Fidel Castro is dead. What’s next?

by Mike Preston (ANews@arkansasedc.com) 16 views 

Editor’s note: Mike Preston is executive director of the Arkansas Economic Development Commission. Opinions, commentary and other essays posted in this space are wholly the view of the author(s).
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Cuba’s long national nightmare is over. Fidel Castro is dead. He was a tyrant who oppressed his people and killed those with whom he disagreed. His reign of tyranny was so unbearable that citizens routinely risked their lives crossing miles of dangerous waters on makeshift rafts to escape the hopelessness of life in their homeland.

But Fidel’s recent death ushers in a new era of optimism for the Cuban people, albeit cautious.

There are some who believe Fidel’s passing will free the current dictator, his younger brother Raul, to do more in the area of political reforms and the modernization of the nation’s infrastructure, which he failed to do out of perceived deference to his then-living older brother.

I’ve been to Cuba. There are signs of progress. For instance, during my visit, fiber optic cables were being installed in Havana. Cuba’s doors, though not fully flung open, are slowly welcoming the rest of the world, and Arkansas is proud to be one of the first to cross the threshold.

While the 1961 economic and trade embargo remains in effect, opportunities have emerged in areas such as agriculture, which is Arkansas’ number one industry and export. Cuba is a market critical to the future of farming in Arkansas and the United States. From 2002 to 2012, Arkansas lost approximately 700,000 acres of farmland and 2,000 farms have gone out of business, according to the U.S. Department of Agriculture. Nationwide, we lost 8 million acres of farmland from 2007 to 2012. There must be a sense of urgency in turning that tide.

Thanks to our governor, Asa Hutchinson, Arkansas is taking the bull by the horns and is leading trade initiatives in Cuba. Gov. Hutchinson was the first U.S. governor to visit the island since the restoration of diplomatic ties between our two nations a year ago.

It is a natural fit for Arkansas. Most everything one can purchase in Cuba comes from other countries, and Arkansas is an exporter, especially in agriculture. Recently, two of our state’s leading poultry producers – Tyson Foods and Simmons – closed a deal with the Cuban government to provide 4,500 tons of chicken worth tens of millions of dollars. That’s a noteworthy accomplishment.

But more must be done.

Arkansas is the world’s leading producer of rice with 1.3 million acres producing over 7,300 pounds per acre. Rice is a staple in the Cuban diet, and the nation imports an average of 500,000 tons of rice, mostly low quality grains, every year from Brazil and Vietnam. Arkansas’ proximity to Cuba makes our state the ideal trading partner.

One of Cuba’s stated objectives for building its economy is attracting international tourists. Of course, U.S. commercial flights must be welcomed there, but tourists will also have an expectation that the food served in Cuba will be of high quality. Brazil and Vietnam can’t provide such. Arkansas, with our rice and poultry, can.

President-elect Donald Trump has hinted in recent days that he will re-negotiate the current deal with Cuba to relax trade restrictions. That is an important first step and with Fidel’s passing, the time for talks couldn’t be better. While the agreement struck with Cuba by the Obama Administration beneficially cracked open the door to American trade opportunities, it was a one-sided deal. The U.S. made all of the concessions while Cuba offered nothing in return. As a moral issue, we should demand political reforms, the release of political prisoners and the removal of oppressive policies that keep the Cuban people from living out their hopes and dreams.

Secondly, we encourage Congress to pass the Agriculture Export Expansion Act, a bipartisan piece of legislation sponsored in part by U.S. Sen. John Boozman, R-Ark. This bill removes the ban on private credit for transactions in Cuba, which is a major obstacle to trade.  If passed, which I hope will happen soon, private banks and companies can offer credit to Cuba for agricultural exports, thus providing new opportunities for Arkansas and U.S. farmers.

Finding new markets for products is key to the growth of any enterprise, and the American farmer is no exception. The opportunity in Cuba is great but requires continued work by both countries to be fully realized.

We can draw some parallels with Arkansas’ trade work in China. There are obvious differences between China and Cuba, of course. Proximity and size are two of the most obvious. Also apparent are the differences in economics. China, though still a communist country, has embraced capitalism and encourages its government-owned enterprises to explore investment opportunities abroad. The U.S. is a stable market and is considered a safe investment for Chinese assets.

Arkansas has reaped the benefits of this Chinese strategy. Earlier this year, Sun Paper, headquartered in China’s Shandong Province, announced it will build a $1.3 billion bio-refinery in south Arkansas. It represents the single largest investment in the state. It didn’t happen overnight. We invested time in building relationships with influential leaders of business and government to raise the profile of Arkansas.

Though Cuba is still a revolutionary market and has yet to fully accept the benefits of a capitalist economy, we are – like in China – working to chip away at barriers and build relationships with the Cuban people. Fidel Castro’s death is an important domino to fall in our continued effort to fling that cracked door wide open.

One thing is clear: the trade embargo of the last 50-plus years hasn’t worked. Instead, it strengthened the resolve of the Castro regime, and the 11 million citizens of Cuba have paid the price and so has the American farmer. Change is underway. Our hope is that Fidel’s death will help add speed to what has been a slow and methodical pace.

The Cuban people deserve access to the best, highest quality foods. And, the Arkansas and American farmer deserves a new market so that they cannot just survive but thrive.

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