HAVANA—At a dingy former Woolworth's here, the fluorescent lights bathe the store's pink walls and thinly stocked shelves in a dim, artificial glow. Still a variety store, though owned by the Cuban state, it sells a hodge-podge of items, including beer and pastries, motorcycle helmets and baseball jerseys, plastic utensils and used clothing. A wall placard lauds the recent 50th anniversary of the Cuban revolution. Customers amble about, although few find anything to buy, the pastries aside.
The situation at the meat counter is also uninspiring. A woman in her 60s is inspecting the day's offerings—pork liver and "Chuck Wagon" chicken franks from a Phoenix company. Yet her mood is not as grim as her surroundings. She tells a visitor that life on this impoverished island is about to get better. "We're waiting to see if Obama can make some changes. We expect a lot. We have to believe in something."
These days, such expectations hang heavily over this worn, seaside capital. Many Cubans—more so on the streets than in the ministries of government—believe that a half century of antagonism with the Yankee behemoth to the north will soon give way, spurring prosperity and ushering in, somehow, a greater sense of normalcy here. "We voted for him too," laughs a 68-year-old man, who, like many Cubans, did not want to be quoted by name. The topic reveals that decades of deprivation and Cold War-style antipathy have not sapped the Cuban capacity for humor. "You take Raúl Castro, and we'll take Obama," jokes another Havana man.
Even the Castro brothers—the president, Raúl, and the ailing former leader, Fidel—have sounded conciliatory notes on Barack Obama. Saying that Obama "seems like a good man," Raúl Castro last year expressed willingness to meet the U.S. president at a neutral place and improve relations "gesture for gesture." Fidel Castro called Obama "intelligent and noble," not the usual tone from the 82-year-old comandante. The administration has been listening. "I think the statements are important. They've registered," says a senior State Department official.
After eight years of hard-line Bush policy on Cuba, Obama's desire to deal directly with adversaries offers a possible historic break from the long Cold War between Washington and the Western Hemisphere's only Communist government. Obama has said he will remove restrictions on Cuban-American travel and remittances to the island but retain the 47-year-old economic embargo as leverage to work for democratic change here. The administration's review of U.S. policy, which may spur additional steps to engage Cuba, is likely to go public in the coming weeks.
American politics also favor change. Obama has more freedom to maneuver on Cuba than his predecessors had. Cuban-American demands for sticking with the hard line on Havana are easing, and Obama's victory in Florida did not depend on Cuban-American votes. The combination of a pro-engagement president in the White House and a more pragmatic Cuban chief in Raúl creates the best chance in decades to renovate a tortured relationship.
Any moves to shed the Cold War tone and re-engage Havana will be welcomed here. But a U.S. decision to withhold further steps like lifting the embargo until Cuba opens its political system could end up prolonging the stalemate. Political conditions for improving ties are "a nonstarter," asserts Josefina Vidal Ferreiro, a senior Foreign Ministry official. "What I see there is the same mistake previous administrations have made," she adds. "The U.S. needs to accept Cuba the way Cuba is."
That is galling to those who want democracy in Cuba now but it is also fair warning of what would be needed to make a breakthrough. "Every time you tie things to Cuban actions, they don't happen," says Vicki Huddleston, a former head of the U.S. Interests Section, America's de facto embassy, in Havana.
Cuban defiance of the norteamericanos has become a way of life, a stubbornness matched by a U.S. approach that, though still failing, just keeps on ticking. The Castros are now facing their 11th U.S. president. Cuban officials seem buoyed by having endured the economic free-fall of the 1990s after the loss of Soviet subsidies and then Bush's squeeze strategy. "Regime change didn't work in the case of Cuba," Vidal declares.
There are no signs of an East European-style upheaval in Cuba. People grumble loudly over their struggle to buy food and house themselves adequately, but the picture on the island of 11.2 million is not one of destitution or of a population seething with discontent. Though buffeted by the global recession, Cuba's economy has been advancing, in spite of the ban on most U.S. trade, investment, and travel. Growth was 7.3 percent in 2007 and 4.3 percent last year. Revenue from tourism and joint ventures with overseas companies keeps growing. Venezuelan oil subsidies continue, and Cuba's friends in Brazil, China, and Russia are joining a potentially lucrative game that U.S. firms cannot play: offshore oil exploration in Cuban waters in the Gulf of Mexico.
In foreign policy, the U.S. bid to isolate Cuba is losing ground, as foreign partners flock to Havana and urge Washington to normalize relations with Cuba. "Cuba's international position has never been more solid," says Carlos Alzugaray Treto, a former Cuban ambassador and a leading analyst. A range of Cuba watchers in the United States comes to a similar conclusion. "In general, they are well positioned internationally and internally to stay in power a good while more," says Daniel Erikson, a researcher at the Inter-American Dialogue and author of The Cuba Wars.
Cuba aims to diversify its sources of foreign support and its economic ties, despite its current reliance on subsidized Venezuelan oil, worth more than $3 billion last year. Cuban officials no doubt are factoring in the possibility that Venezuelan largess might someday vanish, and their searing experience with the collapse of their Soviet patron focuses their minds. "We realized we couldn't be, anymore, dependent on any one country or group of countries," says Vidal.
