A last hurrah for Cuba's communist rulers

Cuba's Communist Party is holding its first congress in 14 years, and for the country's ageing leaders it could be one of their last opportunities to bask in the victories of days gone by.

The red flags are flying high in Havana. Buildings across the capital are decked out with giant Cuban flags.

One of the largest military parades seen in decades is scheduled to pass through Revolution Square, the symbolic political heart of the country.

The parade and congress come exactly half a century after Fidel Castro proclaimed that his was a socialist revolution, rather than a democratic one.

His speech on 16 April 1961 paved the way for a centralised Soviet-style economy and one-party rule.

Military prowess will be a big part of the celebrations

It came on the eve of the ill-fated landing by 1,400 CIA-backed Cuban exiles, who were defeated by Castro forces at Bay of Pigs (or Giron as the Cubans call it).

As a symbol of the revolution's future, thousands of youths will bring up the rear of Saturday's parade.

But as 79-year-old President Raul Castro warned last December, major changes are needed if the system is to survive once the ageing generation which led the revolution has gone.

"Either we change course or we sink," President Raul Castro said.

"We have the basic duty to correct the mistakes we have made over the course of five decades of building socialism in Cuba."

Emerging entrepreneurs?

Cubans are greeting the prospect of change with a mixture of anticipation and trepidation.

With wages barely $20 (£12) a month, there is enormous pressure to implement economic changes that would allow people to earn a decent living.

Until now it has only been possible to survive thanks to food rationing and the heavy subsidies on housing, health and education.

But those handouts have bred a culture of dependency, with no incentives to work, and Cuba's struggling inefficient economy can no longer afford to be so generous.

The government has already launched a programme of allowing 250,000 extra people to become self-employed or set up small businesses with a limited number of employees.

Almost three-quarters of these licences have already been issued; there are small market stalls and cafes springing up across the island.

Congress is expected to endorse these changes, and there are hopes that it could clarify issues such as micro-credits and expand the number and types of jobs people are allowed to do.

Rules, permits, restrictions

In terms of economic impact, a potentially more significant change would be to allow medium-sized state enterprises to become workers' co-operatives, taking them out of the clutches of the central planners.

The Bay of Pigs - or Giron - landing is the stuff of legend in Cuba

Such co-operatives are now well-established in agriculture, where market reforms began at least three years ago.

It is unclear just how far the Communist Party is prepared to loosen state control.

Legalising the right to buy and sell cars and houses, and to travel abroad, are the bread-and-butter issues which will determine for many Cubans whether this is a truly reforming Congress or not.

Cubans are famous the world over for their ability to keep old 1940s and 50s American cars running on the roads. The secret is necessity. Under Cuban law the only cars that can be legally traded are those built before the revolution in 1959.

Most Cubans have the title to their homes and can pass them on to their children. But the only way to move home is to swap with someone. It is a cumbersome, complicated system where money does illegally change hands, including backhanders to the much derided state inspectors.

President Raul Castro has admitted that the system is a mess and encourages corruption. How far he will go in asking Congress to move on easing restrictions is far from clear.

Cubans need permission to leave the island. It is a deeply resented restriction. For the moment, though, hopes that Congress will take the initiative appear to be based more on wishful thinking than concrete evidence.

A new leader emerges?

Phasing out subsidies is seen as a key element turning the debt ridden economy around. Some food and other items have already been taken off the universal monthly ration card. The whole system is expected to be abolished and replaced by some form of means tested benefit for those most in need.

Overstaffing in state-run enterprises is seen as another major problem which needs to be dealt with. Initially 500,000 workers were due to be laid off or reassigned to more productive jobs before congress, followed by another million later on.

Cubans are hoping for a more liberal attitude towards small businesses

The whole process, though, has been put on ice. Alternatives are not in place and the authorities appear uneasy about the political consequences of a large number of disgruntled unemployed.

Congress may approve the concept but it could several years to implement.

There is one other major task which congress is expected perform: selecting new party leaders.

The Communist Party of Cuba is the only political organisation allowed in this one-party state.

Constitutionally it is congress which votes on the composition of a new Central Committee, which in turns names the First and Second Party secretaries, the two most important posts in the country.

President Raul Castro has to be the front-runner to take over from his brother Fidel.

The real interest is in who will become Second Secretary.

Could a younger potential leader be about to emerge or will the question of transition be put off once again with one of the trusted old guard stepping in?