CUBA: IMPACT OF SOVIET CHANGE

Created: 9/10/1991

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Cuba: Impact of Soviet Change

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The collapse of Communist control in the USSR signals the end of Cuba's special economic and military relationship with Moscow and accelerates the political and economic crises Fidel Castro faces. The loss of Soviet trade subsidies and Havana's lack of similarly advantageous alternatives indicate that imports will drop precipitously in coming months,urther sharp contraction of the Cuban economy. Moreover, the suddenness and depth of the post-coup reforms in the USSR haveevere psychological blow to the Cuban regime. Disaffected Cubans may protest publicly for the first time, and the loyalty of the armedeven greater sacrifice because of the cutoff of Soviet militarylikely to diminish. To maintain control, Castro appears almost certain to increase political repression and economic austerity in the short term. The end of Soviet support, while bolstering prospects for an end to communist rule in Cuba, also poses some risks for Washington, such as burgeoning illegal emigration, Latin American pressure to lift the economic embargo, and the possibility that Castro might lash out at the United States in his last days.

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The prompt resignation, arrest, or suicide of many of Cuba's closestKGB chief Kryuchkov, Politburo member Shenin, Army Chief of Staff Hoiseyev, and Prime Ministergreatly undercut Cuban influence In Moscow. The dominant political leader in the post-coup era, Boris Yeltsin, has publicly called for an end to aid to Cuba, presumably including trade subsidies. Russian Foreign Minister Kozyrov has said publicly that the Soviets have long needed to cut economic assistance and end military aid altogether. Castro may have at least one friend in Yeltsin's inner circle--adviser Yuri Petrov had been Ambassador in Havananfluence or. policy appears liiltcd.

Disintegrating Ties

Tho domise of Communist rule in Moscow presages the end ot an already declining military relationship. Deliveries of ilitarv equipment to Cuba hod fallen

compared with the same timeframe year, and Soviet military advisers had been reduced0 |

Those trends almost certainly will accelerate, perhaps even resultingomplete end to military aid and the formal security relationship. If this becomes apparent, Castro might try to save face by first expelling all Soviet military and intelligence personnel fros Cuba.

The end of Moscow's control over the republics also bodes ill for the Cuban economy. Under1 trade accord, Moscow was responsible for coordinating exports to Cuba from the various republics and decentralized enterprises. Yeltsin's expropriation of Russian industries and resources could void Moscow's commitments to Cuba, including Gorbachev's promise of

oil As of July, oil shipments probabl

alreadyercent behind schodule, and the shift in control over the oilwith the industry's worsening productiona larger shortfall in coming months. j

At this early stage, Havana's efforts to negotiate economic agreements with individual republics have yielded mixed results, and any new agreements probably would do little to offset the loss of Cuba's former privileged status with Moscow. o press reports, Cuban trade officials have net withrepresentatives from Russia, the Ukraine, Belorussla, Kazakhstan,

and Uzbekistan over the past year,ew barter dealseen signed. Although details are unknown. Individual republics may have agreedubsidized price for Cuban sugar on some contracts. Nonetheless, as tho republics are freed from Moscow's commitments and face production problems and shortages at home, Cubaotentially severe falloff in trade. The depressed world priceents per pound compared to theents Moscow had promised to pay inthat Cuba wouldteep drop in its terms of trade if it tried to sell its sugar on the open market.

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Difficult Options

All of Castro's options at this point entail serious risks. The Cuban economy probably will decline by at leastercent this year and could contract an additionaloercent2 if all Soviet trade subsidies are eliminated, with few alternatives in the short term to compensate for the loss of the Soviet assistance, Castro, in our judgment, almost certainly will resort to greater austeritythe "zero option" plan developed to copeotal cutoff of Soviet imports. Basic rations will be reduced further, more industries closed, labor mobilisations to agriculture augmented, and public services scaled back even more. B

Increased political repression also appearsfollowed the Soviettry to emulate the Soviet public's examplethe Communist regime. The collapse of Sovietundoubtedlyitter blow to mid-level Cubanthe end of Soviet militaryIncluding of the' ' LmmmmmmmmmV

almost certainly increase anxiety inaTT officer corps. Low morale among the elite, if serious enough, may be the catalyst that sparks open challenges to the regime. ICastro probably calculates that most Cubans lack the political 'consciousness that has been allowed to develop in the Soviet Union. Nonetheless, he will increase repressionreventive measure. smmm|

Boyond these immediate steps, we believe Castro will have to choose from among three basic strategies for survival:

Tough it out. He might rejectCubare-industrial, subsistencerely on still loyal and efficient security forces to maintain order. This option might allow Castro several years in power, but at the cost of increased economic shortages, massive emigration, and, eventually, civil strife.

