A new revolution is happening unnoticed in one of the world's last communist strongholds. In the land of salsa, rum, and Fidel Castro, a significant shift in economic ideology is transforming the future of the island: Cuba is rapidly diversifying its economy and giving priority to developing a world-class information technology (IT) sector. Considering the island's competitive advantages--proximity to the United States, a highly literate population, and the lowest wages for skilled labor in the Western Hemisphere--Cuba could become the digital hub between North and South America.

With 11 million people and more land area than any other Caribbean island, Cuba has been economically and politically isolated from its giant neighbor just 90 miles to the north for the past half-century. However, under the leadership of one of the staunchest communists of the 20th century, Fidel Castro, Cuba is beginning to subtly reorient its economy for the 21st century. The 74-year-old leader and his still officially communist government have adopted a program called "Entrepreneurial Upgrading" that aims to center the country's economic regeneration on technology, markets, and new capital.

Within the past few years, Castro has quietly retired the old revolutionaries who followed Moscow's defunct economic model, replacing them with a new generation of cabinet ministers and senior government officials who seem to have swapped Karl Marx for Adam Smith. The average age of the members of the Cuban National Assembly is 40; the Foreign Minister is 35 years old, and the Minister of Foreign Investment and Economic Cooperation is a 50-year-old woman. These leaders of a new generation read The Wall Street Journal and The Economist and roll their eyes at stilted Marxist dialectic.

"Entrepreneurial Upgrading is the most in-depth, extensive, and transcendent change that has taken place in the Cuban economy," says Cuban Vice President Carlos Lace, architect of the economic reforms. The program requires State-Owned Enterprises (SOEs) to be self-supporting, capable of creating their own production plans and administering their own financial, material, and human resources. These policies represent a truly revolutionary departure from the old socialist command economy, where decisions always came from above. Granting autonomy to SOEs may be the first step toward privatization, a move that is still considered heresy by the old guard. Yet all indications are that the Cuban government has begun to privatize the telecommunications industry.

In January 2000, the Cuban government established a Ministry of Information Technology and Communications (MINIT) with a mandate to make Cuba an "information society" and to quickly develop trade and e-business using IT. MINIT has various subordinate enterprises functioning like corporate subsidiaries, each run by different presidents and focusing on separate IT industries such as telecommunications, software, hardware, wireless internet, business training, and e-commerce.

The Paradoxical Island

More than the average developing country, much of Cuba makes little sense to the Western observer. It has been described as a Third World country with First World people. Although the country is a one-party communist dictatorship, small-scale private enterprise is encouraged. Cubans watch CNN and listen to Miami radio stations, and every type of US and European publication is easily found on newsstands and in bookstores. Che Guevara's passionate visage is ubiquitous, but what would this revolutionary icon think if he saw how the regime he helped to create is commercializing his image? Posters, calendars, books, pins, T-shirts, caps, and even comic books featuring Guevara are sold in every state-owned tourist gift shop--for US dollars, the de facto currency of 21st-century Cuba.

Yet outside of Havana, even in major cities like Cienfuegos, horse-drawn vehicles outnumber gasoline-powered ones. The few automobiles on the roads are likely to be 1950s Oldsmobiles or Chevrolets. Cubans without televisions tend to watch programs through the windows of those who do; a surreal but common Cuban experience is to walk down darkened Havana streets lined with vintage cars while congregations of sidewalk viewers watch a Miami broadcast rerun of I Love Lucy.

As products of Cuba's impressive educational system, children who live in primitive thatched-roof huts are likely to greet you in English, French, or German in addition to their native tongue, Spanish. And they may excitedly tell you about plans for JCC (Cuban Communist Youth) summer camp on the Isle of Youth, where they are no longer indoctrinated in Marxism-Leninism like previous generations of young Cubans but, instead, attend the government's massive Computer Youth Club, which was inaugurated by Fidel Castro in summer 2001.

These Computer Youth Clubs are pervasive, existing in all 14 Cuban provinces. In one club in central Havana, now named "Joven Club--Palacio Central de Computacion" (Youth Club--Central Computer Palace) workstations with modern Pentium processors are situated on the ground floor, occupied by young, goateed, longhaired web designers who look like "dot.commies" from a start-up in San Francisco. The walls are emblazoned with slogans and posters, but not quite of the type one might expect in a club owned and operated by the Cuban Communist Party. The predominant slogan is "Creemos en el Futuro" ("We Believe in the Future") and numerous posters advertise courses in software programming, multimedia, hardware repair, and e-commerce. Classes are in progress upstairs, packed with serious young people avidly learning HTML and the fundamentals of Microsoft Office.

During breaks, students discuss articles in Giga, the slick Cuban computer magazine published by Internet Service Provider (ISP) Colombus Conectividad. Recent topics included internet security, an overview of new hotel reservation software developed by the Cuban firm Softur, and "Programming Orientation for Metaobjects." Despite the embargo, Giga is replete with advertisements for US technology brands such as Microsoft, IBM, Compaq, Macintosh, Sun, and Oracle. And such advertisements make their mark: US-owned Hewlett-Packard has a near-monopoly on printers throughout Cuba. However, because of the US trade embargo such products can not legally be exported directly to Cuba, so they are acquired from resellers in Mexico and Peru.

An Information Society

Fidel Castro seems to have an affinity for the creation of an "Information Society" in Cuba. The septuagenarian president reportedly spends a couple of hours each day surfing the web and sending emails. Nonetheless, access to computers in Cuba is low, and e-mails sent from Cuba are often monitored by state security agencies, taking several days to reach their destination.