Cuba’s Free Trade Farce

With more than 54 years of consistent economic failure to their credit, Cuba’s communist dictators, the Castro brothers, are now about to show the world how to do business by building a new deep-sea port in the small town of Mariel, 30 minutes from Havana. This new port will boast of being Cuba’s very own “Special Economic Zone” free from all the communist principles that caused the very problems the Castros are attempting to fix.

This new zone will allow foreign interests to exploit the Cuban labor force much like business is done in China while implementing the fallacious compartmentalization of ideology and economy. As if economy is devoid of good and bad choices and functions simply as a machine where one provides labor and material, mix the two following the recipe and prosperity follows. One cannot conduct a successful business without trust, honor, good will and integrity all of which comprise a good work ethic. Simply put, a free market economy is only successful because it is based on virtue—a quality entirely foreign to communists.

Consistent with flawed socialistic bureaucracy; foreign companies will not be allowed to hire workers directly. They must go through a government employment agency that will extort a portion of the laborers’ wage to prop up the failed communist regime. This agency will pay workers only a fraction of what they would otherwise receive.

The result will be identical to China’s “capitalist project” that began in the ‘80s. There will be even more sweat shops and rampant exploitation of one more Communist country’s enslaved population by foreign corporations with no moral conscience. Big profits are to be made, both by these corporations and the communist dictators hosting them, even though they are supposed to be ideological enemies.

Cuban trade officials claim that investors from Russia, China, Vietnam, Germany, Spain, Japan, Mexico and Brazil have shown interest, however none have written any checks. A major problem remains unsolved for any investor in a communist country: Marxists have no honor and the Castros are no exception. How can investors protect themselves against government appropriation? More commonly referred to as stealing, which is not limited to proprietary technology but their entire manufacturing facility and all physical assets.

Rather than supporting long-term structural improvements for workers, free trade zones tend to promote less secure jobs as they encourage companies to move to wherever they can secure a better deal.

So how do the Marxist brothers hope to side step the unattractive problem of appropriation? Cuba is now offering investors 50-year contracts instead of 25 and 100 percent ownership of their businesses coupled with duty-free imports and virtually no taxes for the first decade of operation. Translated, this means foreign businesses will be stolen in 50 years, instead of 25 and taxes will skyrocket after 10 years much like adjustable mortgage rates. History clearly shows that Communists are notorious for not respecting treaties with other nations, why would any individual or business feel protected by a paper contract in a country where brutal “might is right”?

Can a free trade zone be the panacea to communism’s disastrous effects on economy? Cuba has been suffering an increasingly moribund economy since Fidel usurped power and has remained afloat principally through the beneficent handouts received from leftist countries. There have been many attempts to liberalize its economy since the collapse of the Soviet Union in 1991, which sent Cuba’s finances into a tailspin, but to no avail. The Castro’s solution has always been to implement more communism, which has resulted in more poverty.

With all of the empty rhetoric spewing from leftists around the world today condemning capitalism, it is baffling to see Cuba adopt an economic development model so closely associated with the free market and capitalistic corporate control. Are the Castros conceding to the failure of the Marxist economic paradigm and now adopting a solution that is firmly ensconced in free-market principles?

Perhaps more importantly, substantial doubts remain regarding the types of industries that might view Cuba as an attractive site for export-driven manufacturing. Even though Cuba claims to have the best-educated labor force in the world, it has almost no experience with modern assembly plants and advanced technology. So the free world remains perplexed as it watches the political gymnastics performed by the Marxist brothers who rail against exploitative global capitalists and the free market on state television, while rolling out a red carpet for them at Mariel in a desperate attempt to promote yet another communist free trade farce.