Castro observes new China

www.sun-sentinel.com By Vanessa Bauzá HAVANA BUREAU Posted March 1 2003

HAVANA· In the early 1960s, with Cuba's revolution still in its infancy and the Sino-Soviet rivalry collapsing into an open feud, Fidel Castro made a strategic decision to align with Moscow as his chief benefactor and ideological ally. Today, hefty Soviet subsidies are but a fond memory here and Castro has turned to one of the last communist countries for trade and much-needed credit. China is Cuba's third-largest trading partner, and Castro, 76, has spent the past four days in Beijing, meeting with his contemporary and outgoing President Jiang Zemin as well as younger Communist Party leaders. Touring a country transformed by aggressive, capitalist-style economic reforms and an infusion of foreign investment, Castro seemed astonished by China's development since his last visit in 1995. "I can't really be sure just now what China I am visiting, because the first time I visited, your country appeared one way and now when I visit it appears another way," he said. "You can say that every so often your country undergoes great changes." Some have speculated Castro could implement similar market reforms to boost his country's economy, hard hit recently by low sugar prices and a regional decline in tourism. "When he's praising the economic achievements of his socialist allies it begs the question, what does he think of the measures that got them there," said Philip Peters, of the Lexington Institute in Washington, D.C. "And is he considering that maybe Cuba can embark on the same path?" The short answer is no -- at least not for now. "To date there's been a political calculation that it would be risky to open up more," said Peters, who has written extensively on Cuba's economy. "They're not going to embark on a slippery slope." In the early 1990s, Cuba spiraled into a deep recession following the collapse of the Soviet Union, its main trading partner and source of $6 billion in annual subsidies. Castro enacted a series of limited economic reforms, including legalizing the use of dollars, creating foreign investment, forming farmers' markets, and establishing small, private enterprises, from popular sidewalk pizza stands to modest shoe repair shops set up in building doorways. But far from encouraging greater private enterprise, the Cuban government has hiked taxes several times and implemented strict regulations. About 50,000 of Cuba's private businesses have closed since 1996, leaving 150,000 still operating, experts said. "China has been more pragmatic in terms of foreign investment and private enterprise in ways Castro would not contemplate," said Robert Pastor, vice president of international affairs at American University and former director of The Carter Center's America's Program. "If Fidel Castro were to release the energies of his people I think you would see dramatic growth very quickly." China is Cuba's third most important trading partner after Venezuela, which provides payment plans for oil, and Spain, which has a chain of hotels on the island. Last year trade between the countries reached $400 million, with China exporting about 600 products, from television sets and rice to plastics, iron and steel. "Over the last three years trade [with China] has increased dramatically. The Chinese government is giving substantial financing for virtually every product they are exporting," said John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council, who recently traveled to China. "They are communist brethren so they'll help each other out regardless of whether it's in their economic interests to do so." On Friday, the front page of Cuba's Communist Party daily, Granma, headlined the "profound ties of brotherhood" with China. Analysts say Cuba has long looked to China as a counterbalance to the United States. China is the only communist country on the U.N. Security Council and has opposed a war in Iraq. Academics and State Department officials have said China and Cuba's ties run deeper than ideology or economic cooperation. In 2001, James Kelly, assistant secretary of state for East Asian affairs, confirmed the delivery of Chinese military equipment to Cuba, but provided no details. Other analysts say relations between two of the remaining one-party states are "more nostalgic and romantic than strategic." "Fidel has a romantic flair among communists," Pastor said. "They look at him and say he's the last communist." South Florida Sun-Sentinel wire services were used to supplement this report. Vanessa Bauzá can be reached at vmbauza1@yahoo.com