Castro tightens grip amid boomlet

US businessmen are holding a Cuba trade summit in Alabama Friday.

FDR promised a chicken in every pot. For Fidel Castro, it's a pot for every chicken.

Since announcing the distribution of subsidized rice steamers and pressure cookers in a speech delivered on International Women's Day in March, the arrocera and olla de presión have become Cuba's newest ideological icons - and small signs of long-overdue modernization.

"Those of you who would like rice steamers, raise your hand," said the 78-year-old president in front of an audience of hundreds of women, sounding a bit like Monty Hall. All the women left with one, and 3 million more are on their way to households across the island. Preliminary distribution of pressure cookers, which, like the rice steamers, come from China, has also begun.

The handouts are more than just populist politics. They're a symbol of an economic uptick under way in Cuba. The communist country's economy grew 3 percent last year, and is projected to grow more than 4 percent in each of the next two years, according to the Economist Intelligence Unit, a research group based in London. This growth - driven by cheap Venezuelan oil, a $500 million investment by China, and a rebounding tourist industry - has emboldened Mr. Castro to curb the market reforms he reluctantly introduced in the 1990s, allowing him to tighten his socialist grip.

The appliance rollout is possible because Cuba's economy is "on a roll," says Kirby Jones, a consultant in Washington who for 30 years has advised US companies working in Cuba. "I've never seen it so favorable as it's been in the last few months."

And not a moment too soon. The government has been feeling the heat since last summer's failure of a major electrical plant. The more energy-efficient steamers and cookers are an effort to mitigate continuing blackouts in advance of summer's increased power demands.

The frequent outages are reminiscent of the "Special Period," those tough years in the 1990s after Soviet aid and oil ended. Venezuelan President Hugo Chávez, a close friend of Mr. Castro, has partially filled that void, selling oil to the island at preferential rates. Venezuela ships up to 90,000 barrels of oil a day here and in return, Cuba sends thousands of healthcare workers and sports educators to the South American nation. In April, Mr. Chávez visited Cuba for a ribbon-cutting ceremony of the first branch of PdVSA, Venezuela's state-run oil company, to open here.

Castro has also boosted economic ties with China, inking the deal to extract nickel from Cuba, which he said will give the country a "push."

But critics say the reversals of market-based policies far outweigh the deals with China and Venezuela. Beginning in 2001, the party leadership began to dismantle reforms it had permitted to help bootstrap the collapsed economy. Castro began limiting the numbers of Cubans legally licensed to work for themselves - computer programmers, used-book sellers, locksmiths, and even magicians, among others.

"There's an ideological element to some of it," says Philip Peters of the Lexington Institute in Arlington, Va. "There wasn't a threat from having locksmiths, but the state supplies employment, and the government never felt comfortable with the erosion of its place as employer." Still, he says, "They haven't abandoned reforms, it's just not the track they're emphasizing."

Still, many companies that came to Cuba when it opened its doors following the collapse of the Soviet Union have been asked to leave. According to the Financial Times, three foreign ventures have shuttered each week since 2000, when there were 700, and only half the homes rented to expatriates are occupied.

But cash deals paid in advance for US agricultural products continue. A two-day "National Summit on Cuba," starting Friday in Mobile, Ala., brings together Cuba experts, representatives of southeastern ports and agriculture, and, via satellite, Cuban officials to discuss trade and other issues, including the US embargo of Cuba. According to summit spokeswoman Lissa Weinmann, Cuba has purchased $800 million worth of goods from the US since 2001.

Ironically, the market reforms that allowed Cuba to grow during the past decade have also contributed to a two-tiered economy. Cuba is divided between those who can't afford a rice steamer and those who, whether because of jobs that pay hard currency, tips earned in the tourist sector, or remittances sent by family living abroad, can buy nongovernment ones from the "dollar" store.

So rice steamers, recentralization of the economy, and the doubling of the minimum wage that went into effect last month show that Mr. Castro isn't going to allow an underclass, whether or not these moves are economically sustainable.

That sustainability could hinge on what Mr. Jones says would be a "quantum political shift in Latin America": the discovery of oil off Cuban shores. Venezuela, China, Canada, Brazil, and Spain are in the initial stages of oil prospecting in Cuban waters in the Gulf of Mexico. No gushers have been discovered yet, but if they are, Cuba's fortune could be made in a hurry.

"Cuba's great dream of all dreams would be to find a lot of oil in their part of the Gulf," Jones says.

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