New leader in Cuba: What's in store after the Castros?

Analysts say little will change as Miguel Diaz-Canel takes over the presidency in Cuba. The country's economy is in desperate need of reform and US-Cuba relations are on the rocks after a brief honeymoon.

It has been nearly 60 years since Fidel and Raul Castro descended from the Sierra Maestra mountains with a band of communist guerrillas to oust US-backed authoritarian President Fulgencio Batista.

Since then, Cubans have known nothing but the Castros at the helm of power in a one-party communist state, first with Fidel, then for the past decade, with 86-year-old Raul after his older brother fell ill and died in 2016. On Thursday, that changed as Vice President Miguel Diaz-Canel, 57, took over as president.

A trained engineer who worked his way up the party apparatus, Diaz-Canel is the first Cuban leader born after the 1959 Communist revolution. But analysts question if Diaz-Canel will implement significant changes, including badly needed economic reforms and the lifting of political restrictions.

Miguel Diaz-Canel is the first Cuban leader born after the revolution

"We should not expect dramatic policy changes as a result of Diaz-Canel's succession," said William LeoGrande, a professor at American University specializing in Cuban politics. "If he was not in substantial agreement with Raul Castro's policy agenda, he would not be the designated successor."

Eduardo Gamarra, a professor of Latin American politics at Florida International University in Miami, said Diaz-Canel is neither a progressive nor liberalizing politician. "He has no interest in rushing through any kind of opening that might lead to a more liberal regime," he said.

Read moreThe Summit of the Americas warns Venezuela about upcoming election

Raul is expected to remain head of the Communist Party until 2021. While that means he could hold significant sway over policy, it may also help Diaz-Canel if he decides to pursue economic reforms opposed by entrenched interests in the government and party bureaucracies.

"If Diaz-Canel makes a bold or difficult but good decision, Raul can say, 'I support him,' and help smooth the way," said Jorge Dominguez, a prominent Cuba expert at Harvard University.

After Castro: A snapshot from Cuba

Afternoon on the Prado Promenade

At the Paseo del Prado, beside the central square, hotels line the streets. El Capitolio, the seat of the government until the Cuban Revolution in 1959, has now become a place for social gatherings, where Cubans meet each other to exchange gossip and play games.

After Castro: A snapshot from Cuba

New Cuban fighters

Children have their first lesson in Cuban boxing during a training session at Rafael Trejo Boxing School in the Habana Vieja neighborhood.

After Castro: A snapshot from Cuba

The florist of Vedado

"The Cuban government made my dream to be a nurse and help people a reality," said Mirta Gomez, a retired nurse. Before the revolution, educational opportunities in Cuba were reserved for the elite. Once Castro came into power, Gomez was able to study nursing. She spent most of her career at Havana's Central Hospital. She still helps out and trains new nurses. Her new hobby is selling flowers.

After Castro: A snapshot from Cuba

Cuba rising

Across Havana, buildings are being renovated to make way for the return of American tourism. As the government authorizes certain private business, hotels and restaurants are leading the construction boom. This building will be a group of "casas particulieres," similar to a bed and breakfast, in the Vedado neighborhood. Cubans need to apply for a license to rent rooms in their homes to foreigners.

After Castro: A snapshot from Cuba

The reader

Francisco Arrosa, 75, reads Granma, the Communist Party newspaper, as he waits for new clients. "We are socialists. What Fidel and the Revolution started, the Cuban people will keep," the car mechanic said. "We may not be wealthy, but every Cuban has access to food, education, healthcare, and housing. These things are the revolution."

After Castro: A snapshot from Cuba

Havana for beginners

Tourists take photos from an old American car driving through Plaza Central. With the decades-long US embargo, vehicles from the 1950s and 1960s were the only option for Cubans for many years. Now, Korean, Chinese, and some European brands are entering the island's market. The old cars continue to be used as taxis or for tourism.

