How to do good business in Cuba
How to do good business in Cuba
Lindsay Lloyd 12:32 a.m. EDT April 5, 2016
President Barack Obama’s recent visit to Cuba showed the same fault
lines in American attitudes toward the communist island that have
existed since 1959.
But it remains to be seen if the administration’s decision to engage
with Havana will produce improvements in Cuba’s dismal human rights
record. Dissidents and independent journalists continue to be routinely
rounded up for daring to challenge the regime’s authority. The most
recent Human Rights Report from the State Department and the Freedom in
the World report from independent watchdog Freedom House continue to
brand Cuba as a repressive dictatorship. Human Rights Watch and other
groups say that human rights abuses have worsened in recent years.
Meanwhile, American businesses are eager to pounce on what they see as
an untapped market. In just the last few weeks, airlines have bid for
direct flights, hotel chains have announced new deals and technology
giants are promising to break down the state’s censorship and isolation.
Even conservatives like Texas Gov. Greg Abbott have been leading trade
missions to Cuba since the thaw began.
But Cuba accepts foreign investment only on its own terms. Businesses
must hire candidates vetted by the state. Ordinary Cubans are barred
access to some facilities, such as hotels. Wages are paid not to the
employee, but rather to a state agency, which then in turn pays the
employee a fraction of his nominal salary.
International business can and should be a force for good. They can
improve the quality of life for their employees and for consumers. But
how do we ensure that their interest in Cuba pays off for the people of
Cuba and doesn’t prolong a decrepit regime’s grip on power?
Look back at the case of South Africa in the late 1970s. At that time,
South Africa had large investments from multinational corporations,
despite its apartheid policies that segregated and discriminated against
the non-white population.
In 1977, the Rev. Leon Sullivan, an African-American minister from
Philadelphia, drafted a set of guidelines for foreign companies doing
business in South Africa. The Sullivan Principles were widely adopted by
multinationals operating in the country, and committed them to provide
fair employment and equal treatment for all, regardless of race.
Sullivan’s approach was seen as too slow-moving for some, but his
principles were seen as a way to promote democracy and economic
empowerment. At the time of his death, Brigalia Bam, a former activist
with the World Council of Churches, explained that “we South Africans
owe a lot to him.”
Later, the Sullivan Principles helped inspire Cuban dissident Gustavo
Arcos Bergnes to develop a similar set of guidelines for foreign
investment in Cuba in 1994. The Arcos Principles outline a set of
standards to promote human rights and fair labor practices. These
standards promote the rule of law, demand equal access for all Cubans,
equal and independent hiring practices, and the establishment of free
U.S. businesses can help improve the sad economic reality of most
Cubans. But as they examine opportunities for trade and investment in
Cuba, they should also seek to improve the human rights situation.
Cuba needs foreign investment far more than foreign investors need
access to a poor society. Corporations, especially American firms that
are eager to do well in Cuba, should also ensure that they are doing good.
Lindsay Lloyd is deputy director of the Human Freedom Initiative at the
George W. Bush Institute. This has been adapted from InsideSources.
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