FIDEL CASTRO faces one of the most serious crises in his 31-year
rule as the Soviet Union and new East European governments impose
tougher trade terms on Cuba, Western observers say.
Even as its economy weakens, Cuba's growing political isolation
is underscored this month by a dispute over asylum seekers that
heightened differences with former ally Czechoslovakia and created a
damaging schism with Spain, the island nation's chief Western
Castro's determination to survive all challenges, however, was
clear last week as Cuba celebrated the 37th anniverssary of the
battle that launched his revolution.
In a speech before several hundred thousand supporters crowded
into the Plaza of Revolution, Castro vowed that Cuba would not
"Our a reaction is to struggle and struggle, to resist and
resist," Castro told the cheering throng. "Socialism is not an
option. It is a historic need. Socialism is ... a result of our
Yet Castro also acknowledged what most Cubans already know. As
the Soviets and East Europeans force Cuba toward trade based on
market prices and hard currency, the country's economy will be
strained to its limits - and an already bleak standard of living is
almost certain to decline.
About 71 percent of Cuba's trade is with the Soviet Union, and
some 14 percent with former East Bloc nations. Since July 2, East
Germany has demanded US dollars in exchange for its goods, drawing
down Cuba's estimated $l70 million foreign currency reserve. The
Soviet Union has indicated that it, too, will seek cash.
As a result, Cubans are tightening their belts. Several times
this year Castro has referred to the possible need for a "special
period" when the economy would move to a warlike footing in order to
reduce consumption. This spring, longshoremen practiced unloading
ships by hand and road crews used picks and shovels instead of
machinery to practice special-period conditions.
"We lack resources and we have worked with less imports. We have
economic difficulties, like all third-world countries," says Jose
Viera, vice minister in the Ministry of Foreign Affairs.
Phil Brenner, a Cuba specialist at American University in
Washington, says new trade arrangements mean central planners will
have little margin for error.
"They were used to dealing with government agencies, and now they
have to go to the international market," Mr. Brenner says. "They're
not quite prepared for that."
Castro has tried to boost hard- currency earnings by expanding
tourism and increasing production of primary exports, including
sugar, coffee and shellfish.
Cuban coffee, for example, is almost imossible to buy on the
island because nearly the entire crop is exported. Cheaper foreign
coffee is imported for domestic consumption. Lobster, shrimp and
crab also are earmarked for export.
"They're the fourth largest shellfish producer, and you can't get
it in Cuba," Brenner says. Meat, eggs, milk are hard to find.
Even among Castro's supporters, economic inefficiency has
generated cynicism, says a middle-aged engineer. …