Dec 11, 2013 | 01:24 GMT

4 mins read

U.S.-Cuba Relations Need More Than Handshakes

It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

U.S. President Barack Obama and Cuban President Raul Castro shook hands Tuesday during the memorial service for Nelson Mandela. The last time the U.S. and Cuban presidents shook hands was in 2000, when Fidel Castro met with Bill Clinton. That was the first time the countries' leaders had made such a gesture since the Cuban Revolution of 1959.

Admittedly, Tuesday's handshake was carefully contrived, coordinated and photographed. But the meeting itself punctuates an ongoing process, whereby the United States and Cuba are slowly improving relations more than 20 years after the end of the Cold War.

Cuba is one of the only countries still isolated from the United States. Considering the modest success of Washington's talks with Tehran, the Obama administration may have a unique foreign policy opportunity: mending ties with yet another political foe.

What is a Geopolitical Diary? George Friedman explains.

But the two countries may not be able to reconcile so easily. Since the beginning of the Obama second term, there has been some talk in Washington that the time has come to lift the embargo. Without the sponsorship of a major global power, Cuba presents no strategic threat to the United States, so there has been no pressing strategic need to isolate Cuba. Instead, the policy has been dictated by domestic constraints, namely the 27 electoral votes controlled by Florida, where anti-Castro sentiment runs strong. Democrats in particular have had to shy away from popular pressure to change Cuba's status for fear that it would disproportionately affect the election results. But public opinions change, and Obama won Florida in both elections, (although his victory was slightly narrower in the second), leaving open the door to a policy shift on Cuba.

Officially, lifting sanctions against Cuba would require Congressional action, and ongoing deadlock in the U.S. legislature probably means that any effort to lift restrictions would have to wait until after the 2014 midterm elections. If support from Congress can be secured, the process would be relatively simple. Appropriate gestures would be made by both sides, which for Cuba would require releasing jailed U.S. contractor Alan Gross from prison in Cuba and authoring some sort of roadmap toward democracy.

Given that Obama has more room to maneuver on this issue than any U.S. president since 1959, it may seem surprising that more progress toward a rapprochement has not yet been made. The primary reason lies in Cuba's needs, not the needs of the United States.

Cuba is changing. Havana is managing a historic transformation away from strict communism kept alive by Soviet subsidies. The island's preliminary economic collapse in the 1990s introduced tourism as a source of income, attracting Europeans, Asians and Western Hemisphere travelers not from the United States. Tourism generates limited social opportunities though and was never going to be a satisfactory source of economic activity. A tourism-based economy was what set the stage for the Cuban Revolution in the first place.

Under Raul's leadership, the island has begun to open up incrementally. But progress has been slow. Domestically, reforms have been introduced haltingly or superficially. Cuba is trying to settle its external debts and only in October managed to restructure $32 billion of debt claimed by Russia from the Soviet era, according to a Reuters report this week. Notably, the reforms enacted under Raul have been unfailingly cautious. Raul is known to be an admirer of the Chinese model of economic management and each change has been made with strict levels of state control and caution akin to those of Beijing.

Sudden economic changes pose a danger to the political stability of the regime and therefore must be made carefully. First, the Cuban government has crafted a domestic narrative of victimhood according to which it is constantly antagonized by the United States. When the embargo is eventually lifted, blaming an external tormentor for its domestic troubles will not be so easy. Second, lifting the embargo will present serious logistical challenges for a country that has tightly controlled the ingress and egress of people, goods and finances.

In short, normalized relations between Cuba and the United States are inevitable at some point, but Cuba may simply not be ready for it. And there is no guarantee that Cuba will benefit from it when it happens. The island is already a major tourist destination. Most countries and companies have some ability to invest in Cuba and the biggest barrier to foreign direct investment in Cuba has essentially been Cuba's disinterest in incorporating investment into its economic system. Ultimately, it will be Cuba's slowly evolving economic adjustments that will determine how fast the country emerges from isolation by its largest neighbor.

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