01/09/2015 10:18 am ET Updated Mar 11, 2015

Dealing With the New Cuba

ADALBERTO ROQUE via Getty Images

In the weeks since Presidents Obama and Castro announced the historic breakthrough in U.S.-Cuban relations, most attention has focused on what the United States should do next. Fine, but in diplomacy and in life, it is critical to understand where "the other guy" is coming from.

Assistant Secretary Roberta Jacobsen will lead the US side in the talks in Havana sometime in January, but it is really the expected encounter between the two Presidents in April at the Hemispheric Summit in Panama that will be the occasion for any further major steps forward.

In his one programmatic statement since the December 17 breakthrough, on December 20 before the Cuban National Assembly, Raul Castro got specific on one area above all: The poor state of the Cuban economy. "The challenge we face is very big. We need to put Cuba's economy at the same level as the political prestige that our little island has acquired thanks to the Revolution, the heroism and the capacity to resist of our people." Raul's problem is that whereas political standing can be fudged -- his "deal" with President Obama reflected that -- it is Cuba's lamentable economic reality that has brought so many of the country's 11.2 million inhabitants either to press the State for change or to "vote with their feet" and leave for Europe, Mexico and/or the United States.

Raul knows that intimately. He has been working on economic reform since he took office in 2008. He has, sadly, little to show for it. Nominal growth is stuck at near 2%, even as government statisticians unconvincingly try to persuade all that 2015 will see that rate top 4%. Most disappointing, the agricultural sector has led the laggards, with near-zero growth in farm production. (In the ultimate irony, the country continues to import more than two-thirds of its food production from abroad -- most of it from the U.S.) In the meantime, the country's infrastructure remains stuck in the same rut it has been in for decades.

Havana is painfully aware of the problem. This past year, the Government launched to great fanfare a huge new foreign-investment zone in Mariel -- the aim being to shift all commercial shipping from the crowded port of Havana, to leave the latter for cruise ships and tourists. The main bet seems to be on the tourism sector, with hotel construction topping any other industry as a recipient of official investment funding. The expectation seems to be that foreigners will be Cuba's economic salvation. Cuban officials, eschewing the strongly nationalistic rhetoric that has characterized Cuban narratives since 1959 and before, seem content to rely on non-Cubans to carry the burden of transforming the country.

That prioritization is surprising. Even if reform measures have been slow to take effect in terms of economic output, the consistently industrious Cuban people have exploited every opportunity offered to them. Opening Cuba to the transfers of funds from abroad has resulted in a flood of resources that by many accounts is the main source of financing for private enterprise. Newfound flexibility of rules in the property market has produced almost all of the real estate arrangements seen in the few past years. The main outstanding gap is reform of employment laws.

The question is what happens to Cuban self-esteem and identity in all this. The rush to attract foreign funds is not surprising; there is very little "reserve capital" in a country that ranks near the bottom of every economic rating of the hemisphere. Besides, the need to reform Cuba's currency is a huge task, comparable only to that of Helmut Kohl in the early 90s when the Deutschmark had to absorb the OstMark.

However, while foreign investment is needed, turning the country over excessively to outside investors is risky. Cubans traditionally have prided themselves on their independence. Raul, keenly aware of the power of Cuban nationalism, has repeatedly cited Jose Marti, Cuba's George Washington, in recent public appearances. At this moment, the population may be so poor that they would settle for almost anything and urge Raul to do the same, but it would be a mistake for Ms. Jacobsen, and even more the President, to seek to press the U.S. advantage by exploiting Cuba's current economic weakness.

Raul Castro has not said much since the December 17 joint announcement, but his December 20th speech to Cuba's National Assembly is a valuable guide to Cuba's current "going in position." Most of the foreign press concentrated on Raul's remarks on economic reform. Those paragraphs were not the core of his speech. Instead, in his most convincing cross between comedian Rodney Dangerfield and singer Aretha Franklin, Castro sought R-E-S-P-E-C-T. It is a very Cuban tune.

Raul himself has not yet figured out how to reconcile the pressing need for foreign financing with Cubans' traditional preference not to be treated as a little brother, but his countrymen and women would certainly resent the U.S. overplaying its hand, as it has so often in Cuba's past. Not right away, perhaps, but eventually.

Raul needs to figure this dilemma out on his own, or at least among Cubans. He would be wise to lean on a wide range of Cuban actors -- the Catholic Church and other indigenous denominations; courageous Cuban nationalists like Yoani Sanchez, Berta Soler and Dagoberto Valdes; respected groups like Cuba's discreet but powerful -- and patriotic -- Masonic movement; Cuban workers hired directly (as they should be) by Cuban and foreign investors; as well as his traditional base in the Communist Party.

The U.S. can only help Cuba so much, and it would be a mistake to try to do more. The world has been waiting for more than 50 years for this moment -- let's not blow the chance.

This post is part of a Huffington Post blog series called "90 Miles: Rethinking the Future of U.S.-Cuba Relations." The series puts the spotlight on the emerging relations between two long-standing Western Hemisphere foes and will feature pre-eminent thought leaders from the public and private sectors, academia, the NGO community, and prominent observers from both countries. Read all the other posts in the series here.

If you'd like to contribute your own blog on this topic, send a 500-850-word post to (subject line: "90 Miles").