TIME Foreign Relations

We Know Why Obama Changed U.S. Policy Toward Cuba. But Why Did Cuba Change Its Policy Toward the U.S.?

(FILE) Picture taken 20 December 1999 in
Adalberto Roque—AFP/Getty Images Fidel Castro (L) with his brother Raul Castro on Dec. 20, 1999 in Havana

To understand the change we need to acknowledge that Castro has always followed a policy of “revolutionary pragmatism”

History News Network

This post is in partnership with the History News Network, the website that puts the news into historical perspective. The article below was originally published at HNN.

The restoration of U.S. and Cuban diplomatic ties is quite an event, particularly given the hostility that defined relations between the two countries for so long. President Obama’s decision to re-open an embassy in Havana and Raul Castro’s agreement to do the same in Washington continues the thaw in U.S.-Cuban relations. The steps taken by both countries have generated much publicity over the past few months. Numerous U.S. media outlets have produced stories on the implications for Obama’s legacy and the potential fallout for 2016 presidential candidates. As usual Washington politicians and pundits have focused their attention on the reasons for the U.S. shift. Yet, it is not President Obama’s decision to seek a normalization that warrants the most attention, but rather the Castro government’s reasoning behind their determination to chart a new course in U.S.-Cuban relations. In fact, much more can be learned from concentrating instead on what is behind the Cuban leadership’s thinking.

Havana’s recent decisions are deeply rooted in what can best be termed as Cuba’s “revolutionary pragmatism.” Though the Castro government continually speaks the language of revolutionary change, it also has also taken a sensible view to foreign policy matters when necessary. Such an approach has guided Cuban engagement with the world from the 1960s to the present.

“Revolutionary pragmatism” traces back to the very beginning of the Castro regime. In the years immediately following the Cuban Revolution, for example, a top issue in US-Cuban relations included Fidel Castro’s support for anti-US guerilla movements throughout Latin America. Castro repeatedly challenged Latin Americans and others around the world to stand up to the United States. He famously declared in 1962 that it was “the duty of every revolutionary to make the revolution. In America and the world, it is known that the revolution will be victorious, but it is improper revolutionary behavior to sit at one’s doorstep waiting for the corpse of imperialism to pass by.”

Yet, privately, Castro proved willing to develop a foreign policy based on practical considerations. On a recent research trip to Cuba I gained access to the Foreign Ministry Archive in Havana and was surprised at what I found. Many detailed reports from the early 1960s discussed the prospects for revolution in Central and South America, but concluded that conditions were not ripe in many nations for radical change. This reality led to a more pragmatic position being taken by leaders in Havana as they approached Latin America.

The most documented aid came in the form of training young Latin Americans in guerilla tactics who traveled to Cuba. As historian Piero Gliejeses’s excellent studies demonstrate, Castro turned his attention to Africa as early as 1964. Havana’s decision to abandon any large-scale support for revolutionary groups in Latin America was not made due to a lack of enthusiasm for challenging Washington’s traditional sphere of influence, but owed instead to practical considerations.

Similarly, in the 1980s when the Sandinista triumph in Nicaragua offered Havana an ally in Latin America, Castro held to “revolutionary pragmatism.” He counseled Daniel Ortega not to antagonize elite economic interests too much. On a visit to Managua, Castro even declared that allowing some capitalism in the Nicaraguan economy did not violate revolutionary principles. He bluntly told Nicaraguan leaders that they did not have to follow the path taken by Cuba, “Each revolution is different from the others.”

Perhaps the greatest illustration of Cuban flexibility was the Castro regime’s response to the collapse of the Soviet Union. In June 1990, after receiving word that aid from Moscow would no longer flow to Havana, Fidel Castro announced a national emergency. He called his initiative “the Special Period in Peacetime.” Cuba welcomed foreign investment, tourism, the U.S. dollar, and allowed small-scale private businesses. While many prognosticators predicated a complete collapse of the Castro regime, the revolutionary government endured due to its ability to adapt.

Thus, recent developments must be viewed within their proper historical context. As it has in the past, Castro’s regime is pursuing “revolutionary pragmatism.”

The impetus for changes in Cuba’s approach owes to several reasons. First, since the death of Hugo Chávez in 2013 Venezuela has become a questionable economic ally. Political instability coupled with a crumbling economy has likely caused Havana to view a key economic patron in Caracas as increasingly unreliable. A complete breakdown of order in Venezuela would greatly affect the Cuban economy in a negative way. Thus, a better economic relationship with the United States is one way of protecting the island from a changing relationship with Venezuela.

