Atlantic Council: 10 points for Cuba’s reintegration into global economy

Days before the opening of the U.S. Embassy in Havana, the Atlantic Council’s Latin America Center launched a new report today that provides a ten point roadmap for Cuba’s reintegration into the global economy.  Key to the success of this effort will be to push for a reengagement between Cuba and the international financial institutions (IFIs) including the World Bank, the International Monetary Fund (IMF), and the Inter-American Development Bank (IDB).

Cuba’s Economic Reintegration: Begin with the International Financial Institutions is the first major policy publication on Cuba’s role in the global economic community since the December announcement of new policies toward Cuba. The team of authors include Cuban economist Pavel Vidal and former Senior IMF Economist Scott Brown, a former mission chief for Albania.

[Click here to read Progreso Weekly’s interview with Cuban economist Pavel Vidal conducted in March 2014.]

Beyond examining conditions in Cuba, the report also looks to the successful reintegration of previously isolated economies such as Vietnam and Albania as possible models for Cuba. It calls on the United States to put aside longstanding objections to Cuban membership to the IFIs and for Cuban authorities to re-evaluate why this may be the moment to take steps toward engaging the international organizations. Joining the IFIs could provide necessary technical assistance to transition the economy, spur economic growth, assist with infrastructure development, and improve the lives of everyday Cubans.

“The road ahead for Cuba will certainly not be an easy one, but the fact that it has shown a willingness for economic reform is encouraging. It must now accelerate the pace of putting its economy in order. This is in the interest of the United States. This report presents ten key recommendations for Cuba’s economic reintegration and shows the critical role that international financial institutions will play in bolstering Cuban society,” said Peter Schechter, Director of the Latin America Center.

“Access to technical know-how and to monies from institutions such as the World Bank, the Inter-American Development Bank, and the IMF would support Cuba’s reintegration into the world economy while encouraging transparency and the nascent Cuban private sector,” said Jason Marczak, Deputy Director of the Latin America Center.

The report was launched at an event at the Atlantic Council. The event featured a keynote address by Secretary Carlos Gutierrez, former U.S. Secretary of Commerce, who recently changed his view on Cuba to a pro-engagement position. This was followed by an animated panel discussion about Cuba’s current economic situation and its potential for global economic integration with the authors of the report, as well as Rafael Romeu, former fiscal economist at the IMF and Ignacio López-Perea, Head of Global Commercial Banking at BBVA.

As the authors note, accession to the financial institutions will require major policy adjustments by Cuba and the United States. In particular, the report argues that the Obama administration and the U.S. Congress must take difficult but important steps to deconstruct and discard the complex legal framework obliging U.S. opposition to Cuban membership in the IFIs.

The report contains ten concrete recommendations for the United States, Cuba, and the international community to bring Cuba back into the international financial system. For example:

• Cuba should carefully analyze all of the potential paths toward IFI membership. Lessons from Vietnam and Albania can serve as a guide to potential benefits and challenges, as well as highlight procedures to membership.
• The U.S. needs to give Cuba breathing room. The United States should give maximum leeway to the IFIs to begin confidence-building discussions and offer technical assistance to Cuba by not enforcing the legal mechanisms that call for U.S. opposition to multilateral loans to Cuba.
• Multilaterals should determine a path for the inclusion of Cuba.  The IMF, World Bank, and the IDB should create a steering group to begin officially engaging the Cuban government.

The full report and recommendations are available online at http://www.atlanticcouncil.org/uscuba.