The Beginning of the End of Cuba’s Dual Currency? (II)

The Beginning of the End of Cuba's Dual Currency? (II)
September 5, 2012
Dmitri Prieto

HAVANA TIMES — The point of the "psychological barrier" around the
issue of dual currency is that if prices charged in CUCs in chopins
(hard-currency stores) are translated into Cuban Pesos (CUPs), and
these in turn are compared to the salaries paid by the government,
this high-prices/low-incomes relationship will reveal the tragedy of
the current economic climate.

I don't want to go into yet another harangue about how many days one
has to work to buy a bottle of cooking oil or a few frozen hamburgers
or a stick of butter (there's an excellent analysis in Spanish by the
Cuban writer Arturo Arango on this, complete with tables and
calculations), but it's one thing to be aware of "what everyone knows"
and quite another thing to recognize it at the official level.

For the last 20 years it has been the dream of Cubans to buy products
at a "chopin" using the currency from their wages. But today it has
become crystal clear that what determines access to such products
isn't the quality ("convertibility") of the currency (CUP or CUC) but
its quantity.

It's crystal clear because if you were to use a debit card to make
your purchases at a chopin, the balance of your salary in "national
currency" would drain out of your account like water running through a
slotted spoon.

Recently there has been increased public debate about the real
purchasing power of Cuban wages, This has followed the adoption of the
new Customs regulations (affecting the importing of articles that are
scarce in Cuba) and the new Tax Law (which is not discussed between
people and whose content is a mystery to the vast majority of all
current and potential taxpayers).

In cyberspace, there are the interesting contributions by acute
polemicists such as Felix Sautie and Roger M. Diaz Moreno (both in
Spanish), among others.

The possible way out of the problem, trumpeted by the new
opportunities for making purchases in chopins (by credit card), would
consist of simply declaring the two currencies equivalent at the
current exchange rate (or another similar one), and then allowing only
one of them in circulation. This is what is in fact being done through
the new payment method in chopins with "national currency" – which
today is only possible through magnetic cards.

Of course, the provocative contradiction between prices and wages
would emerge with full force, especially with the still surviving
memory of those legendary days when the Cuban peso and the US dollar
were exchanged at a 1:1 ratio.

And one would have to take into account that the senior leadership of
both the government and Cuban unions have said quite clearly that at
the moment there are no plans for increasing wages.

The aggressive roar of the lion, which is now being heard over the
propaganda apparatus of the bureaucracy concerning the social
inequality, has generated understandable fears, because (even from the
point of view of Marxism) economic truths cannot be propped up with
ideological slogans.

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