US, Japan And China: Reaching Out To Cuba – Analysis
North Korea’s nuclear program and its defiance to the call from the international community to abandon it in the interest of world peace are shaping power equations between countries that were once adversaries. After US President Barack Obama decided to visit Cuba with a view to normalise relations following decades of Cold War enmity and the communist revolution in 1959, now it is the turn of Japan and China to reach out to the island country.
In May 2015 Japanese Foreign Minister Fumio Kishida paid a visit to Havana in the first trip by a Japanese official to the island nation. This was followed by the visit of Japanese Prime Minister Abe Shinzo in September 2016, the first ever to that country since the Cuban revolution in the 1950s. Earlier, Natsuo Yamaguchi, leader of the Komeito Party, the ruling party’s junior coalition party, visited Cuba at the invitation of the Cuban Communist Party and delivered letters from Abe to Raul Castro and former President Fidel Castro.
Abe’s visit to the Caribbean island is one of a slew by Western leaders since it began normalizing ties with the United States nearly two years ago. U.S. President Barack Obama visited Cuba in March. However, it is unusual for a Western leader to meet Fidel Castro, who usually only sees close allies.
What led to this sudden Japanese interest to relook at its ties with this communist country? Japan’s interest in the development of relations with Cuba grew after the US and Cuba resumed diplomatic relations in 2015, which had been severed since 1961 and the subsequent visit of Obama to that country in March 2016.
Seen from a larger perspective, there were two elements in Abe’s visit to Havana. In seeking answer to the first element, it needs to be kept in perspective that Cuba still remains one of North Korea’s important allies, and by reaching out to the revolutionary leader Fidel Castro, Abe was seeking Cuba’s support to denounce North Korea’s troubling nuclear program and use leverage to stop it. During his four decades as President of Cuba, Fidel Castro did not compromise with his revolutionary principles. It was only after he handed over power to his younger brother Raul Castro because of ill health that Cuba started to adopt the strategy of gradual rapprochement with the West. This process of rapprochement finally culminated with the visit of Obama to Havana on an official visit, the first by a US leader in 88 years. Obama’s meeting with Castro was rather unusual, who normally sees close allies and therefore signalled a change in Cuba’s outlook to the world.
After North Korea conducted the fifth nuclear test in violation of the nuclear non-proliferation treaty, the world was outraged. Prime Ministers Abe joined the world community to condemn Pyongyang’s act and called for toughening sanctions. While addressing the UN General Assembly in September, Abe raised the issue of North Korea’s nuclear problem and how the danger posed by the North’s rapid nuclear development is “substantially more serious” than ever. It was therefore unsurprising that the issue was high on the agenda during more than an hour-long meeting with Fidel Castro.
Cuba is one of North Korea’s few diplomatic allies, along with China, and a fellow member of the non-aligned movement and can have great influence on North Korea. The Non-Aligned Movement (NAM), formed in 1961, was initially aimed at representing the interests of developing countries that did not take sides in the Cold War and join either of the power blocs. North Korea has been a member of the group since 1976 and Abe expected to use the NAM connection of Cuba to reach out to North Korea. A week before Abe’s visit, President Paul Castro had met Kim Yong-Nam, President of the North Korean parliament during the Non-Aligned Summit in Venezuela and the Cuban media characterised the meeting between officials of the two communist nations as “fraternal”.
Japan is concerned that North Korea has been testing nuclear weapons and ballistic missiles at an unprecedented rate since the beginning of 2016 and claims to have mastered the ability to mount a warhead on a ballistic missile. Therefore Abe called for a strong and unified international response to North Korea’s nuclear program. It may be recalled that in 2003 Fidel Castro had visited the site of the world’s first atomic bombing in Hiroshima and left a message in the guestbook saying “May such barbarity never happen again” and therefore told Abe the importance of peace talks aimed at tackling the problem of nuclear proliferation through dialogue rather than coercion.
Besides making an attempt to secure Cuba’s support in the conflict with North Korea, the second element in Abe’s outreach to Cuba was to boost bilateral trade, investment and lay the foundation for increase in tourist flows. In his meeting with Raul Castro, both leaders discussed how Japan and Cuba could deepen bilateral relations, in particular in the commercial and economic spheres. As a first step, the Abe government agreed to write off a part of Cuba’s debt, decreasing it to $605 million, from which, $249 million remain in Cuba’s economy, as they will form an investment fund for Japan’s companies working in Cuba. Japanese government hopes that as reliable partners, Japanese companies could contribute to the betterment of Cuban economy that has started to update its socio-economic model.
Japan has a long history of trade with Cuba, importing seafood, tobacco and coffee while exporting machinery. After Cuba’s détente with the US and business-friendly reforms, Japan hopes to see a new era in the economic relationships between the two countries. The agreement to reorganise Cuba’s debt towards Japan, some of which are to be assigned towards development projects, is in tune with Cuba’s other long-term trading partners who have already used debt forgiveness, swaps and other financing to try to win investment opportunities on the island.
