Media Corner


Economic change eclipses embargo ; Castro's socialism slowly blending with capitalism.

April 13, 2003, Sunday , METRO

BUSINESS; Pg. 1L

BYLINE: BONNIE PFISTER/San Antonio Express-News (Texas)

HAVANA - When speaking of Caribbean culture, observers often talk of sincretizacion , the centuries-long process in which African slaves and their descendants melded Yoruba spirituality with the Catholicism of their Spanish conquerors.

But here on the region's largest, most singular island, a sincretizacion of another sort is underway: the blending of Cuban-style socialism with dollar-chasing capitalism despite a 42-year economic embargo and renewed tensions with the world's most powerful nation.

Most individual Cubans struggle mightily to stretch their small government salaries and food allotments, although healthcare, housing and education remain free.

Meanwhile the centralized government has made tourism a cornerstone of its economic strategy, and low-skilled jobs catering to foreigners tantalize the island's engineers, teachers and doctors with the promise of better pay, often in hard currency.

"The U.S. dollar is now not only the primary measure of value, but also has replaced the revolution as (a) stimulus," said John Kavulich, president of the U.S.-Cuba Trade and Economic Council, an independent business advisory firm in New York.

With the demise of the Soviet Union, Cuba lost 85 percent of its source of foreign income almost overnight, said Omar Everleny Perez Villanueva, an economic professor at the University of Havana.

Then in 1992, U.S. legislators further tightened the terms of the embargo, leveling a six-month ban from American ports of any foreign vessel that had docked in Havana.

"We call it a blockade," Perez said, because it meant foreign shippers choosing to deliver goods to Cuba would forego access to the world's largest consumer market for half a year. As a consequence, costs to import such staples as grains and beans tripled. In 1996, the law was retooled to deny travel visas to the United States for any foreign firm doing business with Cuba.

San Antonio attorney David Cibrian, a specialist in Cuban business law and no particular fan of Castro, described Washington's hard line as a failure.

"It has ceased to be international policy," he said. "It has become a domestic-policy issue, a campaign-finance issue."

In recent years, however, the tide seemed to be turning, said Cibrian. The 1998 visit of Pope John Paul II, the death of virulently anti-Castro exile Jorge Mas Canosa, and negative reaction to the Miami-Cuban community's handling of the Elian Gonzalez affair all helped to bring about a softening in rhetoric.

Meanwhile interest groups in Midwestern farm states have raised their voices about wanting access to the Cuban market. In late 2001, Cuba began legally importing American food products for the first time in nearly half a century. U.S. firms have already cornered 30 percent of that market.

Texas growers, who so far don't have any contracts with Havana, are looking to get a piece of the pie. The two-month-old Texas Cuba Trade Alliance, whose members include Texas A&M University and the state agriculture department, will host an information conference in Austin on the subject next month.

Tourism has continued to be a major focus of the government. Last year, Kavulich said tourism brought gross revenues of $1.8 billion to the island, thanks to foreign tourists, including licensed and illicit U.S. visitors who subvert the U.S. ban by traveling via a third nation.

Some critics worry tourism could be another one-crop strategy, like sugar, that is vulnerable to the vagaries of the international market. Since 9-11, tourism has declined here, as it has worldwide. Additionally, Cuba has a hard time attracting return visitors because its economic troubles mean inconsistent quality for international sun-seekers.

In recent weeks, the bilateral relationship has experienced another bout of whiplash. Incensed at the new U.S. Interest Section Chief James Cason's friendly relationship with dissidents and independent journalists, Castro arrested more than 70 citizens in March.

Half of them were sentenced last week from 12 to 27 years for conspiring to undermine Castro's government. Among those convicted were promoters of the Varela Project, a petition drive for government reforms endorsed by Jimmy Carter during a visit to the island last year.

Organizers called off an emigration conference this weekend that was to bring exiles and natives together in Havana for the first time since the revolution. Cason last week called the crackdown on political dissidents a symptom of instability that could provoke mass flight reminiscent of the Mariel Boatlift in 1980 and the 1994 Balsero crisis.

Two airplanes and a ferry have been hijacked and headed across the Florida Straits in the past month by fleeing Cubans. The ferry ran out of gas not far from the Cuban coast. The airplane hijackers are awaiting prosecution in Florida.

As for the crackdown, described as the harshest in a decade, University of Miami professor of international studies Jaime Suchlicki theorized that Castro might be trying to arrange a trade for five Cuban spies in a U.S. jail while the world's attention is focused on Iraq.

"It is clear that this is not a reaction to the U.S. actions in Cuba or (the U.S.) distributing propaganda," Suchlicki told the Associated Press. "This is Fidel preparing for something and taking advantage of the international situation."

None of which is good for international trade, Kavulich said. "The business community has always attempted to maintain a substantial distance between politics and commerce. The happenings during the last month have made managing that distance more difficult."

How a post-Fidel era may unfold is anyone's guess. While several observers say future government leaders are unlikely to throw open the doors to capitalism in the way the former Soviet Union did, the international support and interest Cuba enjoyed may not be so forthcoming.

Some foreign governments that had extended economic or political largesse to the island as a way of taking jabs at the United States might be less interested when Fidel, with his political star power, is no longer on the scene, said a Washington-based analyst who spoke on condition of anonymity.

"They just help Cuba because it annoys the hell out of the U.S.," he said. "Without Castro, it may as well be Haiti." 

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