holy Week celebrations in Guatemala, publication will resume on Friday, April 5. In this issue, you will find:
•Cubans Take to the Streets: Will It Matter?
•Honduras Continues to Strengthen Bonds with China
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The GCaM Team
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•Cubans Take to the Streets: Will It Matter?
572 words | 3 minutes reading time
Since March 17, Cuba has been shaken by protests. The government is putting on a brave face, calling for dialogue and understating the number of arrests. Cubans have been clamoring for “food and electricity,” but other slogans, like “liberty” and “homeland and life,” an alteration of the country’s official motto, “homeland or death,” have also been heard.
Protests have thus far been concentrated in the eastern region, particularly in Santiago, the country’s second-largest city, and Bayamo. Cuban activists speak of other eastern cities, like Holguín, being heavily militarized.
The protests remain relatively small and are still minor in Havana, located some 500 miles from Santiago.
On March 18, Carlos Fernandez de Cossío, Cuba’s Vice Minister of Foreign Affairs, summoned Benjamin Ziff, the U.S. chargé d’affaires to bemoan alleged U.S. support for the protests. Washington denies any such links.
Between the Lines. Although protests are uncommon in Cuba, they are not unheard of. In July 2021, the island went through a series of protests that enjoyed worldwide support, particularly in South Florida. Hundreds of protesters were arrested, and at least one death was confirmed. 297 individuals received prison sentences of between five and 25 years.
The reasons for the current protests are identical: an acute shortage of food, medicines, and electric power. The regime has attempted to face off these pressures, sending rice and milk to the cities where the protests are particularly strong.
Havana usually attempts to conceal its problems. On this occasion, it has not been able to do so. In February, the government requested World Food Program (WFP) assistance, recognizing the lack of food, fuel, and medicines.
The aid had been requested in late 2023, but only recently came to light. Cuba has already received some 144 metric tons of milk powder, intended for 48,000 kids between six months and three years old.
Panorama. The last five years or so have been particularly trying for the Cuban economy. In 2023, inflation reached 30%, with GDP falling by 2%. The regime has been forced to resort to austerity policies and has cut subsidies on items purchased with ration cards.
In February, the government declared a 400% hike in fuel prices, yet power outages continued. The increase in prices has not remedied the acute shortage of basic inputs.
The regime also dismissed Alejandro Gil Fernández, deputy prime minister and economy minister. President Miguel Díaz-Canel has limited himself to saying that Gil made a “huge mistake,” likely referring to a corruption case.
Since 2021, about 400,000 Cubans have requested asylum in the United States. 142,352 Cubans crossed the U.S.-Mexico border in the last fiscal year. Special regulations entitle them to permanent residency after one year in the United States.
The Future. Havana is conscious of its damaged international profile, hence the government’s attempts to minimize, or at least conceal, instances of repression. Yet a number of arrests have undoubtedly taken place, although the regime has failed to provide official figures.
Cuban activists dream of a sudden change that includes the resignation of political leaders and wide-ranging reforms. This possibility cannot be discarded, yet it remains unlikely at this stage.
Similarly, it is unlikely that Washington will relax its embargo on Cuba to remedy the shortages. On the contrary, the “correct” position, both in light of U.S. interests and pressure from the Cuban lobby, is clear: more pressure.
The Cuban opposition retains some reasons for hope. Even if they fail, the nascent protests demonstrate the growing disenchantment with the authorities. But disenchantment, as has been seen, does not suffice.
Illegal immigration, cui bono?
Let’s talk about illegal immigration. Americans, like all human beings, are motivated by incentives. This includes Democrats. The party’s moderate faction worries that the border chaos will mobilize Trump’s base and cost them the election. That is why Secretary Mayorkas was in Guatemala yesterday, and President Arévalo is traveling to Washington to meet with Vice President Harris next week.
If moderates are truly interested in changing the status quo—that is, the wide-open border promoted by radicals—they need an objective analysis of the incentive structure backing immigration, which begins in a country like Guatemala and ends in a swing state like Arizona.
Radical Democrats promote immigration, both out of cold electoral calculus and mere ideology. Although immigrants do not vote, they are still tabulated in the census, inflating the population of the Democratic-leaning states where they tend to concentrate.
Certain U.S. firms take advantage of the region’s “demographic bonus” by recruiting millions of Latin American workers. Between 2021 and 2022, immigration accounted for 65% of population growth across the U.S. Immigrants hope to achieve the “American Dream”—and vote for their benefactors.
