Fidel Castro has managed to save Cuba's economy from disaster since the Soviet Union collapsed, cutting off support. By slashing subsidies to state enterprises, inviting foreign companies to set up joint ventures and allowing some forms of private enterprise, the aging Communist has coaxed a modest turnaround from his ailing economy.

Castro is afraid to go further. He worries that bringing real capitalism into Cuba will spawn a demanding middle class bent on ousting him. Yet he needs to create jobs and generate foreign exchange to pay for food imports. So he is letting such companies as Canada's Sherritt International invest.

The U.S. objects, but Washington's policy is wrong. The U.S. should end its cold-war posture and act now to spur a speedier shift to capitalism in Cuba. Like the 35-year-old U.S. embargo of the island, the new Helms-Burton Act hasn't hurt the 70-year-old Castro enough to shake his grip. It has only riled America's trade partners in Europe and threatened the World Trade Organization. Rather than sanctioning foreigners investing in Cuba, the U.S. should pursue a policy of "engagement" with the island through trade and investment--a la China. The spread of capitalism will do more to end Castro's reign than enforcing a failed embargo.?

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