• Submitted by: manso
• Editorial Articles
• 10 / 24 / 2010

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The Cuba Study Group, whose board includes some of the wealthiest Cuban American businesspeople, is a weathervane of exile politics. Founded in 2000 by Miami insurance tycoon Carlos Saladrigas, in the aftermath of the Elián González clashes to bring more pragmatism to Cuban American activism, the Cuba Study Group has been inching towards advocacy of normalization with Cuba. Last year, Saladrigas stated it was time to seek interaction with Cuba, including the government, and this year the group came out in support of lifting the U.S. travel ban. In an interview with Cuba Standard, Executive Director Tomás Bilbao, a former assistant of Senator Mel Martinez, explained the group’s microloan initiative, and its proposal for U.S. economic engagement in Cuba.

Please explain the Cuba Study Group’s microloan initiative.

B. In September 2006, realizing that economic development is key in the success of societies in transition, the Cuba Study Group put together a proposal to offer assistance to small business owners inside Cuba. In the proposal, we commit to working with a microloan institution to offer and to help raise seed capital.

Given U.S. sanctions, what kind of a financial institution would provide microloans on behalf of a U.S.-based NGO?

B. They would not be offering loans on our behalf. We’re offering the idea, which has attracted the interest of lots of people and governments. The Spanish government and the Holy See are in conversations with the Cuban government to issue microloans, in a large part as a result of the work of the Cuba Study Group in urging those governments to do so over the last three years. But yes, it’s a politically very sensitive topic, especially when it comes from the United States and from an organization that’s comprised of Cuban Americans. That said, what we believed in 2006 was that it was important to have these types of proposals on the table for the time when Cuban leaders recognize the need to move into a direction of greater economic liberalization. I think that now we’re seeing the beginnings of that.

What about the Cuban government?

B. There’s no doubt that, if you want to be able to operate something like this on the island, the operating institution will have to have contact with the Cuban government.

What institution could that be?

B. Initially, we thought that the best partners would be Banco Compartamos in Mexico. This is a publicly traded company, and one of the largest microloan institutions in Latin America, if not the largest. But as times have changed and things have developed inside Cuba, we’ve looked at other organizations that could also offer financial education and literacy. So we’re looking at, and talking to, other organizations. There are a lot of NGOs, such as ACCION International, Grameen Bank, and many others, there are hundreds of organizations in Latin America. The more institutions are involved in Cuba, the better.

The Spanish government is apparently giving the Cuban government control over their microloan program. Is that OK with you?

B. We have read reports that the Spanish agency for international development would issue at least the first round of loans to agricultural cooperatives through a Cuban bank. What we said in our initial proposal was that, in success cases around the world, it was non-profit organizations that were in charge of operating and disbursing these loans. The Cuban government has no experience and no expertise in this — nor does the U.S. government, or any other government, for that matter. We always think it’s better to let the professional organizations with experience in this field handle the disbursement and management of these loans.

But it wouldn’t be a fundamental obstacle for you if the Cuban government were to insist to be in charge of a microloan program?

B. We let the operational partner decide what makes sense for the program to succeed. It’s not sufficient to issue 100 microloans in the next few months, and then have the program fail. Ultimately, the goal is to have something that is ongoing, that is replenishing, to help serve millions of people, not just hundreds of people.

Does the Cuba Study Group have contacts with Cuban government officials?

B. We do not have contact with Cuban officials. I’ve seen them at conferences, and I’ve introduced myself, I’ve spoken to them, but — needless to say — we do not have ongoing contacts with them now.

Is that possibly going to change in the near future?

B. You have to ask the Cuban officials. We’re always willing to speak, we’re willing to listen, and to enter into a constructive dialogue. But we have been in contact fairly regularly with Cuban economists inside the island, many of whom have written lately articles stressing the importance of microloan programs. Some have even highlighted that it’s important these programs be operated by the microfinance institutions, and not by the Cuban government.

Microloan programs are tiny compared to the amounts Cuban relatives abroad are investing in startup businesses on the island.

B. True, the most natural source of funding for Cuban entrepreneurs are family members living abroad. That being said, not every entrepreneur in Cuba has family living in the United States. For those who do have family, the actions of the Obama Administration last year in removing limits on frequency and amount of remittances to family members is a very positive step.

Still, U.S. embargo laws make it illegal to be a silent partner in a business, a co-owner of a taxi, a lender for a bed-and-breakfast.

B. I don’t think that U.S. law and U.S. regulations discuss that. The U.S. regulations are intended to provide humanitarian assistance to relatives, helping them to meet their basic needs. One can argue, however, there’s no better way to help Cuban families to meet their daily needs then allowing them to become self-sufficient. While the U.S. government has no way in tracking whether the money is being used for buying soap or buying the prime materials to make soap to sell, I think it falls perfectly within the intent of U.S. law. While it doesn’t specify whether they can take equity stakes in those private businesses, certainly this is something that has been going on for some time.

So shouldn’t U.S. laws explicitly allow investments in small private businesses?

B. Certainly, the United States needs to take a hard look at regulations and ensure that it’s not an obstacle to any flow of financial or material assistance to family members in Cuba or to any member of Cuban civil society who wants to reduce their dependency on the Cuban government. In addition to family remittances, there are other important steps that the U.S. government could take to help empower small businesses inside Cuba.

Such as?

B. There is no reason why this administration couldn’t issue a general license allowing any American to send remittances to members of civil society inside Cuba. It makes no sense that U.S. law and not Cuban law prohibits me from doing so. The second thing is, the administration needs to interpret Section 109 of the Helms-Burton Act to include economic empowerment activities.

Explain what Section 109 is about.

B. This is the section that describes the intent of the democracy assistance programs financed by the USAID and the State Department. A very narrow interpretation from the Bush Administration suggested that these programs could only be used for political activity. Not only is that too narrow an interpretation and not the intent of the law, but also helps aggravate situations such as the one with Alan Gross. If the interpretation of the law was to include economic activities, or any activity that helps reduce dependency on the Cuban government, or helps Cuban families become self-sufficient, then the U.S. could move away from programs that are aimed solely at political activities, and more towards programs that are more in line with what it does with other countries in the region. Two more things: The U.S. government could issue a general license for NGOs that work in the field of microfinance and financial education. And the administration could urge Congress to lift the ban on travel, which would ultimately create a flow of products and resources to Cuba. It would also create an important primary and secondary market for the goods sold by independent businesses. You can’t expect those people to succeed if they don’t have a market and access to capital.

Source: Cubastandard.com