Sanctions: Tragedy in Cuba, Farce in Russia

(Bloomberg.com) -

Imagine for a moment that it’s the year 2064 and the U.S. president, flanked by flags, with the Oval Office fireplace behind his back, has arranged to address the nation. …

Today, the United States of America is changing its relationship with the people of Russia. In the most significant changes to our policy in more than fifty years, we will end an outdated approach that, for decades has failed to advance our interests, and instead, we will begin to normalize relations between our two countries. Proudly, the United States has supported democracy and human rights in Russia through these five decades. We’ve done so primarily through policies that aimed to isolate the country. And though this policy has been rooted in the best of intentions, it has had little effect, beyond providing the Russian government with a rationale for restrictions on its people. Today, Russia is still governed by heirs of Vladimir Putin, and the United Russia party that came to power half a century ago. Neither the American nor the Russian people are well-served by a rigid policy that is rooted in events that took place before most of us were born.

I lifted this wording from the speech President Barack Obama gave [on December 17], announcing the resumption of diplomatic relations with Cuba and an easing of the U.S. trade embargo against the island. I’ll admit it’s unlikely that future White House speechwriters would so blatantly crib from 50-year old speeches. But the basic point of yesterday’s speech — that a policy of isolation has been a failure by every measure — will almost certainly eventually have to be rehearsed for the case of Russia. The only question is whether we’ll have to wait 50 years for the U.S. to admit as much.

The U.S. embargo against Cuba, first instituted in 1960, and the Helms-Burton act which broadened it in 1996, both had regime change as their stated objectives. Helms-Burton set out to “assist the Cuban people in regaining their freedom and prosperity, as well as in joining the community of democratic countries that are flourishing in the Western Hemisphere.” It was supposed to lead to free and fair elections, providing “a policy framework for United States support to the Cuban people in response to the formation of a transition government or a democratically elected government in Cuba.”

Fifty-four years later, Cuba is still ruled by a Communist party that brooks no opposition. Even though its economic rules are substantially relaxed compared with the ones Fidel Castro spelled out after his revolution, it’s still an oppressive regime in which everything is subordinate to the interests of the state. This isn’t despite the embargo, but, to a significant extent, because of it. …

It’s not hard to see how Western sanctions against Russia are achieving the exact same result. Russian President Vladimir Putin’s performance at his annual press conference [December 18] demonstrates that, rather than address his administration’s failure to put Russia’s oil windfall to good use in the last eight years, he prefers to portray himself as a bulwark against U.S. aggression. It’s a convenient, popular position: over the past year, Russians have become the most anti-American nation in Europe.

Of course, the U.S. has never officially announced that the Russia sanctions’ goal was to topple Putin’s regime. “These sanctions could be lifted in a matter of weeks or days, depending on the choices that President Putin takes,” Secretary of State John Kerry said … Kerry and other sanctions proponents know, however, that while Putin is in the Kremlin, he will not stop meddling in Ukraine, much less give up Crimea, which he annexed in March. German Chancellor Angela Merkel admitted recently that the West was waging a war of economic attrition against Putin. She evoked the example of East Germany, which came close to an economic collapse in 1989 as the Soviet Union crumbled — and quickly agreed to be absorbed by West Germany not long thereafter.

Cuba provides a powerful counterexample. The country could be described as being on the verge of economic collapse for the entirety of its recent history. The first effect the U.S. embargo had was to quickly render useless the country’s U.S.-made capital stock. The Soviet Union stepped in, but when it fell apart, Cuba had to make some adjustments. Yet the Cuban regime managed to survive with minimal market reforms and few signs of popular discontent.

When I was in Cuba a few years ago, I saw a paradise both despoiled and curiously preserved by the Communists. Decent food and even gasoline were only available for “convertible pesos,” a currency foreign tourists received in exchange for their euros — or even for their U.S. dollars — at an extremely unfavorable rate. …Still, the people I talked to spoke respectfully of the Castros. The Communist leaders were not corrupt, they said, and they were doing their best in the face of the U.S. embargo. More and more private business activity was allowed, they said, and things were getting better. …

I got the same curious feeling in far-wealthier Moscow last week. People were grumbling about the economic costs of Russia’s aggressive self-isolation, but no one was prepared to protest. … Russians are still somewhat cushioned by the subcutaneous fat accumulated in the oil boom years.

Obama admitted the Cuba embargo was a failure. If the U.S. president had foresight, he’d say the same about the Russia sanctions right now — there’s no need to wait 50 years. Trade, openness, and friendliness have a much more beneficial effect on wayward countries than embargoes do. Western leaders imposing sanctions on Russia need to ponder whether they really want to turn Putin’s Russia into Castro’s Cuba — only far bigger and more dangerous.

(Bloomberg.com)