Shadow Government

Cuba's smoke-and-mirror reforms

The Castro regime's announcement that for the first time Cuban citizens will be able to buy and sell their own homes has spurred an outpouring of irrational exuberance that real change is finally coming to the island-prison of Dr. Castro. "To say that it's huge is an understatement," one interested observer told the New York Times. "This is the foundation, this is how you build capitalism, by allowing the free trade of property."

Another told Reuters, "The ability to sell houses means instant capital formation for Cuban families ... It is a big sign of the government letting go." Still another writes in the Christian Science Monitor that these are "incredibly meaningful changes."

Such optimism is ill-founded. In fact, it is indicative only of one of two things: either it betrays a brazen political objective (Time magazine: "Why the U.S. Should Drop the Embargo and Prop Up Cuban Homeowners") or it demonstrates just how low the bar of expectation has been placed for what the Cuban people need and deserve that we must celebrate mere crumbs tossed their way by the Castro dictatorship.

Indeed, sweep away the hype and all you see are daunting hurdles as to how this announcement will change in any way the regime's suffocating control of the Cuban population. The new order restricts people to "ownership" of one permanent residence and one vacation home (as if the average Cuban is in any position to own a second home); all transactions must be approved by the State; no explanation is given on how you grant titles to homes that either have been confiscated from their rightful owners, have been swapped multiple times in the underground economy, or which house multiple families because of the severe shortage of available housing; the construction industry remains state-controlled; and the regime itself admits this order reflects no backsliding on the preeminence of the State in controlling the country's economic and political systems.

Beyond these challenges, however, is the fundamental fact that you cannot conjure private property rights, let alone the free trade in property, out of thin air. Those rights exist only where they are rooted in a credible, impartial, and transparent legal superstructure that can protect one's property, settle disputes, and guarantee transactions against the predations of the State. Anything less is a rigged game where the State is the dealer.

This is how the State Department's annual Human Rights Report characterizes Cuba's judicial system: "While the constitution recognizes the independence of the judiciary, the judiciary is subordinate to the imperatives of the socialist state. The National Assembly appoints all judges and can remove them at any time. Through the National Assembly, the state exerted near-total influence over the courts and their rulings ... Civil courts, like all courts in the country, lack an independent or impartial judiciary as well as effective procedural guarantees."

Translation: Cubans' ability to "own" property, trade, or leverage their property to build capital will continue to exist at the sufferance of the State. And what the State giveth, the State can taketh away. The bottom line is that, ultimately, all Cubans will really own is a piece of paper that says they own something.

Rather than empowering individual Cubans, the regime's goal in allowing the open trade of houses is to hopefully siphon more Cuban American money into the island's perennially bankrupt economy. With average Cubans on the island too poor to buy or improve their dilapidated dwellings, their hope is relatives in Miami and elsewhere will remit even more cash to the island attempting to improve their relations' situation. Indeed, the cynicism of relying on Cuban exiles to support the Cuban economy has never bothered the Castro brothers in the slightest.

The Castro regime recognizes the increasing unrest among the repressed and impoverished Cuban people for fundamental change, but they are capable only of prescribing more painkillers rather than the radical surgery that is needed to restore the nation's health. Pretending to devolve more autonomy in individuals' lives is just one more cruelty inflicted on the Cuban people over five decades of dictatorship, a cruelty made worse by the cheerleading from abroad.

STR/AFP/Getty Images

Shadow Government

Robin Hood Tax is not a feather in Sarkozy's cap

During the recent G20 meetings the world watched as Western leaders tried to make sense of the growing Eurozone crisis while the Greek government teetered on collapse.  Many other topics for debate failed to get much public attention and that will remain the case until the Greek crisis is resolved and the growing financial crisis is addressed. 

Gone are the days when world leaders looked forward to talking about the role the G8 and G20 should take to commit to the developing world and its needs on global health issues, the spread of democracy and the provision of humanitarian assistance to those still in dire need.

Add to this the skewed view that now is somehow the time to transfer a large portion of this responsibility to the private sector insinuating that they are in many ways responsible for the current shortfall in government foreign aid budgets.

Politicians would rather place blame on the private sector than look at their own bloated and over-spent government foreign aid programs.

And yet they still profess a desire to maintain robust foreign assistance programs and to look for new ways to fund global development in a bid to accomplish the Millennium Development Goals.

So how do some of our "progressive" leaders aim to do this?  A new financial transaction tax (known by its advocates as the "Robin Hood" tax) has been proposed to raise more money for developing countries. Far from being a creative solution, I fear that this is yet another way for governments to trumpet flashy big number deliverables rather than focusing on making aid more effective and coordinated.

The "Robin Hood" tax also fails to take into account what the private sector continues to do in the developing world.

To be sure, there remains great hardship in the developing world and foreign aid should be a priority within the G20. But, we need to get away from just upping the ante for the sake of a headline and move towards requiring international aid organizations to prioritize and strategize.  

There is also a need to set conditions in which foreign aid recipients themselves start to contribute some revenue to establish a coordinated approach to solving a programs objective.

There exists a continued disconnect and infighting between donor nations on how best to address foreign assistance. 

Agencies like USAID are often accused by donor nations in Europe of setting up parallel structures and as a result not providing the funding needed to government institutions in developing countries.  At the same time, Congress wants accountability for money spent knowing that there exists too much waste in budget transfers to governments who take advantage of (and even squander) tax payers' money.

So, let's take some time while governments are short on cash to actually prioritize what we are already spending.  Let's get away from big number deliverables and "bold new approaches" and move towards a focus on best practices, program money based on results, targeted spending and investment where we know it will make a difference.

The one thing that should not be on the table right now is an ambitious new tax, especially not one that risks penalizing the only sector that can truly lift people out of poverty; the much maligned private sector.

No matter how many actors and activists Tweet about the noble "Robin Hood" tax, let's remember what works and then focus on making that even more effective. 

Kerim Okten - Pool/Getty Images