After Castro: A snapshot from Cuba

The internet generation

Along one of Havana's most popular boardwalks, Cubans can check their e-mail or read government-approved websites. In 2015, the Cuban government opened the first public wi-fi hotspots in 35 public locations. However, the internet is one of the most censored in the world and essentially unavailable in private homes.

After Castro: A snapshot from Cuba

Keeping the story alive

Canadians make up the largest percentage of Cuba's tourists, but with the resumption of flights and cruise ships from the US, the number of US visitors is expected to surge this year.

After Castro: A snapshot from Cuba

Fishermen of Malacon

As an island nation, fishing plays an important role in Cuban culture, including in its cuisine. Generation after generation have made their livelihood on the practice and fish is one of Cuba's biggest exports. US tourism companies already have their eyes on the country's pristine coastal waters.

Kicking the can down the road: Monetary reform

When Raul came to power in 2008, he implemented a number of gradual economic reforms, but was either unable or unwilling to eliminate a dual-currency system and multiple exchange rates despite his calls to do so. The system has one type of Cuban peso worth 1:24 against the dollar for ordinary Cubans, who receive subsidies, and another, the CUC, that is 1:1 for state-run firms, giving those with access to the CUC significant hard currency advantages.

"Diaz-Canel's likely policy focus is what should be Cuba's monetary and exchange-rate policy," said Dominguez. "For economic management, it is imperative to unify the currencies and the exchange rates."

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20 Cuban pesos (top) are worth about $.04, while 20 CUC are worth $20

Talking about monetary problems but doing nothing about them "would doom the Cuban economy to yet another decade of economic stagnation, one of the least attractive features of Raul's legacy," he added.

Reforming the monetary system would be redistributive, creating winners and losers that could unleash political uncertainty.

"Resistance to the reforms comes in part from fear of its political ramifications, as well as the self-interest of bureaucrats," said LeoGrande. 

But both LeoGrande and Dominguez said that the military, which controls everything from state-farms to factories and hotels, supports economic reforms and would likely benefit. 

Read moreVenezuela: UN agency warns of humanitarian 'catastrophe'

Meanwhile, the urgency of economic reform and attracting investment comes as Venezuela's dual political and economic crises have hit Cuba hard. As Havana's main political ally in the Americas, the socialist regime of Venezuela has significantly cut back subsidized oil shipments in a blow to Cuba's economy.

Relations with outside world

Diaz-Canel assumes power at a time when relations with the United States have plummeted following a historic rapprochement under the Obama administration. The two countries re-established diplomatic relations in 2015, despite a continued decades-long US trade embargo that can only be lifted by Congress. The US-Cuba opening helped contribute to a more than doubling of tourist numbers and an increase in remittances.

The Trump administration, however, seems intent on rolling back those policies. It has already reinstated some travel and commercial restrictions, in part due to what the White House says are concerns over human rights, political prisoners and the absence of free and fair elections.

Adding to tensions, a series of mysterious "sonic attacks" in 2016 and 2017 sickened at least 20 US diplomats in Havana. The alleged attacks, the origin of which still remains uncertain, prompted the US to remove most of its diplomatic staff from its embassy and expel 15 Cuban diplomats from its embassy in Washington.

Read more: Mystery illness in Cuba strikes down American tourists, embassy staff 

The USA and Cuba - a troubled history

The brothel of the USA

Before the revolution, for many Americans Cuba was synonymous with gambling, night clubs and other subversive pleasures. Here, Americans are enjoying a dinner at the Havana Yacht Club. "Cuba was the brothel of the USA," political analyst Karl E. Meyer said later. But for its citizens, Fulgencio Batista's dictatorship mainly meant stagnation, unemployment and poverty.

The USA and Cuba - a troubled history

Last stop Moscow

A guerilla army of several hundred men was enough to help Fidel Castro (in the jeep, center) topple the regime. On January 1 1959, Batista fled, and the rebels took over Havana. The USA immediately imposed sanctions, which were tightened in the following years. Cuba's leadership developed ties with the Soviet Union.

