New challenges for Cuba

For decades, it was Cuba's first response to criticism.

Poor economic performance? An obvious effect of a U.S. trade embargo that amounted to a blockade of the island nation by a bullying superpower.

Arrests of dissidents? A legitimate act of self-defense against mercenaries working for the world's richest nation, which backed the failed Bay of Pigs invasion and plots to assassinate revolutionary leader Fidel Castro.

Now, though, with Washington agreeing to restore full diplomatic ties that were cut in the early 1960s, Cuba's communist government may not be able to blame its old Cold War nemesis so readily.

With that now a greater possibility, however, there are risks.

Latin American countries and others that supported Cuba in its long battle against the United States may become less tolerant of its one-party rule, repression of dissidents and strict controls over the economy and the media if the U.S. threat disappears.

President Raul Castro, 83, has pushed through market-style economic reforms since taking over from his ailing older brother Fidel in 2008.

On the day he took office, he said Cubans should not use the embargo as an excuse for perennial shortages and economic hardship and he poked fun at the blame game in a 2010 appearance before parliament.

But his reforms are slow-moving and he has said the wider goal is to strengthen Cuban socialism, not weaken it.

So it was no surprise that even when announcing the U.S.-Cuban political breakthrough, simultaneously with President Barack Obama in separate speeches, Castro also reminded the world the sanctions were still in place.

Cuba estimates the sanctions have cost its economy about $117 billion U.S. in lost trade and extra costs, including nearly $4 billion U.S. in the most recent annual estimate.

Critics say Cuba exaggerates the costs and has found commercial workarounds with friendlier nations but the impact of not trading directly with the United States has been huge - from lost sales of sugar and other products to the inability to import cheap medicines.

Obama can significantly weaken the U.S. sanctions with executive authority and the White House has said it hopes the U.S. Congress will formally lift the embargo before Obama leaves office in January 2017.

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