Move ahead with limited reforms. To attract internationalfrom oil-producing Latin Americans such as Venezuela andcould implement economic and political adjustments that

j he and other officials have hinted at publicly. xample, he could expand new pay incentives, reopen the free farmers' markets, move ahead with privatisationertain services, and Increase efforts to establishnterprises with foreign investors. In the political realm, Castro could separate the positions of Prime Minister andof which he currentlypledge direct National Assembly elections. Although these steps probably would not threaten his control in the short term, we believe thoy are not sufficient to revive the economy and could lead to even

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greater demands for reform. Moreover, Venezuela would insist on public pledges of more extensive political and economic reform in Cuba before committing to increased aid, in our view, while Mexico would quietly push for additional economic changes.

Introduce sweeping, meaningful reforms. Castro couldew stage of the revolution,ommitment to undertake "appropriate" economic reforms, make elections more open, and embark on extensive personnel changes in the party and government. These moves wouldignificant ideological reorientationvoluntary" diminution of some of I Castro's powers. We believe this would be Castro's least preferred choice, because he probably calculates he would soon lose control.

Despite his orthodox Communist rhetoric, in our view, Castro's Instincts are swaying him toward the second option; his experimentation with political and economic adjustments in the pastonths, in our view, indicates awareness of the need for change, whether he continues making adjustments, however, ls conditioned almost entirely on the depth of Cuba's economic plight. If Castro can somehow piecerade plan providing Cubainimal level of oil and other necessities, he is more likely to prove amenable to reform. If economic challenges are overwhelming, on the other hand, we believe Castro would see no alternative to further austerity and repression to stay in power. MMM^

Implications for tbe United States

The end of Soviet support significantly increases the likelihood of the collapse of Communism in Cuba and the introduction of more democratic rule. The timing of Castro's demise, however, will depend on the emergence of heretofore quiescent forces within the regime's elite and among Cuba's body politic. We believe observable splits in the armed forces and party, an Increase in high-level defections, and significant popularthat we have not yetbe key indicators of the system's imminent demise.

The process of Soviet disengagement, however, also poses some risks for US interests. For example, illegal emigration is likely to continue growing rapidly as economic conditions deteriorate. ubans have already fled the island this year, more than four times the total for all of last year. Even if Castro opts for reform, we believe popular confidence is so ow that thousands of Cubans will still try to leave the island.

In addition, the increase in human suffering in Cuba may prompt greater international pressure on the United States to seek rapprochomcntegime no longer perceived to be

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Moscow's client. Castro has long lobbied the Latin Americans to urge Washington to Lift the economic embargo, and his appeals may at last be falling on newly fertile ground. Venezuelan President Perez and the Latin Americanregional consultativecriticized OS policy. If the Cuban people are seen to be victims of starvation and disease, the Latin Americans may press Washington to rescind the embargo, pm^pj^pj

In his final days, Castro may lash out at the United States. As in the past, he probably will try to exploit nationalist pride to rally tho populace, and he might mount large anti-US demonstrations outside the US Intorosts Section in Havana. In addition, Castro almost certainly will label political dissidents as US stooges and deal severely with them. If he perceives US radio broadcasts are increasingly successful in undermining his credibility and authority, he could use Cuba's massive medium-wave transmitters to jam US broadcasts as far north as Minnesota. It isextremelya desperate Castro, if facing the imminent end of his rule, wouldirect military attack on the Cuantanamo Naval Basearget in Florida, such as the Turkey Point nuclear reactor. He also could call on Latin American revolutionary groupB to launch terrorist attacks against Americans in the region. pm^pm^

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