Drug traffickers have used the open border to introduce record quantities of fentanyl, a synthetic drug, earning “tens of billions of dollars.” This is without counting all the other drugs. Seizures of this particular drug peaked in 2023, when 27,000 pounds were seized in contrast to the 4,800 pounds seized in 2020.
Coyotes now have their hands on an industry worth $13 billion. In 2018, it was scarcely worth $500 million. The message is clear: the border is open, so the risk of being sent back has been significantly reduced. The facts support it. Despite 2.5 million migrant encounters in 2023, the federal government has sued the State of Texas for its attempts at tackling the phenomenon.
Immigrants, motivated by the lack of opportunities in their countries, see the United States as the land of milk and honey. The wage differential means that even if they are undocumented, their income is many times greater.
The final link in this network of incentives are the families of immigrants, who in 2023 received $156 billion throughout Latin America. Remittances were collectively worth $103 billion as recently as 2020.
The narrative that the “root cause” of migration is corruption has been very useful politically, both at home and abroad. But it lacks any kind of explanatory value. It is necessary to overcome it if one really wishes to address the problem.
Daniel de Cádiz
•Honduras Continues to Strengthen Bonds with China
546 words | 3 minutes reading time
In the recent political landscape of Honduras, significant shifts are occurring, notably in its diplomatic and economic relations with China. As the struggling nation grapples with economic challenges, President Xiomara Castro continues to strengthen ties with China, aiming to leverage potential investments and assistance.
Economic Struggles. Honduras, much like its Central American neighbors, faces significant economic hurdles. Honduras’ poverty is exacerbated by factors such as high debt levels, trade imbalances, and limited foreign direct investment (FDI).
The country’s GDP growth has been sluggish, trailing behind regional counterparts, with forecasts indicating a modest expansion in the coming years.
The Castro administration has emphasized the significance of Honduras’ FDI, highlighting its growth to $1.4 billion in 2022, representing a notable increase of 28.9%. This marks a significant departure from 2021, which witnessed the lowest level of FDI in Honduras since 1995.
Perhaps a consequence of low FDI, Honduras has a GDP (nominal) per capita of $3,245, giving it a world ranking of 102. In Central America, only Nicaragua registers lower figures.
Growing Presence. China’s engagement with Honduras has been on the rise in recent years. Beijing has sought to induce Tegucigalpa via promises of infrastructure projects, trade agreements, and financial support. This has all come rather quickly: Honduras only cut off relations with Taiwan in March 2023.
At the time, Eduardo Enrique Reina, Honduras’ foreign secretary, deemed it a matter of “pragmatism, not ideology.” Tegucigalpa had asked Taiwan to raise its yearly aid from $2.6 million to $100 million and renegotiate some $600 million in Honduran bonds payable to Taipei.
Honduras is merely the latest of its neighbors to fall to China. Central America, perhaps on account of its pro-U.S. orientation, historically looked askance at Beijing. Today, only Guatemala and Belize recognize Taiwan.
The Dragon’s Deal. March 21 saw the conclusion of the fourth round of trade talks between Honduras and China. The two countries intend to close a free trade agreement (FTA) by summer.
Once again, the speed is shocking. It marks less than a year since the establishment of diplomatic relations on March 26, 2023. Trade talks began scarcely three months later, on July 4.
China has been keen to provide public backing for a proposed $20 billion rail project, commonly referred to as a “dry canal,” which seeks to connect Honduras’ Caribbean port of Puerto Castillo to the Pacific port of Amapala. Notably, the U.S. embassy has also shown its support for the initiative.
Negotiations are underway for the construction of a 150MW hydroelectric dam, known as Patuca II, in eastern Honduras. This initiative forms part of a larger plan encompassing three dams along the Patuca River, the second-largest river in Central America.
The Big Picture. While the prospect of increased investment and assistance from China holds promise for economic development, it is imperative for Honduras to proceed with caution.
Past experiences in Ecuador and Venezuela serve as cautionary tales. Taiwan and the United States have strongly warned Honduras against entering negotiations with China, highlighting the risks of falling into a debt trap.
Honduras must prioritize its long-term sustainability and national interests while pursuing economic growth and development opportunities. In this regard, China proves a tempting backer.
Nonetheless, all its Central American predecessors, especially those with FTAs (Nicaragua and Costa Rica), have enormous trade deficits with China. There is a substantial risk of unfulfilled infrastructure promises and vast trade asymmetries.