Other reasons for Cuba’s rapprochement with the United States owe to domestic concerns. Since taking power in 2008, Raul Castro has been open to reforms in an attempt to make socialism work for the twenty-first century. Over the last few years the Cuban government has relaxed controls over certain sectors of the economy, but reforms have been slow and halting. Anyone who has spent time in Havana cannot help but notice the aging infrastructure and inefficient public transportation system. A key to any reform agenda is attracting foreign investment, and the United States stands as an attractive partner.

Furthermore, as Raul is poised to step down from power in 2018, Cuba is starting to make preparations for a successful turnover. An improving relationship with Washington may help his likely successor, Miguel Díaz-Canel, better navigate the transfer. In sum, at this point and time, normalization of U.S.-Cuban relations serves Havana’s best interests.

It remains to be seen just how far the Cuban government will go regarding changes in policy. Going back to 2010, Raul Castro declared during a national address that “we reform, or we sink.” His recent push for renewed relations with the United States will likely create an influx of U.S. tourists and more capital from American businesses. In turn, this could place Cuba down the path of other communist nations who embraced elements of capitalism, China and Vietnam notably. Just how far Raul will go with his reform agenda remains to be seen.

Ultimately, a U.S.-Cuban thaw is a positive step. Antagonism between the two countries serves no one, especially the Cuban people. Yet, we should not see the recent shifts as merely Washington changing course. The steps taken by Havana are equally important and should be viewed as part of a long history of shrewd diplomacy. While Cuban foreign policy has traditionally been revolutionary in rhetoric, it has proven once again to be pragmatic in practice.

Matt Jacobs received his PhD in History from Ohio University in 2015. This fall he will be a Visiting Assistant Professor of Intelligence Studies and Global Affairs at Embry-Riddle’s College of Security and Intelligence. He has conducted research at the Cuban National Archive and the Cuban Foreign Ministry Archive, both in Havana.

Read more: Why Did the U.S. and Cuba Sever Diplomatic Ties in the First Place?

TIME politics

When Khrushchev Said No to Pepsi but Yes to Peace

Nixon Argues With Khrushchev
Howard Sochurek—The LIFE Picture Collection/Getty Richard Nixon makes a point during an argument with Soviet Premier Nikita Khrushchev, Moscow,, July 25, 1959.

July 24, 1959: Nixon and Khrushchev spar at the opening of an American exhibition in Moscow, in what becomes known as the “kitchen debate.”

Nikita Khrushchev was not impressed by the color television. He took what TIME described as a “skeptical sip” of Pepsi. And when he and then-Vice President Richard Nixon made their way into the “sleek, gadget-stocked” kitchen of a model American ranch house, the Soviet Premier’s irritation came to a head.

“ You Americans think that the Russian people will be astonished to see these things,” he said. “The fact is that all our new houses have this kind of equipment.”

“We do not claim to astonish the Russian people,” Nixon retorted. “We hope to show our diversity and our right to choose. We do not want to have decisions made at the top by one government official that all houses should be built the same way.”

On this day, July 24, in 1959, while Nixon was in Moscow for the opening of the U.S. National Exhibition, he and Khrushchev bickered about communism and capitalism, arms and ultimatums, hypertension and détente — everything, in short, except the kitchen sink, although they did discuss the merits of washing machines.

The exchange, which was videotaped and later broadcast in both the U.S. and the U.S.S.R., became known as the “kitchen debate,” and it brought Nixon a reputation as a diplomatic master, capable of disarming Khrushchev’s bluster without ever backing down. As TIME reported:

…within what may be remembered as peacetime diplomacy’s most amazing 24 hours, Vice President Nixon became the most talked about, best-known and most-effective (if anyone can be effective) Westerner to invade the U.S.S.R. in years… [H]e gave sharp point to the glittering achievement of the fair because—on Communism’s home grounds—he managed in a unique way to personify a national character proud of peaceful accomplishment, sure of its way of life, confident of its power under threat.

While the hour-long conversation was tense at moments — as when Khrushchev told Nixon, “You know nothing about Communism except fear” — it led to “laughs, finger-shakings, and more argument” later in the day, according to the New York Times.

And while Khrushchev expressed disdain for the technological wonders of the American model home — “Don’t you have a machine that puts food in your mouth and pushes it down?” he asked “with heavy sarcasm,” per TIME — the pair agreed, importantly, on one thing.

Standing in an American kitchen in Communism’s capital city at the height of the Cold War, Khrushchev declared, “We want peace with all other nations, especially America.”

“We also want peace,” Nixon agreed.

As they left the kitchen, Nixon put an arm on Khrushchev’s soldier and said, “I’m afraid I haven’t been a good host.” According to TIME:

Khrushchev smiled and, underscoring the weird aspect of the whole performance, turned toward the American guide who had been standing in the model kitchen and said: “Thank the housewife for letting us use her kitchen for our argument.”

