Castro's Bumpy Ride Into the Future

DECAYING. Outmoded. Short on fuel. But like the 1948 Buicks and 1957 Cadillacs sputtering through the streets of Havana, jury-rigged with Soviet parts, Fidel Castro's island empire hasn't broken down yet.

Still, Cuba has never been more politically and economically isolated. Cuba experts predict this will be the hardest year for Cubans since Mr. Castro took over in 1959.

``It will be a very bad year. Conservatively, I estimate a 5 to 10 percent decline in gross economic output,'' says Ant'onio Jorge, professor of economics and international relations at Florida International University.

With the demise of communism in Eastern Europe, Cuba's staunch allies and sweet trade deals are history. All trade with former Soviet satellites is conducted on the basis of hard currency - of which Cuba has precious little.

Closer to home, the Marxist Sandinistas in Nicaragua have been voted out, cutting off at least some nearby political and moral support. And with the ouster of Gen. Manuel Noriega in Panama, Cuba's use of that country's free-trade zones to skirt the 28-year-old United States trade blockade is a plan that no longer functions well.

Food, oil, paper, clothing, electronic goods, soap, and machine parts all are in short supply. In the past year, el comandante has been preparing Cubans for the worst. Castro has declared ``a special period in time of peace'' - the euphemism for a siege economy. From bread to brassieres, almost every item of daily life is rationed.

Havana retiree Berta Min waits patiently in line for her monthly ration of fish. ``There's not a lot, but we don't go without,'' she says defiantly. The supermarket shelves behind her are almost bare. Small brown paper bags of rice, sugar, and brown beans. Some cans of condensed milk. A few bottles of vegetable oil, and vinegar.

``Before rationing,'' she continues, ``there were enormous lines. You waited overnight and maybe you got nothing. At least with this,'' she waves her libreta, the little ration book, ``I'm guaranteed my fish.''

Another elderly woman interrupts. ``It's organized, but there's not enough food. Before, it was disorganized but we had food. The situation now is worse than I've ever seen.''

Castro himself said recently a prolonged US recession coupled with higher oil costs or a shortage of Soviet oil may deepen Cuba's problems. ``Any deficit that could occur would force us into greater sacrifices,'' said the stout, animated leader in Army olive drabs at a press conference.

Now, more than ever, Cuba's economic hopes ride on the Soviet Union. Seventy percent of Cuba's trade is with the Soviet Union. Cuba sends sugar, citrus fruit, and nickel to the Soviets, who in turn supply manufactured goods and 90 percent of Cuba's oil needs. But last year, Cuba received only 10 million metric tons of the 13.3 million promised by the Soviets. The shortfall is critical. Cuba used to resell about 1.5 million metric tons to gain hard currency.

Moscow, however, faces its own dire economic needs. Instead of the traditional five-year trade pact, a one-year agreement was signed Dec. 29. The Soviets will pay less for Cuban sugar this year, but still more than world market prices, Cuban officials says. All other trade will be in hard currency at market prices, including oil.

Soviet Ambassador Yuri Petrov confirms Cuba will in 1991 receive the same oil as last year. The number of Soviet technicians here will drop from 2,000 to 1,000. But he adds that Soviet funding will continue for 80 construction projects, including a nuclear plant. Negotiations are also under way to convert Cuba's 15 billion ruble debt ($25 billion) to the Soviets into US dollars, and to set a repayment schedule.

``The Soviets are sticking by Cuba,'' notes a European diplomat. ``But whether the Soviets can honor their commitments and whether Cuba can pay is another question. A lot depends on what happens in the Soviet Union.''

CUBA is also seeking new trading partners. ``Relations with China are closer now,'' says Jiri Valenta, director of Soviet studies at the University of Miami. A military pact was signed in December. To counter fuel shortages, 200,000 bicycles were bought from China. And China is expected to become Cuba's surrogate representative in Washington, a duty Czechoslovakia dropped in December.

Meanwhile, Latin interest in trading with Cuba is lukewarm. ``An initial surge in investment and trade from Venezuela and Brazil ran into the sand when they realized Cuba wasn't paying its bills,'' a Western diplomat says.

The US Congress has also shown little interest in relaxing the trade embargo that began in 1962. And recent crackdowns on human rights activists in Cuba have only stiffened US resolve. A US official says US policy might change if Cuba changes its attitude toward human rights as well as its support for leftist guerrillas in El Salvador.

But Isidoro Malmierca, Cuba's minister of external relations, replies that, to improve relations, ``the US must recognize Cuba ... has the right to choose its own path, its own government, and its own form of development.''

Politically, Castro shows no signs of changing. He spoke vaguely about reforms at this summer's Fourth Communist Party Congress. But few observers believe any significant changes will emerge. Soviet leader Mikhail Gorbachev's perestroika [restructuring] remains a dirty word here. ``Socialism or death'' is the preferred line.

The war against Iraq has also reinforced Castro's ever-present propaganda, which warns Cubans to be ready for a US invasion. ``Look at Panama, Grenada, El Salvador. Now Iraq. The US always tries to solve problems by force,'' says Nellys Elena Garc'ia Echemendia, an 18-year-old otherwise inclined to question Castro's policies.

Yet raw economic forces are compelling Cuba to adopt less-than-socialistic practices. Bonuses are given to the most productive farms. Prohibitions on individuals raising pigs were lifted.

To bolster crop production and reduce reliance on fuel-guzzling farm machinery, city workers ``volunteer'' for two 15-day stints a year in the country. Even senior Foreign Ministry officials participate, say diplomats posted here.

It is hoped that tourism and biotechnology will be future founts of foreign exchange. Spanish, Italian, and German investors have been given management control over the new joint-venture hotels being constructed. Officials also indicate foreign ownership will be allowed as well.

But without access to US tourists (US law forbids Americans to spend money in Cuba) the market is limited. Already the disparity between the high life of tourists and Cubans' falling standard of living is causing political problems. Economic ``apartheid'' is how Cubans describe it.

``Dissatisfaction is likely to grow given the downhill economic slide,'' a European diplomat says. But few predict that Cuba will follow in Eastern Europe's footsteps any time soon.

Castro's is a ``home-grown revolution,'' Cuban officials regularly point out. Even critics say that, until now, Soviet subsidies have kept Cuba's poor in better living conditions than poor in other Caribbean and Latin American countries.

``What type of capitalism would we return to?'' asks Max Iamador, a provincial Communist Party chief. ``The capitalism of the United States, Japan, France, England? ... With this type of capitalism, people would go hungry.''