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This is what the Cuban economy looks like

By Nele Goutier

A Cuban supermarkets selling products that costumers can get with their libreta, a ration card subsidized by the government. Basic goods like sugar, oil, rice, beans, bread, eggs, coffee and salt are cheaply available thanks to state subsidy. What can be bought for 1.20$ in shops that accept the libreta, costs roughly 58$ in the overpriced supermarkets that were traditionally set up for foreigners. Reason for Cubans to avoid these supermarkets? That’s not an option, because all other goods than the absolute basics are only available in the ‘tourist shops’. Groceries in such ‘luxury’ supermarkets are to be paid with a different currency: the Peso Convertible, also known as CUC. It’s not just a matter of a different coin. The CUC is worth 24 times more than the Cuban Peso, or CUP, and thus extremely expensive for people that earn CUP’s – 78% of the population. For a long time the double currency created severe problems for the Cubans. They were paid in CUP by the state, with which they could only buy the basics. All other goods were only available for CUC’s. The only way for Cubans to get hold of CUC’s was by getting involved with the ones in the possession of the precious currency: foreigners, often in the tourist industry. It was illegal, but necessary for whomever couldn’t live on a diet of rice, beans and white bread. This changed in July this year. Cubans can now pay with whatever kind of currency they want, but the price differences between state supermarkets and modern shops remain the same. Basic goods are cheaply available, while all other goods – from shampoo to tomato ketchup – are as expensive as before and hardly affordable for Cubans. José Carlos: “I don’t care about the kind of currency they allow me to pay with. As long as they don’t pay me more, nothing changes.”

A Cuban supermarket selling products that costumers can get with their libreta, a ration card subsidized by the government. Basic goods like sugar, oil, rice, beans, bread, eggs, coffee and salt are cheaply available thanks to state subsidy. What can be bought for 1.20$ in shops that accept the libreta, costs roughly 58$ in the overpriced supermarkets that were traditionally set up for foreigners. Reason for Cubans to avoid these supermarkets? That’s not an option, because all other goods than the absolute basics are only available in the ‘tourist shops’.
Groceries in such ‘luxury’ supermarkets are to be paid with a different currency: the Peso Convertible, also known as CUC. It’s not just a matter of a different coin. The CUC is worth 24 times more than the Cuban Peso, or CUP, and thus extremely expensive for the 78 per cent of the population who earn CUP’s.

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For a long time the double currency created severe problems for the Cubans. They were paid in CUP by the state, with which they could only buy the basics. All other goods were only available for CUC’s. The only way for Cubans to get hold of CUC’s was by getting involved with the ones in the possession of the precious currency: foreigners, often in the tourist industry. The men on the picture do so by  offering a ‘bici-taxi’ service to tourists. Economic interactions with foreigners were for a long time illegal, but necessary for whoever couldn’t live on a diet of rice, beans and white bread. This changed in July this year. Cubans can now pay with whatever kind of currency they want, but the price differences between state supermarkets and modern shops remain the same. Basic goods are cheaply available, while all other goods – from shampoo to tomato ketchup – are as expensive as before and hardly affordable for Cubans. José Carlos: “I don’t care about the kind of currency they allow me to pay with. As long as they don’t pay me more, nothing changes.”

Even though groceries can be paid in both CUC’s and CUP’s today, CUC’s are still worth 24 times more than CUP’s and therefore much more profitable. Maria tries to boost her meager state income by selling beverages on the street. Cubans pay the equivalent of 0.15$ in CUP’s, while tourists – usually unaware of the price levels for Cubans – pay 2$ in CUC’s. By selling one drink to a foreigner, Maria earns 5% of a month’s salary in no-time. Private initiatives were traditionally not allowed in Castro’s Cuba, but since 2011 there is a list of 201 occupations that can be practice independently. On the list are carpenters, housekeepers and taxi-drivers, but no doctors, manufacturers, im- and exporters or journalists are allowed.

Even though groceries can be paid in both CUC’s and CUP’s today, CUC’s are still worth 24 times more than CUP’s and therefore much more profitable. Maria tries to boost her meager state income by selling beverages on the street. Cubans pay the equivalent of 0.15$ in CUP’s, while tourists – usually unaware of the much lower price levels for Cubans – pay 2$ in CUC’s. By selling one drink to a foreigner, Maria earns 5% of a month’s salary in no-time.

A man preparing his beer tank for Santiago's unnual carnival

A man preparing his beer tank for Santiago’s annual carnival. Private initiatives were traditionally not allowed in Castro’s Cuba, but since 2011 there is a list of 201 occupations that can be practiced independently. On the list are carpenters, housekeepers and taxi-drivers, but no doctors, manufacturers, im- and exporters or journalists are allowed.

A policeman in Havana Vieja.

A policeman in Havana Vieja, paid in CUP by the government.

"Long live the Committee of Defense of the Revolution"

“Long live the Committees of Defense of the Revolution”. Formed in 1960, the CDR’s are the eyes and ears of the communistic regime and are located in each and every block all over the country. CDR-employees have the responsibility to monitor, control and report about all that’s going on in their block. Who goes where, who buys what, who spends time with whom, and – most importantly – who is says what about the revolution?