Read more from 1959, here in the TIME archives: Foreign Relations: Better to See Once

TIME diplomacy

U.S. and Cuba Announce Embassy Openings

Head of US Interests Section in Havana delivers a letter from Obama to Cuban President Castro
Alejandro Ernesto—EPA Chief of Mission at the US Interests Section in Havana Jeffrey DeLaurentis (left) meets Cuban interim Foreign Minister, Marcelo Medina (right), in Havana, Cuba, on July 1, 2015.

Both countries will restore full diplomatic relations and reopen embassies July 20

(WASHINGTON) — President Barack Obama announced Wednesday that the U.S. and Cuba will reopen their embassies in Havana and Washington, heralding a “new chapter” in relations after a half-century of hostility.

“We don’t have to be imprisoned by the past,” Obama said from White House Rose Garden. “Americans and Cubans alike are ready to move forward.”

Cuban television broadcast Obama’s statement live, underscoring the new spirit.

The embassy agreement marks the biggest tangible step toward normalizing relations since the surprise announcement in December that the U.S. and Cuba were restarting diplomatic ties. The posts in Washington and Havana are scheduled to open July 20, Cuba’s Foreign Ministry said.

Secretary of State John Kerry will travel to Cuba for the opening of the U.S. Embassy.

For Obama, ending the U.S. freeze with Cuba is central to his foreign policy legacy as he nears the end of his presidency. Obama has long touted the value of direct engagement with global foes and has argued that the U.S. economic embargo on the communist island just 90 miles south of Florida was ineffective.

The president on Wednesday reiterated his call for Congress to lift the embargo, which he said has failed to bring political change in Cuba. However, he faces stiff resistance from Republicans, as well as some Democrats, who say he is prematurely rewarding a government that engages in serious human rights abuses.

Rep. Ileana Ros-Lehtinen, R-Fla., said in a statement that opening a U.S. Embassy in Cuba “will do nothing to help the Cuban people and is just another trivial attempt for President Obama to go legacy shopping.”

The president also will face strong opposition in Congress to spending any taxpayer dollars for building or refurbishing an embassy in Havana. Congress would have to approve any administration request to spend money on an embassy.

The U.S. cut off diplomatic relations with Cuba in 1961 after Fidel Castro’s revolution. The U.S. spent decades trying to either actively overthrow the Cuban government or isolate the island, including toughening the economic embargo first imposed by President Dwight D. Eisenhower.

Since the late 1970s, the United States and Cuba have operated diplomatic missions called interests sections in each other’s capitals. The missions are technically under the protection of Switzerland, and do not enjoy the same status as embassies.

Ahead of Obama’s remarks, the top U.S. diplomat in Havana delivered a letter from the White House to Cuba about restoring embassies in the countries’ respective capitals. U.S. Interests Section chief Jeffrey DeLaurentis arrived at the Cuban Foreign Ministry in Havana on Wednesday morning to hand-deliver the message.

In a highly unusual move, Cuban state television broadcast Obama’s remarks live with translation in Spanish.

While the opening of embassies marks a major milestone in the thaw between the U.S. and Cuba, significant issues remain as the countries look to normalize relations. Among them: talks on human rights; demands for compensation for confiscated American properties in Havana and damages to Cuba from the embargo; and possible cooperation on law enforcement, including the touchy topic of U.S. fugitives sheltering in Havana.

Sen. Ben Cardin of Maryland, the top Democrat on the Senate Foreign Relations Committee, said the opening of embassies was part of the administration’s “common sense approach to Cuba.” However, he called for Cuba to recognize that it is out of step with the international community on human rights.

“Arrests and detentions of dissidents must cease and genuine political pluralism is long overdue,” Cardin said in a statement.

Obama and Cuban President Raul Castro met in April during a regional summit, marking the first time U.S. and Cuban leaders have met in person since 1958.

For Obama, the embassy announcements come amid what the White House sees as one of the strongest stretches of his second term. He scored major legislative and legal victories last week, with Congress giving him fast-track authority for an Asia-Pacific free trade deal and the Supreme Court upholding a key provision of his health care law.

The court also ruled in favor of gay marriage nationwide, an outcome Obama supported.

___

Associated Press writer Peter Orsi in Havana contributed to this report.

TIME politics

The Untold Story of How the Reagan Administration Got Rid of Pinochet, Chile’s Ruthless Dictator

Augusto Pinochet
Robert Nickelsberg—The LIFE Images Collection/Getty Chilean leader General Augusto Pinochet, in 1985

It’s a victory story, but a little more complicated than people think

History News Network

This post is in partnership with the History News Network, the website that puts the news into historical perspective. The article below was originally published at HNN.

