Raul Castro seeks alternatives to Venezuela.

By LUIZ ALBERTO MONIZ BANDEIRA,  www.project-syndicate.org) Friday, July 18, 2008, from Brasilia. and posted on The Japan Times.

Raul Castro has begun a gradual process of changing Cuba’s economy and international relations. Within Cuba, he hopes to legitimize his government by improving standards of living. Outside of Cuba, he does not want to be held captive by Cuba’s one international supporter: Venezuelan President Hugo Chavez.

Castro believes in giving farm workers greater incentives. He has authorized the sale of farm machinery and tools — centralized until now — directly to farmers, as well as handing over idle land to private cooperatives and other organizations that request them. He also canceled the debts of some small producers and raised the prices paid by the state for milk and meat.

In another measure intended to improve the lives of ordinary Cubans, he has removed restrictions on acquiring computers, microwave ovens and other appliances. Cuban officials stress that the purpose of these changes is to increase efficiency, “not alter the socialist model.”

But, like China and Vietnam, the government will have to embrace the market more openly if it is really to improve living conditions. Only with foreign investment and economic liberalization — a process that has already begun in some measure — can Cuba hope to offer its 11.2 million people more consumer goods and comfort, improve the social welfare system, and rehabilitate the country’s infrastructure.

This is essential not only in order to build a “better socialism,” as Castro has promised, but especially to legitimize the continuity of the regime established by his brother Fidel’s revolution.

For now, Cuba is politically stable. The evolution of its internal situation leaves no doubt about the consolidation of Raul Castro’s authority. There is somewhat greater freedom of expression, with debates and criticism of several aspects of Cuba’s socialist model, such as low salaries and the dual monetary system, which has caused income inequality by favoring those who work in tourism and for foreign companies.

But greater political liberalization is unlikely in the short or medium term. Cuba’s government argues that America’s financial and political support for the opposition impedes that.

Nevertheless, with Felipe Perez Roque as minister of foreign affairs, Cuba continues to conduct a pragmatic foreign policy. Venezuela and China have become Cuba’s main economic and commercial partners, and may continue to be so.

But Raul Castro wants to avoid dependence on one or two countries alone. His objective is to diversify Cuba’s foreign relations and prevent problems that any change in these countries could cause his regime — a constant imperative since the collapse of the Soviet Union.

As a result, relations with Latin America’s giants, Brazil and Mexico, are being put on a more normal footing and relations with Spain are being improved. Moreover, negotiations with the European Union have resumed, greater understanding with the Vatican is being fostered, and Castro himself has publicly suggested the possibility of dialogue with the United States.

Although Venezuela provides between $1.5 and $2 billion annually to Cuba, Castro regards Chavez as something of a headache, owing to his rhetoric and his confrontational attitude with several countries. Chavez is simply not the right person to help Cuba normalize its international relations.

Moreover, Venezuela has its own economic problems, despite its enormous dollar reserves. Shortages of medicines and basic foodstuffs such as milk, sugar, eggs, beef, and chicken abound as a consequence of price controls and mounting inflation. This reminds Castro of the economic dislocations that led the Soviet Union to slash its aid to Cuba in the years before it collapsed.

Venezuela’s problems make collaboration and support from Brazil — the Southern Hemisphere’s largest industrial power — even more important. During President Luiz Inacio Lula da Silva’s visit to Havana in January 2008, Brazil and Cuba signed several economic and commercial agreements.

Indeed, Brazil doubled its loans to Cuba for the purchase of foodstuffs and medicines, to $200 million, and has arranged projects to rehabilitate Cuba’s infrastructure with the participation of Brazilian companies.

Other agreements include a project in which Brazil’s state energy company, Petrobras, and Cuba’s Cupet will extract oil in the Gulf of Mexico, and another that involves technological aid from the Brazilian company Pessquisa Agropecurria for the development of soya production in Cuba.

As these initiatives suggest, rapprochement with Brazil and Mercosur appears to be Cuba’s best international alternative as Raul Castro seeks to avoid falling into America’s economic orbit.

Luiz Alberto Moniz Bandeira, a former professor at the University of Brasilia, is the author of more than 20 books.