(Bloomberg) -- President Joe Biden’s administration is set to ease restrictions on Cuba to allow more US financial support of small businesses, a limited step to try to help private firms struggling to survive in the island’s shattered economy.
The US will unveil regulatory changes aimed at bolstering the entrepreneurial sector on the communist-run island as soon as this week, according to a person familiar with the matter, who spoke on condition they not be named ahead of the announcement.
Advocates for engagement with Cuba, which has been subject to a US trade embargo since the early 1960s, expect to see limited measures imminently from agencies including the State Department. They could be announced as Cuban President Miguel Diaz-Canel visits New York for the United Nations General Assembly beginning Tuesday.
The moves — which will likely give Cuban entrepreneurs access to the US banking system — “will hopefully make life easier for the Mipymes,” said Miami-based lawyer Pedro Freyre, using the Spanish acronym for micro, small and medium-sized enterprises.
The Biden administration sees entrepreneurs as Cuba’s best hope to grow its economy and curb the outflow of migrants from the island, a State Department official said, speaking on background. The official declined to confirm an announcement was pending, but said US policy seeks to support the Cuban people while restricting any benefits to the regime and military.
While the Cuban government had been hoping Biden would swiftly reverse the “maximum pressure” policy pursued by Donald Trump, there’s no indication that more radical changes are imminent. US Democrats are wary of doing anything that might alienate Cuban-American voters in Florida, a key swing state, ahead of the 2024 election.
Cuba’s deputy foreign minister was in Washington last week and met with Biden administration officials ahead of Diaz-Canel’s visit to New York.
Helping entrepreneurs is “something that has bipartisan support, because Republicans of course are on board with anything that boosts private industry and private enterprise in Cuba,” according to Freyre, a Democrat who was active in policy discussions during President Barack Obama’s attempted detente with Cuba.
Ricardo Herrero, executive director of the pro-engagement Cuba Study Group, also believes a package of policy tweaks — including greater clarity on what level of lending will be permitted — is imminent.
The measures will “detail how Cuban entrepreneurs can open up bank accounts in the United States and then have access to those bank accounts from inside Cuba,” he said by phone Sunday night. “That in itself changes the game.”
Cuba is suffering its worst economic crisis since the collapse of the Soviet Union three decades ago, with blackouts, shortages and rampant inflation. Tighter sanctions under Trump and the slump in tourism caused by the Covid-19 pandemic aggravated the downturn.
Last year, the latest wave of people fleeing the country exceeded the tally from the 1980 Mariel boatlift and the 1994 Balsero crisis combined.
Diaz-Canel’s government wants the US to remove it from its list of state sponsors of terrorism. But the regime’s crackdown on protesters in 2021, plus accusations — which Havana denies — that it helped send Cubans to fight for Russia in Ukraine, leave Cuba with little leverage and few friends in Washington.
Which is why, according to one Republican Cuba policy veteran, the imminent moves will be limited in scope.
Biden’s team “has shown no appetite to re-engage at the level of the Obama administration,” said Jose Cardenas, who worked on Latin America issues in George W. Bush’s administration. “There’s going to be no Normalization 2.0. They see really little upside, politically, to such an initiative.”
(Updates with comments from Cuba Study Group and Washington visit by Cuban official.)
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