In fact after Cuba started business-friendly reforms, many companies from foreign countries have started descending in Cuba in recent months scouting for openings and Japanese firms do not want to lose having a foothold in the country of 11 million people. In July 2016, trading house Mitsubishi Corp opened a Havana office as it is keen to establish some infrastructure projects at Cuba’s Mariel special development zone, which stands to benefit from increased traffic through the renovated Panama Canal. The Japanese government might help with providing the required finance. Both the public and private sectors in Japan are willing to work in close cooperation to build the economic partnership with Cuba.
Besides debt write-off, Abe also announced a grant of $12.58 million (1.27 billion Yen) in medical aid to buy medical equipment, including for cancer treatment. It was also agreed that a study would be launched to set up a center in Cuba to train doctors. The Japan International Cooperation Agency (JICA) would also be establishing a permanent office in Cuba soon. Both Abe and Castro also agreed to convene a deputy minister-level meeting of government officials and business leaders in Tokyo in November 2016 to discuss specific investment projects in Cuba. At present, Cuba’s major trading partners are Venezuela, China, Canada and Spain and Japanese companies hope Abe’s visit would facilitate Japan to expand its economic footprint in that country. At present, the number of Japanese companies doing business in Cuba is small; of the total of 700 or so foreign companies operating in Cuba, only 18 are Japanese. Besides Mitsubishi Corp., other Japanese major companies such as Mitsui Co. and Marubeni Corp. are also trying to increase their engagement with Cuba.
Cuba is endowed with rich and precious resource such as nickel and other minerals, besides blessed with various tourism resources. As Cuba’s social infrastructure has deteriorated, Japanese ODA could satisfy Cuba’s demand for development. Based on the present relationship, Japan’s expansion of investment in Cuba’s development projects will benefit both countries.
Abe’s visit to Cuba demonstrates his intention to enlarge Tokyo’s clout beyond the Asia-Pacific region. The visit now opens a new page in the relationship between Japan and Cuba. Analysts were quick to opine that the visit was beyond economics and was aimed at increasing Japan’s role as a political and security power and that Abe was trying to reach out to places where Japan’s foreign policy had not been very active for the past twenty years.
There seems to be some sort of competition between Japan and China to expand their strategic footprint in this island nation as a week after Abe’s visit, the Chinese Premier Li Keqiang visited Cuba too as both want to deepen their countries’ ties with Cuba. Li visit marked the first visit by a Chinese premier since the two countries established diplomatic relations 56 years ago, although President Xi Jinping visited in 2014. Li pledged to inject a new dynamism in the China-Cuba relationship. The visits by the two Prime Ministers of Japan and China could not have come in such an opportune time for Cuba is in desperate need of development aid and investment to improve its economy. Though Cuba restored full diplomatic relations with its long-time nemesis, the US, it remains cash-starved and does not have access to commercial credit. After the end of the Cold War, Cuba remains isolated having lost first the Soviet Union, and then Venezuela, as its key political and economic allies.
At present, China is Cuba’s top creditor and its No.2 trade partner after Venezuela. The total bilateral trade is small, accounting for $1.6 billion in the first nine months of 2015, a 57 per cent increase on the same period the previous year. After Cuba introduced business-friendly reforms, China also sees economic opportunities in the island nation and is keen to deepen cooperation on biotechnology, renewable energy, computers, home appliances, and farm machinery, as well as in culture, education and tourism.
It was noteworthy that Li Keqiang and Raul Castro signed around 30 agreements, forging new areas of economic cooperation in various sectors and “intensify the mutual political trust”. The agreements were for collaboration in the science, environmental, industry, energy, public health and agricultural sectors. China also agreed to extend lines of credit for certain projects but did not specify how much. Even when Japan too is pushing its economic agenda in Cuba, it remains unclear how China’s economic engagement strategy will be different – engagement through government-backed official development aid or private investments. Notwithstanding both Japan’s and China’s outreach initiatives to Cuba, the opening of Cuba first to the US led to other countries to actively push their own agendas. This seems to be another chapter in a much longer story of competition between the world’s second and third largest economies, both in Asia, for expanding their respective strategic space and influence in the developing world as well as access to the resources.
In the meantime, the US has chosen Jeffrey DeLaurentis, America’s top diplomat in Havana, to become the first official Ambassador to Cuba in five decades. This announcement is being interpreted as a step forward a more normal and productive relationship between the two countries. Once unthinkable, the two countries have mended ties after more than half a century of enmity, having announced a thaw in relations first in December 2014 and then restoring full diplomatic relations in July 2015. There are some reservations, however, in certain US political circles that the nomination of a new ambassador might not have major impact as the Castro regime is yet to make “significant and irreversible progress in the areas of human rights and political freedom for the Cuban people”. The Obama administration has, however, done further in normalising relations with Cuba.
As another step, the US Department of Transportation has given approval to six airlines to begin the first scheduled flights to Cuba in more than five decades. Though charter flights to Cuba were already allowed, this is the first time normal commercial airlines will be allowed to travel between the US and Cuba. This shows that with the US, Japan and China reaching out to Cuba, Cuba, once spurned by the world, is again welcome. As Obama prepared to leave office, his opening up policy to Cuba is another significant legacy he leaves behind him.