Raol Castro's Big Gamble.(Point of View)

He is betting that he can improve living standards while also keeping the lid on political dissent.

As predicted by many observers of the Cuban scene, including Brian Latell, author of "After Fidel," and this writer, the island's new president, Raol Castro, has hit the ground running--sort of. During his first weeks in office, though not necessarily in power, he has either implemented or announced important changes in the everyday lives of ordinary Cubans, while simultaneously retaining, and even strengthening, the limitations on political dissent. For instance, he cracked down on a demonstration in Havana last week of the Damas de Blanco, the spouses of the 75 political prisoners arrested in 2003.

This suggests Raol is applying the so-called Vietnamese solution: initiating promising economic reforms without offering an inkling of political change. It is also similar to what Mexicans back in the 1990s called perestroika without glasnost, when their country experienced significant economic changes under President Carlos Salinas but continued to face the same one-party political system that had ruled since the 1920s. Raol Castro is allowing Cubans, for the first time, to own cell phones, DVDs and computers (so long as they're not connected to the Internet), as well as access to hotels previously restricted to foreign tourists. Perhaps he will soon also allow them to leave the country without exit permits. True, it is something of an exaggeration to compare this even to Mexico's modest political liberalization of the '90s. Cuba's reforms hardly represent a major opening of the island's society, and scarcely resemble the type of transformations Mikhail Gorbachev initiated in the former Soviet Union. In fact, many argue that Raol's reforms are merely cosmetic, because they are limited to "exotic" consumer goods, and because the typical Cuban on the street lacks the resources to take advantage of them.

Nonetheless, the reforms should not be dismissed out of hand. No one really knows how much convertible currency average Cubans have stashed away under their mattresses, whether in dollars, euros or CUCs (freely exchangeable Cuban pesos, which are different from regular pesos). The long queues of people lining up to purchase cell phones on the first days the stores opened suggest that there may be far more money circulating in the island's underground economy than many, including the authorities, may have imagined. Whether this money comes from tips earned in the tourism industry, gifts brought or sent from Miami to family members on the island outside traceable channels or through Cubans moonlighting for foreign residents as drivers, housekeepers or other older but less respected professions in exchange for hard currency, Cubans' pent-up demands for these types of consumer goodies could well surpass expectations, as well as the authorities' capacity ...