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Last Updated: Wednesday, 20 February 2008, 12:39 GMT
Castro's glory days are long gone
By Robert Plummer
Business reporter, BBC News

Fidel Castro's many diehard fans will not thank you for saying it, but communist Cuba's greatest achievements now lie more than 30 years in the past.

Billboard in Havana with picture of Castro and slogan: Socialism or Death
Cuba's socialism has taken it down a lonely path

As the world waits to learn who the next Cuban president will be, there is every chance that Mr Castro's successor will seek to preserve the current system with as little change as possible.

But economically and politically, the island is a long way from the revolutionary confidence it enjoyed during the height of the Cold War in the early and mid-1970s.

By that stage, Cuba had successfully overcome the worst that the US could throw at it.

The turmoil of the 1960s, marked by the abortive Bay of Pigs invasion and the Cuban missile crisis, had given way to a sullen war of attrition that continues to this day.

But Mr Castro reacted to Washington's trade embargo by linking the Cuban economy ever more closely to the Soviet Union and its Comecon network of Eastern bloc states.

Moscow shored up basic living standards in Cuba by buying a huge chunk of the country's sugar crop at inflated prices, while providing cheap supplies of crude oil.

Despite this lifeline, conditions were not particularly comfortable even then for ordinary Cubans, who had been subject to rationing since the US economic embargo began in 1962.

Vanguard hopes

Not just food, but even clothing was rationed. Every Cuban was entitled to two shirts, a pair of trousers, a pair of shoes and two pairs of underpants a year.

These items, of course, were produced on a one-size-fits-all basis, under a rigidly centralised state planning system more concerned with meeting quotas than aspiring to elegance.

Former Chilean President Allende (1971 picture)
Salvador Allende's downfall cost Cuba an ally in the region

But back then, Cuba could still bask in the belief that its much-vaunted revolution had put it in the vanguard of history.

When Chile's Salvador Allende became the world's first democratically elected Marxist president in 1970, the Cuban model started to look eminently exportable to other parts of Latin America.

The following year, President Castro paid a month-long visit to Chile, during which he hosted huge rallies and gave public advice to the country's Popular Unity coalition.

The visit undoubtedly exacerbated the political polarisation in Chile that led to Mr Allende's overthrow by General Augusto Pinochet in 1973.

After the violent coup in Santiago, Cuba provided a refuge for many Chilean Communists.

Yet officials in Havana remained unabashed by the failure to build socialism in Chile, suggesting that their own experience showed that armed struggle, not peaceful change, was the way to defeat capitalism.

Reform spurned

These comforting illusions became harder to sustain once Cuba's cosy relationship as a client state of the Soviet Union began to unravel.

From 1987 onwards, Soviet leader Mikhail Gorbachev began to introduce wide-ranging economic reforms under the process known as perestroika.

For the first time, a communist command economy began grappling with previously alien concepts such as supply and demand, private enterprise, joint ventures and even bankruptcy.

Fidel Castro and Raul Castro (1 July 2004)
Many observers see Raul Castro as a potential reformer

President Castro wanted to retain the economic benefits provided by Moscow, but had no intention of allowing any kind of liberalisation in Cuba.

Not even an official visit by Mr Gorbachev to Cuba in April 1989 could persuade his Cuban counterpart to reform.

But mere months later, after the fall of the Berlin Wall and other sweeping political changes in Eastern Europe, Mr Castro could see that hard times lay ahead.

"We are witnessing sad things in other socialist countries, very sad things," he said in a speech that November, mindful of the fact that 75% of Cuba's trade was with the soon-to-be-dissolved Comecon bloc.

Changes reversed

That historic failure of the main alternative to free-market capitalism has pretty much set the scene for Cuba's current economic plight.

After the final collapse of the Soviet Union in 1991, President Castro decreed a "Special Period" of hardship and allowed a few modest steps towards a market-oriented system.

Cubans were allowed to set up restaurants in their homes, known as "paladares", while independent farms and farmers' markets also sprang up, encouraged by the decision to let the US dollar circulate freely.

However, most of these reforms have since been reversed, after subsidised Venezuelan oil and Chinese investment deals gave Mr Castro the excuse he needed to tighten control again.

Now many observers, without any real hard evidence to go on, are pinning their hopes on the prospect of wide-ranging economic reforms, under Mr Castro's brother Raul or whoever emerges as a longer-term successor.

But during Raul's time in office as acting leader, he has shown little desire to embrace radical change. Cuba may have to wait for a new generation of leaders before liberalisation arrives.

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