Thursday, July 17, 2008

Life in Cuba: One Country, Two Currencies

Same old story...,0,5077590.story
Life in Cuba: One Country, Two Currencies

Doreen Hemlock

Havana Bureau--South Florida Sun-Sentinel

7:25 AM EDT, July 16, 2008


Salesman Juan Carlos Lee hears the complaints daily. He works in an Old Havana store that offers juice, candy and other goods only for sale in Cuba's hard, convertible currency, not in local pesos.

"Ay, everything is so expensive. Convertible currency is such a problem. Cuba, it's not easy," clients tell him.

Lee tries to calm buyers by noting prices are rising worldwide for food, oil and other basics.

But he knows first-hand how hard it is to make ends meet with a salary equal to about $20 a month, when many consumer items now sell at international prices. He gives thanks that family in Spain sends him money. Yet like clients, he yearns for a day when wages stretch far and shopping takes one currency, not two.

"That's going to take time," the 42-year-old Havana resident said Tuesday. "It won't be overnight."

Strapped for dollars, euros and other currencies needed to buy imports, communist-run Cuba uses a unique dual-currency system to conserve foreign reserves. It pays islanders in local pesos and offers some goods and services at peso outlets, often with hefty subsidies. But increasingly, it requires a dollar-like convertible currency unit or CUC at other shops and businesses, where prices include little or no subsidies.

Cubans pay 25 pesos per CUC, a hefty sum when salaries average in the 400-range monthly. Those who can best afford it are those Cubans who earn some pay or tips in CUC from tourism or the thriving black market, and those who receive cash from friends and family overseas.

The government recognizes the four-year-old system hurts national self-esteem and widens social divides. Officials vow to end the program once foreign reserves spike -- a growing challenge as import prices soar.

Lucia Morgan, 38, a teacher in Havana who earns about $20 a month, said she copes with rising costs by buying soda just once or twice a week at the CUC store, instead of three times. She's also trying to rely more on goods sold in pesos, like rice and beans, foregoing the spaghetti she buys in CUC.

Other Cubans seek quicker change. The Federation of Latin American Rural Women, a group known by its Spanish initials as Flamur, is campaigning to end the two-currency system it calls "discriminatory." On Monday, two activists protested by entering a pharmacy that sells goods in CUC and offering to pay for a bottle of medicine in local pesos. The cashier refused, and the manager took the bottle away, the group said.

"These actions will continue until the popular will is fulfilled, expressed by the 10,738 signatures that we gave the National Assembly, to pay in all establishments in the country with the same currency in which are wages are paid to us," Flamur President Belinda Salas said in a news release. "We will not be intimidated."

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