Is Cuba coming in from the cold?

One of the most extraordinary geopolitical trends of recent years has been what might be called, with apologies to John le Carré, “coming in from the cold.” Many countries that had excluded themselves from the globalization system and maintained an adversarial relationship with the West have recently performed an about-face, opening themselves to foreign investment and normalization of relations. Myanmar (formerly Burma) was the first of the recent converts, making rapid progress since 2011. Iran has followed with on-again off-again negotiations on a nuclear deal. Is Cuba the latest example? To answer this question, one must first understand the trend itself. Generally speaking, there are two factors that appear to be driving these countries’ decisions to put aside decades of isolation. The first of these is the emerging markets boom. A heat map of global economic growth in 1992 (see below) was hardly a compelling advertisement for the globalization system. “Open your markets to the West,” it said, “and the West will get really rich while you struggle.” As the map shows, most emerging economies outside of Asia were floundering, while the U.S. powered head. This was the tail end of the so-called “great divergence,” in which the poorest countries of the world became relatively poorer, in complete contradiction of economic theory. By 2005, the global economic growth heat map looked very different. Nearly every economy in the world was booming. Led by China and India, the ‘BRICs’ were catching up with the West, and looked set to surpass the United States in economic size. The only emerging economies whose performance was wobbly were the refuseniks: Iran, Cuba, North...