The Beginning of the End of Cuba’s Dual Currency? (II)September 5, 2012 | | Print |
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).
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.