Policy Position Letter

Foreign Investment and the Rights of Cuban Workers

Background

For over sixty years Cuba has been ruled by a regime fundamentally hostile to free markets and private property. This is the primary reason behind the economic decline of a once prosperous nation and the ongoing misery of its people. After the collapse of the former Soviet Union, the Castro regime decided to attract foreign investment to support its flailing economy. Some nations, claiming a desire to encourage a democratic transition in the island, have since promoted investment in mixed ventures with the regime. This policy, known as “constructive engagement”, has often been lauded as a better alternative to the traditional U.S. policy of economic isolation.

Engagement has failed

Thirty years later, engagement has failed to encourage a democratic transition in Cuba. Even the brief ―if intense― experiment with engagement during the last two years of the Obama Administration failed to encourage a modicum of reforms, and only resulted in further strengthening and legitimizing the regime’s hold on power.

Engagement has, however, resulted in the systematic exploitation of Cuban workers by greedy foreign capitalists in cahoots with a ruthless regime. The regime decides who foreign companies can hire based on political loyalty, keeps 90% of their wages in hard-currency while paying them a fraction in worthless local currency, and prevents workers from organizing independent unions or directly negotiating their contracts. Foreign companies operating in Cuba routinely acquiesce to these rules that violate international labor practices.

Protecting the rights of Cuban workers

The Center for a Free Cuba believes that to achieve an effective democratic transition, political reforms must precede economic ones and not the other way around. That is why the Center has consistently opposed any unconditional policy of engagement with the Castro regime. The Center believes that at a minimum, any policy of economic engagement with the Castro regime must meet a set of basic conditions that would protect the rights of Cuban workers. Based on a set of stipulations for foreign investment proposed by Cuban dissidents in 1994 known as “The Arcos Principles”, the Center for a Free Cuba recommends three basic principles that all foreign companies must adhere to in order to conduct business in Cuba, if they don’t want to become accomplices to the exploitation of Cuban workers.

Three Principles for Cuban Workers’ Rights

1)         Foreign companies must hire Cuban workers directly, giving them the ability to negotiate their working terms with their employers and without the Cuban government’s interference.

2)         Foreign companies must pay Cuban workers directly in any legal hard currency or its market equivalent in the legal local currency.

3)         Performance evaluations of Cuban workers hired by foreign companies must be assessed based solely on merits related to their work and shall not include any political or ideological requirements.