Fidel's New Best Friend

This story was written by CBS News Producer Portia Siegelbaum

Not even President Fidel Castro's failure to attend the festivities dampened the interest in ties with Cuba. And the reopening of the Cuban Embassy in Montevideo on Wednesday highlighted what Larry Birns, director of the Washington-based Council on Hemispheric Affairs, described as a shift in alliances.

"In more than 40 years of monitoring, I have never seen the U.S. so isolated in Latin America and Cuba so not isolated," Birns said.

Another example of this, he said, is Cuba's participation in negotiations to end the dispute between Colombia and Venezuela. Birns also believes that efforts by countries like Brazil to attract foreign investment and multinational corporations does not mean they've given up their leftist ideals.

"They need to tax the multinationals to finance their social programs," he said. "Only Chavez, because of Venezuelan oil, can afford to go it alone. The rest can't, and so they need to reaffirm their leftist credentials in another way."

Cozying up to Cuba is one way to do that.

"That is why in a sense Castro has become a sort of a blarney stone for them to kiss to show that they have authentic leftist credentials," Birns concludes.

In addition, Castro's long-term analysis of the international financial agencies "is coming to the fore as almost a vindication that privatization is not superior to a mixed economy and that has given Castro a kind of cache as an economic pundit, capable of seeing developments down the line."

In this context, it's easy to understand Cuba's appeal to Uruguay's new president, a 65-year-old cancer specialist and former Montevideo mayor, who won the election by urging greater efforts to fight poverty and who takes a cautious view of the free-market economic policies promoted by the Bush Administration.

Under former President Jorge Batlle, who favored closer economic and political ties with Washington, Uruguay's economy shriveled more than 10 percent and, according to United Nations statistics, one out of every three Uruguayans fell below the poverty line.

Various left-of-center South American leaders who share Vázquez' views attended his inauguration, including Luiz Inacio Lula da Silva of Brazil, Hugo Chavez of Venezuela and Nestor Kirchner of Argentina. Also present were the presidents of Bolivia, Chile, Paraguay and Peru. The U.S. sent Labor Secretary Elaine Chao.

Holding up the flag for the island was Foreign Minister Felipe Perez Roque, who said health reasons prevented the Cuban president from being there. Presumably, the nine-hour flight and subsequent activities were seen as too grueling for the 78-year old Castro who tripped, breaking a kneecap and fracturing an arm last October.

A Cuban diplomat, speaking on the condition of anonymity, suggested a different reason for Castro's absence. "Security reasons probably weighed in also."

In 2000, Cuban security agents detected the arrival of known anti-Castro exiles in Panama prior to Castro's arrival for an Ibero-American Summit. When arrested by local police, the four men were found in possession of a large quantity of explosives, which the Cubans charged were intended to assassinate Castro.

However, they were only convicted of endangering public safety and in August 2004 they were pardoned by Panamanian President Mireya Moscoso, setting off a diplomatic tiff with Havana.

Contacts between Uruguay and Cuba have simmered at consular level for nearly three years, ever since outgoing President Batlle sponsored a resolution at the United Nations condemning Cuba's alleged human rights violations. The Cubans fired back, labeling Batlle a "Yankee bootlicker." Batlle retaliated by breaking relations.

Vázquez clearly intends to turn things around. His remarks made immediately after the formal signing of notes re-establishing relations were highlighted in the Cuban media Wednesday.

"I am enormously pleased ... to fraternally welcome the Cuban people once more in this House and to tighten these ties and friendship that should never be broken," declared the new president.

The top headline on Radio Reloj, Cuba's 24-hour all-news station, was a message of congratulations and good will from Castro to Vázquez. The local press also expressed Cuba pleasure at the new government's emphasis on regional integration via MERCOSUR, the South American Common Market.

It has similarly given wide coverage to Chavez' efforts to integrate Venezuela's economy with those of Brazil and Colombia, rather that with "the United States and Europe" and to the region's turn away from the international monetary institutions and Castro's favorite whipping boy, neo-liberalism.

By Portia Siegelbaum