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By Anthony Boadle
WASHINGTON, Nov 27 (Reuters) - Pummeled by world economic troubles and Hurricane Michelle, Cuba's communist government has opted for ideological retrenchment instead of reform to keep its grip on power, U.S. officials and experts said on Tuesday.
Young aides around Cuban President Fidel Castro like a "shadow cabinet" have greater influence on the "Maximum Leader" than older technocrats who are more inclined to legalize private ownership of small and medium enterprises to bolster the economy, they said.
"Ideology has the upper hand today. It would take significant social unrest to change this," said Gillian Gunn, Caribbean studies director at Georgetown University.
Speaking at a Rand Corporation conference on the role of Cuba's military after Castro leaves the scene, Gunn said the Cuban leader wanted no further expansion of private property than allowed by economic reforms adopted in the deep crisis that followed the collapse of the Soviet Union a decade ago.
The pace of reforms was halted once the economy picked up and before they had undermined the political hold of the state over the economy and the work force, she said.
Castro, 75, is now surrounded by young advisers who are more ideological than technocratic ministers and wield greater power because they have direct access to the leader who has been in power for decades, she said.
Three aides who probably best represent the young aides' influence are student leader Hassan Perez, Communist Youth leader Otto Rivero and Foreign Minister Felipe Perez Roque, whose roles have grown enormously in the last two years.
The experts agreed the Cuban military, which has gained a big stake in the dynamic sectors of the economy such as tourism, citrus exports and telecommunications, would have a central role in a post-Castro transition.
Castro's younger brother Raul, the defense minister and his designated successor, is a pragmatist who favors economic reform and basically wants to retire, participants said.
"The Cuban military is well equipped to survive a transition after Castro. It is on a better footing economically than other institutions in Cuba," said acting Assistant U.S. Secretary of State for Western Hemisphere Affairs, Lino Gutierrez, told the conference.
Washington sees the Cuban military as a source of stability in a transition to democracy that would avoid bloodshed and a mass exodus of Cubans to the United States 90 miles (140 km) away.
Gutierrez said tourism, Cuba's main source of hard currency, had plummeted since the Sept. 11 attacks in the United States, and Cuba would not reach its goal of drawing 2 million tourists this year.
Russia's recent decision to close its electronic spy station at Lourdes in Cuba -- for which Moscow was paying $200 million a year -- was another loss of revenue and a "humiliation" for the Cuban government, the official said.
Economic downturn and high unemployment in Florida, home to most Cuba exiles in the United States, has brought a big drop in family remittances to Cuba that amounted to some $840 million last year, said economist Jorge Perez-Lopez.
Hurricane Michelle, Cuba's worst in 50 years, caused severe damage on the island three weeks ago, destroying a third of the sugar and citrus plantations and knocking down 100 communications towers, the State Department's Gutierrez said.
In the wake of the hurricane, Cuba had dropped its aversion to buying food and medicine from the United States for cash, taking advantage of changes made earlier this year to the four-decades-old U.S. trade embargo against Castro's government.
Castro had earlier rejected the relaxation, saying Cuba would not buy a single grain of rice, because it still banned public or private financing of the sales to cash-strapped Cuba.
"Castro has done a 180," Gutierrez said.
Four U.S. agribusinesses last week became the first American firms to sign trade deals with Cuba since Castro's 1959 revolution, securing initial food sales of $20 million.
Looking to the future, participants said Raul Castro, 70, had a strategy to succeed his brother in the case of his death, but no stomach to hold on to power.
"Raul Castro is pragmatic. He knows he does not have his brother's charisma. He does not want to stay on because he knows where he is standing," said Alvaro Prendes, a former U.S. trained fighter who commanded the Cuban Air Force at the time of the 1962 missile crisis.
"He does not have a lust for power. He has been ready to retire and have a quite life for a while now," said Gunn.
"He does not envisage himself taking over a Fidel-like role where he would be the undisputed leader of a government for a long period of time," she said.
Gunn said Raul Castro would like to supervise a transition to something stable where he was a respected elder statesman but not responsible for day to day affairs of government.