A post-Castro transition may have parallels to Eastern Europe's experience

 BY JOHN DORSCHNER

 If the experiences in Eastern Europe in the past decade are any indication, Cuba faces a tough time making changes after the inevitable end of Fidel Castro.

 ``Right now we are not seeing a possibility of real transition,'' says Jaime Suchlicki, director of the Institute for Cuban and Cuban American Studies at the University of Miami. ``We are seeing a succession. If we think of transition, it is going to be long and painful and slow.''

 Dealing with an oligarchy shaped by communism, improving woefully inefficient state industries, adjusting to a flood of people leaving the country and figuring out how to handle returning émigrés -- these have all been factors in Eastern Europe and may well apply to a future Cuba.

 In one sense, Cuba has been making a transition for a decade. That may give it an advantage over Eastern Europe, which in 1989 and 1990 had to adjust not only to the end of communist dictatorships but also to the demise of favorable trade deals with each other and the Soviet Union.

 Cuba has adjusted by forging deals with Western investors to build up tourism and other industries to compensate for losing the huge subsidies from the Soviet Union when it vanished.

 ``The post-communist transition in Cuba is already under way,'' wrote Michael Radu, a fellow with the Foreign Policy Research Institute, in a book, Collapse or Decay? Cuba and the East European Transitions from Communism, published by the Cuban American National Foundation.

 The Cuban economy bottomed out in 1993 and has been rising slowly since then, according to economic data collected by Carmelo Mesa-Lago of the University of Pittsburgh.

 Suchlicki, Miami economist Antonio Jorge and others point out that army generals, either retired or current, have been put in charge of major economic sectors, such as tourism, sugar and telecommunications.

 ``The succession has already taken place in Cuba,'' says Suchlicki. ``This bumper sticker: `No Castro -- No Problem.' In 1989, I said that was bulls---, and I still say it's bulls---.''

 All the military officers are close to Raúl Castro. Their power (and the lucrative fruits obtained from their economic posts) keep them loyal to the regime, and give them a solid base for a post-Fidel future.

 Suchlicki believes that the Castro brothers are shifting toward a ``Chinese solution,'' in which Beijing placated its military with economic plums in order to keep the old oligarchy in power while accepting loads of foreign investment. ``The military is running Cuba,'' Suchlicki says.

 This is a major contrast with Eastern European, where the Soviet Union kept the satellites' armies weak in order to ensure its own dominance. Vendulka Kubalkova, an East European specialist at the University of Miami, points out that in 1989 the armies did little to stop uprisings against Marxist-Leninism. In Czechoslovakia, she notes, captains drained the fuel from tanks so that they couldn't be used against the people.

 It's difficult to envision such a scenario in Cuba. ``The military in Cuba will play an important role'' in any future transition, says Radu. ``The military is the only institution in Cuba that functions.''

 Because of this, says Suchlicki, ``Raúl will be able to maintain control. . . . How long can he hold on? One year? Two? Three? I don't have a crystal ball. . . . Look at Haiti. Who succeeded Papa Doc? Baby Doc. He wasn't running the country. It was the old institutions like the Tonton Macoutes,'' which propped up the Duvalier regime for another 15 years.

 Others aren't so sure. ``The government won't have time for a Chinese solution,'' says Gary Maybarduk, an economics expert with the Department of State. He guesses the regime will last less than five years after Fidel. The reason: ``Most state enterprises will collapse very quickly. They don't produce anything.''

 So how will the oligarchy adjust?

 Lisandro Pérez, head of the Cuban Research Institute at Florida International University, believes ``there will be a strong impulse to maintain some kind of welfare state,'' perhaps with gradual reforms.

 Jorge, an FIU economics professor, thinks changes will be much more dramatic, but ``the first, almost instinctive reaction will be to close ranks against anything that
 might endanger their future to keep on living and to keep their economic privileges and also, if possible, to exercise political power.''

 In Romania, and other places, the transition was greased by communist leaders redefining themselves as capitalists and grabbing lucrative state enterprises through
 sweetheart deals.

 Jorge and others think that's likely to happen in Cuba. For one thing, they won't be able to continue for long in the old way because Cuba has become ``the most indebted country in the world,'' says Jorge.

 In the past 10 years, the country has amassed a debt of $11 billion to Western interests, according to Mesa-Lago's calculations. Then there's a debt of $13 billion to
 Western creditors from the 1980s, as well as $10 billion to $100 billion that is owed to the old Soviet Union.

 ``They can't keep going on like that,'' says Jorge. And so, he believes, after Fidel, the ruling cúpula ``will redefine themselves as social democrats and work to get
 elected,'' as frequently happened in Eastern Europe.

 WHO OWNS THE PROPERTY?

 Property restitution has been a large and lingering problem for most of the former Soviet Bloc countries, as they try to seek a balance between present occupants and the pre-communist owners.

 In Timisoara, Romania, for example, the prewar owner of an apartment house struggles in the courts to get back those apartments of childless tenants who die, but can do nothing about apartments occupied by tenants who have children.

 In Poland, one family claims it owns the land now occupied by the U.S. embassy.

 This confusion over property has sparked more than a million lawsuits and dramatically slowed the economic transition because foreigners are hesitant to invest in land or buildings while ownership remains unclear.

 Restitution battles are likely to be ``more important for Cuba than for other countries,'' warns Marcelo Selowsky, an economist with the World Bank, because many
 American corporations and Cuban émigrés are waiting to reclaim properties, perhaps sparking battles that could stretch on for years.

