Revolution in retreat

Revolution in retreat
Under Raúl Castro, Cuba has begun the journey towards capitalism. But it
will take a decade and a big political battle to complete, writes
Michael Reid
Mar 24th 2012

WHEN ON JULY 31st 2006 Cuban state television broadcast a terse
statement from Fidel Castro to say that he had to undergo emergency
surgery and was temporarily handing over to his brother, Raúl (pictured
with Fidel, left), it felt like the end of an era. The man who had
dominated every aspect of life on the island for almost half a century
seemed to be on his way out. In the event Fidel survived, and nothing
appeared to change. Even so, that July evening marked the start of a
slow but irreversible dismantling of communism (officially, "socialism")
in one of the tiny handful of countries in which it survived into the
21st century.

Raúl Castro, who formally took over as Cuba's president in February 2008
and as first secretary of the Communist Party in April 2011, is trying
to revive the island's moribund economy by transferring a substantial
chunk of it from state to private hands, with profound social and
political implications. He has abolished a few of the many petty
restrictions that pervade Cubans' lives. He has also freed around 130
political prisoners. His government has signed the UN covenants on human
rights, something his brother had jibbed at for three decades.
Repression has become less brutal, though two prisoners have died on
hunger strikes. Cubans grumble far more openly than they used to, and
academic debate has become a bit freer. But calls for democracy and free
elections are still silenced. The Communist Party remains the only legal
political party in Cuba. And Raúl Castro has repeatedly dashed the hopes
of many Cubans that the hated exit visa, which makes it hard (and for
some, impossible) to leave the country, will be scrapped.

The economic reforms, set out in 313 "guidelines" approved by a
Communist Party congress in April 2011, are being implemented slowly and
with great caution. That is because they face stubborn resistance from
within the party and the bureaucracy. Indeed, the leadership shuns the
word "reform", let alone "transition". Those terms are contaminated by
the collapse of the Soviet Union, an event that still traumatises Cuba's
leaders. Officially, the changes are described as an "updating" in which
"non-state actors" and "co-operatives" will be promoted. But whatever
the language, this means an emerging private sector.

The new president often says his aim is to "make socialism sustainable
and irreversible". The economy will continue to be based on planning,
not the market, and "the concentration of property" will be prohibited,
Raúl Castro insisted in a speech to the National Assembly in December
2010. He is careful not to contradict his elder brother openly: his
every speech contains several reverential quotes from Fidel, who despite
his semi-retirement is consulted about big decisions. (For brevity and
clarity this report will refer to each Castro brother by his first name.)

Fidel's frail and ghostly presence in his compound in Siboney, a leafy
enclave of mansions on Havana's western outskirts, doubtless checks the
speed of reform. But he no longer controls the levers of power and
rarely comments on domestic politics.

This special report will argue that whatever the intentions of Cuba's
Communist leaders, they will find it impossible to prevent their island
from moving to some form of capitalism. What is harder to predict is
whether they will remain in control of the process of change, or whether
it will lead to democracy.

No turning back this time

When the Soviet Union collapsed in 1991, many outsiders believed that
communism in Cuba was doomed. Massive Soviet subsidies and military aid
for Cuba had offset the economic embargo imposed by the United States in
1960. By the 1970s they had also brought stability after Fidel had all
but bankrupted the island by his manic shifts from forced
industrialisation back to exaggerated reliance on sugar, the economy's
mainstay since colonial days. The overnight withdrawal of Soviet
subsidies and trade links caused Cuba's economy to contract by 35%
between 1989 and 1993 (see chart 1).

In response, Fidel declared a national emergency, dubbed "The Special
Period in Peacetime". He opened the island to foreign investment and
mass tourism and legalised small family businesses and the use of the
dollar. But then he found a new benefactor in Venezuela's Hugo Chávez,
who began to provide Cuba with cheap oil. A big chunk of that is
officially counted as a swap of oil for the services of some 20,000
Cuban doctors, sports instructors and security advisers working in
Venezuela. China, too, emerged as a new source of credit.

Thus bolstered, Fidel reversed course again. Many family businesses, as
well as some foreign ventures, were shut down; the dollar ceased to be
legal tender in 2004. The ageing leader launched "the Battle of Ideas",
sending out armies of youths as ill-trained teachers and social workers.

This time, Raúl has insisted, there will be no turning back: the reforms
will happen sin prisa, pero sin pausa (slowly but steadily). But Raúl is
no liberal. He and Ernesto "Che" Guevara, the Argentine adventurer who
died in Bolivia in 1967, were the orthodox Marxists among the leaders of
Fidel's Rebel Army, the ragtag band of bearded guerrillas who toppled
the corrupt, American-backed dictatorship of Fulgencio Batista. As
defence minister from 1959 to 2008, Raúl set up and led Cuba's
formidable armed forces.

When Raúl took over from Fidel, he moved slowly at first, amid factional
fighting. To general surprise, the men who lost out in 2009 were Carlos
Lage, who had run the economy since the Special Period and was seen as a
reformer, and Felipe Pérez Roque, the young foreign minister. They were
denounced for having criticised the Castros (Mr Lage was caught on tape
describing the leadership as "living fossils") and for having been
corrupted by power. Instead, José Ramón Machado Ventura, an 81-year-old
Stalinist, was named as Raúl's deputy.

But Raúl also quietly discarded nearly all of Fidel's ministers and key
aides. Their replacements are mostly army officers. Rafael Hernández, an
academic who edits Temas, a quarterly journal attached to the culture
ministry, points out that many of them are engineers by profession.

Fidel ruled Cuba through the unbridled exercise of his massive ego. He
centralised all power in his own hands, imposed Utopian egalitarianism
and performed frequent policy swerves. By all accounts, Raúl is more
modest, by nature a delegator and team-builder, more interested in
getting things done than making speeches. When he took over in 2006 he
put an end to the 4am meetings his brother loved. He is the Sancho Panza
to Fidel's Don Quijote (they even look the parts).

Raúl seems to be acutely conscious that Cuban communism is living on
borrowed time. The economy is grossly unproductive. Venezuelan aid in
2008 was offset by devastating hurricanes and the knock-on effects of
the global financial crisis on Cuba's tourism and trade. The country is
running down its capital, but living standards remain frugal. Its famed
social services are no longer affordable. The population is shrinking.
Mr Chávez, its Venezuelan patron, is being treated for cancer and faces
a close election in October. And the Cuban leadership is gerontocratic:
Fidel is 85, Raúl is 80 and the average age of the Politburo is over 70.
The históricos, as those who fought in the revolution are known, are
dying off. With Mr Lage gone, they have no visible successors. Raúl's
opportunity to institutionalise the system has come very late in the
day. "We either rectify things, or we run out of time to carry on
skirting the abyss [and] we sink," he warned in his December 2010 speech.

http://www.economist.com/node/21550418