Castro says Cuba's economic model is flawed

WASHINGTON — Fidel Castro's comment to a visiting U.S. journalist that Cuba's economic system doesn't work is the strongest signal yet that the communist island is looking to private enterprise and foreign investment.

"The Cuban model doesn't even work for us anymore," Castro told journalist Jeffrey Goldberg after being asked if he believed it was still worth exporting, according to a post Wednesday on The Atlantic magazine's website. Castro didn't elaborate, Goldberg said.

Since re-entering the public sphere in July after a life-threatening illness, statements by the 84-year-old former president have focused on international affairs. His silence on domestic issues signals he is willing to allow his brother Raul to reduce state control of the economy, said Tomas Bilbao, executive director of the Washington, D.C.-based Cuba Study Group, which promotes free-market reforms of Cuba's economy.

"These are pragmatic admissions from an idealist," Bilbao said.

Raul Castro, 79, has initiated measures to open the economy since being handed power by his brother in 2006. The moves come as the economy suffers its worst slide since the former Soviet Union ended its support in the 1990s, Bilbao said.

In an Aug. 1 speech to the National Assembly, Raul Castro said the government will allow more citizens to work for themselves. He warned that some government workers will lose their jobs to reduce inefficiency.

Cubans now can run private taxi companies, own cellphones and operate barbershops. The state still controls 90 percent of the economy, paying workers salaries of about $20 a month in addition to free rationed food staples and health care, and nearly free housing and transportation.

President Obama, in an April 2009 memorandum lifting travel restrictions to Cuba for Cuban Americans, also directed the U.S. government to allow companies to provide communications services to the island, saying it would "decrease dependency of the Cuban people on the Castro regime."

Still, the government's rhetoric under Obama has remained the same as under George W. Bush, which discourages Cuba from opening the economy faster, said Larry Birns, director of the Washington-based Council on Hemispheric Affairs, a research group.

"Taken all together, we are witnessing what could be the most transformative moment in Cuba's relationship with the outside world," Birns said. "The Obama administration would be foolish not to engage in an effort at rapprochement between the U.S. and Cuba."