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Cuba Leaves Castro Era With Slim Prospects for Change

April 17, 2018 9:31 am

HAVANA— Raúl Castro is set to step down as Cuba’s president this week, marking the first time in 59 years that a Castro brother won’t be officially in charge of Cuba.

But few people in this rundown capital city are expecting much change. Cuba’s communist leaders are dedicated to maintaining their one-party system and reasserting state control of the economy after a brief surge in private enterprise fueled by the restart of diplomatic relations with the U.S. in 2015.

Mr. Castro’s likely successor, Miguel Díaz-Canel, a 57-year-old party apparatchik, has excoriated small-business owners as enemies of the state and said the U.S. opening to Cuba under President Barack Obama was meant to “destroy the Cuban revolution.”

While Mr. Díaz-Canel is expected to handily win a vote in the country’s rubber-stamp National Assembly, the Castro family won’t be leaving the political stage. Mr. Castro is likely to stay on as head of the Communist Party. One of his sons is an influential official and a former son-in-law is a powerful general.

“It’s new that we are going to have a new president, but we feel everything will be the same,” said Margarita Álvarez, who makes ends meet by renting rooms to tourists.

For much of 2016, Cuba seemed to be at the center of the world as celebrities including the Rolling Stones and fashion designer Karl Lagerfeld flocked to the island nation, along with Wall Street CEOs and tens of thousands of U.S. visitors.

The reset with the U.S. boosted a buoyant private sector of small businesses—centered on guesthouses, restaurants, taxi companies, hairdressing salons, barber shops, and other enterprises—that now employ more than half-a-million workers.

“It looked for a while as if Cuba was going to turn into a modern country,” said Idania del Rio, who runs a designer shop.

But the Obama detente spurred a backlash from alarmed regime stalwarts scared that more economic freedom would lead to political liberalization. Last year, the government stopped issuing new licenses for restaurants and other businesses as officials railed against the new entrepreneurial class.

Mr. Castro himself, despite being the architect of the modest economic reforms that enabled private jobs, lashed out at the new entrepreneurs.

“There are reports of cases where the same person has two, three, four and as many as five restaurants,” he said in a speech to the National Assembly last year. “Someone who has traveled abroad as many as 30 times. Where did he get the money?”

At the same time, the election of U.S. President Donald Trump has further dimmed hopes for change. Mr. Trump has stopped any further engagement with the island and discouraged tourism, one of Cuba’s most important moneymakers.

Relations soured further in September after what U.S. officials called “targeted attacks” mysteriously affected the health of almost two dozen American diplomats. The U.S. reacted by dramatically downsizing the U.S. Embassy in Havana, making it almost impossible for Cubans to obtain U.S. visas.

“Everything has stopped,” said Hugo Cancio, a Cuban-American who runs business in both Miami and Havana. “It’s been a huge psychological impact.”

Many young Cubans are as desperate to get out as ever, but changes in U.S. immigration policy have it much harder for Cubans to enter their favorite destination. “Young people don’t see a future,” said Adonis Penton, who drives a private taxi for a Havana hotel.

Meanwhile, investor interest in Cuba has largely faded, analysts say. “There was a tsunami of interest on Cuba, but that lasted only two years,” said Emilio Morales, a former Cuban official who runs a Cuba business newsletter out of Miami.

One indicator of that dropoff, he says: Four months after the reopening of U.S.-Cuban ties, there were more than 400 proposed investment projects for Cuba’s nascent Mariel Special Economic Development Zone, meant to make the Cuban port the heart of a future Caribbean trade hub. Now, the number is back to 35 firms like it was before the Obama opening, and only 10 of them are operating, he says.

Many analysts say the regime missed a golden opportunity to open up a system now in virtual economic and political rigor mortis. What scared the hard-liners most, they say, was Mr. Obama’s March 2016 visit to Havana. Millions on the island watched on television as he delivered a rousing speech praising the new economy of private workers and encouraging Cubans to hope for a brighter future. That trip, said Ted Henken, a Cuba expert at New York’s Baruch College, “set in motion a real paranoia and fear of change.”

The results are evident. Niuris Higueras runs one of Havana’s top restaurants, where first lady Michelle Obama held a lunch during the presidential visit. “You see how things are? Difficult,” she said, pointing to the mostly empty 50 seats in her establishment one recent lunchtime.

Mr. Castro’s probable successor, Mr. Díaz-Canel, is a tight-lipped survivor of a generation that suffered repeated purges because its leaders showed untoward ambition or reformist tendencies—or were just caught making jokes at the Castro brothers’ expense.

He has no political base or revolutionary credentials, analysts say, putting him in a weak position to make changes.

As the top party man in Villa Clara province, Mr. Díaz-Canel earned a reputation for being liberal by allowing a gay club with transvestite shows, called Menjunje, to open in the city of Santa Clara, says Juan Juan Almeida, who lives in Miami and is the son of a top Castro commander. But countering that impression, Mr. Díaz-Canel later took a hard line by shutting down an M.B.A. program sponsored by the Catholic Church in Havana, when he served as minister for higher education.

Last year, a video of Mr. Díaz-Canel excoriating liberals in Cuba in a meeting of party cadres was leaked, in what some observers say was a strategic move to strengthen his position with the party hard-liners on whose good graces he depends to get the top job.

In the video, Mr. Díaz-Canel blasts self-employed entrepreneurs, the Catholic Church, independent journalists and several embassies, ranging from Norway to the U.S., as enemies of the Cuban state. Obama’s opening, he said, was just another way of trying to “destroy the Cuban revolution.”

Mr. Díaz-Canel isn’t the only dauphin in waiting. A powerful second generation of Raúl Castro’s offspring is in the wings, first among them Alejandro Castro, the current leader’s only son. Although only a colonel in Cuba’s interior ministry, the younger Castro—known as “El Tuerto” or the one-eyed man, having lost an eye in an accident—helped negotiate the U.S.-Cuba rapprochement. The 52-year-old, seen as a hard liner, wrote a 2015 book about the U.S. called “The Empire of Terror.”

Also in waiting is Raúl Castro’s former son-in-law, Gen. Luis Alberto Rodríguez López Callejas, now divorced from Raúl’s daughter. Gen. Rodríguez is in charge of Gaesa, a military-run conglomerate that controls a good chunk of Cuba’s economy, especially in the valuable tourism sector. Last June, Mr. Trump prohibited U.S. businesses from doing business with Gaesa and U.S. visitors from staying at Gaesa-run hotels.

“He is the Cardinal Richelieu, the eminence grise, the man who gets things done,” said a U.S. lawyer with Cuban government contracts. Gen. Rodríguez and Alejandro Castro are among the country’s 10 most powerful people, according to a former high-ranking Cuban intelligence officer. Like much else in Cuba, that isn’t likely to change.

Write to José de Córdoba at jose.decordoba@wsj.com

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