Aid in Cuba talks: Close but no cigar

With Cuba and U.S. officials set to meet Friday in a second round of talks to hash out sticky details around re-establishing diplomatic relations, the picture for foreign aid still remains unclear — although little movement is expected any time soon. Despite bursts of business and diplomatic moves — companies like Netflix have entered the Cuban market and the Obama administration has proposed to reopen its Havana embassy — insiders say the road to resuming foreign aid is more complicated. What happens in the negotiations between U.S. and Cuban officials will largely determine Havana’s introduction into multilateral aid institutions given the United States’ soft power in global development. “In order for Cuba to join the World Bank or Inter-American Development Bank, it first needs to join the [International Monetary Fund], which needs U.S. Congressional approval,” Augusto de la Torre, World Bank chief economist for Latin America and the Caribbean, told Devex Wednesday on the sidelines of a forum on the region. Although the U.S. no longer has power to veto country membership into the IMF, it “would not be nice” if Cuba joined without support from Washington, Torre said. But as officials prepare to discuss the toughest points in normalizing relations, the U.S. Congress — particularly hard-line Cuban-American legislators — remains critical of lifting the U.S. embargo on Cuba. And Washington’s Helms-Burton Act restricts the president’s ability to end the embargo without Congressional approval; only Congress can repeal this law to lift the embargo. If Cuba attempted to join the IMF, and if other countries were in favor, the U.S. would not have power to block the membership, said Manuel Orozco, senior fellow at the Inter-American Dialogue. Cuba, however, “is not interested in joining the IMF” anyway, he told Devex. Indeed, Cuba has not expressed interest in jumping into the foreign aid scene. According to the World Bank, it too had not received an application for membership from Cuba. “But that might change,” Mavis Anderson, senior associate at the Latin America Working Group, told Devex, if Cuba is removed from the U.S. list of state sponsors of terrorism and if Washington and Havana do normalize relations. Despite the island nation’s isolation from major donors and foreign assistance during the past 50 years, some aid organizations have continued working there, and are preparing to ramp up operations. These include Oxfam International and Save the Children, which both told Devex they are in the early stages of potentially expanding program work in Cuba, but declined to comment further on specifics. What is clear is that “normalization is a ways down the road yet,” Mavis noted, and major aid flows aren’t budging any time soon. Will Friday’s round of talks provide a clearer blueprint toward a resumption of U.S. aid to Cuba? Let us know by leaving a comment below. Stay tuned to Devex for more news and analysis of U.S. aid, and subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you FREE every business day.