How the IMF and World Bank could save Cuba's economy – defying the US embargo

I’ve just finished reading a new report by Professor Richard Feinberg, a former Clinton administration official and non-resident fellow at the Brookings Institution.  “Reaching Out: Cuba’s New Economy and the International Response,” clocked in at a daunting 101 pages but should nonetheless be required reading for anyone following the island nation’s long-awaited economic restructuring. 

Cuba’s economic transformation is a hot topic, to be sure; another excellent report, Cuba’s New Resolve: Economic Reform and Its Implications for U.S. Policy, written by Cuba expert Collin Laverty for the Center for Democracy in the Americas, offers a detailed look at Cuba’s economic reforms to date, and in so doing, lays to rest any question of whether these reforms are just a temporary fix or irreversible.  If Cuba’s New Resolve argues that Cuba is serious about its economic reforms, Reaching Out offers what the international community should do about it with an 800-pound gorilla – the US embargo – in the room.

I’ll admit that after reading Professor Feinberg’s introduction, I next skipped to the middle for both a history lesson and a pragmatic, creative vision for Raul Castro’s Cuba to reconnect with the International Financial Institutions (IFIs) – the World Bank and the International Monetary Fund, as well as with regional development banks – in spite of opposition from the United States.  

Feinberg unravels the conventional wisdom that says Cuba and the IFIs would make unhappy bedfellows – Cuba withdrew from the World Bank and the International Monetary Fund more than 40 years ago – by pointing to successful IFI engagement with nonmembers like Kosovo and South Sudan, and with proud and strong states like Daniel Ortega's Nicaragua and Vietnam, with which Cuba shares key similarities.  The IFIs are more interested in “the long game,” Feinberg argues, and their willingness to take things step by step would fit nicely with Cuba’s (urgent) need for gradual changes.  He talks to both sides, and a senior Cuban diplomat tells him that “Cuba has no principled position against” engagement with the IFIs – a statement Feinberg believes signals a real shift in Cuban policy (hopefully a Cuban official will field that question publicly in the not too distant future).  

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