Decoding the Situation

John Kerry will raise the star spangled banner this Friday over the embassy in Havana. The U.S. secretary of state sanctions this mutual thaw in relations, which doesn’t, however, solve questions of trade or political repression.

On Thursday, the undying Fidel Castro celebrated his 89th birthday. The evening before, former U.S. President Jimmy Carter, only one year older, announced he has cancer. It’s a strange clash of historical times: The two heads of state were, in 1978, the authors of the first attempt at reconciliation between Cuba and the United States. The operation was a failure, partly due to the opening of “interests sections,” which have acted as embassies for nearly 40 years.

Since then, water has flown through the Florida Straits, through the 90 miles (144 kilometers) that separate the kingdom of capitalism from the communist enclave. This Friday, when the star-spangled banner is raised before the American Embassy in Havana, in the presence of U.S. Secretary of State John Kerry, this page of the Cold War will be almost turned; the only thing left is to end the economic embargo imposed on the Caribbean island by Washington in 1961.

What the United States Stands to Gain

On Dec. 17, midway through his second term, Barack Obama decided to take the plunge that his predecessors didn’t dare. It has long been known that the embargo, meant to asphyxiate the regime and provoke its downfall, has missed its target. Only the electoral weight of exiled Cubans in South Florida has held back American presidents. Obama broke down the barriers, gambling on the sociological and demographic evolution of the “Sunshine State”: the most fiercely anti-Castro exiles have aged, while their descendants and more recent immigrants don’t have the same thirst for revenge.

The gamble is risky nonetheless: Two Republicans from Florida, both candidates to succeed him, call out Obama on this matter almost daily. Jeb Bush, son and brother of two former presidents, and Marco Rubio, son of a Cuban immigrant, are at the helm of a parliamentary strategy akin to guerrilla warfare, with the aim of preventing Congress from voting to end the embargo.

The White House is focusing on a “Vietnam-like” economic change, already set in motion by Raul Castro, who is encouraging the private initiative to relieve an excessive and inefficient public sector. Despite the small size of the domestic market (12 million inhabitants), American companies strongly desire access to these markets as almost everything, from industry to city planning, needs to be reconstructed. In May, Obama’s advisors summoned the economic circles who are interested in the Cuban market and told them to go to Cuba and glide on the embargo’s loopholes without waiting for the embargo to be lifted. Other countries are also engaged in this race: François Hollande is the first head of state to go there to sell this knowledge to his entrepreneurs.

What Cuba Stands to Gain

In taking over from his brother Fidel in 2008, Raul Castro understood that the Cuban economy, overburdened with debt, needed to breathe. He placed the island on a path to progressive reforms and "cuentapropismo" (self-employment), allowing the state to lighten an overabundant public sector. Uncertainties about the future of their Venezuelan ally, with the fall of oil revenue and elections, precipitated the reconciliation with Washington.

However, the Cuban economy remains archaic and non-industrialized, with a very important rural sector. Cuba is one of the last countries where ration books, the notorious "libreta," persist. Pride in the revolution, healthcare and education are faring poorly, with the population surviving thanks to System D. Tax revenues remain weak, in a country where the residents have only recently learned the meaning of the word “tax.”

If foreign capital is welcomed, it will be after the embargo is completely lifted, which could take a few more years. Cuba is waiting for certain measures to be softened, the first being the travel ban on American citizens. With the influx of tourists, Cuba is at risk of exceeding its accommodation capacity, but the country needs the dollars from vacationers to keep its head above water.

What Democracy Stands To Gain

In a country where the Communist Party is the only authorized party, freedom of press or a multiparty system have never been on the agenda during negotiations with the United States. Even if complaining (of bureaucracy, of corruption and of chaos in the transportation and food distribution sectors) is a national sport for Cubans, very few Cubans openly dissent. The price to be paid is a deterrent: unfair trials and long prison sentences, the violent repression of demonstrations, social ostracism and policing. Hopes of increased respect for human rights have been met with disappointment; the regime hasn’t relaxed in this area.

Is it that the United States has no means of pressuring its new partner? This perspective is maintained in conservative American circles. “He might as well be raising the white flag of surrender,” ranted Florida Rep. Mario Díaz-Balart, a fierce opponent of Fidel Castro (who happens to be his uncle), on Wednesday.

The opposition realized the effects of these pressures when they learned that none of its members would be invited to the U.S. flag-raising this Friday. Late Wednesday, the State Department promised less conspicuous connections. This policy of discretion is not necessarily less effective: The discussions that led to the statements of Dec. 17, 2014 were, in fact, made in secret.