* Diaz-Canel has limited military experience
* Held posts in two provinces, good military ties
* A tough, but flexible manager, like Raul Castro
By Marc Frank
HAVANA, Feb 25 (Reuters) - When Cuban President Raul Castro named former engineering professor and long-time Communist Party insider Miguel Diaz-Canel as his first vice president and potential successor on Sunday, he chose managerial skills over flair.
Diaz-Canel, 52, is the youngest non-military man to come so close to the pinnacle of power in Cuba since the Castro brothers took power in 1959.
He was appointed first vice president on Sunday at a meeting of the National Assembly where Castro also announced he would step down in 2018 at the end of his second five-year term as president.
Diaz-Canel would step into the presidency if Raul Castro could not complete his term. He rose through the ruling Communist Party's ranks including key posts outside the capital and enjoys some name recognition at home, though is far less well known abroad.
While he has only two years of routine military service under his belt, Diaz-Canel's ascent through the provincial ranks has earned him strong ties with the military, connections that other up-and-coming figures who fell by the wayside in past reshuffles have lacked.
"This is a major change in Cuba, not just generational," said Arturo Lopez-Levy, an analyst at the University of Denver who used to work for the Cuban interior ministry on intelligence issues and U.S. relations. "The promotion of Diaz-Canel should be seen as part of an institutional change in the way the Cuban elite is promoted."
Before joining the government in Havana, Diaz-Canel held top Communist Party posts in two important provinces, Villa Clara and Holguin, centers of the booming tourism industry as well as new private-sector activity, both key elements of an economic reform process being pushed by Raul Castro.
That experience makes Diaz-Canel well-equiped to help Castro advance those reforms, designed to make the economy more efficient and bring in more foreign currency, without loosening the Communist Party's political control.
"He has ties to the provincial tsars of the party. Those leaders are very important," said Lopez-Levy. "They don't appear in the international media, but they are a very strong power in the island. They are kings in their own provinces."
In Cuba, there is no political campaigning, so proven loyalty and strong connections inside the party and the military are more valuable than a media-savvy style.
"I am not used to making frequent appearances in public, except at times when it is required," Raul Castro said in his first public statement after taking over for his ailing brother Fidel in 2006. "Moreover, I have always been discreet, that is my way, and let me clarify that I plan to continue that way."
Discreet would be an understatement in describing Diaz-Canel's public persona as he worked his way up through the Communist Party over 30 years, even as other young cadres rose and fell.
Like Raul Castro, he is considered a methodical speaker and lacks the charisma of Fidel Castro. Diaz-Canel has so far not made any public comments since his appointment on Sunday.
He was brought to Havana in 2009 to become minister of higher education and then a vice president of the Council of Ministers.
He arrived soon after a number of high-flying Fidel Castro protégés who lacked Diaz-Canel's party-level managerial experience, most notably former secretary of the Council of Ministers Carlos Lage and Foreign Minister Felipe Perez Roque, were fired by Raul Castro.
A Communist Party source said Diaz-Canel was viewed within the ranks as "sincere, incorruptible, a staunch communist, a nationalist loyal to the Castros' revolutionary vision."
Despite being known as an effective manager, he also has a reputation for negotiating the fine line between Raul Castro's reform agenda and the sometimes more dogmatic doctrine of provincial party members resistant to change.
"Diaz-Canel, while a loyalist of the old style, is young, reformist when reform is called for, a known entity without ever being singled out or even thought of as a threat to Fidel or Raul," said Hal Klepak, professor of history and strategy at the Royal Military College of Canada.
Klepak, who wrote a book on the Cuban military under Raul Castro, pointed out the president is well known for picking the best man for a job. "He is just the sort of man that Raul, looking for continuity and institutionalization of the revolution, can count on, but anxious like Raul to modernize that government."
Fidel Castro, who removed himself from power in 2008 due to ill health, made a rare appearance at the National Assembly meeting on Sunday where Diaz-Canel's appointment was made, appearing to add his seal of approval to the choice.
Diaz-Canel appears in fine shape for his age, with a full head of salt and pepper hair, which he used to wear long, with a chiseled face, square chin and muscular frame.
Lopez-Levy recalled meeting him in the 1990s, describing him as "an articulate, flexible guy," with a reputation for being tolerant of homosexuals at a time when the Communist Party was still mistrustful of the gay community.
John McAuliff, director of the New York-based Fund for Reconciliation and Development who specializes in university level exchanges with Cuba, also met Diaz-Canel at an education conference last year and described him as intelligent and engaging.
"Diaz-Canel stopped by and was very friendly. The keynote speech he gave at the conference could have been made by any serious international educator in the United States," he said.
"I joked with him ... that I could post it without attribution and no one would guess it was by the Cuban minister. He said I should," McAuliff added. (Additional reporting by David Adams; Editing by David Adams, Kieran Murray and Cynthia Osterman)