Cuba Without Castro: A Look Ahead
Fidel's serious illness has led to speculation about what might come
next for the Caribbean's largest nation. Here are some possible scenarios
by Geri Smith
For decades, Cuban Americans living in Miami have toasted each other at
New Year's by saying, "Next year in Havana!" They'll be doing the same
this Dec. 31, but for the first time since Cuban leader Fidel Castro's
successful revolution in 1959, there is a chance their wish may come true.
Castro, 80, who underwent major intestinal surgery in July, has not been
seen in public since mid-September, leading to rumors that he may be
near death, suffering from incurable cancer. The government in Havana,
headed by acting President Raúl Castro, his 75-year-old brother, says
Fidel is recovering and does not have cancer. Some speculate that he may
be suffering from diverticulitis, a condition in which the colon becomes
infected and inflamed, sometimes requiring surgery.
Castro's illness has generated much debate among Cuban exiles and the
Bush Administration over what would happen on the Caribbean island of 11
million people if Castro, the world's longest-reigning leader, were to
die in the coming weeks or months. Here's an analysis of possible scenarios:
Brothers, Not Twins
Who is really in charge now? Raúl assumed Fidel's top job, that of first
secretary of the Central Committee of the Cuban Communist Party. His
other posts were distributed temporarily to other top government
officials including Foreign Minister Jorge Pérez Roque and Carlos Lage,
the country's top energy official. When Castro fell ill, he said he
would be back at work in December, but he missed the big public birthday
celebration staged for him on Dec. 2.
Is Raúl like Fidel? No. Raúl is not as charismatic as his older brother
is, and he does not command the same kind of loyalty among average
Cubans as Fidel does. As head of the armed forces and security apparatus
he earned a reputation for ruthlessness dating from the early days of
the revolution, when he allegedly ordered hundreds of summary
executions. Raúl has maintained loyalty among top military officers by
appointing them to prestigious jobs heading state-run companies.
Would Raúl continue Fidel's economic policies? Raúl has visited China
and Vietnam and is said to advocate emulating China's strategy of
opening the market while maintaining heavy state control over the
economy. When the former Soviet Union collapsed in 1991 and ended its $4
billion in annual subsidies to Cuba, Raúl was instrumental in
restructuring the economy during the so-called "Special Period" that
followed, when energy, food, and other basic goods were in extremely
short supply. He oversaw the military's assumption of control over an
estimated 60% of the economy, including such important economic sectors
as tourism and agriculture.
A Two-Tier Society
Will Cuba's economy collapse? There's no reason for it to collapse.
Cuba's economy is currently growing at an 8% clip, thanks in part to
high world prices for its nickel, which accounts for 25% of the
country's exports. (The price of nickel, used in stainless steel, has
doubled this year, reaching a record price of $34,950 a ton on Dec. 15.)
More than two million tourists, mostly from Canada and Europe, visit the
island annually, spending some $2 billion. And the country has
discovered significant offshore oil deposits that already provide nearly
40% of the oil that Cuba consumes. Venezuela's leftist president Hugo
Chávez sends 100,000 barrels a day of crude oil and refined petroleum
products to Cuba at sweetheart prices.
But aren't there many shortages on the island? Yes. The average Cuban,
whether a doctor or a seamstress, earns just $15 to $20 a month and must
use a government-issue ration book for basic necessities such as cooking
oil, meat, and soap. Only Cubans with immediate family members living
overseas are allowed to receive up to $1,200 annually in remittances,
which they can use to buy other items in special government shops that
accept only hard currency.
This has created a two-tier society in Cuba. Families receiving money
from abroad and Cubans who work in the tourism sector and earn tips in
dollars live relatively well, though not by any means in luxury. Most
everyone else has to struggle. In the early 1990s the government allowed
some Cubans to open small businesses, including family-run restaurants
in their homes, but that partial liberalization was rolled back in the
late 1990s.
Striking (Lots Of) Oil
In spite of the embargo, some U.S. companies are doing business with
Cuba, right? Yes. Since 2000, the U.S. government has eased the embargo
slightly, allowing U.S. companies to export around $1.2 billion in food
items, chiefly wheat, soybeans, rice, corn, oilseeds, meat and poultry,
and dairy products, as well as some medicine to the island. In 2005
alone those exports totaled $361.5 million. Companies must get a special
license from the U.S. government and Cuba generally must pay for all
purchases in cash. U.S. government studies have indicated that if the
embargo is lifted, U.S. agricultural exports to Cuba could exceed $1
billion annually within five years, making Cuba the second most
important market for foodstuffs in the hemisphere, after Mexico.
Cuba discovered oil off its northern coast in 2002. How promising is
that? Very. Studies show that Cuba may have about one billion barrels of
reserves in coastal areas, and there may be from four billion to six
billion barrels of unproven oil reserves in deep waters in Cuba's part
of the Gulf of Mexico, according to Jorge Piñon, a retired Amoco and BP
executive now at the University of Miami's Institute for Cuban &
Cuban-American Studies.
Cuba currently produces 68,000 barrels of oil per day. U.S. oil
companies are interested in participating in Cuba's promising oil
sector, but for now they must watch from the sidelines while companies
such as Canada's Sherritt and Spain's Repsol, as well as state companies
from Norway, China, and India, get most of the business.
When Fidel dies, is there any chance that thousands of Cubans will try
to flee to the U.S.? Few analysts expect widespread unrest. When Castro
announced that he was stepping down temporarily July 31, nothing
happened. The U.S. government, however, has contingency plans in place
should thousands of Cubans make an effort to flee the island to reach
Florida or if Cuban American exiles in Miami organize a flotilla of
boats to pluck remaining relatives off the island, which lies just 90
miles south of Miami.
Communism Isn't Negotiable
Would Castro's death make it possible for the U.S. to normalize
relations and lift the 45-year-old economic embargo of the island? Not
quite. Raúl has called for better ties with the U.S., but has made it
clear that the country's Communist system is non-negotiable. The 1996
Helms-Burton law stipulates that Washington cannot recognize a
transitional government in Cuba until both Fidel and Raúl are out of the
picture and the country moves toward a free-market democracy.
Under President Bill Clinton, Washington loosened restrictions on
academic exchanges and on travel to Cuba by Cuban Americans, but
restrictions were reimposed by the Bush Administration, which restricts
remittances and now limits visits by relatives to once every three years.
Some believe that Congress, now controlled by the Democrats, may ease
those restrictions once again in the belief that greater
people-to-people contact will do more to loosen the Castro brothers'
grip than isolation. In mid-December, 10 members of the U.S. Congress,
including six Democrats and four Republicans, made a rare, three-day
visit to Cuba—the largest U.S. delegation to do so since the 1959
Revolution.
Can Americans get one last look at Communist Cuba before Fidel departs?
Not legally. An estimated 80,000 Americans violate the embargo by
visiting Cuba each year, usually flying in from Canada or Mexico, but
they are subject to hefty fines if their trip is discovered. For a
virtual look inside today's Cuba, check out the "Cuba at a Crossroads"
slide show, which includes photos from a trip to the island taken by
BusinessWeek's Frederik Balfour, a Canadian citizen.
Smith is BusinessWeek's Latin America correspondent.
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