1. NS4540 Winter Term 2017 Cuba Up-Date 2017
Federal Reserve Bank of Chicago, Strong Dollar Weak Dollar

2. Overview
Castro’s death unlikely to have a longer term impact on domestic political climate where the reform agenda is already losing momentum
Forecasts:
Expectations among dissidents and exiles of a rapid political shift in Cuba are misplaced
Uncertainties surrounding US policies towards Cuba under Trump will limit both practical prospects and appetite for reform
International interest in Cuba as an investment destination will not be affected
Oxford Analytica, Cuba: Fidel’s death will not prompt policy shifts, November 28, 2916

3. Assessment I
In practice little yet in clarity over Trump’s Cuba policy.
Has promised to roll back Obama’s measures or at least demand a “better deal”.
His appointments suggest a hard line
Trump does face conflicting pressures from business interests wanting to take advantage of the easing of sanctions
Notable in the tourism and agricultural ectors
This may favor partial continuation of Obama’s process

4. Assessment II Regional reactions
Political landscape in Latin America as a whole is far less pro- Cuban than in recent years
Center right governments now in power in several countries previously closely aliened with Cuba – Brazil and Argentina
Venezuela faces major domestic difficulties
Great uncertainty in Cuba slowing down reforms
Trump in the United States
A second succession when Raul steps down in 2018

5. CARICOM Trade Deal
Late January 2017 Cuba signed a trade deal with the 15 member CARICOM community
In part due to poor Cuban economic performance and lack of a benefactor
Should provide more competition for domestic firms forcing improvements in productivity and competitiveness.
Other countries in region see the Cuban economy expanding with better relations with the U.S.
Cuban growth would help stimulate activity throughout the region and in turn feed-back to Cuba
Virtuous circle of growth and reform might be set in motion.