Cuba after Netflix
Cue the House of Cards metaphors. On February 9, Netflix announced via Twitter its release of content in Cuba. It’s been two months since the resumption of U.S.-Cuban diplomacy and Frank Underwood’s journey to the White House can now be viewed within sight of the Plaza of the Revolution.
Of course, few on the island actually received Netflix’s tweet. Approximately five percent of Cubans have regular internet access, Cuban broadband is among the slowest in the world and Netflix’s $7.99 monthly fee is prohibitively expensive for a vast majority of Cubans. For the foreseeable future, Netflix’s Cuban clientele will consist of tourists, visiting businesspeople and journalists, government personnel, and private computer owners with access to foreign subscriptions and/or cash remittances from abroad.
It may be a small and symbolic investment, but Netflix’s expansion into Cuba is an investment nonetheless. The tech giant’s foray is adding to a growing sense of commercial momentum that is attracting the attention of investors, drawing the island closer to North American capital and eroding support for the half century-old embargo. This momentum will begin to disabuse many U.S. firms of their “wait and see” approach to assessing Cuban markets and devising investment strategies. It will also give elected officials cover to rethink their advocacy for an unsuccessful policy toward Cuba and the chance to garner support from the business community. Though the embargo remains in place with congressional backing, it now faces unprecedented opposition.
Consider that just one week after Netflix’s announcement, Conan O’Brien taped an episode of his show in Havana. Several days later, Rep. Nancy Pelosi led a congressional delegation to the island. On February 12, a bipartisan group of U.S. senators introduced a bill to lift the embargo. And on February 27, the U.S. and Cuba will conduct the second round of diplomatic talks to restore ties. After decades of sporadic news coverage, a regular weekly news cycle on U.S.-Cuba relations is taking shape. The drumbeat of reconciliation is unmistakable.
This momentum is developing at an uncertain moment in Cuba. Fidel Castro is eighty-eight, infirm and retired. Raúl Castro is eighty-three and plans to retire in 2018. Miguel Díaz-Canel, Raúl’s heir apparent, has not proved himself as a leader or a policymaker. The generals in charge of key national ministries are also aging and have mostly untested successors for their posts. Cuba’s first revolutionary generation is transitioning from leadership, and the next one is hidden from the view of most Cubans.
It is increasingly unlikely that the crackdowns of the past will continue unabated. Since the release of 53 political prisoners in January 2015, some Cuban officials have come to realize that relaxing their harassment of dissidents may improve their prospects in a shifting landscape. Yoani Sánchez, Cuba’s leading democracy activist, operates a media organization that criticizes government policy and reaches an international audience through sober journalism and social networking. Her example is making everyday repression more difficult for state elites and is influencing younger Cubans to rethink their relationship with the government.
This moment has been decades in the making. After the collapse of Soviet subsidies in 1992, the Revolution faced a hardened U.S. embargo and an economic crisis of seismic proportions. A new generation of leaders enacted economic reform—but little political reform—to sustain Cuban socialism in a post-Cold War world. The tourist sector expanded. U.S. dollars were legalized and domestic equivalents were created. Paladares (family-owned restaurants) sprung up in private homes and casas particulares (private accommodations) received legal sanction. Partners in Latin America, Western Europe and Asia were courted and consolidated. Oil flowed from Venezuela. The Revolution survived the tumult and the leadership remained more-or-less intact. At the same time, Cuba was increasingly riven by a divide between those with access to tourist dollars and/or foreign remittances and those surviving on rations and state incomes.
Which brings us to the 95 percent of Cubans without regular internet access—they won’t be streaming House of Cards anytime soon. While this may seem a trivial concern, it points to significant challenges on the horizon. Unless state and non-state actors can invigorate Cuba’s economy and improve the country’s infrastructure, housing, commercial, and communications sectors, Cuba risks accelerated growth in tourism and stagnation in other key areas. Similar asymmetry predominates across much of the Caribbean and drives the region’s status as the most impoverished in the hemisphere.
Avoiding it will not only require sound policy, but public and private sector cooperation in Cuba and the U.S. that prioritizes the interests of ordinary Cubans. Such a development will go a long way toward allaying the mistrust of the past sixty years. More importantly, it may be the surest way to generate political and financial returns on both sides of the Florida Straits.
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