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Cuba: Kicking the Cigar Down the Road

After nearly 50 years of hostility and mutual recrimination, are relations between Cuba and the United States finally on the verge of fundamental change? Fidel Castro no longer rules in Havana. More than 100 members of Congress have called for a "tough-minded review" of U.S. policy toward Cuba. Barack Obama, the likely Democratic nominee for U.S. president, has called for face-to-face talks between the U.S. and Cuban leaders.

Change has been a long time coming. When Fidel first seized power in Havana, John Kennedy was not yet president, Obama was not yet born, and Hawaii was not yet a state. But we will have to wait a bit longer for any fundamental shift in Cuba's politics or in Washington's approach to its government. Cuba's old guard remains in charge, it has plenty of foreign friends to help prop up its economy, and Washington is far too pre-occupied with other problems this year to end the four-decades-old trade embargo.

First, Cuba's communist graybeards will soldier on a while longer. Fidel's 76-year-old brother, Raul, is now president. Hardliner Jose Ramon Machado, 77, has been named his chief deputy. The 81-year-old Fidel has not wielded day-to-day authority since a health crisis removed him from the public eye in July 2006, but he will remain a force to be reckoned with for as long as he lives. Cuba's new president will do nothing that appears to repudiate his older brother's life's work.

Castro's most determined critics - in Washington, Miami and elsewhere - have long hoped he might go the way of Romania's Nicolae Ceausescu, the tyrant drowned by the anti-authoritarian tidal wave that swept his country in 1989. But Cuba is not Romania, Poland or East Germany. Its revolution is homegrown and a point of national pride, not an ideological straitjacket imposed by a neighboring power. Though the revolutionary slogans now ring hollow for many Cubans, no one under the age of 50 has known a Cuba without Castro. High hopes for the future are tempered by fears of upheaval.

For the moment, Raul Castro's mandate is a straightforward one: improve the Cuban people's standard of living while maintaining the Communist Party's political control. More a pragmatist than an agent of change, Raul knows he doesn't share Fidel's place in Cuba's collective imagination and that public patience with his rule might not last if market reforms appear to move Cuba's economy from bad to worse. He must also maintain morale within the military, which controls several economic sectors and will resist any attempt to privatize them.

Raul Castro has spoken publicly of the need for "structural and conceptual" change to Cuba's economy. But for the time being, we're likely to see a more modest version of the decentralization of economic decision-making Cuba attempted in the early 1990s, a modest revaluation of the peso to improve purchasing power, and cuts in the size of government to improve bureaucratic efficiency. Farmers and state-owned companies might gain a bit more independence from their bureaucratic minders, but we should not expect any deliberate move toward Chinese-style large-scale liberalization - much less some kind of Caribbean perestroika.

For near-term survival, there's no need for such changes, because Cuba's economy is not in crisis. Wages are stagnant and prices are high, but the country continues to get by with a little help from its friends. Hugo Chavez's government in Venezuela now plays the role once occupied by the Soviets. Over the past two years, it has delivered more than $2 billion in aid and about 92,000 barrels of oil per day.

Chavez has problems at home that might eventually limit his generosity. In a December referendum, his people balked at voting him president for life, and his government's mismanagement of the state-owned oil company may eventually create serious financial imbalances. But that won't happen this year.

After Venezuela, China is now Cuba's largest commercial partner. Trade between the two countries doubled in 2006 to some $1.8 billion and pushed past $2.2 billion in 2007. Beijing has extended credits to help ease shortages across the island. Chinese-made trains, buses, appliances and other consumer products have become common across the island.

Spanish companies have invested in Cuba's tourism. Canadian firms are involved in Cuba's mining sector. Dubai Ports World, the state-owned Arab firm that set off a firestorm in Washington two years ago with a bid to operate several U.S. ports, is reportedly considering a plan to invest $250 million in creating a modern container facility in the Cuban port city of Mariel. Though the Bush administration has tightened rules on cash flows between Cuban-Americans and family members on the island, remittances still add hundreds of millions of dollars to Cuba's economy each year.

Nor will we see a substantial near-term shift in U.S. policy toward Cuba. Washington is preoccupied at the moment with a presidential election, a slowing economy and the war in Iraq. The only part of Cuba that figures prominently in the American political debate these days is the U.S. base at Guantanamo Bay.

Thanks to loopholes in the embargo, U.S. farmers are already Cuba's leading food supplier. Agricultural shortages in Cuba may open the door a bit wider to U.S. exporters this year. But real change will come to the island - and to Cuban-American relations -only when both Castro brothers have gone. When a new generation of leaders emerges in Havana - no matter who is then living in the White House - political resistance to pressure from U.S. commercial interests will finally buckle.

But for the moment, that tough-minded policy review will have to wait. A year from now, Cuba will still be a police state with a centrally planned economy and the United States will still have an embargo. Only when Cuba has fully escaped from the Castros' long shadow will demand for change on the island reach the boiling point - and only then will a consensus develop in Washington in favor of reversing more than four decades of abject policy failure.

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