U.S. travelers not only rent rooms, but dine at private restaurants and purchase paintings and CD recordings by Cuban artists, adding dynamism to the burgeoning private sector in Cuba.
But the lion’s share of the Cuban economy remains in the hands of the state. There are few signs of enhanced dynamism among state-owned enterprises, despite promises of more decentralized decision-making.
More than a year ago, the Cuban government announced, to great fanfare, a new economic development center at Mariel, just west of Havana. But very few new foreign investments have been approved, and there are no visible groundbreakings. New investments require multiple approvals by Cuban bureaucrats who seem unsure of their authority or just what the new investment rules should be.
Yet broad-based growth in Cuba will be possible only if low levels of domestic savings and investment are supplemented with significant inflows of foreign capital and technologies.
Similarly, the Obama administration offered to permit U.S. firms to buy and sell with the growing Cuban private sector. But the Cuban government has not yet put in place the distribution channels to make that promising new commerce a reality.
On the U.S. side, some firms complain the new U.S. regulations lack sufficient clarity to satisfy their legal counsels. Another missing piece: Can U.S. banks provide the trade credits that routinely grease international commerce?
Will the Cuban and U.S. governments seek to give a renewed impetus to commerce across the Florida Straits? Or will they be satisfied with what they have already accomplished?
In both Havana and Washington, some will argue that restoring diplomatic relations, after more than five decades of antagonism, is sufficiently daring and groundbreaking for the time being.
Yet in both capitals, there is unease the gains to date could be largely reversed, particularly if Republicans regain the White House. Are the pro-change constituencies strong enough in both countries to ensure the sustainability of the liberalization path?
The outcomes of these debates in Washington and Havana will decide whether the two governments believe they need to undertake a second round of measures to facilitate travel and commerce, or whether they or can rest comfortably on their laurels.
Richard E. Feinberg is a professor at the University of California, San Diego, and a non-resident senior fellow at the Brookings Institution.