Cuba Without Castro: A Look Ahead


Fidel's serious illness has led to speculation about what might come next for the Caribbean's largest nation. Here are some possible scenarios

For decades, Cuban Americans living in Miami have toasted each other at New Year's by saying, "Next year in Havana!" They'll be doing the same this Dec. 31, but for the first time since Cuban leader Fidel Castro's successful revolution in 1959, there is a chance their wish may come true.

Castro, 80, who underwent major intestinal surgery in July, has not been seen in public since mid-September, leading to rumors that he may be near death, suffering from incurable cancer. The government in Havana, headed by acting President Raúl Castro, his 75-year-old brother, says Fidel is recovering and does not have cancer. Some speculate that he may be suffering from diverticulitis, a condition in which the colon becomes infected and inflamed, sometimes requiring surgery.

Castro's illness has generated much debate among Cuban exiles and the Bush Administration over what would happen on the Caribbean island of 11 million people if Castro, the world's longest-reigning leader, were to die in the coming weeks or months. Here's an analysis of possible scenarios:

Brothers, Not Twins

Who is really in charge now? Raúl assumed Fidel's top job, that of first secretary of the Central Committee of the Cuban Communist Party. His other posts were distributed temporarily to other top government officials including Foreign Minister Jorge Pérez Roque and Carlos Lage, the country's top energy official. When Castro fell ill, he said he would be back at work in December, but he missed the big public birthday celebration staged for him on Dec. 2.

Is Raúl like Fidel? No. Raúl is not as charismatic as his older brother is, and he does not command the same kind of loyalty among average Cubans as Fidel does. As head of the armed forces and security apparatus he earned a reputation for ruthlessness dating from the early days of the revolution, when he allegedly ordered hundreds of summary executions. Raúl has maintained loyalty among top military officers by appointing them to prestigious jobs heading state-run companies.

Would Raúl continue Fidel's economic policies? Raúl has visited China and Vietnam and is said to advocate emulating China's strategy of opening the market while maintaining heavy state control over the economy. When the former Soviet Union collapsed in 1991 and ended its $4 billion in annual subsidies to Cuba, Raúl was instrumental in restructuring the economy during the so-called "Special Period" that followed, when energy, food, and other basic goods were in extremely short supply. He oversaw the military's assumption of control over an estimated 60% of the economy, including such important economic sectors as tourism and agriculture.

A Two-Tier Society

Will Cuba's economy collapse? There's no reason for it to collapse. Cuba's economy is currently growing at an 8% clip, thanks in part to high world prices for its nickel, which accounts for 25% of the country's exports. (The price of nickel, used in stainless steel, has doubled this year, reaching a record price of $34,950 a ton on Dec. 15.) More than two million tourists, mostly from Canada and Europe, visit the island annually, spending some $2 billion. And the country has discovered significant offshore oil deposits that already provide nearly 40% of the oil that Cuba consumes. Venezuela's leftist president Hugo Chávez sends 100,000 barrels a day of crude oil and refined petroleum products to Cuba at sweetheart prices.

But aren't there many shortages on the island? Yes. The average Cuban, whether a doctor or a seamstress, earns just $15 to $20 a month and must use a government-issue ration book for basic necessities such as cooking oil, meat, and soap. Only Cubans with immediate family members living overseas are allowed to receive up to $1,200 annually in remittances, which they can use to buy other items in special government shops that accept only hard currency.

This has created a two-tier society in Cuba. Families receiving money from abroad and Cubans who work in the tourism sector and earn tips in dollars live relatively well, though not by any means in luxury. Most everyone else has to struggle. In the early 1990s the government allowed some Cubans to open small businesses, including family-run restaurants in their homes, but that partial liberalization was rolled back in the late 1990s.

Striking (Lots Of) Oil

In spite of the embargo, some U.S. companies are doing business with Cuba, right? Yes. Since 2000, the U.S. government has eased the embargo slightly, allowing U.S. companies to export around $1.2 billion in food items, chiefly wheat, soybeans, rice, corn, oilseeds, meat and poultry, and dairy products, as well as some medicine to the island. In 2005 alone those exports totaled $361.5 million. Companies must get a special license from the U.S. government and Cuba generally must pay for all purchases in cash. U.S. government studies have indicated that if the embargo is lifted, U.S. agricultural exports to Cuba could exceed $1 billion annually within five years, making Cuba the second most important market for foodstuffs in the hemisphere, after Mexico.

Cuba discovered oil off its northern coast in 2002. How promising is that? Very. Studies show that Cuba may have about one billion barrels of reserves in coastal areas, and there may be from four billion to six billion barrels of unproven oil reserves in deep waters in Cuba's part of the Gulf of Mexico, according to Jorge Piñon, a retired Amoco and BP executive now at the University of Miami's Institute for Cuban & Cuban-American Studies.

Cuba currently produces 68,000 barrels of oil per day. U.S. oil companies are interested in participating in Cuba's promising oil sector, but for now they must watch from the sidelines while companies such as Canada's Sherritt and Spain's Repsol, as well as state companies from Norway, China, and India, get most of the business.

When Fidel dies, is there any chance that thousands of Cubans will try to flee to the U.S.? Few analysts expect widespread unrest. When Castro announced that he was stepping down temporarily July 31, nothing happened. The U.S. government, however, has contingency plans in place should thousands of Cubans make an effort to flee the island to reach Florida or if Cuban American exiles in Miami organize a flotilla of boats to pluck remaining relatives off the island, which lies just 90 miles south of Miami.

Communism Isn't Negotiable

Would Castro's death make it possible for the U.S. to normalize relations and lift the 45-year-old economic embargo of the island? Not quite. Raúl has called for better ties with the U.S., but has made it clear that the country's Communist system is non-negotiable. The 1996 Helms-Burton law stipulates that Washington cannot recognize a transitional government in Cuba until both Fidel and Raúl are out of the picture and the country moves toward a free-market democracy.

Under President Bill Clinton, Washington loosened restrictions on academic exchanges and on travel to Cuba by Cuban Americans, but restrictions were reimposed by the Bush Administration, which restricts remittances and now limits visits by relatives to once every three years.

Some believe that Congress, now controlled by the Democrats, may ease those restrictions once again in the belief that greater people-to-people contact will do more to loosen the Castro brothers' grip than isolation. In mid-December, 10 members of the U.S. Congress, including six Democrats and four Republicans, made a rare, three-day visit to Cuba—the largest U.S. delegation to do so since the 1959 Revolution.

Can Americans get one last look at Communist Cuba before Fidel departs? Not legally. An estimated 80,000 Americans violate the embargo by visiting Cuba each year, usually flying in from Canada or Mexico, but they are subject to hefty fines if their trip is discovered. For a virtual look inside today's Cuba, check out the "Cuba at a Crossroads" slide show, which includes photos from a trip to the island taken by BusinessWeek's Frederik Balfour, a Canadian citizen.


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