Castro to speak at birthplace of Cuba revolution

By Jeff Franks

HAVANA (Reuters) - President Raul Castro returns to the birthplace of the Cuban revolution this week for a speech that will be watched for news on what some consider another, quieter revolution now taking place on the socialist island.

Instead of the armed rebellion that brought his brother Fidel Castro to power in 1959, Raul Castro has launched reforms aimed at revitalizing Cuba's state-run economy while keeping it under the control of the ruling Communist Party.

His changes have raised hopes among Cubans and speculation about the depth and breadth of a transition that began in earnest when he formally replaced his brother as president in a February vote by the National Assembly.

Castro's speech, to be given in the eastern city of Santiago on Saturday, will mark the 55th anniversary of the July 26, 1953 rebel assault which Fidel Castro led on the nearby Moncada army barracks.

The attack was a military disaster, with many rebels killed, but it began the revolution that ended with the elder Castro toppling U.S.-backed dictator Fulgencio Batista.

The annual July 26 speech is the most important of the year for Cuba's leader, and will be the second for Raul Castro, who provisionally took charge when Fidel Castro underwent intestinal surgery in 2006 that forced him to step aside.

Fidel Castro's last public appearance was his speech on July 26, 2006.

Since taking over, the 77-year-old Raul Castro has lifted caps on wages and restrictions on goods including cell phones and computers, and promised to eliminate "excessive prohibitions" to productivity.

Broader changes are underway in agriculture, where Castro has decentralized decision-making and distribution, granted additional land for private farmers and cooperatives and is now offering them credits to obtain farm machinery.

His steps away from hard-line socialist doctrine of the past have heightened speculation that he wants to follow China's lead and steer Cuba toward market socialism. Officials deny it, but Castro has already pushed for better management and productivity and more money for good workers.

"Socialism means social justice and equality -- but equality of rights, of opportunities, not income," he said in a recent speech to the National Assembly.

Cuba watchers will be listening to his speech in Santiago for indications of Castro's next steps, how far he wants to go with reforms and how fast he hopes to get there.

So far, the pace has been deliberate and the biggest changes mostly in agriculture, but many believe wider reform is needed to improve the economy and the lives of Cubans.

"I'm looking to see what he does with the rest of the economy. He has diagnosed big problems and prescribed small measures that don't measure up to Cuba's challenges, especially when it comes to generating jobs and ending income equality," said Cuba expert Phil Peters at the Lexington Institute in Virginia.

STANDING IN THE WAY?