The USA and Cuba - a troubled history

Debacle in camoflage

In 1961, a troop of soldiers made up of exiled Cubans, with the help of the US intelligence service the CIA, attempted to overthrow the regime. The attempt was a fiasco: Cuba's revolutionary army managed to stop the Bay of Pigs Invasion within three days, having captured more than 1000 prisoners.

The USA and Cuba - a troubled history

A close shave

The shattered relationship between the US and Cuba meant the Soviet Union had a base just 90 miles (144km) from the US at their disposal. The Kremlin wanted to station missiles there – and in 1962 the Cuban Missile Crisis led the world to the brink of a nuclear war. The USA used a naval blockade to force the removal of the missiles.

The USA and Cuba - a troubled history

Unique in Latin America

The Soviet Union invested in the new relationship, massively supporting the island for decades – for instance with crude oil, which Cuba re-exported to acquire foreign currency. This way, Cuba was able to establish exemplary health and education systems.

The USA and Cuba - a troubled history

The exodus of the Marielitos

In 1980, Fidel Castro allowed volunteers to leave for the USA from Cuba's Mariel harbor. Around 125,000 Cubans arrived in Florida. Among them were people who had been released from jails and psychiatric wards by the Cuban government shortly before. The crime rate in Miami increased dramatically.

The USA and Cuba - a troubled history

Struggling economy

Over decades, the US embargo severely restricted the Cuban economy. In addition to this, there was no economic diversification: sugar cane - being harvested in this photo - remained the main export of the island after the revolution. Cuba was completely dependent on help from the Soviet Union - just how dependent became apparent after 1990.

The USA and Cuba - a troubled history

The Special Period in Time of Peace

With the collapse of the Soviet Union came the collapse of the Cuban economy. Without help from the East, the Cubans had nothing. In 1990, Castro announced the "Período especial." The lack of petrol and replacement parts for cars meant ox carts came back into daily use. Since the end of the 1990s, Venezuela has supplied Cuba with discounted oil.

The USA and Cuba - a troubled history

Changing sanctions

Since 1993, the United Nations General Assembly has been calling for the US to end its embargo policy. The US has continually changed the levels of restrictions. In 1996, for example, the embargo restrictions were tightened; in 1999 they were eased again. In 2004, President George W. Bush - seen here on a poster in Havana - increased the sanctions.

The USA and Cuba - a troubled history

A new chapter?

Now the USA and Cuba seem to be starting a new chapter. A US embassy should be reopened in Havana, travel and trade restrictions are to be relaxed. Cuba's president Raul Castro (seen here on the TV screen) announced the changes at the same time as US President Barack Obama.

Trump's approach is backed by Republican hardliners, especially Cuban-American politicians such as Senator Marco Rubio in the key swing state of Florida, where much of the anti-Castro Cuban diaspora lives. As a result, Trump's policy is also aimed at serving his voter base in Florida and paying back political debts.

"Diaz-Canel is not going to be very welcoming to any initiatives coming from hardline Cuban Americans" on issues such as civil society and democracy, said Gamarra. "The hardliners in the US will make it easier for him to take that position."

He added that Cuba has become closer economically and politically to Russia and China, countries that don't tie investment to questions of human rights and democracy.

Read moreRussia again casts a long shadow over Cuba

However, Dominguez pointed out that while Cuba is not Trump's top priority, relations look worse than they really are.

"The US and Cuban government retain close cooperation on law enforcement, the Coast Guards, migration, the Guantanamo base borders, hurricane tracking, oceanographic research cooperation, civil aviation and hundreds of thousands of people are still traveling from the United States to Cuba," he said. "All of that is under the cover of gruff, grumpy, harsh rhetoric. That's the political bargain Trump has struck: let the good practical policy legacy of Obama continue, but change the rhetoric."

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