Castro’s Power, Cuba’s Future Hinge on Continued Economic Bond With Soviets : Alliance: The two Communist nations rely on one another, observers say. Their ties could stymie attempts to overthrow the dictator.

Cheered by the collapse of communism in East Europe, Cuban exiles have been dancing in the streets of Miami in expectation of Fidel Castro’s imminent downfall. One militant anti-Castro group, Alpha-66, has even begun paramilitary training in the Everglades to join battle instantly if there is an armed uprising.

But Cubans in the streets of Havana, and experts here from both East and West, say that despite international pressures and increased domestic grumbling over the Communist country’s severe economic problems, the hemisphere’s most durable dictator may stay in power for years.

“His relationship with the Soviet Union is the key,” a Western diplomat said, noting that the Soviets’ annual $5.5-billion package of aid and credits has been the Havana government’s lifeline for the past three decades. “If that goes on, he goes on.”

A top Soviet diplomat, who is privately critical of the Castro regime but believes it is in no danger of collapse, said: “I don’t think it is possible that we will cut our aid to Cuba. We need their products. They need our assistance. It will go on.”

Not one expert interviewed recently in the course of a two-week visit to Havana saw any sign of a significant weakening in Soviet-Cuban ties. This despite a newly abrasive tone in the relationship, including stingingly critical articles and ominous grumblings about continued aid to Cuba in the Moscow press.

Nor have they detected the kind of restiveness in the military and among the people that would suggest that the regime is losing its grip. Among the specialists who talked with a reporter on the condition of anonymity were diplomats from East and West Europe, Latin and North America, and the Soviet Union.

None foresaw a Caribbean copy of East Europe’s experience, but all agreed that even with continued Soviet aid, Cuba faces hard times that will keep the country on a tough austerity diet for as long as the U.S. embargo lasts. The main problems today, they said, are a shortage of hard currency, brought on by the country’s almost total reliance on trade in nonconvertible rubles and barter with the Soviets and the former East Bloc countries, and sluggishness and mismanagement in Cuba’s centrally controlled economy.

Castro and other government officials have been candid about the grim prospects, which they said will become acute in 1991, when trade agreements expire and Cuba must begin paying hard currency for spare parts and other vital goods from its suppliers in East Europe.

“We don’t deny that when our economic ties with Eastern Europe are torn down we are going to face some problems,” said Jorge Gomez Barata, a top Castro adviser in the Central Committee of the Cuban Communist Party. “But we will be able to continue without disorder.”

While barter and ruble-based trade with the Soviets is expected to continue, Castro and the government-run press have warned frequently of the need for belt-tightening. Gomez Barata and other senior officials emphasize that they have reordered government priorities to emphasize greater self-sufficiency in industry and agriculture and a crash program to develop tourism and other hard-currency earners.

On the streets of Havana, there is ample evidence that hard times already are here. Long lines form quickly at food markets when sparse supplies of imported pork, beef and chicken arrive from hard-currency countries such as Brazil. A running joke heard in food lines at several Havana markets has it that “if there’s another revolution it won’t be over ideology, it’ll be over a chicken breast.”

As they queue for food, people complain openly about recent increases in the price of bread and eggs, both in short supply since December when the Soviets delayed a bonus shipment of wheat and feed grains and the Cuban larder ran dry.

A Soviet Embassy official said wheat had routinely been sent a month or more in advance of its committed due date, so that Cuba, in effect, received a bonus of an extra month’s wheat supply after each year’s commitment was fulfilled. The expectation was that Cuba would stockpile the bonus grain against a rainy day.

The rainy day came in December, when, facing problems at home and with their formal 1989 commitment fulfilled, the Soviets withheld the advance shipment.

“We’ve been telling them all along they should have prepared for it,” a Soviet economic specialist complained. “It is impossible to live without at least a minimum stockpile. It’s all very frustrating.”

Cuban economist Eugenio Balari, who directs the government’s think tank on domestic consumption, acknowledged: “There was a certain amount of guilt on our side. We should have stockpiled so we had a cushion. As it was, we practically had to unload the wheat from the boats and truck it directly to the bakers when it came. Now we’ve increased the price of bread and eggs, not for the money but for conservation, so we will have a cushion. Once we have a stockpile, maybe we will lower the prices again.”

Although one hears grumbling in the food lines, none of the foreign experts here believe that the public’s unhappiness even borders on the kind of discontent that has been responsible for bread riots and rebellion in many other Third World countries.

“The average Cuban may be eating a bland diet, but even with shortages, he is better fed than most other Latin Americans,” a Scandinavian diplomat said.

Another bonus feature of Soviet-Cuban trade has been a liberal flow of subsidized Soviet oil, about 20% to 25% more than enough to meet Cuba’s domestic needs. Until now, the Castro government has routinely sold the surplus oil for desperately needed hard currency. As recently as 1985, the last year Cuba reported its oil trade figures, the re-export of Soviet oil earned Havana a tidy $621 million.

Since then, re-export earnings have gone unreported, leading some specialists to conclude that the bonus oil flow has slowed or even ended. But a Soviet diplomat, without revealing figures, said the oil flow continues in excess of Cuba’s needs.

“The Russians may cut back somewhat, but it’s not in their interest to cut Cuba down to starvation rations,” another diplomat said.

The Soviet economic specialist agreed, saying: “There’s no question that we need these products. In the U.S.S.R., we produce about 8 to 9 million tons of sugar a year and have to buy 4 million tons from Cuba to make up the shortfall. The significance to us of the Cuban sugar is considerable. Nickel is vital for our industry. And Cuba’s citrus fruits are very important to us.”

But he hinted at harder bargaining by a Soviet delegation now in Havana to begin negotiating new trade terms to replace the five-year cooperation agreement that expires at the end of this year. Because of the use of barter and overvalued rubles and Cuban pesos, it is hard to calculate the extent of the Soviet subsidy to the Castro regime. But experts say the Soviets pay more than twice the world price for Cuban sugar and similarly unrealistic prices for raw materials and citrus fruits.

Thus Cuba may soon be getting less nourishment from the Soviets than it has in the past, but the experts doubt that any future cutback will be sharp enough to endanger the Castro government. Even if Soviet aid dropped to only $3 billion a year, it would suffice to keep Castro’s troubled economic machine running, predicted Prof. Philip Brenner, a Cuba specialist at American University in Washington.

Like many diplomatic specialists here, Brenner predicted that Soviet aid will continue and that Castro might survive as Cuba’s leader for another decade.

“Cuba is essential to the Soviet Union’s image as a superpower,” Brenner said. “While it is costly, there are certain benefits, both military and civil.”

He cited in particular Moscow’s largest electronic eavesdropping network outside the Soviet Union and the continued use of Cuban bases for aerial surveillance and naval support.

Most of the experts here believe that Cuba’s military importance to the Soviets has waned, except, as one said, “as the last nice tropical outpost for KGB and army officers to do temporary duty.” But they said Cuba’s military importance is not the chief element of the strategic equation in Moscow.

“It’s not the strategic military value but the broader geopolitical value that counts,” one said. “This is one of the Soviets’ last claims to being a great power. With East Germany gone, Cuba is their most important ally.”

As a result, he said, Moscow cannot afford to endanger Castro’s grip on power by undercutting him too severely in economic terms.

“The regime’s arms are still strong, and the army is loyal to Fidel,” a European diplomat said. “And he still exercises a moral authority unlike that of any of the fallen East European Communist leaders. As long as the military remains behind him, he will be able to repress any challenge to his power.”