Fidel Castro’s transfer of power to his brother Raúl is beginning to look like a test run for an eventual transition. As I wrote Tuesday (here, and in this op-ed in the Chilean newspaper La Tercera), the real question is whether the eventual permanent transfer of power will simply be a transition to new leadership or whether it will be a transition to a different kind of regime.
That’s a question to which probably nobody, even in Cuba, knows the answer. The Castro brothers have in fact been planning the transition to Raúl’s rule for some time. Given Raúl’s prominent treatment in the Cuban press recently, Cuba expert Brian Latell asked two months ago whether the transition has already begun.
Raúl has led the armed forces since the beginning of the revolution. The fall of the Soviet Union and the loss of massive subsidies to the island transformed Raúl’s role and that of the military. In the 1990s Raúl advocated policy changes that opened up the Cuban economy to foreign investment in a few sectors, such as tourism and mining, that earn foreign exchange. The Cuban economy also became dollarized. (Several years ago I asked the head of Cuba’s central bank why Cuba had become dollarized and whether he thought that was a good thing or bad thing. His response was a long one. He didn’t answer the first question, but did say they were not happy with the development and intended to dedollarize—something they began to do two years ago). As it happened, the military began running all sorts of businesses in Cuba in the 1990s including hotels, gas stations, travel services, and import-export agencies that generate hundreds of millions of dollars in revenue.
When I visited Havana four years ago, I saw how retired military officials also play a prominent role. They are the ones entrusted to run the major state-owned enterprises. They produce a certain level of revenue for the state, beyond which they engage in what appears to be quasi-private business activity, all of which amounts to a strange mixture of socialist statism with entrepreneurship.
Foreign exchange and increased economic activity have helped spread the informal economy, another factor that may affect Raúl’s rule. Thousands of Cubans now conduct business or other activities independent of the state in all manner of areas (taxis, messenger services, restaurants, libraries, etc.).
Two other observations struck me during my visit to Cuba: 1. I don’t think I met anybody who truly believed in communism. I met with high officials at ministries and top people at the University of Havana and official think tanks, some of whom were very intelligent and quite sophisticated, and all of whom left me with an impression that cynicism about the revolution was widespread. 2. Discontent with the status quo among the general population was also widespread. To this day, the economy has probably not yet bounced back to the income or consumption levels that existed in 1989 or 1990. Food rations are skimpy and clinics cannot afford to provide basic medicines or supplies (patients must finance those goods themselves). Why put up with the lack of freedom if the revolution can’t even guarantee basic necessities?
Since Venezuela began to provide massive subsidies to Cuba a few years ago, Havana has backtracked on its limited reforms. The subsidies have not significantly improved living conditions in Cuba, however, and have made doing business more cumbersome. For all of the above reasons, whoever follows Fidel, including Raúl, will have a difficult time maintaining the status quo. I believe that Raúl will be willing to compromise on socialist principles if only to benefit certain constituencies such as the military and shore up his power. Limited economic reform, not political reform, would be on the agenda. My guess is that that will be the beginning of more fundamental policy changes. My hope is that those changes will also lead to political change and (this part is most unlikely) that the transition to a more open society happens as swiftly as possible.