Dollars Buy Castro Breathing Room : Cuba: Consumer trade in goods and services has eased tensions somewhat, buying time for the limping revolution.

Given the Castro regime’s proclivity for making matters worse, and given the sometimes atrocious nature of scarcities and deprivation in Cuba today, it seems brash or imprudent to suggest that the situation on the island is improving. And yet several factors indicate that tensions have dropped, and that the economic outlook has changed slightly for the better since last summer. Three shifts in Cuban life explain this somewhat surprising turn of events.

First is the return of the peasant markets, now known as agro-mercados, and the opening of markets for individually manufactured crafts and goods. Food now can be obtained outside the rationing system and the black market; not everything is always available and some products vanish quickly, but fruit and vegetables, some meat, chicken and eggs and staples such as rice and potatoes can be purchased, a major improvement over the past few years.

Critics in Havana argue, not without reason, that prices at the peasant markets are outrageous: A pound of anything can cost the equivalent of half a week’s minimum wage, or 20% of the average wage. And the markets encourage price-gouging and hoarding. But if one views the price issue in dollars, the perspective is quite different. In dollars, at the unofficial rate of exchange, the goods available at the agro-mercados are affordable, as are services provided by the newly authorized, so-called independent professions, such as plumbers and auto mechanics.

Here lies the second factor contributing to the slight Cuban upturn: the U.S. dollar.

Most of the dollars held by ordinary Cubans can be traced to three points of origin: remittances from Miami (the Clinton Administration’s restrictions notwithstanding); tourism, benefiting both the state, which receives payment for air fares and hotels, and society, which rakes in cash for everything from art to prostitution; and spending by the burgeoning foreign non-tourist community in Havana.

The market works: Between the availability of dollars and the loosening of restrictions on business, demand has generated its own supply. The most convincing sign is the rise in the value of the Cuban peso, from more than 100 to the dollar a few months back to 40 to 1 today.

No doubt, the growing circulation of dollars has dealt a blow to what is left of the Cuban Revolution. Citizens are increasingly divided into two groups: those with access to dollars, thanks to family in Florida, wares or talents to peddle or jobs in certain sectors, and those lacking such access. Inequality, the bane of all Latin American societies, and the reduction of which has been the pride and joy of Fidel Castro’s experiment, has returned to Cuba, with a vengeance. But it has accompanied a rise in living standards for some Cubans, a minority, but a substantial one.

Castro’s uncanny and legendary political skill underlies the third and last factor that explains why life and politics are less tense in Cuba today than months ago. The rafter crisis of last August was no minor affair: Once again, the revolutionary regime projected to the world the dismal spectacle of a population willing to risk anything--sharks, storms, exposure, life itself--to leave a Caribbean inferno. Yet, as so many times in the past--in 1959, with the exodus of the Cuban professional elite; in the early ‘60s, through the Camaguey airlift; in 1988, thanks to the Mariel boat exiles--Castro put to good use the theory that to leave is to forsake opposition, political struggle and dissidence. The tens of thousands who took to the sea in August were not opposition leaders, but they did include many of the island’s most fiercely discontent. As Castro cornered the Clinton Administration into reopening a minimal legal emigration safety valve, the rafters’ sea-lift gave others hope that they, too, soon would be able to leave Cuba for the land of milk and honey across the Florida Straits.

This expectation, of course, makes little rational sense. But Castro’s genius always has been to sense and tap the passions and the dreams of the Cuban people. He hasn’t lost his touch, even if the price of keeping it has stretched well beyond the bounds of any democratic acceptance or accountability. What the loosened restrictions have given Castro is what he needs most: time to outlast another American President, time to recover from the loss of his Soviet subsidy, time to restructure the Cuban economy before popular discontent forces open the political system and sweeps away the last vestiges of revolutionary rule.

Fidel Castro just may have bought himself breathing room, no small feat after 40 years of single-handed political survival.