Hot spots: Cuba.(international)

President-elect Barack Obama said during his election campaign that he would not lift the economic blockade of Cuba, which in some form has been in effect since the administration of Jack Kennedy, but he did talk of plans to end restrictions on family visits and on remittances by Cubans in the U.S. who want to help relatives back home. There are many who feel that easing these restrictions would have a low political cost, but a high symbolic value, demonstrating to the world that Mr. Obama intends to approach relations with Latin America differently from the way the departing Bush Administration handled them. It is quite likely, therefore, that the incoming U.S. government will go ahead with such an easing of embargoes.

The European Union decided last June to lift the minimalist diplomatic sanctions it had imposed in 2003, after the Castro regime jailed 75 dissidents. These penalties consisted mainly of restricting political contacts and inviting dissidents to embassy functions, prompting a boycott by Cuban officials that became known as the "cocktail wars." As for Latin America, it never had much taste for isolating Cuba, and Venezuela's Hugo Chavez has replaced the Soviet Union as Cuba's main provider of material assistance. All in all, therefore, the island has little objective reason to blame its economic difficulties on the outside world, and it will have even less in the near future. But those who have long argued for "constructive engagement" as a way to bring about change in Cuba have little to show for it, notwithstanding the minor liberalization of economic regulations that Raul Castro has undertaken since he became president in February last year.

In a country where the state controls about 90% of economic activity and employs by far the bulk of the national labor force, Rafil Castro has begun to revamp the wage system to create more incentives. He has also lifted bans on the sale and ownership of computers, DVD players, cell phones, home appliances and a variety of other consumer goods. Furthermore, the government is now allowing private farmers to cultivate unused land for up to a decade, with leases renewable if conditions are met and taxes paid. More recently, the government said it would lift a nine-year ban on new private taxis.

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Most of these measures merely legalized practices that had already become commonplace. They cost the government nothing and they benefit few. They do not address the problem of the dual exchange rate that has, essentially, divided the population into haves and have-nots, a situation in which those who receive cash transfers from relatives abroad or who work in the tourist industry have access to hard currency, while state workers paid in pesos do not and therefore cannot go to hotels or high-end shops. The measures also do nothing to address the island's fundamental problems of food scarcity, low productivity and a dismal lack of job opportunities.

All these problems have been exacerbated by the effects of hurricanes Gustav and Ike, which struck Cuba in a 10-day period starting last August 30. The storms severely damaged crops and left some 200,000 homeless. They had no major effect on the capital Havana, nor did they impact the main tourist resorts, nickel mining or the oil industry, but two of the island's most valuable export crops, citrus and tobacco, suffered big losses, almost half the sugarcane fields were flattened and a reported 3,000 tobacco curing sheds were ruined. Enormous damage was sustained by food supplies, housing and the electricity grid. All told, the losses are said to add up to $5 billion.

Cuba's main allies rushed to the rescue. Russia sent several cargo planes with emergency supplies. Brazil and Spain dispatched smaller shipments, Venezuela promised extensive aid and China offered debt relief, as well as ...