WHEN 200 Cuban exiles went back to Cuba last month to meet with President Fidel Castro Ruz, they did so with some optimism that the Cuban leader might be reaching out for dialogue, perhaps even groping for some kind of peaceful transition.
Few believe that now.
The ``Nation and Emigration'' conference in Havana turned out to be a carefully manipulated affair designed to bolster Mr. Castro's sagging image.
The invitees were selected by the Cuban regime. They were controlled by Cuban officials. They were told there would be no media coverage.
But Cuban television taped a session, including a segment that showed a prominent Miami woman exile kissing and praising Castro. Then the network released an edited version of the tape to news organizations at $700 a copy.
Says one Washington expert on Cuba: ``This was not a dialogue. This was a monologue with an echo. Castro used these people cynically.''
Magda Montiel Davis, the Miami lawyer who was seen on television kissing Castro and telling him he was ``a great teacher,'' told The New York Times later: ``This has definitely set the moderate community [of Cuban exiles] back.''
The next time Havana makes an overture to exiles, she said, ``people will think not twice, but three times'' about responding.
The conference seemed to be a public relations exercise intended to suggest that Castro is popular among exiles - even as his standing at home appears to have reached a new low. Visitors to Cuba tell of Cubans calling Castro names in public. One woman told a foreigner volubly in the street: ``This man [Castro] has to get out now. We're fed up and he's an obstacle to solutions.''
This unusual condemnation in public stems from the misery brought on by a collapsing economy. Food and consumer goods are in short supply. Although Castro has hinted at opening up the economy, he has in fact reverted to strict state control with a negative impact on the people.
Savings accounts have been frozen.
Police and military roadblocks now ring Havana to stop farmers bringing in food to sell on the open market. Farmers have been arrested and their produce has been confiscated. The government demands that they sell their goods at low, state-set prices.
The electric power system is in a state of collapse. Cuban oil, which has a high sulphur content, has corroded parts of the power plants. It will take six months to get spare parts from the Czech Republic and Russia. Cubans must make do with four hours of power a day for the rest of this year.
In the words of an expert based in Washington: ``Hope for a peaceful transition is fading. The people know that Castro has failed and is simply hanging on. In the past, people have been afraid of the consequences of rebelling. But now they have to decide which is riskier - rebellion or the economic disaster which confronts the country.''
With official relations between Havana and Washington still in the deepfreeze, many Cubans take their cue on American reaction to what they might do from Radio Marti, the United States government-run station that has been broadcasting to Cuba since 1985. Radio Marti has had its ups and downs but over the years has developed a substantial Cuban audience. It has been criticized as being too heavily influenced by hard-line exiles.
Some moderate Cuban-Americans argue that there can never be change from within Cuba, for instance by military coup, if participants fear they will be taken over and liquidated by a wave of returning hard-line Cuban-American exiles.
Thus an advisory panel earlier this year recommended that Radio Marti should avoid ``tailoring its programs to Cuba's committed opposition'' and should strike a more balanced editorial position.