 Suchlicki and Jorge, two academics in the mainstream of Miami Cuban thinking, believe émigrés should forget about moving back into their old houses that have been occupied by other families for decades. ``You can't evict people from their premises,'' says Jorge. ``Obviously this is stupid.'' He suggests the fastest way for Cuba to redevelop is to separate compensation from the property involved. That means, for example, that the government could sell a state factory to the entity able to develop it the fastest, while arbiters decide how to compensate previous owners.

 Another property problem concerns the Western firms that have been investing billions in Cuba in the past few years. If one of these companies has a new hotel sitting on, say, property owned in 1958 by a Miami Cuban, it could lead to legal battles that might reverberate for years in Cuban, American, Canadian and European courts.

 Yet another problem that will inevitably come up in Cuba -- as it has frequently in Eastern Europe -- is whether foreigners should be allowed to own property. Many
 governments fear that wealthy Western investors will buy most of their land and make them in effect colonial states. In Romania, for example, foreigners can own a
 building, but not the land underneath.

 For Cuba, says attorney Matías Traviesco-Díaz, a restitution specialist, ``the question is, will they sell to a foreigner -- and who is a foreigner?'' Many émigrés, of course, still consider themselves Cubans, but powers in Havana may rule otherwise.

 HOW TO PRIVATIZE

 Eastern European countries have tried various strategies with varying results in getting rid of state firms.

 One is to give citizens vouchers, making them shareholders in state companies. That distributes assets, but often doesn't do anything to modernize old inefficient
 factories.

 Another alternative is to give the factory to its present employees. This seems fair, says Ricardo Lago, a European bank economist. But in practice, the old managers
 don't understand capitalism and so they often do nothing more than ``asset stripping.''

 Jorge says that the German solution worked well, in which the government auctioned off the eastern state factories to ``whomever can develop [them] as readily as
 possible.''

 Lago likes Hungary, which encouraged foreign investors to come in with very few limitations. ``They bring knowledge, they bring money, and they can manage these
 companies.'' He suggests the government sell foreigners 51 percent of a firm, with the state retaining 49 percent to fund laid off workers and old pension funds.

 EXODUS EXPECTED

 Experts are certain that, if/when Cuba opens up, the rush of people will be away from the ex-communist land, not toward it.

 That's been the trend in Eastern Europe. Jorge Pérez-López, an economist with the U.S. Department of Labor, conducted a study there which concluded that émigrés returning to their homelands ``tend to be a very tiny'' group -- while the fleeing of professionals was ``frightening.''

 ``Millions will come, if the U.S. lets them,'' predicts Suchlicki.

 Only 20 percent of Miami Cubans now say they would go back, according to polling done by Lisandro Pérez.

 A BATTLE WITH MIAMI EXILES?

 The role of Miami émigrés in a new Cuba is one of the trickiest -- one that will separate the island from Eastern Europe, because, as Maybarduk of the State Department says, ``nowhere else do émigrés retain the emotional ties -- and the anger -- as is the case in Cuba.''

 From one viewpoint, Miami's affluent émigrés could pump a ton of money into a new Cuba, giving it a boost that Eastern European countries didn't get.

 On the other hand, the wealth and power of the Miami community might cause people in Cuba to fear that these outsiders might grab their homes or their jobs.

 The Castro regime has played on this fear ``as a scare tactic,'' says Lisandro Pérez. He adds that many actions in America, such as the Helms-Burton Act, help
 substantiate the fear.

 Particularly fearful would be the oligarchy grabbing state assets for themselves. The Miami Cuban community is in a way a second oligarchy, and that could be a problem. Robb Luzar, an American businessman who has seen the Romanian oligarchy grab much of the country's wealth, suggests a battle between these two Cuban oligarchies could be a ``powderkeg.''

 ``I wouldn't worry about it,'' says Radu, the fellow at the Philadelphia think tank who has studied both Cuba and Romania. ``There's not going to be any doubt who is in charge. In every single case in Eastern Europe, the diaspora had no influence in politics. People like their money, but they certainly wouldn't like their leadership. It won't be just the army that opposes the diaspora -- the people themselves won't want it.''

 Cubans will likely share the sentiments of East Europeans, who stereotyped émigrés as the rich ``sitting in Paris, eating caviar,'' while people at home suffered.

 Investors will be welcomed warmly, but not those venturing into politics. ``All would-be presidents among the émigrés lost, some by landslides, in countries as different as Lithuania and Yugoslavia, Poland and Romania,'' wrote Radu.

 ``The Miami Cuban community. . . should be prepared to deal with a large portion of the population that both distrusts and envies them,'' wrote Radu in the book published by CANF.

 ``At first it's going to be very difficult for Cubans Americans to go there,'' acknowledges Suchlicki. Assuming that Raúl's generals remain in charge, ``they are going to manage this very gradually.'' Still, he believes that, because of their affluence and business backgrounds, Miami Cubans ``will play a role in rebuilding.''

 But could Miami Cubans deal with the Cuban oligarchy developed and nurtured by Castro?

 Lisandro Pérez predicts many entrepreneurs here would have no hesitation in ``jumping on the bandwagon'' of making money in Cuba.

 Jorge wonders if it might be easier to persuade the oligarchs to retire. ``One way is to buy them off. `Please accept my donation, and goodbye.' ''

 Whatever happens in Cuba, experts agree, the specifics will be hard to foresee.

 In 1989, virtually no one predicted that the communist system in Eastern Europe would collapse so completely in a few weeks' time.

 Now, most social scientists believe that the Marxist-Leninist system is as dead as feudalism. As Kubalkova at UM wrote, ``The timing and form of that collapse is not predictable. . . . The only certainty is that the post-socialist transformation will be extremely difficult and painful.''

                                    © 2001