In Subtle Campaign, Cuba Seeks Better Ties With U.S. : Caribbean: Havana also makes gestures to exiles. It hopes for an easing of a crippling trade embargo.

Beset by a withering economy, Cuba is reaching out to two of its worst enemies for help: Cuban American exiles and the U.S. government.

According to diplomats and political experts here, Fidel Castro’s government is in the midst of a subtle campaign to isolate or split the exile community.

At the same time, it is playing to elements of the Clinton Administration seen as potentially open-minded about the prospects of better Havana-Washington relations.

The outlines of the Cuban strategy began to take shape this past weekend during a rare conference here with about 200 exiles.

Simply by holding meetings with people who fled the Castro regime, the government was fostering a sense of accommodation.

But it also announced reforms in immigration regulations aimed at removing the red tape that impedes travel to and from the island.

The measures included removing a five-year waiting period before a Cuban exile can return; creating a high-level office within the Foreign Ministry to deal exclusively with exile immigration matters; permitting the children of exiles to attend school in Cuba, and eliminating expensive fees charged exiles who return for visits.

The changes have two immediate objectives, said a diplomat from a country with relatively cordial relations with Castro.

“First is to split the exiles and weaken the hold of the foundation,” he said in a reference to the Cuban-American National Foundation, a virulently anti-Castro organization based in Miami. The foundation is perceived widely as influencing, if not dominating, U.S. Cuba policy.

“Next,” the diplomat said, “is the hope that these so-called humanitarian gestures will give moderates in the (Clinton) Administration an opportunity and rationale for easing the pressure on Cuba.”

The ultimate goal, and one acknowledged by Cuban officials, is the easing, if not total lifting, of the 30-year-old U.S. trade embargo that the Castro government blames for much of the island’s wrecked economy and for the increasingly visible misery of nearly the entire population of 10 million.

“We would have immediate relief in terms of investment, tourism, international aid and credit,” said Ariel Ricardo, a Foreign Ministry official.

At the same time, he said, there is no question that lifting the embargo would promote political and economic changes inside Cuba.

Therein lies the real danger, the diplomats and other experts say. Any liberalization of Cuba’s Communist economic program and relaxation of the repressive political system would begin a process that Castro might not be able to control.

That such a threat exists was seen in the public reaction to the existence of the meeting with the exiles, a three-day session that ended Sunday.

Even though the agenda supposedly was limited to discussions of immigration matters, many ordinary Cubans held out hope that the conference would bring immediate relief from their impoverishment.

“Castro created immediate expectations of immediate improvements here in Cuba,” the diplomat said.

“Castro was frightened by what happened to the Soviet Union and the other (Communist) countries that lost power when they tried to reform,” a Western diplomat said. “He thought that he could somehow survive either through willpower or by hoping something would just work out. He’s wrong.”

The fact is, all the sources agreed, that Cuba is doomed economically. It has almost no way of earning the foreign currency needed for recovery. It lost its foreign aid when the Communist world collapsed four years ago, and its only viable export, sugar, will fall far short again this year of meeting even minimum needs.

As a result, the country has almost no industrial production, it is nearly out of fuel, electricity and even food, and the government is about to eliminate tens of thousands of jobs.

“Right now,” a foreign economic expert said, “Cuba is in danger of falling to the level of the poorest countries in the region.”

On the surface, the immigration measures will have little real impact beyond the exile communities themselves, a Western diplomat said, certainly not enough to cause a change in the anti-Castro nature of U.S. policy.

Still, “these are important steps,” said Alicia Torres, a prominent Miami exile who attended the conference, the first such meeting since 1978, “because it accepts the idea of freedom of travel,” a powerfully emotional issue among the exiles.

The Cubans hope that the measures announced here will have such an impact that large numbers of the estimated 1.5 million Cubans living in the United States will begin to question the rigid positions of the Cuban-American National Foundation, which demands the total removal of Castro and all remnants of his regime before accepting any easing of U.S. policy.

In the view of some Western diplomats here, the Cubans are deluding themselves.

“This won’t create any momentum toward lifting the embargo,” one diplomat said.