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July 31, 2014

Editor’s letter: Cuban perestroika

"Mr Gorbachev, tear down this wall!" US president Ronald Reagan demanded from his Russian counterpart during the last throes of the Soviet Union era.

At Berlin’s Brandenburg Gate, in a 1987 speech which has gone down in history as a milestone of the tempestuous Cold War years, Reagan challenged Mikhail Gorbachev’s authority and told him that if he sought the liberalisation of the economy and the prosperity of its people he should "come here" and "open this gate".

Seriously isolated since the fall of the Berlin Wall, the last communist country in the Americas has stepped up a gear to undertake its own perestroika and glasnost – Soviet terms for economic and political reform.

Cuba passed a new foreign investment law in March, which came into force last month. The law is aimed at attracting $2.5bn a year and so reach the target of 7% GDP growth for its economy to remain sustainable.

But a wall doesn’t need to be made of bricks and mortar to serve its purpose. Aren’t restrictions to commerce the most burdensome barricades for our free markets? If a US entrepreneur would like to do business with Cuba, wouldn’t he be banging his head against the invisible wall of the embargo imposed by his government?

The more knowledgeable readers of this magazine may well be tempted to issue a severe rebuke for my comparing the Berlin Wall to the US embargo on Cuba. And that’s fair enough, but other readers might argue that both are relics of the Cold War years and should be consigned to history.

As Reagan also said, the Berlin Wall would fall for it couldn’t withstand faith, truth and freedom. And the knowledgeable reader will also realise the truth today that the embargo hasn’t been successful in bringing democracy to the Cuban people, as the past 50-plus years prove.

It hasn’t provided opportunities for American businessmen either. Those opportunities are being seized by entrepreneurs in Canada, Latin America, Europe, and communist China.

But will the new law provide a robust and safe framework for investments? The Cuban government still needs to assure foreign investors that this latest move goes beyond a friendly piece of legislation. The communist regime should guarantee that the state won’t interfere in the normal course of business – whatever the reason, including protecting their sacred cause: the Cuban revolution.

After all, freedom for the markets and freedom for the Cuban people might not be contradictory goals, but related concepts that could cause democratic values and civil liberties to flow forth.

In his speech, Reagan also quoted West Germany president Richard von Weizsacker when he said the German question would be open as long as the Brandenburg Gate was closed.

Accountants, as fundamental gatekeepers of businesses and government’s finances, might have a fundamental role to play in the Cuban perestroika, if that’s what’s coming. The Cuban question remains opens – this issue of The Accountant hopes to shine a little light on some answers.

Related storyAccountancy profession key to opening up Cuban economy

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