Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The United States and Cuba Begin Restoring Relations

Politics / US Politics Dec 18, 2014 - 11:04 PM GMT

By: STRATFOR

Politics

The United States and Cuba on Dec. 17 took their most assertive step in several decades toward normalizing relations. The most important announcements concerned the resumption of high-level political discussions focused on renewing formal diplomatic ties between the countries, which have been nonexistent since 1961. Cuban and U.S. officials will hold high-level meetings in the coming months, and the two countries will work toward establishing embassies in Havana and Washington. The United States will also immediately relax some sanctions on trade and travel to Cuba. President Barack Obama announced that the United States would loosen certain restrictions on financial transactions with Cuba, remove some restrictions on U.S. citizens traveling to Cuba, and authorize the export of certain goods to the Cuban private sector. The U.S. State Department will also review Cuba's designation as a state sponsor of terrorism. Obama has the legal authority to immediately implement the measures he announced, but he left the issue of formally lifting the trade embargo up to Congress. Together, the announcements signaled a gradual process of reopening Cuba to the United States.


Havana has much to gain from starting such a process, especially at a time when its regional partner, Venezuela, faces severe instability. Cuba fears that a declining Venezuelan economy will limit one of the island nation's sources of financing and low-cost petroleum shipments while it is attempting to transition toward a new leadership and economic model.

However, a formal end to the embargo is a long way off. The United States' Cuban Liberty and Democratic Solidarity Act of 1996 requires visible progress toward Cuban concessions such as liberalizing political activity, holding free elections and dissolving state security bodies. Nonetheless, the measures announced by Obama will allow the administration to deepen ties with Havana before it approaches Congress to request the lifting of sanctions. Talks between U.S. and Cuban officials will continue into the next year, with the April summit of the Organization of American States serving as the largest public forum at which the two sides can meet. Given Cuban President Raul Castro's advanced age, it is likely the talks will discuss an eventual political transition in the country.

A more immediate question is how the budding rapprochement between the United States and Cuba will affect the behavior of Venezuela, Cuba's most important ally in Latin America. Cuba shares intelligence with Venezuela, enabling Caracas to detect threats from within the country — though at the cost of fomenting discontent within the Venezuelan armed forces. While Cuba's rapprochement with the United States may not immediately change Caracas' relationship with Havana, Venezuela's mounting economic distress and potential for unrest may make it see Cuba's improved ties with the United States as a potential threat in the long run.

Ultimately, Venezuela's future will rely on global oil prices and Venezuelan President Nicolas Maduro's ability to simultaneously manage unrest on the streets and from challengers within the government. The coming year will be a critical one for Maduro, and he is looking for any lifelines that could provide an economic reprieve. With Cuba openly engaging the United States, Maduro may have an additional incentive to seek his own rapprochement with the United States. In fact, several hours after the U.S.-Cuba prisoner swap was announced, Maduro publicly said Venezuela would be willing to improve its stagnant political ties with the United States.

Maduro would not be starting from scratch. Earlier this year, he designated an ambassadorial nominee to the United States and held discussions — albeit inconclusive ones — with Washington to restore normal diplomatic relations. Over the past year, several reports emerged that Caracas was negotiating the resumption of direct counternarcotic activities with the U.S. Drug Enforcement Administration, though no deal has been reached yet. These discussions could be renewed as a result of today's agreements between Cuba and the United States.

Restoring relations with the United States will not solve all of Maduro's problems, however. Venezuela's plummeting economy and its negative impact on the ruling United Socialist Party of Venezuela is largely the result of long-term structural problems that cannot be easily reversed. It is highly unlikely that Maduro will be able to address these problems without incurring major political costs. Consequently, restoring political ties with the United States will depend more on domestic factors than moves from Obama or a subsequent U.S. president.

Regardless, today's developments signal the first step in a long process of reconciliation. While the details of the rapprochement have yet to be solidified, Obama's announcement sets a clear goal for U.S.-Cuban relations, one that could have broader implications throughout the region.

"The United States and Cuba Begin Restoring Relations is republished with permission of Stratfor."

This analysis was just a fraction of what our Members enjoy, Click Here to start your Free Membership Trial Today! "This report is republished with permission of STRATFOR"

© Copyright 2014 Stratfor. All rights reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis.

STRATFOR Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in