WASHINGTON, Sept. 28 (UPI) -- A longtime thorn in America's side is wilting, and fast. Fidel Castro's government is broke. Foreign investment in Cuba is down an almost unbelievable 92 percent over the last year. Castro can't pay his bills, and several of his most important trading partners have suspended credits and export insurance to his government.
Yet, like the second-to-last scene of a banal Hollywood western, some are out trying to muster a cavalry to save his desperate regime. This time, the cavalry is American tourist and special farming interests who seek U.S. taxpayers as infantry, but their objectives will only strengthen the Western Hemisphere's most enduring dictatorship.
At the end of July, the House of Representatives voted on two amendments, each approved by 95 vote margins, to end restrictions on travel and lift restrictions on financing exports to Cuba. The Senate will consider the legislation soon.
President George W. Bush has threatened to veto any legislation that would "bolster the Cuban dictatorship," but the anti-embargo lobby has argued successfully that trade with Havana means American profits and Cuban prosperity.
Since last year, U.S. companies have been allowed to trade with Castro's government on a cash-and-carry basis; that is, Cuba must pay for American products, generally agricultural items, with cash only, but not with credit. But the new legislation will extend American export credit and export insurance to Castro's government --- both of which are funded by American taxpayers. Under the proposed policy, when Castro defaults on his purchases American taxpayers will have the burden of picking up his tab. And like the wretched farm bill that passed last spring, this legislation is good for the green triangle, but a raw deal for American taxpayers.
In a July 11 letter to the House Appropriations Committee, Secretary of State Colin Powell and Treasury Secretary Paul O'Neill wrote: "Trade by other nations with Cuba has brought no change to Cuba's despotic practices, and it has frequently proved to be an unprofitable enterprise."
Unprofitable, indeed. France, Spain, Italy and Venezuela have suspended official credits to Cuba because Castro has failed to make payments on its debt, including debt incurred on agricultural purchases. In fact, according to Powell and O'Neill's letter, two foreign governments have approached the United States to complain that Cuba's payments of cash for U.S. agricultural products have meant that they are not getting paid at all.
In international capital markets, reputation is everything. So it was little surprise when Reuters reported on July 8 that, "Direct foreign investment in Cuba plummeted to $38.9 million in 2001 from $488 million the year before." And earlier in the year, despite Castro's tantrum, Russia closed its spy facility near Havana, which will cost the Cuban government $200 million per year in foregone rent payments.
Castro's current creditors are far from happy with these circumstances, as many have not received payment on interest of principal credit since 1986. Without even counting Castro's debt to Russia, which he will not pay because he declares his debt is to a country that "no longer exists," Havana owes billions of dollars to western banks and former socialist countries.
If this is not enough evidence, the cavalry lobbying for American credits and imminent subsidies should ask the Canadians for their advice. On Aug. 7, 2002, the Montreal Gazette reported that a 15,000 ton Cuban-owned ship has been held in the port of Conakry, the Guinean capital, for the past month "while an Ontario company, armed with legal judgments, pursues Cuba for more than $3 million U.S." Guinea's Court of Appeals upheld the ship's detention, pending the payment of more than $275,000 in debt to the Ontario company.
Imagine U.S. companies chasing down Cuban cargo ships in international waters to collect payment, while American taxpayers sit on the sidelines knowing that they will pick up the bill when the debtor doesn't pay. Castro pricks America's side again.
Critics of current policy claim that Cuba is purely a matter of Florida's electoral politics, but the facts show otherwise. While announcing his "U.S. Initiative for a New Free Cuba" in May, President Bush declared that, "Cuban purchases of U.S. agricultural goods ... would be a foreign aid program in disguise." Current policy toward Cuba has saved taxpayers millions in export insurance, subsidies, and de facto foreign aid.
All, because trade with Cuba does not represent trade with Cuban business owners, entrepreneurs or consumers; Trade with Cuba is trade with the Castro government itself, which monopolizes virtually all enterprises and exploits Cuban workers as their sole employer. National Security Advisor Condoleezza Rice, recently wrote that, "In Cuba, Fidel Castro is still the one man through whom everything has to go. Any trade that goes through Cuba is going to strengthen Cuba's regime."
Capital markets lie only when con artists run the show. And forcing taxpayers to subsidize Cuba, which has seen a 92 percent decrease in foreign investment over the last year is a leap from a precipice trumping Enron and WorldCom combined.
But American taxpayers did not have to bail out those companies. Why should we be forced to bail out the head of an openly hostile government -- one of seven nations listed by the State Department as state supporters of international terrorism?
A Castro bailout under the proposed policy is more a question of "when" than "if." And policymakers should seek to protect the interest of taxpayers before propping up a regime that is openly hostile to the United States.
(Frank Calzon is executive director of the Center for a Free Cuba. "Outside View" commentaries are written for UPI by outside writers who specialize in a variety of important global issues.)