Throughout the Cold War era the United States periodically confronted the problem of dealing with Latin American allies whose regimes were collapsing due to mismanagement and/or popular disaffection but who were unwilling to relinquish power in ways that provided an opportunity for Washington to influence the political transition in a manner favorable to its interests—politically, economically and regionally. The Reagan administration’s dealings with the military dictatorship of General Augusto Pinochet in Chile, though the regime was not at risk of collapse, is often cited as an exemplary case of a successful democracy promotion strategy. But how was Reagan’s State Department able to pursue this approach and what kind of democratic transition was the administration willing to support?

President Reagan’s publicly declared support for freedom, democracy and human rights generally–a position most comprehensively outlined during a June 1982 address to the British Parliament and directed primarily at the Soviet Union–gave pragmatic conservatives in the State Department an opportunity to contemplate policies beyond the strictures laid down by a group of hardline Cold War warriors who initially monopolized senior foreign policy positions. Their eventual replacement or retirement from Reagan‘s inner circle of advisers provided opportunities to make the case for a policy less driven by reflexive anti-communism. Additional personnel changes during Reagan’s second term further strengthened the position of Secretary of State George Shultz as the President’s most trusted and hence influential foreign policy adviser.

By 1983-84, the resurrection of civil society in Chile produced a consensus among key State Department officials on the need to re-evaluate the administration’s approach to Pinochet. The emergence of social movements in Chile (across the social class, occupational and political spectrum) offering a direct political challenge to the military regime eventually led to a consensus calculation within State that the time had arrived when it might be in the best long-term U.S. interests to promote a return to civilian rule. Regional developments also entered into this policy rethink: transitions from dictatorship to democracy were occurring across much of Latin America to a point where Chile was beginning to stand out like a ‘sore thumb,’ and had become an international pariah with whom the U.S. was most closely identified.

Following Reagan’s inauguration for a second term, the bureaucratic debate over Chile policy moved decisively in favor of Shultz and his key State Department advisers who were opposed to Pinochet’s indefinite rule and keen to see practical steps taken to culminate in a transition to democracy. To achieve what Deputy Assistant Secretary of State for Inter-American Affairs James Michel termed the ultimate goal of facilitating “the emergence of a centrist political consensus and a soft transition into democracy,” State was able to convince Reagan to publicly reject Pinochet’s constant declaration that Chileans faced a stark choice between the order and stability provided by the military and the chaos he associated with his opponents. Not only did this rejection strike a crucial blow at the dictator’s defense of his rule but simultaneously boosted the influence of junta members who had tired of both the military’s adventures into politics and Pinochet’s own ambitions.

Meanwhile, administration officials had settled on a two-track policy approach: on one hand, prodding Pinochet with a mix of quiet diplomacy, public criticism and largely symbolic economic pressures to cajole him to return Chile to a restricted democratic political order; on the other, coaxing ‘anti-regime’ social movements and political parties of the center-right–that Washington associated with moderation,’ ‘dialogue,’ ‘compromise,’ and limited ‘reforms’—and discouraging their involvement with ‘anti-system’ forces of the Left viewed as synonymous with ‘violence,’ ‘polarization,’ ‘radicalization’ and other activities that ‘endangered’ democracy.

Washington’s support for a democratic transition, in other words, did not reflect a sustained and principled commitment to the promotion of democratic norms and values; rather, the application of the policy revealed a highly conditional and qualified support based on calculations that bilateral and regional U.S. interests would be best served by a return to electoral rule but under circumstances that would leave little to chance, much less to ‘democratic adventurism.’ The revival of an inclusive, multiparty system that characterized Chile prior to 1973 was never considered an option warranting U.S. support and encouragement. This approach dovetailed perfectly with the junta’s non-negotiable preconditions for a transfer of power: a civilian governing alternative that would preserve the essential objective of the September 1973 coup — which was to eliminate the threat from the Left – maintain the junta’s political and economic structures, and forego recriminations against the armed forces over their brutal methods of governance.

The Reagan White House was under no circumstances prepared to countenance a re-democratization process that might result in an ‘unacceptable’ segment of the opposition (left social movements and their militant political party allies) from heading a newly elected government. Thus, in contrast to the requests for ‘soft’ changes asked of the junta, U.S. policymakers demanded a wide-ranging set of major concessions from the ‘responsible’ opposition, including acceptance of the legitimacy of the coup and the generals own 1980 Constitution, and the armed forces’ demand for amnesty from prosecution for human right abuses perpetrated during their 15 year rule.

