HAVANA (Reuters) - Cuban President Raul Castro picked a team of close political and military allies as he succeeded his brother on Sunday, consolidating his power and dashing hopes of rapid change in the communist state.
Raul Castro and his new leadership group, elected by the rubber-stamp National Assembly, are mostly elderly men expected to move slowly as they try to boost the island's struggling economy while remaining loyal to the ideals of long-time leader Fidel Castro, who retired last week.
The man most associated with economic reforms in the 1990s, Carlos Lage, was passed over in favour of Jose Ramon Machado Ventura, a hardline communist ideologue and close Raul Castro friend, to be Cuba's new deputy leader.
"He has opted for long-time, close comrades instead of a bold shift to the next generation," said Phil Peters, an expert on Cuba at the Lexington Institute think tank near Washington, who was surprised by the promotion of Machado Ventura.
The dour 77-year-old apparatchik in charge of organization in the ruling Communist Party could dampen the debate Raul Castro has encouraged about the hardships and restrictions Cubans face in an inefficient state-run economy.
"Machado is known for ideological constraints he exercises on debate. He is much more of the old guard in his view," said Julia Sweig, Cuba expert at the Council on Foreign Relations, a Washington think tank.
Lage, 55, was considered the odds-on favourite for the No. 2 job by the foreign business community in Cuba, where he is seen as an advocate for a faster opening to private business.
"This is a message of staying the course," said the manager of a multinational company operating here.
"But we hope it means they have consolidated power and are able to carry out reforms that have been under study to raise productivity and wages," the foreign executive said.
If Machado Ventura is on board with a reform program, his promotion to deputy leader could be a sign that Raul Castro has achieved consensus on the way ahead, Peters said.
The man Washington dubs "Fidel Lite" has raised expectations among some Cubans that they might be able to travel abroad and buy and sell their homes and cars.
He said in December that Cuba has "excessive prohibition," and announced in his inaugural speech that he will start lifting some simple restrictions in a few weeks.
He also said he will study a "gradual and prudent" revaluation of the Cuban peso, used to pay meagre state wages averaging $15 (7.50 pounds) a month. The aim is to increase purchasing power by bringing the peso's value closer to the hard currency CUC used to buy consumer goods.
"Gradual and prudent" could be the watchword of a Raul Castro administration as it seeks to improve the standard of living for Cubans without dismantling the socialist system his brother built and before discontent rises.
"Raul is really a pragmatist and for all of them the clock on bread and butter issues starts ticking now," Sweig said.
Still, anyone banking on Cuba opening up to a Chinese-style market economy after five decades under Fidel Castro will be disappointed.
Brian Latell, a former CIA analyst, said Machado Ventura is absolutely reliable, but he does not appeal to young Cubans, nor does he settle the issue of who will succeed Raul Castro, who at 76 is no spring chicken.
Among Raul Castro's top leadership team, only Lage is under 70.
(Editing by Jeff Franks and Kieran Murray)
(For special coverage from Reuters on Castro's retirement, see: here)