The uncertain roads in Cuba’s future

Rafael Pampillón. Professor. IE Business School

31 January 2007

If Fidel Castro dies soon, what are the options for Cuba after almost half a century of military government?

Following the example of China
Most analysts believe Cuba will undergo a transformation similar to China’s. In other words, Raúl Castro will embark upon a series of economic reforms, while the Communist Party continues to rule. In that case, the political system will combine economic freedom with political repression, in a way similar to the Chinese model. The absence of Fidel Castro, the absolute leader whose charisma among Cubans is undeniable, would be compensated for with economic improvements. This alternative would include economic reforms aimed at opening up the Cuban economy to the exterior and encouraging free competition. The person to guide this change would be Carlos Lage, the current prime minister of Cuba. Lage, unlike Raúl Castro, is highly popular among Cubans and is highly respected in the international community for his role as the architect of the economic reform programme of the 1990s. He also is considered by his compatriots to be a moderate politician.

For his part, Raúl Castro has shown interest in the free market. Proof of this is evinced by his many trips to China to study Peking´s economic policies. Although it isn’t clear whether a government led by Raúl Castro will successfully implement a Chinese-style transition, the seeds of economic reform may already have been sown.

The economic power of the military
A recent article (Cuba´s military put business on the front lines) published in the Wall Street Journal suggested that Cuba would follow the Chinese model of deregulation. The Communist Party would keep a tight hold on politics while at the same time carefully introducing market initiatives. Whatever happens, it is important to remember that the Cuban Revolutionary Armed Forces play a very important role in the island’s economy. They control Gaviota SA, which is the fastest growing hotel conglomerate, and they manage the sales of Havana cigars and other consumer goods through a retail chain located throughout the island. What is more, they have great influence in the allocation of nickel mines and oil prospecting. According to the Institute of Cuban Studies at the University of Miami, the armed forces control more than 60% of the economy. If the armed forces maintain or increase their monopolistic control after Fidel´s death, the island will not feel the benefits of free competition.

A better fit, Spain or Venezuela?
However, a Spanish-style Cuban transformation cannot be rule out. In this scenario, Fidel´s death would nudge the Communist Party towards democracy. On the island, a broad political front would emerge, in which a small representation of exiles would help complete the transition from dictatorship to democracy. A period of uncertainty would ensue, characterised by temporary bouts of social unrest, until the transition was made.

A Venezuelan-style transition is also possible. Here a new charismatic Chávez-type leadership would appear to transform Castrismo into Chavismo. We must remember that Venezuelan president Hugo Chávez controls the oil that Cuba uses, and in the end he may have a lot of influence over who governs in Havana. As a result, some analysts have begun to include him in their scenarios. Of course, Chávez will throw all his support behind preventing a popular uprising and stemming the growing influence of anti-Castro supporters from the United States. Chávez has been very clear: If the United States (and that includes Miami-based anti-Castro supporters) enters Cuba, Venezuelan blood will be shed.

Then there’s always Raul.
Can the Castro model be maintained? Anything is possible. In this case, the political and economic structures will remain the same. The uncharismatic Raúl Castro would assume all the presidential functions after Fidel´s death. The Cuban people would accept the succession without confrontation or trauma, in compliance with the Cuban Constitution. Venezuela, Bolivia, Ecuador, China and North Korea would maintain their support for Cuba, as they have done so far, and they would refrain from ousting Raul Castro. Like the Venezuelan transformation, this possibility is contingent on an increase in support for the popular, left-wing governments that are making headway in Latin America.

Then there is Romania and Soviet –Style
A fifth possibility would be a Rumanian-style transformation of Cuba. Fidel dies and the people rise up against the government and the Communist Party, whose main leaders flee Cuba and seek exile in Venezuela. The Cuban exiles return to the island from Miami and form a common front against internal and external (Venezuela) Castrismo in an effort to transform the country’s dictatorship into democracy. This process could lead to violence and even trigger a civil war.

The sixth scenario is a Soviet-style transformation. This would involve replacing Fidel Castro by a nomenklatura, raising the question of who would be included in this elite? Besides Raúl Castro, other members would include José Ramón Machado Ventura, José Ramón Balaguer, Esteban Lazo and the youngest of them all, Carlos Lage. The first three of these figures are from the provincial and national apparatus of the Communist Party, and the fourth has been acting Prime Minister for over 15 years. This group could be joined by another very visible leader in the nomenklatura of the island, the president of the National Assembly, Ricardo Alarcón, as well as by the young minister of the exterior Felipe Pérez Roque, and the president of the Central Bank, Francisco Soberón Valdés.

Could the creation of a new elite lead to an open war between the various factions of the Communist Party? How tightly knit will this nomenklatura be and, above all, would the team of successors be able to maintain the social peace amidst growing popular pressure for democracy and an improved standard of living?

Finally- what about the USA?
Upon Fidel´s death, will the United States relinquish the opportunity to wield its power over the island? The US is involved in other "wars", but it has an increasing number of "unaligned" countries in its backyard (Cuba, Venezuela, Argentina, Nicaragua, Bolivia and Ecuador). The US has many interests on the island and it will do everything within its power to increase its influence there. Cuba is geographically too close to the USA for it not to be considered as a prime tourist and business destination for North Americans. Today it is virgin territory for US companies. In addition, the various communities of prosperous exiled Cubans who are anxious for their country to transform into a democracy will not stand by quietly and watch.

Whatever the case (more information at http://economy.blogs.ie.edu/ ), the Cubans who live on the island will be the ones to bring change. In other words, it will not be a group of exiled Cubans who gain power from the beginning, but rather those suffering under the Castro regime who will finally steer the country through change. However, any transition to democracy will include the return of the Cubans from Miami and, with them, problems such as property rights.

To conclude, there are four important forces that will bring about the final result: (1) the emigrants in exile, represented by the Florida lobby, but present throughout Central America and who have close personal and family ties with the island; (2), Chávez, whose influence with Cuba (a country that is more than just an ´Ally ") is far from being fully calibrated; (3) the unpredictable reaction of the Cuban masses to future change. Sooner or later, the great discontent of the people who have suffered deep deprivation will bubble to the surface. And finally there is always the question of the Cuban Communist Party´s capacity for assuming the challenges of change. I am sure that Cuba will progress towards democracy. What I do not know is at what speed.

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