Undeniably, this represented a political victory for the forces that carried out the 1973 military coup and a personal triumph for Pinochet himself. The armed forces presided over a political transition at a time of its own choosing, with its internal cohesion, sense of honor, and institutional power unaffected, if not strengthened; the country was now governed by a popularly elected civilian regime dominated by the moderate and conservative opponents of military rule committed to maintaining generals’ neoliberal economic model; and those opposition forces posing the greatest threat to the state – the social movements of the left – were politically marginalized. If the Reagan White House played a less than decisive role in wresting political power from the armed forces, what ultimately transpired was the best possible outcome from the perspective of U.S. bilateral and regional interests.

Morris Morley and Chris McGillion are co-authors of the just published “Reagan and Pinochet: The Struggle Over U.S. Policy toward Chile”(New York: Cambridge University Press).

TIME Foreign Relations

President Obama to Nominate Gayle E. Smith as USAID Chief

Gayle Smith, special assistant to President Obama and senior director at the National Security Council, speaks during the Society for International Development (SID) World Congress in Washington, DC
Jewel Samad—AFP/Getty Images Gayle Smith, special assistant to President Obama and senior director at the National Security Council, speaks during the Society for International Development (SID) World Congress in Washington, DC, on July 29, 2011.

Currently serves as a senior director on the National Security Council

President Obama announced Thursday he would nominate Gayle E. Smith to head up the U.S. Agency for International Development, or USAID. Smith currently serves as the senior director for development and democracy on the President’s National Security Council.

In a statement, President Obama said he has “no doubt” Smith can use the experience she’s had leading international development and humanitarian crisis response missions at NSC in a role as the USAID Administrator.

“Gayle’s energy and passion have been instrumental in guiding America’s international development policy, responding to a record number of humanitarian crises worldwide, and ensuring that development remains at the forefront of the national security agenda at a time when USAID is more indispensable than ever,” Obama said, urging the Senate to “act quickly” on her nomination to succeed current USAID chief Rajiv Shah.

The announcement comes just as the work of USAID is being put to much needed use. The department’s disaster and recovery team landed in Nepal on Wednesday, where they’re joining in the global effort to help survivors of Saturday’s massive earthquake.

If confirmed, Smith will have to face crisis such as the Nepal earthquake as well as the impact of infectious diseases like Ebola. USAID is leading the U.S. government response to outbreak of the deadly virus in West Africa where efforts have shifted to controlling spread to getting new infections down to zero.

That’s not to say USAID hasn’t had its misses—the organization was blasted for leading an effort to convince young Cubans to lead an uprising against their leader Raul Castro. The effort proved largely unsuccessful.

TIME Foreign Relations

President Obama Phones Cuban Leader, White House Confirms

President Barack Obama makes his way to Air Force One before departing from Andrews Air Force Base in Maryland on April 8, 2015.
Mandel Ngan—AFP/Getty Images President Barack Obama makes his way to Air Force One before departing from Andrews Air Force Base in Maryland on April 8, 2015

The two spoke via telephone on Wednesday

President Obama and Cuban President Raul Castro have spoken on the phone for the second time, a White House official confirmed, in a historic move that comes amid improved relations between the U.S. and Cuba.

The conversation took place Wednesday, before the President left for his trip to Jamaica and Panama, where this weekend’s Summit of the Americas offers an opportunity for Obama and Castro to have a face-to-face meeting. No further details of the discussion were provided.

All eyes have been on Cuba and U.S. relations throughout the President’s travels this week. It has been four months since the White House announced that the U.S. would be taking a new approach to Cuban policy after decades of tension.

Obama and Castro could sit down for a meeting as soon as Saturday, reports say, but the White House has not said that a formal meeting is scheduled. The U.S. may also soon announce that Cuba will be removed from the State Department’s list of terror sponsors, a lingering sore spot in the relationship between the nations.

In another sign of change, Secretary of State John Kerry and Cuban Foreign Minister Bruno Rodriguez also sat down for a meeting on Thursday.

TIME Foreign Relations

U.K. Prime Minister David Cameron Boasts That Obama Calls Him ‘Bro’

Britain's Prime Minister David Cameron and U.S. President Barack Obama watch a fly-past by the Red Arrows during the NATO summit at the Celtic Manor resort, near Newport
Andrew Winning—Reuters U.K. Prime Minister David Cameron, left, and U.S. President Barack Obama watch a flypast by the Red Arrows during the NATO summit in Wales on Sept. 5, 2014

But which definition of "bro" is he referring to?

U.K. Prime Minister David Cameron says he’s so chummy with U.S. President Barack Obama that he’s often referred to as “bro” by his American counterpart.

