SIGNS OF CAPITALISM ARE ALIVE IN CUBA

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HAVANA-Brightly-colored billboards tout products from around the world, car rental companies offer new Mitsubishi and Nissan cars, stores have everything from Christian Dior clothing to Zenith color televisions.

At times, it's hard to believe that a full-fledged capitalist market isn't alive and well in Communist Cuba.

While there are reminders of Cuba's previous dependency on the former Soviet Union and Eastern European nations-mainly old Hungarian buses and rusty Russian Lada cars-Cubans are now shopping with U.S. dollars at spacious stores selling Italian pasta, Canadian mineral water and Japanese electronics.

"You can get anything here, if you have dollars," said one young Cuban holding a Pepsi.

The U.S. dollar has become the currency of choice. Foreigners who visit never need Cuban pesos, and exchange offices at hotels use dollars as their base denomination.

But the legalization of the dollar last August has created a dual economy consisting of those who have access to dollars and those who don't. Estimates vary on the number of Cubans who can get U.S. dollars, but some Cubans said about 40% of Cuba's 11 million people get some amount of dollars from relatives living abroad.

Eduardo, a 23-year father of a six-month old daughter, says he tries to get dollars by giving rides to tourists, even though it's illegal since he's not a government-licensed "tourist taxi." Although Eduardo said his 10-year-old car could be taken away if he were caught be the government, he has no other choice because rationed food is not enough to get his family through the month.

While the loss of Russia's aid is apparent in lack of fuel and frequent electricity outages, the economic embargo prohibiting U.S. firms and their subsidiaries from selling products in Cuba doesn't seem to exist.

Bars stock Old Milwaukee beer along with Cuba's Hatuey and Cristal and a variety of beers from Holland, Canada, Venezuela and Panama. Stores are regularly stocked with Winston and Marlboro cigarettes, and new Coca-Cola machines are scattered throughout the country.

U.S. companies only speculate on how their products are getting into the country. "Our product could be purchased by third parties and sold in Cuba that way," said a Coca-Cola spokeswoman in Atlanta. Arturo Villar, frequent Cuba visitor and publisher of Miami-based "Latin American Business Reports," said his understanding is that U.S. goods are getting in through importers buying the products in third countries such as Panama, Mexico and Spain.

However the products are getting in, label-reading proves interesting: Labels on Pepsi cans can read "bottled in Panama" or "made in Holland;" J.M. Smucker jam packets on the state-run Cubana airlines are made in Montreal; Gerber baby food is produced in Mexico.

Billboards are the most apparent form of advertising, and Cubans and frequent visitors say outdoor advertising has grown tremendously since last August.

"Ten months ago I walked all over Havana and the only commercial billboard I saw was in front of a building that had just been painted, saying the paint used was made by Pinturas Montana in Venezuela," Mr. Villar said.

Now, there's outdoor advertising for Holland's Largarto beer to Italy's Benetton clothes.

Promotion is also at work. In Varadero, an upscale beach resort about 70 miles east of Havana, Tecate beer had set up a sidewalk promotional stand, selling its beer for $1 while beers at other bars and cafes ran $1.50 to $3. The extra draw was a TV at the stand showing World Cup soccer games.

Television seems to be moving more slowly. While Cubans said some ads had run on local TV stations, one week of watching the two state-owned TV stations yielded only one public service spot asking parents to teach children well.

Cuba's two state-run channels are on between 6 p.m. and midnight. But many Cubans say they illegally hook up to cable TV at home with black market satellite dishes

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