How Panama changed history in the Americas

Thank Washington. Thank Havana. But also thank Panama City.

Jorge Dominguez does.

The Harvard University Latin America scholar says it was a bold but largely unacknowledged master stroke by newly elected Panamanian President Juan Carlos Varela that sparked this week’s stunning announcement that Cuba and the United States mean to restore diplomatic relations, after more than five decades of bitter hostility.

“Panama said, ‘We’re going to do it — and tough luck,’ ” says Dominguez.

He is referring to Varela’s decision this past October to invite Cuban President Raul Castro to attend a hemispheric summit scheduled for next April in the Central American country.

That move put the ricocheting ball of regional diplomacy firmly in Washington’s court.

There have been several previous such meetings, known as Summits of the Americas, but the host leaders in every case have bowed to U.S. wishes and kept Cuba off the guest list.

Varela chose a more daring course.

“Panama decided to invite Cuba as a full participant,” says Dominguez. “The White House had to reach a decision, to accept or not.”

Now it seems U.S. President Barack Obama will indeed be in Panama next spring, along with his Cuban counterpart, as their two countries work to restore full diplomatic relations, something they have not enjoyed since Washington severed ties in 1961.

“If you want to ask why this happened at this time,” says Dominguez, “that is your answer.”

In other words, thank Panama — but also spare a moment of recognition for a still emerging spirit of solidarity and assertiveness in a region long dismissed as Washington’s “backyard.”

That new spirit is just one of several regional shifts that foreshadowed — and have now been reinforced by — this week’s announcement of renewed Cuban-U.S. ties.

“It’s very clear that Latin American and Caribbean states are feeling their oats,” says John Kirk, a professor of Latin American studies at Dalhousie University in Halifax. “The days of ‘gunboat diplomacy’ are over.”

Long dominated economically and politically by the United States, Latin American governments have a history of grudgingly giving in to U.S. demands, a history that has certainly included the shunning of Cuba following its 1959 socialist revolution.

With just two exceptions, Mexico and Canada, every country in the Americas has at some point suspended diplomatic ties with the fractious Caribbean island and its former leader, Fidel Castro. All were responding at least in part to U.S. pressure.

Granted, not a lot of pressure was needed in every case, considering the sternly conservative cast of many past Latin American governments, including a grim procession of right-wing military dictatorships.

Nowadays, no dictatorships remain, except Cuba, and the governments of at least 10 of Latin America’s 20 countries can be classified as left of centre.

The U.S. is now the only nation in all of the Americas, from mighty Brazil to little Barbados, that does not have full diplomatic relations with Cuba, a powerful indication of how far Washington has fallen behind its hemispheric neighbours.

Sooner or later, someone or something had to end the seeming interminable standoff between Havana and Washington, and regional pressure has surely played a part.

“The sense of Latin American unity will be strengthened by this,” says Kirk. “Latin American resolve and dignity have been strengthened.”

But other factors were — and are — at play.

Take Venezuela.

Cuba’s closest ally, Venezuela has been pummelled of late by falling prices for oil, which accounts for almost all of the country’s foreign earnings.

This is miserable news for the socialist government of Venezuelan President Nicolas Maduro, whose approval rating has sunk below 25 per cent, in a country beset by the world’s highest inflation rate, unnerving violence, and stubborn shortages of consumer goods.

But Cuba has serious economic troubles of its own, and they might soon turn catastrophic if oil-rich, cash-poor Venezuela were to suspend or scale back its current practice of supplying the island with more than 100,000 barrels of petroleum a day on very generous terms.

“That would hit Cuba very hard,” says Arch Ritter, a Cuba expert at Carleton University in Ottawa.

According to Susan Purcell, director of the Center for Hemispheric Policy at the University of Miami, the Cuban leader has been earnestly trying to cobble together a Latin American backup plan, focusing mainly on Brazil — so far, without much success.

“The threat has been hanging over them for months,” says Purcell, who believes the fear of losing even some of that Venezuelan oil is partly what drove Castro to agree to restore ties with the U.S., a prospect that is bound to pay significant economic dividends for his country. “The main trigger on the Cuban side was Venezuela.”

Meanwhile, for socialist countries such as Venezuela, Bolivia and Ecuador — whose leaders delight in excoriating the United States for sins both real and imagined — the warming in relations between Havana and Washington will make the “anti-imperialist card” just a little more difficult to play.

“It lessens the potency of that argument,” says David Smilde, a Venezuela expert at Tulane University in New Orleans, “but they’re going to make that argument, anyway.”

For Caribbean and Latin American countries heavily reliant on income from tourism, the prospect of an accord between Cuba and the U.S. might be welcome in principle, but it is likely to pose a severe challenge in economic terms.

Thanks to its proximity to the U.S., its long ribbons of white-sand beaches, and its rich, flamboyant culture, Cuba is bound to present a massive competitive threat to countries such as the Bahamas, Barbados, Jamaica and even Mexico.

“The cruise industry will ramp itself up quickly,” says Kirk. “Hotel chains will be scouting for virgin territory. I would be quaking in my boots.”