The British leader told the Daily Mail in an interview that Obama sometimes calls him “bro” on the phone, adding that the relationship between 10 Downing Street and 1600 Pennsylvania Avenue is “stronger than it has ever been, privately and in public.”

The “bro” comment set off some confusion in the British press regarding whether Obama was rather rudely calling Cameron a “bro” — that is, a member of a beer-pounding, usually shirtless tribe of “young white Americans, often fellow members of a university fraternity, who emulate black rap culture,” according to the Telegraph’s consultation with Urban Dictionary; or “an alpha-male idiot,” as the American term is alternatively translated, according to the Independent’s perusal of the same source.

Or, perhaps Obama was simply referring to his British comrade as his “bro,” meaning he feels a warm relationship with Cameron.

Like all brothers, the playful pair have been scolded together, especially after the two world leaders snapped a “selfie” at Nelson Mandela’s funeral in December 2013. Cameron has also been criticized for behaving a bit like a younger sibling to Obama, a point bolstered when the American President upstaged the British Prime Minister while shaking hands with NATO delegates September last year (leaving his “bro” without a hand to shake). But older bro Obama looked decidedly more sprightly playing ping-pong than Cameron (five years his junior) did in 2011, to the amusement of the U.K. press.

TIME politics

Cuba’s Unanswered Questions

Obama Makes Statement On U.S.-Cuba Policy
Pool / Getty Images U.S. President Barack Obama speaks to the nation about normalizing diplomatic relations with Cuba, at the White House on Dec. 17, 2014

In 2013, TIME took a look at a changing Cuba

When President Barack Obama announced Wednesday that the United States would work toward normalizing long-severed diplomatic relations with Cuba, it came as a surprise to many.

But as TIME observed in a feature story last July, change has long been underway for an Island nation that, in the past, has had a reputation for seeming frozen in time. Rules about commerce and private business had been relaxed, citizens were encouraged to find non-state jobs, tourism was opening up and the possibility of a non-Castro leader suddenly seemed less distant. However, that didn’t mean that Cuba’s future was clear.

Many of the questions raised by writer Pico Iyer are, even in this new phase of Cuban history, still unanswered:

Cubans today are free–at last–to enjoy their own version of Craigslist, to take holidays in fancy local tourist hotels, to savor seafood-and-papaya lasagna with citrus compote, washed down by a $200 bottle of wine, in one of the country’s more than 1,700 paladares, or privately run restaurants. They’re free to speak out against just about everything–except the two brothers at the top–and they strut around their capital in T-shirts featuring the $1 bill or Barack Obama in his “Yes we can” pose, even (in the case of one woman leaning against the gratings in Fraternity Park) in very skimpy briefs decorated with the Stars and Stripes.

Yet as what was long underground is now aboveboard, and as capitalist all-against-all has become official communist policy, no one seems quite sure whether the island is turning right or left. Next to the signs saying EVERYTHING FOR THE REVOLUTION, there’s an Adidas store; and the neglected houses of Old Havana sit among rooftop swimming pools and life-size stuffed bears being sold for $870. “Nobody knows where we’re going,” says a trained economist whose specialty was market research, “and people don’t know what they want. We’re sailing in the dark.”

Read the rest of the story, free of charge, here in TIME’s archives: Cuban Evolution

TIME Foreign Policy

America’s Uneasy Path Abroad in 2015

A U.S. soldier from the 3rd Cavalry Regiment walks with his rifle, after returning from a mission at forward operating base Gamberi, in the Laghman province of Afghanistan
Lucas Jackson—Reuters A U.S. soldier from the 3rd Cavalry Regiment walks with his rifle, after returning from a mission at forward operating base Gamberi, in the Laghman province of Afghanistan, Dec. 15, 2014.

The U.S. is still the world’s leading economy, but its geopolitical clout isn’t what it used to be

America is not in decline. The U.S. will have the world’s most formidable military for the foreseeable future. Its economy remains the world’s largest, and its recovery will probably gather more steam in 2015. Its workforce is not aging nearly as quickly as that of Europe, Japan or China. No country has a greater capacity for technological innovation. Almost all the world’s biggest tech companies are based in the U.S. For next-generation cloud computing, artificial intelligence, advanced manufacturing and nanotechnology, bet on the U.S. America has an entrepreneurial culture that celebrates not simply what has been accomplished but also what’s next. There is every reason to be confident that America has a bright 21st century future.

But its foreign policy is a different story. American power is on the wane, a process that will accelerate in 2015. Power is a measure of one’s ability to force others to do things they wouldn’t otherwise do, and there are now more governments with enough resources and self-confidence to shrug off requests and demands from Washington. There was never a golden age of U.S. power when an American President could count on other governments to do as he asked. But there are several reasons the U.S. is now less able to build coalitions, forge trade agreements, win support for sanctions, broker international compromise or persuade others to follow its lead into conflict than at any other time since the end of World War II.

