Cuba's New Look

By Tim Padgett/Havana

For 37 years Cuba's communist dictator, Fidel Castro, has chafed, rattled and raged under the cold-war headlock of a U.S. trade embargo. But this past summer the wily presidente sensed an opening. Philadelphia health-care-products giant SmithKline Beecham (a subsidiary of SmithKline Beecham in Britain) got the Clinton Administration's O.K. to pay Cuba some $20 million for the rights to test and market, in the U.S., a meningitis vaccine developed by Cuban scientists. Embargo rules still require SmithKline to pay initially in barter instead of dollars--a Yanqui condition that aides expected Castro to reject. To their surprise, he approved it. "We'll do this," he said, "as a humanitarian gesture for American children."

Castro is betting that a serious antiembargo movement is afoot--and, for once, he's right. The SmithKline deal marks "a significant moment for U.S. companies who want opportunities in Cuba," says John Kavulich, president of the U.S.-Cuba Trade and Economic Council in New York. It also reflects the sentiment of U.S. politicians and business leaders--not to mention lovers of Cuba's famed cigars--who are mounting a campaign to dismantle Washington's economic sanctions against Cuba. They're convinced that the embargo will never make Castro cry uncle, a point he will drive home this week if, as expected, he attends the World Trade Organization meeting in Seattle.

The time is ripe, they insist, to invade Cuba again, not with an exile army but with the same products--Nike shoes, burgers and MTV--that have helped promote democracy and capitalism around the world. If the U.S. can do business with erstwhile enemies like China and Russia, they argue, why not with Cuba? "This embargo hasn't helped us move the ball," U.S. Chamber of Commerce president Thomas Donohue said last month. "We have carried this anger too far."

What exasperates the embargo busters most is watching foreign competitors' cutting tourism and other lucrative deals on an island of 11 million repressed consumers just half an hour's flight from Miami. Feeling that ire, the White House this year further loosened U.S. travel restrictions to Cuba, making it easier for Americans like business executives, researchers and athletes--as well as families with kin in Cuba--to board a charter flight in Miami, New York City or Los Angeles that lands in Havana. Donohue paid Castro a visit last July, the first ever by a U.S. Chamber of Commerce chief. Other high-profile delegations--including one led by Illinois' Republican Governor George Ryan in October--descended on Havana soon after, scoping the possibilities of selling everything from long-grain rice to fiber-optic cable. "[The Cubans] need everything in the world--technology, farms, hospitals," says Ryan. "Illinois would be in a prime position to help them." In a key step toward that goal, Missouri's Republican Senator John Ashcroft, prodded by U.S. farmers desperate for new global markets, introduced a bill this fall to eliminate the stringent licensing rules on sales of food and medicine to Cuba.

Ashcroft has clear support in the Senate--and behind the scenes among some in the Administration--since a Reuters poll last spring found that 67% of Americans favor ending the embargo. "It's hard for me to find anyone in this building who supports our Cuba policy anymore," says a State Department official. In Florida, where the most ardent anti-Castro lobby resides, a recent Miami Herald survey showed more people against than for the embargo. Meanwhile, cultural contacts between the U.S. and Cuba are at an all-time high, sponsored in large part by U.S. corporations like AT&T and agro-titan Archer Daniels Midland.

The long-term goal, in theory, is to change Cuba. The SmithKline deal led to long and apparently educational meetings between U.S. executives and Cuban officials such as Concepcion Campa, 48. Campa is director of the state-run Finlay Institute, the Havana bio-research facility at which she created the meningitis vaccine. But she's also a communist Politburo member, and she got a crash course in capitalist haggling during the negotiations, as well as a closer, less ideological understanding of Americans. "It was hard to make sense of all those Anglo-Saxon contract clauses," she told TIME. "But we appreciated each other's forms of thinking better in the end."

That's the point, says Elena Freyre, executive director of the Cuban Committee for Democracy in Miami. "The next leader of Cuba will be from Cuba, not Miami," she says. "There are people there we need to start reaching out to." Freyre concedes that trading with Castro, now 73, could prop him up in the short run. More important, she insists, is ensuring that his successor is market- and democracy-minded. And since Castro blames the embargo for worsening Cuba's moribund economy--a cover for his own socialist blunders and human-rights abuses--why not take away his alibi? Even Cuba's leading dissident, Elizardo Sanchez, agrees. "After the fall of the Soviet Union," he says, "the worst strategy to take against a closed society like Cuba is to tighten its isolation."

Still, it's too early to count out the embargo's tenacious Cuban-American lobby. Its chief muscle is in the House, where efforts similar to Ashcroft's have been killed this year. "Trading with the most anti-American dictator in the world is a cheap, cynical manipulation of farmers' emotions," said Jorge Mas, head of the Cuban-American National Foundation in Miami. Besides powerful Republican Senator Jesse Helms--who tightened the embargo in 1996 after Castro's air force shot down two small U.S. civilian planes near Havana--Mas has two other key allies: presidential contenders George W. Bush and Al Gore, who need Florida's electoral votes.

What's more, Cuba is no Shanghai. It is not an easy place to do business. Canadian and European executives warn that the island is an emerging market the way molasses is a river: the socialist bureaucracy is maddening; the military, headed by Castro's brother Raul, plays an inordinate role in business affairs; and some 85% of the wages that foreign companies pay impoverished Cuban workers (who make an average $15 a month) ends up in government coffers. Cuba's post-Soviet economy has made a comeback since it crashed in 1993, but the country has garnered less than $3 billion in foreign investment in the '90s--largely because Castro remains ideologically opposed to opening more widely to private capital. "So far, he's invited us in only to assure his survival, not his country's prosperity," says a frustrated foreign investor.

But the "financial structures will change," insists Peter Nathan, a Connecticut businessman who is taking a medical-products exhibition to Cuba in January--the first U.S. trade show there since Castro's 1959 revolution. Health care, though advanced in Cuba, suffers severe shortages. At Havana's William Soler Pediatric Hospital, the German and Japanese equipment is obsolete. "It seems medically unethical," says director Dr. Diana Martinez, "not to let Cuba buy this equipment more cheaply from the U.S."

Despite their poverty, Cubans are eager to buy from the U.S. To the extent Castro allows, they are trying out capitalism, creating new private businesses, from boarding houses to pizza-delivery services, primed by the annual $800 million that family members in the U.S. send them. Many even draw dollars from Havana ATM machines, via accounts set up by U.S. relatives in Canada and Europe. But for Cubans, entrepreneurship is fraught with migraines, from exorbitant government licenses and taxes to graft. And for those who have no access to dollars, despair--and resentment--is rising. At the same time, Cubans are worried that turning capitalist too quickly could invite the kind of abuses that have devastated Russia's economy. "We want the embargo to end," says a high-ranking Cuban official, "but we're afraid of it happening." The big difference now is that, increasingly, Americans no longer are.

--With reporting by Massimo Calabresi/Washington, Julie Grace/Chicago and Dolly Mascarenas/Havana

With reporting by Massimo Calabresi/Washington, Julie Grace/Chicago and Dolly Mascarenas/Havana