Castro Edges Toward Change

A STRING of pronouncements from Havana in recent days suggests that President Fidel Castro Ruz is opening up his socialist economy to free-market forces.

Well, not exactly. True, in the face of appalling shortages and a rundown economy, Mr. Castro has loosened some controls on small businesses. And some foreign investment in Cuba's state-owned companies is being encouraged. But an individual still cannot start a business in Cuba. Farmers' crops must be sold to the state, and the state determines the price. The imported spare parts that keep agricultural machines running must be bought from the state, which, again, determines the price.

There are rumors that the Castro regime is planning confiscation of bank accounts, or the compulsory diversion of these accounts to government bonds. Factories are idle, but workers are still getting paid. Thus, money accumulates in bank accounts, but there is nothing to buy with it.

One Latin America expert on Cuba says Castro is trying to create a ``mirage of a market economy'' to lure investors and convince Washington to lift its embargo.

What kind of investors might be attracted to Cuba? Companies prepared to accept high risk for investing in joint ventures, but who hope to recoup their investment in a few years. And firms that want to get their feet in the door, hoping that a post-Castro Cuba will evolve into a free-market system.

Canadians are looking at development of Cuba's deposits of nickel, the fourth-largest in the world. But they are looking cautiously because nickel prices are down at the moment, and large shipments of stolen Cuban nickel from the former Soviet Union are flowing into Europe. In the past, uneconomic and energy-inefficient methods have hindered extraction of Cuba's nickel.

Other investors are eyeing Cuba's citrus industry and some of its developments in biotechnology, particularly involving pharmaceutics.

Castro toyed with private-sector production in the early 1980s, but stopped in 1986 for fear it was developing a capitalist class. Says one knowledgeable Cuban expert: ``It worked for a while because entrepreneurs who wanted building materials, agricultural supplies, trucks, and so on, simply stole them from what the Soviets were shipping in and subsidizing. But now the subsidies from Russia are gone, and there's nothing to steal.''

So, Castro has turned to a series of makeshift moves to help the Cuban economy: legalizing currency imports, tourism, and gift parcels from abroad. Some of this borders on extortion. Package tours to Cuba are so expensive that even some expatriates who dearly want to visit family members are boycotting them. A few weeks ago, more than 5,000 gift packages from Canada were held up in Havana while Cuban authorities tried to levy five times the value of their contents in duties and shipping costs.

All this is causing some disarray among Cuban expatriates in the United States, uncertain of what is happening in Cuba and confused about how to respond. Conservatives such as the Miami-based Cuban-American National Foundation maintain hard-line support of the boycott against Castro. The Clinton administration echoes that line, but may be edging away from the foundation.

American liberals and newly-emerging Cuban-American opposition groups, staking out a position counter to the Foundation's, want the embargo lifted entirely. Still other expatriate groups are willing to make small, humanitarian gestures to Cuba in return for specific reforms by the Castro regime. The centrists are on the right track. If there are to be concessions on the American side to alleviate the Cubans' suffering, Castro should produce genuine, verifiable reforms, not a mere ``mirage'' of a market economy.