Already a Bloomberg.com user?
Sign in with the same account.
Fidel's brother may use his stint at the helm of the Communist island to implement economic reforms—but don't expect big policy shifts
When Fidel Castro announced on July 31 that he was undergoing gastrointestinal surgery and handing Cuba's political reins over to his brother Raul, the world collectively wondered if this might finally be the end of the demagogic Communist leader's ironclad grip on Cuba and its ossified economy. Raul, who is just five years younger than his nearly octogenarian brother, has long been the designated successor. But the differences between the two brothers' economic ideologies has been readily apparent, sparking rumor that Raul may implement reforms to stimulate private enterprise and foreign investment once Fidel is out of commission.
"Raul has always been first a Communist while Fidel has always been first a fidelista," obsessed with maintaining his authoritarian control, says Andy Gomez, a senior fellow at the University of Miami's Institute for Cuban and Cuban American Studies. As the head of the armed forces, Raul has engaged with other Communist countries and shown particular interest in more open Communist models, such as China.
Because Fidel announced that Raul would only be taking over for a few weeks, any long-term implications of the change are unknown. The immediate impact of Raul's rule will be slim to none, most experts have concluded.
But if Fidel remains incapacitated for the long term and Raul's leadership becomes permanent, he is likely to take some small steps toward reform. Raul could ease up on small enterprises and permit citizens to run paladares, or restaurants run out of private homes, again. (Fidel permitted paladares for several years but then recently cracked down and forced many to close.) Raul might also ease rules on foreign investment and apply free-market policies in the agricultural sector to stimulate production, says Phil Peters, a Cuba expert at the Lexington Institute, a think tank in Washington, D.C.
There may be strong political incentives for Raul to implement these reforms as well: With Fidel out of the picture and the first real opportunity for a democratic transition on the horizon, citizens may launch a major political movement. Raul could use economic reforms to help quell discontent, offering Cuban a handful of opportunities for better livelihoods.
That would be especially important since Raul is unlikely to embrace a democracy movement. Some experts say Raul may turn out to be a more effective power broker, and may choose to divide up some of his responsibilities one day, especially with Ricardo Alarcon, the president of the Cuban National Assembly, and Felipe Perez Roque, foreign relations minister. But that would be the likely extent of the opening.
OPEN FOR BUSINESS?
The other major question about Cuba's economy is if and when the U.S. Congress will vote to end the embargo on Cuba. According to Dan Erikson with the Inter-American Dialogue, a nonprofit organization in Washington, D.C., a changeover could "breathe new life into the [question of] travel and economic embargoes on Cuba."
U.S. agricultural companies have already succeeded in winning some small exceptions, and can export certain food products to Cuba like grains. American oil companies could become the next in line to lobby for exemptions, particularly if Cuba's offshore oil exploration yields some major finds.
Castro's abrupt power handoff is fanning the hopes of many groups with an interest in seeing Cuba open for business after 47 years of isolation. From Miami's more radical Cuban exiles to major U.S. agricultural companies such as Archer Daniels Midland (ADM), many are starting to dust off their "Return to Cuba" strategies.
Dwight A. Roberts, president and chief executive officer of the U.S. Rice Producers Assn., would love to see the Cuban market fully opened to his members. "We should be able to sell our products around the world," he says. "People in Cuba are just like those in the U.S." Roberts, however, suspects burgeoning hope for a new opening could easily be dashed. "The speculation for years has been: what will Cuba be like after Castro is gone? Everyone thinks they know, but nobody knows for sure."
Before American companies get too excited about potential investment opportunities in Cuba in the near future, everyone will need to see how Fidel's recovery goes. While his announcement on July 31 was unprecedented, the combative leader is unlikely to go down without a fight. And he surely knows that many are hopeful for a more significant transition in the direction of democracy and economic reform than he has had in mind for Cuba.