Raul Castro Raises Hopes for Economic Reforms in Cuba

By Dan Erikson
Published in the Dialogue's Latin America Advisor ., March 20, 2008

Raul Castro Raises Hopes for Economic Reforms in Cuba

Originally published in Dan Erikson's monthly Eye on the Americas column for the Dialogue's daily Latin America Advisor.

WASHINGTON, DC—In his February 24 inauguration speech, Raul Castro gave clues to the careful balancing act that he will have to achieve as he consolidates his power as Cuba's new president.

Speaking before the island's National Assembly, he began by paying homage to his brother who had ruled Cuba for 49 years: "Fidel is irreplaceable and the people should continue his work when he is no longer physically with us, although his ideas will always be with us." He then asked for permission to continue consulting Fidel on decisions related to "defense, foreign policy, and the socioeconomic development of the country," leaving some observers to wonder if Raul was ready to strike out on his own.

But it was his economic plan, not his comments on Fidel, that most sparked people's interest. Raul outlined a plan to make the Cuban government "more efficient" that sounded suspiciously like the American business practice of "downsizing," calling for a more compact operational structure, fewer institutions, and a reduction in paperwork. Indeed, Raul Castro used the speech to sketch his vision of a leaner Cuban government concerned with elevating production, and he even suggested that the Cuban peso would be re-evaluated in the future to allow people to live on their legally earned incomes, rather than scraping to survive in the country's thriving black market.

Raul Castro's February 24 remarks included a single bureaucratic phrase buried in the final third of the speech that most sparked popular imagination: "I referred to the excess of prohibitions and regulations, and in the next few weeks we shall start removing the most simple of them." This was the first time that the Cuban people had heard an estimated timeframe for the implementation of reforms, and it was measured in weeks, not months or years.

On a recent visit I made to Cuba, the island buzzed with rumors about the likely possibilities: eliminating the exit visa, allowing Cubans to stay in hotels with visiting family members, expanding Internet access, allowing foreign investment in agriculture, microcredit for the country's beleaguered entrepreneurs, maybe even legalizing cable television via satellite. In addition, some Cubans hopefully eyed the expansion of a public discussion on gay and transsexual rights, promoted by Raul Castro's 46-year old daughter Mariela Castro Espin, as a sign of increasing social space on the island.

One political analyst surmised that Raul might legalize private property and allow the Cuban people to buy and sell homes, on the theory that the government would buy crucial time if the people spent the next few years obsessed by real estate, rather than, say, democracy.

Raul Castro's first effort to deliver on the expectations he had raised came this month. Citing the "improved availability of electricity," the government lifted a ban on the ability of ordinary Cubans to buy consumer electronic goods like DVD players, computers, 24-inch televisions, and microwaves—all goods that were previously only legally available to foreigners and companies in Cuba.

The new rules marked an important step forward, but also reminded people how far they have to go. Air conditioners are scheduled to remain restricted until 2009, and the private sale of toasters will only be legalized in 2010.

It was simultaneously a step forward and a stark reminder of how controlled the Cuban economy remains. One University of Havana professor commented, "the ceiling for the maximum amount of change we can expect in Cuba under Raul is below the floor of what the international community will even be able to perceive." Still, for Cubans desperately seeking economic relief, even the smallest steps will be welcome.

Dan Erikson is a Senior Associate for US Policy at the Inter-American Dialogue.