Cuba Under the Other Castro

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For some, though, Raúl's no-nonsense manner might be a positive as his government seeks to streamline the Cuban economy. Over the past 19 months, Raúl has urged public officials and citizens to offer suggestions for improving government services, and he has taken steps to start solving some of the most-mentioned problems, such as spotty public transportation and low prices paid by the government to private farmers. Efforts to improve agricultural production have been less successful and will take longer to carry out. The only success story he could mention in his assembly speech was an effort to improve milk distribution, which he said has saved the government $30 million.

Cubans say they are anxious to see how quickly Raúl will move to implement economic reforms. In several key speeches, Raúl Castro has described the country's mostly state-run firms as "inefficient" and said there were "excessive rules" that govern almost every aspect of life in Cuba, from getting a license to start a small businesses, to moving from one apartment to another. He has also pledged to improve the country's public housing, which is decrepit and in short supply.

Wanted: A Living Wage

While those changes would please many Cubans, what most want is a significant boost in wages, which range from the equivalent of just $6 a month for pensioners to $11 a month for unskilled workers and $17 for university-trained professionals, including doctors and engineers. Most Cubans perform additional work on the side, such as selling vegetables in neighborhood markets or repairing shoes, in order to feed and clothe their families. That's true of Carlos, 28, who also didn't want to give his last name: A university graduate, he earns $20 a month as a warehouse security guard and another $50 selling cabbages, radishes, and leeks at a small neighborhood market near downtown Havana. "If you don't hustle on the side, you can't make it to the end of the month," he says.

The government heavily subsidizes a basic basket of food rations for every Cuban, which can be bought in the Cuban pesos with which most people are paid, but it's only enough food to last 10 days; the rest must be purchased on the open market, paying with a special currency linked to international currencies. Prices at special-currency shops are similar, or in many cases, higher than they are in the U.S.: A liter of cooking oil, for example costs around $2.16. Cuba's agricultural production, dominated for many years by state-run farms and cooperatives, is dismal, and more than 80% of Cuba's food is imported, to the tune of $1.7 billion last year.

Raúl said in his acceptance speech that he would study the possibility of eliminating the system of subsidized food rations for all Cubans, "which he said is irrational and unsustainable" as it is extremely costly and benefits some citizens who earn more and don't need the subsidy. He also said he would continue Fidel's efforts to come up with a way of revaluing the Cuban peso and perhaps phasing out the dual-currency system if it can be done without "traumatic effects."

Not on the Table: Democracy

But Cubans want more than better wages. Many have long been frustrated that only well-connected government officials, artists, and academics are allowed to travel overseas and that the country's many hotels and beach resorts are reserved for foreigners who pay in foreign currency. "I would love to travel overseas one day, but how can I even think of that possibility if I'm likely to earn less than $20 a month?" says Manuel, 18, a high school student who wants to become a journalist.

In his speech, Raúl referred indirectly to those frustrations but said they might take longer to resolve, in part because of the four-decades-old U.S. economic embargo against Cuba.

Raúl said Cuba has no intention of changing the country's socialist form of government, which U.S. officials have said is necessary before Washington will consider reestablishing diplomatic relations and lifting the trade embargo against the island of 11 million people. Some, Raúl said, "are bent on conditioning relations with Cuba to a 'transition' process aimed at destroying the work of so many years of struggle." That showed how little they understand Cuba, "so proud of its full sovereignty and independence!"

Smith is BusinessWeek's Latin America correspondent.