February 12, 2021

Cuba announced this week that it will open up its economy to expand private businesses on the island. The economic reforms announced by the Communist government will allow for more Cubans to become “cuentapropistas” or entrepreneurs – a sign that the state recognizes the need to push for economic growth since the contraction seen as a result of the pandemic. Reportedly, the Cuban economy has shrunk by 11% since the start of 2020. The new reforms will expand the number of legal economic activities in Cuba from 127 to 2,000. Other reforms launched on January 1 include a “monetary reordering,” which effectively devalued the Cuban peso against the U.S. dollar and eliminated the use of the “convertible peso,” which was a secondary currency in circulation. The government has also removed subsidies on some goods. The reforms are seen as a positive and overdue step to reduce the state’s role in the economy and increase economic activity and opportunity, but there are still restrictions. For example, major industries like sugar and tobacco are left off the list, and the government will continue to control the healthcare, education, and communications sectors in Cuba. There is no indication that the economic reforms will lead to political opening, either. Still, they are a sign that the Cuban government is willing to reduce its role in the economy, and these will be welcome changes from Washington’s perspective as the Biden administration looks to revise U.S. policy toward Cuba.

Germany, Poland, and Sweden each expelled a Russian diplomat stationed in their respective countries following Moscow’s expulsion of their envoys for attending protests in support of Alexey Navalny, though spokespeople for Germany and Sweden noted that observing the demonstrations was part of their diplomats’ professional duties. German chancellor Angela Merkel also said the country reserves the right to impose sanctions on Russia and individuals involved in the poisoning and imprisonment of Navalny. President Biden called for Navalny’s immediate release in a speech last week, in which he said the days of the U.S. “rolling over” to Russian aggression are over. And while he moved quickly to extend the New START treaty limiting Russian and U.S. nuclear stockpiles, he has also sought to reverse the previous administration’s approaches to major flashpoints in the U.S.-Russia relationship, including withdrawal of troops from Germany and alignment with NATO more broadly. And Russia shows no signs of backing down – on the contrary, punitive sanctions under the Trump administration were met with increasingly aggressive and sophisticated cyberattacks, along with a continuation of efforts to wage disinformation warfare. Even now, Russia is employing its news outlets in a disinformation campaign promoting its own vaccine and disparaging U.S.- and European-made ones in Latin America. The stage is set for a prolonged and potentially escalating period of confrontation with Russia, one that ideally will end with a new set of rules of engagement that encompasses modern tools of warfare, particularly cyber and social media. Until then, we anticipate more diplomatic tit-for-tats, and as news continues to trickle out about the SolarWinds hack and/or continued political repression related to the Navalny case, some new sanctions against Russia, as well.

A WHO team investigating the origins of the Covid-19 pandemic in Wuhan, China has released a statement that effectively debunks theories that the virus was released – accidentally or otherwise – from a Chinese lab. The findings do not completely absolve Beijing of failing to act swiftly and transparently to prevent the virus from spreading globally. However, had they indicated that the deaths of more than 2 million people worldwide and a broad swath of economies in recession or depression were the result of carelessness by Chinese scientists, the geopolitical impact would have been severe and potentially destabilizing. Unfortunately, the WHO damaged its credibility early on in the battle against the pandemic by claiming that China had been cooperative and transparent when initial investigations were underway. Leaked audio from internal WHO meetings conducted early in the pandemic reveals that the organization’s officials were privately complaining about China’s lack of transparency, even while they publicly praised Beijing for its transparent cooperation. Until findings are made fully public, international observers are likely to maintain a healthy degree of skepticism regarding the actual origins of the virus and Beijing’s role in a cover-up. Reports of the first phone call between Presidents Xi and Biden suggest that the U.S. will put the focus squarely on cooperation in ongoing handling of the Covid-19 pandemic – and preventing a future one – though any concrete findings that political considerations in Beijing interfered with an effective response may complicate that approach.

For more on Russia, listen to TAG President Jack Devine’s recent interview with the president of the Association of Former Intelligence Officers (AFIO) James Hughes about Jack’s new book Spymaster’s Prism and Russia’s ongoing aggression against the West, including and especially the United States. Here is the link.