First, there are a growing number of emerging powers that, although they can’t change the global status quo on their own, have more than enough power to ignore what America wants—and even to block U.S. plans they don’t like. For example, Washington can still tell governments of developing countries that access to capital from Western-dominated lending institutions like the IMF and the World Bank depends on democratic or free-market reforms. But the strongest emerging markets need capital less than they used to, and some of them are creating their own lending and investment institutions.

The BRICS countries—Brazil, Russia, India, China and South Africa—in 2014 launched a $50 billion development bank, an alternative to Washington-based lenders. The BRICS bank can’t by itself end U.S. dominance of the global financial system. But add the China Development Bank, the Brazilian Development Bank (BNDES) and an expanding list of important regional lending institutions, and the world’s borrowers are no longer quite so dependent on Western lenders. The numbers tell the story. In 2013 the World Bank disbursed $52.6 billion. The same year, Brazil’s BNDES invested $85 billion, and its Chinese equivalent extended loans valued at $240 billion.

While emerging powers awaken, Washington’s relations with its traditional allies are not what they used to be. It was inevitable that as the Cold War receded further into history, Americans and Europeans would have less in common. Both are unhappy with Vladimir Putin and his assault on Ukraine, but Russia is not the Soviet Union. It’s not a global military power. European nations have far more economic exposure to Russia than America does, and Washington needs Putin’s help to get things done in other regions, most notably in the Middle East. Though the U.S. and Europe have coordinated their sanctions on Russia so far, we’re more likely in 2015 to see disagreements over how best to handle Putin.

Nor has it helped transatlantic relations that the U.S. National Security Agency was reportedly listening to German Chancellor Angela Merkel’s phone calls and collecting Internet data, raising fears across Europe that U.S. information-technology firms have given America’s spy agencies deep access to European secrets. Last February, Merkel took the extraordinary step of calling for a European Internet, one walled off from the U.S. So much for free movement through cyberspace.

Anti-American anger in many European countries—which rose sharply during the presidency of George W. Bush, then eased with the election of Barack Obama—was tested by the spy revelations. It will be tested again by the Senate’s recently released torture report, which embarrassed a number of European governments that reportedly provided “black sites”—secret U.S. prisons—for use by the CIA. This can only make it more difficult for the next U.S. President to win support from European leaders for anything that wary European voters might not like. The country’s relations with Britain will suffer in years to come as it becomes clear that the U.K. will sharply reduce the role it plays in Europe or exit the E.U. altogether. Britain has given Washington much of its influence inside the E.U., and a U.K. outside Europe would weaken the alliance.

It’s also inevitable that the rise of China will fray U.S. ties with allies in Asia as the governments of these countries hedge their bets on U.S. staying power in the region. An ally like Japan knows that Washington is now less likely to intervene in its security disputes because the American public won’t support a lasting U.S. commitment to solve what are perceived to be other people’s problems. A Pew Research poll conducted in late 2013 found that for the first time in the half-century that Americans have been asked this question, a majority of respondents said the U.S. “should mind its own business internationally and let other countries get along the best they can on their own.” Just 38% disagreed. More recent polls tell the same story. In a democracy, no President can sustain an expensive, ambitious foreign policy without reliable public support. In the U.S., this support is no longer there, and the world knows it. Short of another large-scale terrorist attack on U.S. soil, it’s hard to imagine anything that can restore public appetite for a more assertive foreign policy anytime soon.

For all these reasons, the U.S. will exercise less power in the coming years in nearly every region of the world, and we can expect a de-Americanization of the international system. But there are other forces at work as well. Some countries will make a more determined move away from reliance on the dollar. As the world’s primary reserve currency, the dollar has served for decades as the vital asset for central banks and commercial transactions of all kinds. Dollar dominance offers the U.S. important advantages. Its stability ensures that the country remains the safest port in any storm, attracting investment that keeps U.S. interest rates relatively low, despite the expansion of the national debt. It helps U.S. companies avoid the transaction costs that come with currency conversion and allows Washington to pay its debts by simply printing more money.

But dollar dominance is on the wane as China, Russia, Brazil and others move to denominate more of their commerce in other currencies. Five years ago, China conducted trade almost entirely in dollars. Nearly a quarter of that trade is now settled in renminbi.