A construction worker having a sidewalk siesta. One of the main problems of communism, according to its opponents, are the fixed state salaries that take away the incentive to work. “The Cuban economy is like a boomerang”, my Cuban friend told me, “it comes back and hits you.”

A construction worker having a sidewalk siesta. One of the main problems of communism, according to its opponents, are the fixed state salaries that take away the incentive to work. “The Cuban economy is like a boomerang”, my Cuban friend told me, “it comes back and hits you.”

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Fishermen at Cayo Granma. Traditionally they lived off the fruits of the sea. Today most have a job in the nearby city of Santiago, while fishing during their time off as a supplementary income. Over the past decades, the island has transformed from a privileged paradise-like island strewn with luxurious mansions for upper-class Americans to a run-down fishermen’s town with wooden shacks popping up between the facades of what once were extravagant residences. When the Americans left after 1959 the villas were given to fishermen and the islet became a leisurely escape from the urban hustle and bustle. That all changed in the ‘90s, when Cuba entered a deep crisis due to the fall of the Soviet Union and the resulting stagnation of Russian trade. After repeated attempts to hijack the ferry to the island and escape Cuba for good, the government decided to ban travelling across the bay. But it couldn’t stop dissidents from escaping: roughly 1.5 million (5% of the population) have fled to the United States. Today, the island has caught the attention of foreign tourists and has regained its status as a peaceful destination for a daytrip.

Fishermen at Cayo Granma. Traditionally they lived off the fruits of the sea. Today most have a job in the nearby city of Santiago, while fishing during their time off as a supplementary income.
Over the past decades, the island has transformed from a privileged paradise-like island strewn with luxurious mansions for upper-class Americans to a run-down fishermen’s town with wooden shacks popping up between the facades of what once were extravagant residences. When the Americans left after 1959 the villas were given to fishermen and the islet became a leisurely escape from the urban hustle and bustle.
That all changed in the ‘90s, when Cuba entered a deep crisis due to the fall of the Soviet Union and the resulting stagnation of Russian trade. After repeated attempts to hijack the ferry to the island and escape Cuba for good, the government decided to ban travelling across the bay. But it couldn’t stop dissidents from escaping: roughly 1.5 million (5% of the population) have fled to the United States. Today, the island has caught the attention of foreign tourists and has regained its status as a peaceful destination for a daytrip.

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Juan Pedro is a farmer, like there are many. In Cuba he is like all other farmers, in Europe he would be quite exceptional, because Juan Pedro does not use pesticides or fertilizers. His farm is completely organic, like almost all farms in Cuba. A matter of ideology? Not really. When the SU fell, a large part of the Russian trade vanished, leaving Cuba in a severe crisis. During the ‘Special Period’, as the crisis is subtly referred to, agricultural production dropped with 54%. The state saw no other option than to lift their monopoly on food production and to rent land to small-scale farmers. In the absence of agricultural chemicals and fuel, the farmers were forced to make a leap and develop natural ways of production in which biodiversity plays a key role. “Look”, says Juan Pedro, “I alter avocado plants with mango trees. They both use the soil differently and their roots don’t get intertwined. Like that I can use the soil maximally without exhausting it.”

Juan Pedro is a farmer. In Cuba he is like all other peasants, but in Europe he would be quite exceptional, because Juan Pedro does not use pesticides or fertilizers. His farm is completely organic. A matter of ideology? Not really. When the SU fell, a large part of the Russian trade vanished, leaving Cuba in a severe crisis. During the ‘Special Period’, as the crisis is subtly referred to, agricultural production dropped with 54%. The state saw no other option than to lift their monopoly on food production and to rent land to small-scale farmers. In the absence of agricultural chemicals and fuel, the farmers were forced to make a leap and develop natural ways of production in which biodiversity plays a key role. “Look”, says Juan Pedro, “I alter avocado plants with mango trees. They both use the soil differently and their roots don’t get intertwined. Like that I can use the soil maximally without exhausting it.”

Juan Pedro has the right sell any surplus on the market and keep the profits. This encourages him, and his colleagues alike, to maximize their efficiency which resulted in an even more precocious agriculture. The many old-timers that dominate the Cuban streets may give the country an old-fashioned image, but in terms of agricultural development, Cuba is light-years ahead of the industrialized world. " width="5184" height="3456" class="size-full wp-image-3475" data-wp-pid="3475" /> Juan Pedro has the right sell any surplus on the market and keep the profits. This encourages him, and his colleagues alike, to maximize their efficiency which resulted in an even more precocious agriculture. The many old-timers that dominate the Cuban streets may give the country an old-fashioned image, but in terms of agricultural development, Cuba is far ahead of the industrialized world.

Juan Pedro has the right sell any surplus on the market and keep the profits. This encourages him, and his colleagues alike, to maximize their efficiency which resulted in an even more precocious agriculture. The many old-timers that dominate the Cuban streets may give the country an old-fashioned image, but in terms of agricultural development, Cuba seems far ahead of the industrialised world.

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Text and images by Nele Goutier

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