David Jessop, Contributor

Pity poor Thomas Shannon, the United States State Department's Assistant Secretary of State for Western Hemisphere Affairs.

He now has the unenviable task of travelling the world trying to convince governments and international organisations that they should contribute to President Bush's proposed multibillion-dollar 'Freedom Fund for Cuba'.

While the U.S. president has formally asked the U.S. Secretary of State, Condoleezza Rice, and the Cuban-born U.S. Commerce Secretary, Carlos Gutiérrez, to lead this effort, it will be Mr. Shannon who will have to do the work.

The fund was one of a number of new initiatives contained in a speech made in Washington by the U.S. President on October 24.

The remarks, President Bush's first on Cuba for four years, proposed a post-regime change fund 'to help the Cuban people rebuild the economy and make the transition to democracy through grants, loans and debt relief.

Internet access

It also proposed to license non-governmental organisations (NGOs) and faith-based groups to provide computers and Internet access to the Cuban people and to invite Cuban young people into the Partnership for Latin American Youth scholarship programmes to have "equal access to greater educational opportunities".

The subtext, however, was more interesting.

The speech made clear that the U.S. administration was not prepared to accept any dialogue with the island's collegiate leadership.

This is despite public and other recent suggestions from the Cuban Government that it was willing to open a dialogue based on mutual respect with Washington in the hope that this might lead eventually to more normal relations.

The United States, the U.S. president said, "was prepared to take new measures right now but only if the Cuban regime, the ruling class get out of the way". Later in his remarks, he made clear that the U.S. would "not seek accommodation with a new tyranny in the interests of stability".

The U.S. president also appeared to call directly on the Cuban military, police and officials to "embrace the people's desire for change".

They must decide, he said, whether to defend "a disgraced and dying order" or whether to "embrace (the) people's desire for change".

Extraordinary exchange

Later, at a press conference, the Commerce Secretary Carlos Gutiérrez and Thomas Shannon answered questions from a bemused media. In one extraordinary exchange, Secretary Gutiérrez was asked what if the Raúl Castro government remained in office. His reply was: "The president was very clear if that's the future of the Cuban regime, then that's very unfortunate for the people of Cuba. That's a big big shame for the people of Cuba who deserve freedom."

Even more bizarrely in response to a question on the timing of President Bush's speech, Mr. Gutiérrez replied that "it's just one of these things. It seemed like as good a day - better than tomorrow and better than yesterday".

Reporters also noted that, while President Bush gave the impression that the Freedom Fund would definitely be created, Mr. Gutiérrez merely indicated that "we will explore with our international partners the opportunity to create a freedom fund to support the Cuban people's transition to democracy".

The paucity of content in Mr. Gutiérrez's replies suggested an administration without any practical policy on Cuba other than to play to the converted among a largely older generation of U.S. Cuban-Americans in the electoral swing state of Florida.

In response, Cuba's Government in a show of confidence and disdain, gave live television coverage to much of the speech, ran extracts extensively in its print media, and criticised the U.S. president for being arrogant.

In almost all of Europe, the President's remarks were privately greeted with dismay, being seen by officials as marginal to reality, failing to grasp what is happening internally in Cuba and lacking in ideas about how to engage with the island's increasingly pragmatic leadership.

In Cuba itself, a vigorous internal debate is under way on how the country should address the economic and social challenges it faces.

It revolves around issues such as economic management, efficiency, the improved delivery of social services, and creating an economy that can deliver more materially. This debate is largely characterised by pragmatism, an absence of socialist rhetoric and finding uniquely Cuban solutions.

Debate on options

From late 2006, a large number of commissions reviewed most aspects of Cuban life. This internal debate on options probably drew to a close in July. Then, Raúl Castro made it clear that a "structural and conceptual change" was necessary and that Cuba's government needed to establish what was economically most efficient and learn lessons from it.

He also spoke of a future where there was "a predominance" of socialist property and a "non-monolithic approach to development". He envisaged a role for foreign investment providing capital, technology and markets. He used Fidel Castro's words from 2000 to justify this approach: "It means changing all that ought to be changed. It is defying powerful and ruling forces inside and outside the social and national spheres."

Subsequently, Raúl Castro made clear that the new Cuban economic model would be based on Cuba's tried and tested military economic model that successfully operates in tourism and other sectors.

He also initiated a public debate to achieve the endorsement of the conclusions he alluded to in July and it would seem to guarantee the 'socialist legitimacy' of what is being proposed.

As a consequence, a fundamental national debate has been under way on the economic relationship between centralisation and decentralisation and the future interconnection between producers, buyers, sellers, distributors in the chain of supply, as well as on taxation, encouraging productivity and by extension, material gain.

New economic thinking

This may result sometime after elections to the National Assembly in November in announcements that lead to significant agricultural reforms, a new approach to foreign investment in areas regarded as economically strategic, and to other social and economic reforms.

All of which is not to suggest that Cuba is changing its overall model or its approach to organised dissent.

Rather, it is beginning to come to terms with its inefficient system and recognising the need to develop new economic thinking if its social model is to survive.

Cuba faces the same challenges as all other Caribbean nations. Food security, energy security, climate change and economic globalisation all require new approaches to economic and social organisation.

Like others, it has recognised that this requires significant changes to a system that was, as one young Cuban recently noted to me, created in the fire of the Cold War.

This is a reality well understood at high levels in Europe, Canada and most of the rest of the world, where this is seen as presenting an opportunity for engagement. Unfortunately, it is a view with which President Bush and his advisers seem to be wholly out of touch.

David Jessop is director of the Caribbean Council. Email: david.jessop@caribbean-council.org