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Tuesday, July 31st, 2007...7:10 pm


Cuban Economy

I have found during my various visits to Cuba that most Cubanos I have talked to are not the least bit reluctant to talk politics and complain about their government. I have also found, generally speaking, in Cubanos with whom I have spoken an understanding of USA politics which exceeds that of most of those I know in the USA.

This morning, July 9, I road to Havana with Pupi, a fellow with a 1986 Muscovi, to take a friend to the bus station for a trip to Pinar del Rio, where she has one more exam to take to finish her second year of law school. Pupi and I talked politics the entire trip.

Pupi’s opinions seem to me quite characteristic of Cubanos with whom I have spoken. While he professes his love for Cuba and his fellow Cubanos he expresses many criticisms of the Cuban government and its economic system. He also expressed his distaste for the many shortcomings of the USA economic system. He indicated his belief that there are good and bad aspects to each system, and that he believes a better economic system than either, as it now exists, would be to combine the good aspects of each.

Pupi reinforced my understanding that the Cuban economic system which, while referred to as socialism, is really state capitalism. “El estado”, to which the government here is referred, operates virtually all business in Cuba, except for a very limited number of permitted private businesses, such as casa particulars, the owners of which rent rooms to tourists, and paladars, private restaurants which are limited as to the number of tables they may serve. (Incidentally, casa particulars here in Playa Baracoa must pay a monthly tax of $130 USA to the state, whether or not they have had guests in a given month. The tax on casas in Havana is more, as is, generally, the nightly rent.) El estado discourages competition.

Pupi also reinforced my understanding that the efforts of the Cuban government are to ensure a, more or less, equal level of wealth amongst the population. And since Cuba is a relatively poor country, that means maintaining an equal level of poorness. Though poorness here is not such that there is in Mexico or, I suspect, in most other countries of Latin America, with some very rich folks and lots very poor. Folks here are in good health and are well educated. It is rare to see a Cubans missing teeth, for example; while in Mexico it is not.

I should explain that the Cuban economy operates with two different currencies. One, the “convertible peso”, CUC, which exchanges at a rate of one CUC for $.89 USA, and what’s called “moneda nacional” which exchanges at 23 to one with the CUC. Thus, for example, a pack of Poular cigarettes that sell for $7.00 pesos moneda nacional, sell for about $.30 CUC.

It really is a ridiculous currency system. A fact apparently understood by government officials, as I recently read that the government is moving toward the unification of the two currencies.

Throughout the country one will encounter shops, in buildings resembling shipping containers, operating side-by-side, one accepting moneda nacional and the other accepting CUC, referred to as Cucas (phonetically speaking). The CUC shop typically will have a wide assortment of goods while the moneda naciaonal shop generally sell cigarettes, beer, rum, and soft drinks. There are also produce and other types of markets at which are accepted moneda nacional.

The Cuban government operates the CUC shops as a means of capturing money from tourists, money sent to Cubans from other countries, and money from those Cubans who operate casa particulars or who work in the tourist industry, thus who earn more than most Cubans.

I should also explain that each month each Cuban is provided a ration of black beans, rice, and other essential foods. Though, cooking oil is sometimes provided only every other, or every third month. While cooking oil is consistently available in the CUC shops.

Pupi indicated to me that, though he may visit a health care clinic without charge when necessary, often necessary medicines are not available. He also expressed his disapproval of the fact that the Cuban government sends medical professionals and sells medicines to other countries and that the Cuban government should attend to the needs of Cubans before assisting others. (A complaint, I note, one often hears in the USA, despite the fact that the USA expends about only 1% of its annual budget on assisting other countries.)

He also indicated that he is unable to buy milk for his children, aged 8 and 16, as milk is reserved for younger children; and that he can not afford “bisteak” which is a very thin, very tough cut of beef popular in Mexico.

Pupi agreed when I suggested that by permitting Cubans to operate private business the economy would improve for all. He also agreed with my suggestion that it seems possible to permit Cubans to operate private businesses and to tax them at a level necessary to maintain the country’s excellent free health care and educational systems.

The irony is not lost on Pupi of the fact that the “socialist” Cuban system is really a system of state capitalism; and that the “capitalism” practiced in the USA often amounts to a system of corporate socialism.

We both agreed that there must be a means of providing folks with the incentive to produce more and better products that capitalism provides, while at the same time attending to the educational, medical, and other needs of citizens. After all it is the promotion of the “general welfare” of a people for which governments are generally created.

2 Comments

Filed under Travel, Cuba

2 Comments

  • Ruminations of an Expatriate » Blog Archive » Cuban Economy
    November 1st, 2007 at 5:52 pm

    […] morning I received notice that my blog entry relative to the Cuban Economy is featured on the front page of “The Issue“, at which the Issue of the Day is the […]

  • Cuba, Mexico, USA « Liberal Fascism
    February 27th, 2008 at 12:49 am

    […] under Uncategorized   Inspired by discussions of Cuba’s place in the world here, here, here, and doubtless other […]

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