Conflicting ideologies define the heated relationship between the distinctly capitalist United States and proudly communist Cuba. President Barack Obama is scheduled to go on a diplomatic visit to Cuba for the formal purpose of examining progress on human rights. The US currently has commercial, economic, and financial embargos on Cuba that forbid any US corporation from doing business with Cuba. Obama’s visit represents a chance that the embargos on Cuba will be lifted.
Following Cuban independence, the United States had tremendous economic influence over Cuba; 45% of Cuban firms were owned by the US. Under the regime of Fidel Castro, relationships between the two countries became progressively more heated resulting in the United States instituting a full trade embargo on Cuba in 1962. Tensions between the two culminated in the infamous Cuban missile crisis when Cuba had Soviet nuclear weapons pointed at the US. The strained relationship between the two countries slowly eased towards civility as communist countries, especially Cuba’s main ally, the Soviet Union, collapsed. With the help of Pope Francis, efforts were made to normalize relationships between the two countries and potentially lift the embargo. Diplomatic relations were recently restored on July 20, 2015 with the implementation of an embassy in each country.
Recently, there has been tremendous progress in relations between the US and Cuba. In slightly less than a year, there have been clear signs of progress; ferry services have resumed transporting US citizens to Cuba; American cell phone companies now provide service in Cuba; and there have been talks about environmental and investor protections. Despite progress between the two countries, the Cuban economy is very restricted and has recently faced a stagnation in growth. Economic restrictions have caused state-owned firms to be uncompetitive and have inequitable payrolls. Cuba additionally has the 2nd oldest population and Cuba’s workforce participation rate is estimated to be one of the lowest in the world.
Obama’s visit is the first by an incumbent US president since Calvin Coolidge in 1908. Assuming diplomatic relationships are successful, pundits predict there is a strong possibility of the trade embargo being lifted. Doing so would liberalize Cuba’s economy by bringing in unprecedented direct foreign investment. Obama’s visit will ultimately be critical in influencing future economic relations with Cuba.