Technology companies, soft power, and the fight to liberalize Cuba.
There is a truism, fashionable in American foreign policy circles, that the liberalization of trade will, over time, soften the contours of authoritarian regimes as the oppressed become acquainted with the wonders of Western goods and services. This, evidently, is President Obama’s view. And American technology companies are following suit, disrupting Cuba’s outdated economic model with mobile apps and sharing economy platforms.
Airbnb, a “peer to peer online marketplace and homestay network,” entered Cuba after Obama eased trade restrictions in December 2014. To date, Airbnb has facilitated the stays of 13,000 U.S. travelers in Cuban “casa particulares” (private homes), and this in a country where hotels are often booked months in advance. With the number of international visitors projected to rise from 3 million to 4.75 million by 2024, Airbnb’s services may turn out to be just the kind of development that catalyzes the social and economic liberalization of Cubans.
But here is a point worth considering. American interaction with Cuban host families expose the latter — in a visceral manner unmatched by, say, Voice of America — to our culture of freedom and equality. This exportation of domestic values, culture, and policies is a force for political change that constitutes American “soft power.” Political scientist Joseph Nye defines soft power as “the ability to get what you want through attraction rather than coercion.” As Obama and others argue, instead of relying on the hard threat of sanctions or military force, the U.S. is now using its economic strength and cultural influence to incentivize liberalization.
And Cuba has been responsive. This year, Raúl Castro removed the limit on the number of rooms Cubans could offer for rent and legalized small and medium businesses in certain sectors. There is still, however, too much red tape. For example, renters have to report passport information and length of stay for their visitors to the government in a timely manner, and the Cuban government can tax renters as high as $300 per month irrespective of whether or not they have house guests.
Despite this regulatory burden, 4,000 Cubans listed their homes for rent within the first year of market entry. This makes Cuba the fastest growing Airbnb market in the world. The average earnings per booking are $250, a substantial amount in comparison to the average monthly wage in Cuba which hovers around $27. Airbnb is thus supplying a livelihood to Cubans in a way the Castro regime cannot.
And Airbnb is not the only American technology company to reach out to the potential 11 million customers just 90 miles of the coast of Florida. Google, Priceline, Paypal, Stripe, and Netflix add to the growing crowd of high-visibility firms making efforts to engage the Cuban market.
However, tech companies are quickly discovering just how difficult the going can get. Cuba is one of the worst countries for internet connectivity. According to Freedom House, under 5 percent of Cubans have access to unrestricted global internet. Try streaming Netflix — or hosting your Airbnb profile — with a dialup connection of 52 kilobits per second. To put this in perspective, current consumer grade internet connections have download speeds at approximately 14,000 kilobits per second.
Critics of economic engagement with Cuba like Senator Marco Rubio argue trade liberalization will prop up a Cuban regime complicit in human rights violations against dissidents. Though Rubio and others advocate maintaining sanctions on trade and travel, opponents argue sanctions have been demonstrated to disproportionately hurt the Cuban people and 50 years of sanctions policy has not moved the needle on regime change. Moreover, it seems hard to improve freedom of expression in Cuba without allowing exposure to American ideals. Perhaps it is high time to try a new strategy.
As Raúl ages, it is decisively important that American companies, backed by the strength of the U.S. government, take advantage of opportunities to engage with Cuba. In 2014, the White House amended regulations to allow the commercial export of telecommunications products such as phones, computers, internet infrastructure, software and related services. In March, Obama traveled with 11 CEOs, including Airbnb’s founder Brian Chesky and Paypal’s CEO Daniel Schulman, to secure deals with officials. It is also incumbent on the private sector — especially if the next president lacks backbone — to advocate for a freer Cuba by sharing success stories as Airbnb has done.
The bottom line is this: American tech engagement with Cuba should be seen as a positive force for economic and social liberation. Empowering Cuban entrepreneurs and facilitating free market principles, while not ends in themselves, are certainly propaedeutic to a free and healthy Cuba. For 56 years, we’ve tried the alternative and it has not worked.
Photo credit: AirBNB