Castro Courts International Visitors

MORE than three decades after guiding Cuba into the communist bloc, Fidel Castro is quietly flirting with capitalism in an effort to revive his nation's battered economy. As President Castro publicly condemns Soviet perestroika (restructuring), he is privately courting Western investors in hopes of turning Cuba into one of the Caribbean's premier tourist destinations.

Cuban planners even speak wistfully of a rapprochement with the United States that would permit American tourists and investors to infuse the island with dollars.

``We have to think like capitalists but continue being socialists,'' says Georgina Cepero Hern'andez, director of promotions and international relations for the National Institute of Tourism. ``It's difficult, but we manage to do it. It's a fast way to develop the country. We don't care about ideology. We're in tourism.''

But as Mr. Castro experiments with capitalism, he must deal with serious obstacles, including an inefficient work force and Washington's refusal to lift a 30-year economic embargo.

The new-found pragmatism is driven in part by the prospect of losing $4.5 billion annually in Soviet economic assistance. Although the subsidy continues, Soviet President Mikhail Gorbachev has made it clear that it is a burden he would like to shed.

Castro also faces a population anxious for material benefits that the revolution has failed to provide. (See story at left.)

Tourism offers a quick means of attracting Western currency. To accomplish that end, Castro said recently he wants to boost the annual number of visitors to Cuba from the present 300,000 to 2 million by the year 2000.

In addition, Cuba is aggressively soliciting foreign investors. Within the past year, the island has attracted nearly $100 million in Spanish and Italian investment for tourist developments, including a $47 million Cohiba resort scheduled to open in time for the Pan American games next summer. Ms. Cepero says construction of the hotel about 20 miles east of Havana, plus other building and renovation projects, will add 5,000 new hotel rooms to the 9,000 available to foreign visitors.

But making tourism succeed will not be easy. Cuba spends only $3 million per year on advertising, and its biggest potential market, the US, remains off limits.

Although it is not illegal for a US citizen to travel to Cuba, it is a crime to spend dollars there. Exceptions are made for journalists on assignment, students, and those visiting relatives. Only about 6,000 Americans visit Cuba per year, compared to 50,000 Canadians and a like number of West Germans. Cuban officials concede that they need trade with the US. They would like to see the Bush administration lift the travel restrictions as well as the economic boycott.

``We need every help we can get,'' says Mano Coyula, deputy director of the Group for the Integral Development of Havana, a collection of architects and engineers planning Old Havana's renovation.

``Most people here think of the US as a monster - everything controlled by one mind doing harm to our country,'' Mr. Coyula says. ``But foreign investment could be good for our country.''

Still, Cuba probably will have a long wait. A Western diplomat, who spoke on condition of anonymity, says Washington is not going to make things easier.

``We see the change in the Soviet Union and Cuba going the other way. Is this the time that we should reward Cuba, let it off the hook?'' says the diplomat. ``[Castro] is not going to guarantee that there will be change, so we're not going to do that. He's not going to make any change that will cause him to lose control.''

However, Wayne Smith, a former chief of the US interests section in Havana, says the US could exert more influence by negotiating. ``Castro hasn't reached anything like a crisis,'' Mr. Smith says. ``Rather, he's firmly in power.''

Smith, a Latin American specialist at Johns Hopkins University's School of Advanced International Studies, says tourism could become an asset for the Cuban economy if developed properly.

One roadblock is Cuba's workforce. Nationally, absenteeism runs about 12 percent, and Cuba's socialist system provides few incentives for excellence. In a June 3 speech, Castro himself castigated the state Construction Ministry for inefficiency and told workers they had no right to relax with the work of the revolution unfinished.

``They underutilize their industrial equipment and they don't have good business management,'' says a European diplomat who also spoke on the condition that he not be identified. ``The greatest problem in the country is the lack of incentive to work. They have no motivation to serve people well.''

A case in point is the Cohiba project. Cubanacan, a Cuban holding company, has signed a contract with the Spanish firm Hocusa to complete the hotel in time for the Pan American games in 1991.

But the diplomat says the project is three months behind schedule. Although Cubanacan has agreed to permit cash bonuses for superior performance, it turned down a proposal to allow managers to fire unproductive workers.

Cepero acknowledges that service in Cuban Hotels also is a problem. She says training institutes have been established to restore the expertise that flourished in Cuba before Castro overthrew the dictatorship of Fulgencio Batista in 1959.

``We are trying to improve the quality of service,'' she says. ``It's our duty to develop our country. We must know how to deal with capitalist countries and think as capitalists but have it in mind that we are a socialist country and the objective of business is to achieve our political goal.''