VZCZCXYZ0000
OO RUEHWEB

DE RUEHUB #0195/01 0891909
ZNR UUUUU ZZH
O 301909Z MAR 09
FM USINT HAVANA
TO SECSTATE WASHDC IMMEDIATE 4277

UNCLAS HAVANA 000195 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: OREP PGOV PREL PINR CU
SUBJECT: SCENESETTER FOR VISIT OF CODEL LEE/KILPATRICK 
 
¶1.  (SBU) SUMMARY:  Codel Lee/Kilpatrick will be arriving in 
Cuba at a time of slow motion and sometimes contradictory 
change.  Raul Castro has now consolidated his power.  The 
Cuban economy has many serious weaknesses that can only be 
addressed through bold, innovative, and immediate action. 
There is, however, no indication that the current government 
intends to take such action.  End Summary 
 
CHANGES IN CUBA 
 
¶2.  (SBU)  Following cabinet and other leadership changes in 
early March of this year, the ruling inner circle is now made 
up entirely of individuals who are known for their loyalty to 
Raul Castro and/or their experience as military officers. 
The result is a much older governing group, but one which is 
likely to respond well to Raul Castro when he demands greater 
discipline and efficiency within the government and society 
alike.  The reforms already announced by the Raul Castro 
government, and any more that are expected in the short term, 
will likely follow an already established  pattern.  They 
will tend to decentralize activities and devolve decision 
making tasks to the provincial and municipal levels.  To the 
extent possible they will reduce the number of steps that 
need to be taken within the government to achieve a desired 
goal.  They will not, however, seek to change the fundamental 
nature of the current Cuban system of state control over the 
means of production and distribution.  As such, they are 
unlikely to be able to address the contradictions within the 
system which tended to make it inefficient in the first 
place.  Execution of policy will be decentralized, but 
development of policy will remain the sole purview of the 
inner governing circle.  Fidel Castro continues to wield 
significant moral authority through his occasional 
"Reflexiones" pieces in the official press.  Many of these 
pieces appear to be more of a hindrance to action by the GOC 
under Raul than of any support.  The true state of Fidel's 
health is unknown.  The next possibility for change in Cuba 
may come with the Sixth Communist Party Congress which is 
supposed to take place later in 2009.  If Raul has any real 
reforms up his sleeve, the PCC Congress may give him the 
political legitimacy to carry them through. 
 
ECONOMIC AND POLITICAL SITUATION 
 
¶3.  (SBU) Economically, Cuba is not being affected directly 
by the world financial crisis since it does not participate 
in the world financial network in any significant way. 
However, the subsidiary effects of the financial crisis will 
probably begin to be felt later in 2009, as revenues from the 
sale of Cuba's principal export product--nickel--remain weak 
as world demand for stainless steel and other products 
requiring nickel declines.  The world financial crisis will 
also probably hit Cuba's tourism sector hard as Europeans in 
particular have less to spend on foreign travel.  Finally, 
the steep decline in the price of petroleum will make it more 
difficult for Cuba's primary patron state, Venezuela, to 
continue to subsidize Cuban petroleum needs or provide other 
financial support.  Each one of these problems alone would 
create a significant challenge for the GOC, but added to them 
the effects of the three major hurricanes that struck Cuba in 
late 2008 and caused damage estimated at almost 20 percent of 
GDP must be considered.  The GOC has not been able to do 
anything significant to repair the damage done by the 
hurricanes.   Cuba's already poor credit history keeps it 
from attracting the financing necessary to carry out 
hurricane repair work and advance the economy at the same 
time, especially in a world atmosphere of much tighter 
credit.  The GOC under Raul has shown no inclination to open 
up the moribund political system in Cuba.  Civil society 
groups continue to try to organize, but effective GOC 
repression of their activities keeps them on the margins. 
 
FOREIGN POLICY 
 
¶4. (SBU) GOC foreign policy has focused on a largely 
successful effort to build support for its position vis a vis 
the U.S. government among other countries in the world, 
especially among the Europeans and Latin Americans. 
Regarding the U.S. itself, at the moment the GOC appears to 
be taking a wait and see attitude about the Obama 
administration.  The GOC may hope for some adjustments in 
U.S. policy toward Cuba that will make its life easier, but 
it should not be expected to initiate any positive steps in 
that direction. 
 
¶5.  (SBU) We have taken several steps to broaden contacts 
with the people of Cuba.  In addition to the legislated 
changes on travel signed into law by the President, Cuba is 
being included for the first time in two scholarship programs 
for study in the United States.  We also have offered to 
relax the travel restrictions on our respective interest 
sections and Cuba's mission to the United Nations, and await 
a GOC response. 
FARRAR