Cuba and Alba's Grannacional Projects at the Intersection of Business

GLOBALIZATION AND THE SOCIALIST MULTINATIONAL: CUBA AND ALBA’S GRANNACIONAL PROJECTS AT THE INTERSECTION OF BUSINESS AND HUMAN RIGHTS Larry Catá Backer The Cuban Embargo has had a tremendous effect on forts. Most of these have used the United States, and the way in which Cuba is understood in the global le- its socio-political, economic, cultural and ideological gal order. The understanding has vitally affected the values as the great foil against which to battle. Over way in which Cuba is situated for study both within the course of the last half century, these efforts have and outside the Island. This “Embargo mentality” had mixed results. But they have had one singular has spawned an ideology of presumptive separation success—they have propelled Cuba to a level of in- that, colored either from the political “left” or fluence on the world stage far beyond what its size, “right,” presumes isolation as the equilibrium point military and economic power might have suggested. for any sort of Cuban engagement. Indeed, this “Em- Like the United States, Cuba has managed to use in- bargo mentality” has suggested that isolation and ternationalism, and especially strategically deployed lack of sustained engagement is the starting point for engagements in inter-governmental ventures, to le- any study of Cuba. Yet it is important to remember verage its influence and the strength of its attempted that the Embargo has affected only the character of interventions in each of these fields. (e.g., Huish & Cuba’s engagement rather than the possibility of that Kirk 2007). For this reason, if for no other, any great engagement as a sustained matter of policy and ac- effort by Cuba to influence behavior is worth careful tion. This suggests that to study Cuban global en- study. gagement requires a recognition and rejection of the Yet, over the last decade that engagement has as- “Embargo mentality” as the ordering device for anal- sumed an important economic as well as military and ysis. diplomatic character. Globalization has not left Cuba Conventionally understood, Cuban engagement has untouched (despite Cuban and American protesta- been episodic and opportunistic. It has been (and tions to the contrary). But Cuba has sought to en- continues to be) confrontational at times and always gage globalization on its own terms. The engagement ideologically driven in large part, perhaps, because must be understood as increasingly bound up within the context of Cuba’s external relations, especially those strategies have worked well for Cuba on the in- those in which Cuban has participated in the con- ternational stage. Since the 1959 Revolution, Cuba struction of a multi-national institutional architec- has fought a number of wars on multiple fronts in ture and in which it may not appear to take the lead. the service of its national interests and internationally significant ideological campaigns. Virtually every le- But Cuba is quickly learning one of the great lessons ver of state power has been used in these efforts— of global engagement. “Seven Cuban doctors and a including military, diplomatic, organizational, eco- nurse have accused their government of engaging in a nomic, media, cultural, religious and ideological ef- ‘modern form of slavery’ with Venezuela after barter- 230 Globalization and the Socialist Multinational ing their services for cheap Venezuelan oil.” (Galliot the production, sale and distribution of goods. (Ven- 2010). This is a not unusual consequence when state ezuela August 21, 2009). operated enterprises that combine sovereign and private activity collide with emerging international hu- These projects and enterprises are still at a very early man rights rules. This collision, and its particular po- stage in development. But all of them share certain characteristics founded on their organizational tential effects on Cuba’s recent efforts to define a framework: control by the state, a conflation of labor space for itself within global economic frameworks, is and capital as components of production and a focus the subject of this paper. on state policy for the production and distribution of Since the start of the 21st century, conventional eco- goods and services in the service of state determined nomic globalization has been the object of one of the economic welfare maximization. Yet, these enterpris- principal long term ideological wars waged by the es, arguably created as a challenge to the convention- Cuban state. (Castro 2003). The Cuban state has al global economic framework still must operate been active in its attacks on the organizational frame- within the general parameters of human rights and work of global conventional economic organization, other norms with respect to which international con- from sovereign debt (Backer 2006) and business or- sensus has been developing, many with Cuba’s ap- ganization (Backer 2004) to the basis of private pow- proval. Among important new developments in the er to effect trade between states. (Castro 2000). rules of business behavior, especially those touching Among its many activities in this realm, the Cuban on internationally recognized human rights, are soft law instruments developed through the Organization state has undertaken two significant efforts. The first for Economic Cooperation and Development seeks to develop an alternative basis for inter-govern- (OECD), and the principles of business and human mental management of trade through the Alternativa rights being developed by the United Nations Bolivariana Para los Pueblos de Nuestra América through the Secretary General’s Special Representa- (ALBA). (Backer & Molina 2010). The second, real- tive, John Ruggie—the Protect-Respect-Remedy ized in large part within the ambit of the first, seeks framework. (Backer 2010). In particular, the rela- an alternative basis of the organization of economic tionship between enterprise, state, and worker ap- activity for the production of goods and provision of pears to serve as a flash point for conflict between the services. grannacional conception of business and global con- The basic theory and objectives of the grannacional sensus on the rights of workers—especially in areas generally, is offered as a new form of transnational of pay, forced labor, and trafficking. There is already public enterprise, one that is meant to provide a via- an indication of potential conflict in recent cases filed in the United States in which these issues have been ble challenge to current conventional global systems raised. (Licea v. Curaçao Dry Dock Co. 2008). “For of economic organization. These ideas have been ar- multinational corporations facing allegations of hu- ticulated as the “concepto grannacional” being given man rights abuses, the stakes have never been high- effect through the inter-governmental arrangements er.” (Drimmer 2009). That applies, in equal mea- of ALBA. Grannacional economic activity, ideologi- sure, to economic enterprises sponsored, owned or cally based, is divided into two categories. The first, controlled by Cuba. And this is an area in which state proyectos grannacionales (PGs), are inter-governmen- sovereignty will provide little protection to enterpris- tal in character. These include efforts to create alter- es geared to projection within world markets. natives to dollar-denominated trade transactions grounded in the “sucre” (Venezuela July 9, 2010) but This paper considers Cuba’s new efforts at global en- also embrace enterprises targeting education, tourism gagements through the device of the grannacional in and the provision of medical services. The second, its ALBA framework. The paper starts by examining empresas grannacionales (EGs), focus on the creation the basic theory and objectives of the grannacional of entities controlled by ALBA states and geared to generally as articulated in ALBA publications as the 231 Cuba in Transition • ASCE 2010 “concepto grannacional” that serves as the organizing bility of conforming to the OECD’s Guidelines on framework of these multi-state socialist enterprises. It Corporate Governance of State Owned Enterprises, considers distinctions and implications for the divi- and (3) the possibility that these enterprises will not sion of grannacional efforts between proyectos granna- be able to conform to the United Nation’s develop- cionales and empresas grannacionales. It then focuses ing business and Human Rights project. MBA serves on a specific grannacional-related project—the Mi- as a template both to understand the character of the sión Barrio Adentro (MBA), a socio-political barter operationalization of social sector grannacionales and project in which Cuba exchanges doctors and other also to illustrate the way in which these projects raise health field related goods and services under its con- significant questions of international law compliance, trol for Venezuelan goods, principally petroleum. especially the ability of these enterprises to comply (Convenio 2000). MBA is analyzed as an example of with emerging standards of business conduct. the application of Cuban-Venezuelan approach to THE GRANNACIONAL—CONCEPT, economic and social organization through the state. PROJECT, ENTERPRISE The MBA is also useful as an illustration of the diffi- culties of translating that approach into forms that To understand the grannacional project, one must might conform with emerging global expectations of start with the presumption that its contours are a construct of applied ideology. It serves as an applica- economic conduct by private

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