At the same time, China has announced the creation of an Asian Infrastructure Investment Bank, an institution that will not require borrowing nations to uphold the environmental and labor standards that are conditions of help from Western capitals. China has also created a $40 billion Silk Road Fund that is designed to extend Chinese commercial influence across South and Central Asia and into Europe. Those initiatives will give China greater market power—and therefore political influence—with the governments of partner countries and will help Beijing escape the dominance of U.S.-mandated rules and standards. In addition, Russia and China are now talking about creating their own ratings agency to further diminish Western influence in their economies.

The emergence of new lenders and investors provides autocratic governments access to cash without having to promise democratic reforms. But diminished influence abroad is only part of the story. For many emerging states, partisan paralysis in Washington makes democracy a less than appealing path toward development.

Nor will it be as easy for the U.S. to build greater support for market-driven capitalism, particularly as China continues to demonstrate the growth potential of the state-driven variety. In 2015 congressional opponents of the U.S. Export-Import Bank, an 80-year-old institution designed to enhance the market power of U.S. companies operating abroad, will finally have a golden opportunity to kill it. At the same time, though much has been made of China’s economic-reform process, changes to China’s economy have less to do with privatization and more with making China’s enormous state-owned companies work more effectively.

American prospects in the Middle East are not, for the moment, very encouraging. The Obama Administration’s bid to make a deal with Iran to scuttle its nuclear program leaves the Saudis worried that the U.S. will lift sanctions on Riyadh’s bitterest rival, shifting the region’s balance of power in Iran’s favor. The continued erosion of U.S.-Saudi ties will persuade the Saudi royal family to run a much more independent foreign policy than it used to. For example, though technically part of a U.S.-led anti-ISIS coalition, the Saudis are not working as hard as they could to track funding and arms that militants from the Islamic State of Iraq and Greater Syria receive as they work to destabilize Iraq and Bashar Assad’s Syria. Even in places where the U.S. and Saudis have shared interests, the two countries are no longer closely coordinating policies.

The most direct challenge will come from China. Washington is still working to solidify its long-term commercial and security interests in East Asia via the Trans-Pacific Partnership, a colossal U.S.-led trade deal involving a dozen countries on either side of the Pacific. For the moment, this is not a deal that will include China and its state-dominated economy. That’s why China is working on an enormous international trade deal of its own. At a regional summit meeting in November, Chinese President Xi Jinping announced a road map for the creation of a Free Trade Area of the Asia-Pacific (FTAAP). More than 20 countries have formally signaled interest in FTAAP membership. In fact, China—not America—is now the world’s lead trading nation. According to analysis by the Associated Press, in 2012 the U.S. was the largest trade partner for 76 countries, and communist China was the lead partner for 124.

The U.S. will remain the world’s most powerful nation for years to come, but that status doesn’t carry as much weight as it used to. Advantages enjoyed for decades are fading as new powers push for new rules and standards—in international politics, the global marketplace and online. Globalization will continue to spread new ideas, speed the flow of information, lift nations out of poverty and drive global consumption. But it’s less likely than before to promote American values and an American worldview.

Bremmer is president of Eurasia Group, a political-risk consultancy

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Cruise Line Shares Sail Higher as U.S., Cuba Relations Improve

Carnival's Breeze cruise ship stands docked prior to departure in Miami, Florida on March 9, 2014.
Bloomberg—Bloomberg via Getty Images Carnival's Breeze cruise ship stands docked prior to departure in Miami, Florida on March 9, 2014.

Investors place bet on cruise operator shares even though tourism is still banned

Shares of cruise-line operators sailed to big gains on Wednesday as investors placed a bet that improving relations between the U.S. and Cuba could lead to new opportunities for tourism.

Shares of Carnival, Norwegian Cruise Line and Royal Caribbean all rose in early trading Wednesday, outpacing the Dow Jones Industrial Average, after the Obama administration said it plans to lift many of its existing travel restrictions on Cuba.

The new regulations will make it easier for Americans to visit to Cuba under the 12 categories of travel that are currently allowed, The Wall Street Journal reported, though it isn’t immediately clear if or when the island will be open for mass tourism. Some kinds of tourism are still banned, according to various media reports,.

Still, Cuba is appealing to companies with the most to gain from the increased travel. The tropical island’s attractive beaches and proximity to the United States makes it a potential vacation hotspot. The Caribbean is already the largest cruise line market in the world, and Americans hop on the industry’s bulky ships more than any other nation.

Some of the cruise line operators already have strong links to the Caribbean. For example, nearly all of Norwegian’s ships serve the region. The Caribbean also makes up roughly 35% of Carnival’s passenger capacity, more than any other region. That means that if the U.S. were to allow its citizens to freely visit Cuba, many of the cruise industry’s ships are already in prime position to dock at Havana and other Cuban cities.

This article originally appeared on Fortune.com

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