Castro exit augurs economic, not political change

HAVANA (Reuters) - Cuban leader Fidel Castro's retirement from politics after nearly 50 years in power could usher in gradual economic reform but a move away from one-party communist rule will take longer, Cuba experts say.

Castro did not name his successor in Tuesday's announcement that he was relinquishing the positions of president and commander-in-chief. But his brother, Raul Castro, has been running the government during his 19-month absence and will likely stay in the job.

For some analysts, the transfer of power has already taken place in a seamless succession to the less-charismatic Raul Castro, ensuring stability on the island of 11 million people

"The transition occurred a year and a half ago. This is a step in the right direction to continue reforms that are badly needed for the economy," said an executive in Havana for a multinational company with a big stake in Cuba's future.

Since becoming acting president on July 31, 2006, after Fidel Castro fell ill, Raul Castro has encouraged open debate on Cuba's problems, ranging from low wages and housing shortages to the inefficiency of the socialist state and a thriving black market.

He has promised "structural changes" in agriculture and raised expectations among Cubans that they will be allowed to freely travel abroad and buy and sell their cars and homes.

Fidel Castro has remained in the public mind by writing reams of articles in the state media and most analysts believe Raul Castro is reluctant to advance reforms that dismantle his brother's vision of an egalitarian society.

"Fidel plans 'to fight as a soldier in the battle of ideas,' he says, and he will continue to write his newspaper commentaries," said Phil Peters, a Cuba expert at the Lexington Institute near Washington.

"But the force of his orthodox ideas will probably wane in a government that is seeking solutions to deep-seated economic problems created by excessive centralization and planning, not to mention lack of economic freedom," Peters said.

DEEP-SEATED CHANGES NOT EXPECTED

Cuban economists expect the government to announce economic measures in the months ahead, but not fundamental changes that would move Cuba's state-run economy toward a free-market economy.

Frank Mora, a political scientist at the National War College in Washington, said Fidel Castro's successors will have to head in a direction that is the antithesis of the way he believes Cuban society should be organized.

"He will not go into some sunset nor will he become that crazy uncle in the attic, but they are pushing him up those stairs," Mora said.

Even if Fidel Castro died, Cuba will not change in any big way.

"The Raulistas understand the dangers of going too far too fast with economic reform," he said.

Government opponents said the time had come to end the Communist Party's monopoly over politics, lift censorship and allow Cubans to speak out freely about the future.

"This is a crucial moment. Cuba wants change, the people want change," said Cuba's best-known dissident, Oswaldo Paya.

But Paya's closest collaborators have been in prison since a 2003 crackdown that broke Cuba's nascent dissident movement, leaving fractious groups that are infiltrated by the state.

U.S. President George W. Bush said he hoped Castro's exit would mark the beginning of a democratic transition in Cuba, and called for the freeing of some 230 political prisoners as a first step.

Cuba watchers, however, expect political change -- when it comes -- to emerge from within the one-party state.

In the end, it was illness and not opposition from the U.S. government that defeated Castro, who bowed out having survived the hostility of 10 administrations dating back to Eisenhower.

"Fidel Castro is leaving on his own terms, at a time of his choosing," Peters said.

"Neither invasion, nor covert operations, nor embargo, nor a steady strengthening of U.S. sanctions since 1992, nor the current administration's myriad efforts have forced him from office."

(Reporting by Anthony Boadle; editing by Angus MacSwan and Frances Kerry)

(For special coverage from Reuters on Castro's retirement, see: here)