Cuba, of course, remains close to its primary benefactor, Hugo Chávez of Venezuela, and traditional friends like Russia and China. But Canada remains a key investor and source of tourists, as does the European Union, which has resumed normal relations with Havana. Most extraordinary is the outpouring of Latin American opposition to the U.S. embargo, in part a reaction to Bush's intense pressure. Brazil, South America's rising power, proclaims a desire to be Cuba's principal partner, and Obama's choice on Cuba is now being seen in the region as a barometer of just how much of the Bush legacy Washington is willing to abandon in reaching out to Latin America.
Paradoxically, the U.S. attempt to isolate Cuba has given it a higher international profile than it would attract otherwise. Latin American officials say that America's policy stiffens Cuban resolve to shun political reform and encourages their governments to embrace the Castro regime despite misgivings about its authoritarian ways.
Cuba has also been rewiring its economic circuits to bypass the United States. The result: U.S. leverage keeps declining. "Ten years ago, they needed the U.S.," says Kirby Jones, a Maryland-based consultant on Cuban business who started going to the island in 1974. "Now, with everybody moving in, they need the U.S. less and less."
On domestic economic matters, the Cubans also are moving, if cautiously, to strengthen their position. The weaknesses remain obvious: inadequate food supplies, shoddy, crowded housing, the aging Chevys and Studebakers still on the roads, the loathed dual-currency system. The signal achievements of the revolution—free and universal healthcare and education—remain, though they face new strains. In one corner food mart, a 66-year-old woman examines a blackboard listing the rationed staples and pronounces the scene "the same" as it was 20 years ago, when she first shopped there. A standard Cuban salary is 418 nonconvertible pesos (less than $20) a month. One day of such wages buys a pound of pork, and nothing else. Even Raúl Castro has conceded that Cubans cannot make do on such wages alone.
At a better-stocked supermarket that takes only convertible currency, Linnet Pérez explains the strategy: "Everybody tries to get hard currency." The Cubans pursue convertible pesos through remittances from relatives, employment in tourism, selling small services, and, of course, the black market. In Cuba, a bartender mixing mojitos for foreigners nets an income many times that of a physician.
Raúl Castro has taken an off-ramp from his brother's Communist economic orthodoxy. But the goal, he says, is not to dismantle socialism but make it more efficient. He has alluded to the system's fictions, noting, "Sometimes in socialism two plus two equals three." He has called for eliminating "excessive" regulations, trimming some subsidies, and making wages reflect the value of work. Most visibly, he has expanded consumer choices, permitting Cubans to purchase microwave ovens, DVD players, and cellphones.
The most significant reforms are in agriculture. Raúl settled past debts to farmers and lifted the prices they receive. The state is now leasing out large swaths of unused land to private farmers and allowing them to buy supplies directly from state stores. The changes are bringing more produce to markets just months after hurricanes devastated farms.
In Güira de Melena, a rural area south of Havana dotted with fields of onions, sweet potatoes, and plantains, a private farmer named Eddy Alfonso Sánchez describes his improving fortunes. "The payments now are very fast. We get better prices for our products," Alfonso, 31, says. The new prosperity has allowed him to add a Russian tractor to his vintage 1952 35-horsepower Ferguson model. He has also bought a car and a motorcycle.
In politics, Raúl's moves are more cautious. He authorized limited debate in the state-controlled media and elsewhere about economic problems, and newspapers have written about corruption and poor services. The State Department dismisses the moves as "small" and "very controlled," but here they have significance. "People are talking inside the system and in ways that you wouldn't hear five years ago," says Luís René Fernández Tabío, a political scientist at the University of Havana.
At the same time, the Communist Party and the Castros face no serious challenge. Dissidents, many jailed after a 2003 crackdown, are being released slowly, but they remain marginalized. Blogging appears to be the only area where criticism of the state is growing, despite sharp restrictions on Internet access.
Government media control has not meant freezing out American culture. Ask university students and others what they watch on television, and the answer includes American shows like Grey's Anatomy, House, The Sopranos, and Prison Break. Fernando Rojas Gutiérrez, a vice minister for culture, expresses the hope that Obama will restore the wider cultural exchanges scrapped by Bush. As for American culture, he says, "Our philosophy is quite different from that of the former socialist bloc. We never banned or prohibited it."
The most important development in Cuban politics, though, is that the transition from Fidel—formalized just over a year ago—has gone smoothly. In public, Raúl, 77, shows deference to Fidel, but there is little doubt who is calling the shots. This month, Raúl shook up his cabinet, firing two younger ministers often pegged as potential successors. It was disclosed that Raúl had consulted with Fidel, but Raúl has now put more of his own stamp on the government, in the process deepening the influence of the military, where he spent decades as defense minister.
Lacking Fidel's iconic status, Raúl has dispensed with the revolutionary theatrics of his brother. The younger Castro's speeches are measured in minutes, not hours. He seems to recognize that ideology here moves few and bores many. "Raúl's mission is to make practical changes to improve people's lives," says Rafael Hernandez, editor of the Cuban journal Tames.
Pragmatism will be required on both sides to overcome the deadlock between Cuba and the United States. It may be that any détente will have to begin modestly. The Obama administration may first try talking with Cuba about "neighborhood" issues like immigration, drug trafficking, and the environment. "This would be a good place to start. There's no political minefield to hold us or them back," reasons Philip Peters, a Cuba watcher at the Lexington Institute. That may not be the full breakthrough many have hoped for. But with half a century of mutual distrust and inertia to overcome, it may be the best that can be done.