The recent changes that have become apparent in Cuba after the closing of the Cold War had silently changed the country from its emblematic form known in the 60's into an island which is both moribund and lost in economic uncertainty. The Cuban economic model is now in constant modification while its decline in status in the world stage is more obvious.
It's worth recalling the economic history of Cuba over the most recent decades. That which its history shows us is the inevitability of its debilitated state after the disappearance of its prime patron in the Soviet Union. Undeniably, communist Cuba would have not achieved even its present state which out Soviet aid. Which allies in its own hemisphere, Cuba lacked much of any opportunities until the Soviet state realized the enclave after the failed Bay of Pigs invasion. Thus began a relationship and alliance that would benefit the red isle and would create the memorable image of socialist Cuba still held today.
El Período Especial
The intention of the Soviet Union was to maintain perhaps the only viable isle of resistance against the United States in the far west; Cuba served most simply as a political investment. Soviet statecrafters imposed artificially high minimum prices on Cuban sugar so that the fledgling island could maintain good terms of trade; thus the Castro government could export a relatively small portion of sugar and other quintessentially Cuban exports in exchange for petroleum and other commodities of the USSR. The soviet economy had the productivity to support this economic disequilibrium for the time being, but during the gradual decline of the regime in the 80's, its perspectives turned more bleak.
Cuba's introduction into the post-Cold War and post-soviet world is often called "the Special Period," with the specialness of said era stemming from a series of crippling economic crises caused by the new lack of soviet subsidies and by new energy problems. The constant influx of Russian oil at beneficially unequal terms was obviously lost with the fall of the USSR. This was not only a detriment to Cuban transportation, but it produced a dangerous scarcity of petrochemicals used in agriculture. The state could then only grow food "organically" without the use of modern technology and the result was harvests that were negligible and insufficient.
The gross domestic product of Cuba sped quickly downwards for years until 1993, with a gravity comparable to the Great Depression in the United States. A third of Cuba's total productivity was lost nearly immediately and along with 73% of its total international trade. This instability was translated into lessened calorie intake, with the United Nations reporting the 3,053 calories per capita consumed in 1989 reduced to only 2,099 in 1993. The traditional economic system of communist Cuba was revealed as being more and more unstable and more evidently dependent on the lost soviet aid. The real mystery is how the Castro regime could have been maintain for so long on life-support.
The government's response came gradually in the form of economic reforms that were more agreeable to market mechanisms. More foreign investment was accepted and economic rights as the rights to buy and sell some types of property were restored. For a time, American dollars came into use in the country and more foreign tourism was explicitly allowed.
The Bolivarian Age
Although the economic contraction of the Special Period had revealed a certain miserability in the 90's, a new ally of the Cuban government would come in the form of the Republic of Venezuela under the tutelage of Hugo Chávez Frías. After his ascent to power in the coup of 1999, Chávez, with a reborn interpretation of socialism put into action subsidies and economic aid to support the monument of the communist Cuban government.
The exchange between the two countries holds an intention similar to propaganda. The economic situation of Cuba is significantly more severe than that of Venezuela and thus, Venezuela has had to turn itself into a constant caretaker of the island. The pretension however is that there are equal terms between the two; it is touted that Venezuelan oil and Cuban medical technology put the two equal in exchange, but as it happens, Cuba receives more more goods of higher marketable value, creating a situation not unsimilar from the one during the Cold War.
The Chavist government has employed its profit from its membership in the OPEC to further simulate the economic performance of Cuba and other leftward allies. Cuba, Venezuela and other members of ALBA have mutually established a number of aid programs and treaties of "economic cooperation," which more often than not is a more socialist-friendly working of free trade treaties. The fruits of the Cuba-Venezuela relationship have enabled the revocation of some of the more liberal policies enacted in the 90's; the US dollar is no longer used as legal tender and many of the regulations on private property have been restored to their Col War states.
With all this said, the future of the Communist Party of Cuba depends strongly on the policies of Venezuela and of the other members of ALBA. The obvious problem is the near imminent death of Chávez and the related possibility of a political shift in the legislature that might make predictions of the country difficult. The United Socialist Party of Venezuela (mostly Chavist) has held onto the majority of the National Assembly since the "Bolivarian Revolution," yet it may be difficult to prognosticate how much the personalty cult of Chávez is necessary for the party's success. The opposition candidate for president has already announced that Cuba shall not receive the current level of subsidies if the Mesa de Unidad Democrática wins the election. Thus, the links established by Chávez may be in danger of being severed with any fall in socialist fervor.
Raúl and Liberalization
The youth and vibrancy of Raúl Casto with all probability are not sufficient to continue the great socialist experiment in the Caribbean. It could be said that the transfer of power to Raúl is a symbol of the reforms regretfully put into place for the good of pragmatism, but as well it is a face-saving act for the ideals of pure Revolution. Fidel Castro stood publicly and with a defiant attitude against a long line of American presidents and statesmen, yet now if he were personally to give his abdication in the form of backpedaling against the communist economic policies, the well-kept defiant image of Cuba might be shattered.
Thus the transformative figure needed in the current difficulties of the regime in incarnate in the character of Raúl, whose brief reign has seen the revitalization of the somewhat liberal tendencies imposed in the 90's. Obviously to save face in terms of ideological consistency, the reform is not worded as "liberal" or "privatizing" but "cuentrapropista," that is in the aid of people who labor for their own account, i.e. "entrepreneurs" as is said in the capitalist tongue.
Regulatory reorganization consists primarily in the reopening of private rights: entrepreneurs can now hold larger firms with several more employees. The expectation of increased remittances from Cuban-Americans provides an further incentive for reform. Although the government still imposes many state-dictated prices, such prices are often based on the studies of the actual market mechanisms of the black market. More and more the official policy has been to imitate freer markets under the official tutelage of the vanguard party.
As for the Future
Having noted all of this, it should be difficult to imagine the continuation of the Cuba known during the Cold War. The collapse of the regime seems inevitable without significant changes in the fundamental methods of the governance of the party.
Price dictation is becoming continually more unsustainable while officials have searched desperately to recalibrate the state market; free markets have become necessary, but still in a way illegal. In a sense, the prime error of Cuban leftist movements was the idea that all economic injustice and scarcity would evaporate with the elimination of the market economy and private property. Not only was this entirely in error, but in the idealist revolution, the capacity to mold a innovative society way lost.
Cuba, as an emblem and miracle of the revolutionary left had kept itself afloat not but economic production, but by attracting tribute from socialist stalwarts for its image as a brave sheep amongst imperialist wolves. Thus the Cuba-Venezuela relation is quite similar to the USSR-Cuba patronage. And now the doubts loom as to the future of the former with the possible coming death of Hugo Chávez.
Even now with constant Bolivarian aid, the circumstances in Cuba have still been poor enough to warrant moderate means of liberalization with the creation of a small private sector. An often common goal amongst socialist nations is that of autarky, the creation of a society without need of foreign aid or trade which comes so often with imperialism, but instead Cuba has become dependent on whatever socialist state may be willing to support it for the time being.
Perhaps the only real question seems to be what the nature of the seemingly inevitable reform shall be. There are no opposition parties in Cuba and media access is limited. Popular upheaval then might be difficult to see, although imaginable. Most of the political class is heavily aging with the younger generation thoroughly unrevolutionary. Still the Communist Party has indeed set in motion a process of reforms by its own volition, not unsimilar to the still nominally communist People's Republic of China, thus it remains to be seen which factor will actually shove the island into thoroughly liberal territory.