The ‘Truly’ Convertible Money Now Prevails In Cuba

[El Presidente]

 

          I thought it was a very good article.  Worth a read. 

 

http://translatingcuba.com/about_translating_cuba/

The ‘Truly’ Convertible Money Now Prevails In Cuba

July 21, 2020 Reinaldo Escobar, Translator: Regina Anavy

Besides household appliances and auto parts, Cubans can now buy food and personal hygiene and cleaning products with dollars in the CIMEX* shops. (14ymedio)

 

14ymedio, Reinaldo Escobar, Havana, July 16, 2020 – in the midst of a growing shortage in Cuban markets, the Government has decided to increase the distance between consumers and merchandise, improving the capacity to buy for holders of debit cards that can only be nourished with foreign currency. This commercial modality started at the end of last year for the sale of household appliances and auto parts, but now it’s being applied to food and personal hygiene and cleaning products.

The reason for this “partial dollarization” of commercial activity is that despite its name, the CUC (Cuban convertible peso) is not a convertible currency in international markets. It doesn’t make sense for the State to buy merchandise abroad in euros, yen or dollars to sell it later in the internal market in exchange for a piece of paper that has no real value and can’t be exchanged off the Island for any other currency.

Monetary unification has been announced many times, only to be postponed. As of yesterday, the Cuban peso (CUP), with which salaries are paid, won’t inspire envy, and the chavito (slang for the Cuban convertible peso) is now humiliated. What is valuable for real life will be the currency that is truly convertible: dollars, euros, yen or crowns. It’s not important that customers can’t get their hands on it; it’s enough that an electronic device can read the card and verify that the value is there.

In the absence of a political explanation that justifies this measure, it will undoubtedly be supported with reasons related to the restrictions imposed by the U.S. on Cuba, and with the infallible argument that what is collected will swell State funds in order to maintain social benefits. So a privileged minority that has access to foreign currency will finance a deprived majority.

When Fidel Castro introduced the dollar into the economy, he already accepted foreign investment and authorized self-employment, arguing that he was doing it to save the Revolution’s achievements.

Almost three decades later, it should be stated that, more than “saved,” these achievements only survived, at a high price and a highly regrettable standard. At this point, it’s not possible to go back to repeating the same argument.

Among the foreseeable consequences of this risky step, salaries will be farther away from being the natural support of the family economy, since almost everyone who has access to the debit cards won’t be part of the work force. This isn’t money earned “with the sweat of the workers,” but rather received as a handout or gift from the exterior.

The already growing social inequality will now extend to a highly sensitive sector: nutrition. What they’re going to sell in these stores aren’t “delicacies” but rather products of primary need, for which there’s a pressing demand.

What are they going to tell the kids of someone employed by the State when they ask why some of their classmates bring food to school for snacks that they can’t get?

Despite what is established in the Cuban Concept of the Social and Economic Model, in the Communist Party guidelines and in Article 65 of the Constitution, the new rule now won’t be “to each according to his work” but rather to each according to their relatives or friends abroad who are ready to send remittances. As a result, no one will now have the same enthusiasm for “the common work that provides justice to all,” but will strive to improve their personal relationships.

The dollarization of one indispensable part of retail commerce isn’t in itself bad news. It’s almost a blessing that this has been established by the present authorities, so that there won’t be leftist criticism of those who, after a foreseeable change, propose that everything be dollarized. In this sense they are already including other “advances,” like the elimination of workers’ dining rooms, the closure of Schools in the Countryside or the elimination of illegal gratuities.

The defect in this measure is its incoherence in relation to the other economic, social and political factors. It’s enough to remember that point 19 of the macroeconomic policies of the Party guidelines proposes “consolidating the pecuniary functions of the Cuban peso, with the goal of strengthening its role and preponderance in the monetary and financial system of the country.” Can undercutting the ability of the Cuban peso to convert itself into goods and services be a way of strengthening it?

When complaints about poverty are combated by arguing the inviolability of principles, believers close their mouths and forge ahead; but something will have to happen when principles are trampled underfoot and the suffering increases.

*Translator’s note: CIMEX is a State-owned Import-Export corporation. Its financial branch, FICIMEX, controls credit card transactions in Cuba and remittance wire transfers from other countries.

Translated by Regina Anavy

[1LegLance]

So food can be purchased with debit cards.....

All I want to know is when I can use a US or Canadian credit or debit card to get my cigars

[NSXCIGAR]

...to each according to their relatives or friends abroad who are ready to send remittances.

Now that's the true communist creed.

[Nino]

http://translatingcuba.com/the-dollar-returns-to-rule-our-lives/

The Dollar Returns to Rule Our Lives

14ymedio, Yoani Sanchez, Generation Y, Havana, 18 July 2020 – The first time I entered a hard currency store was in long distant 1994. I had to show the three one-dollar bills that a friend had given me, and thus managed to enter the shopping* on the ground floor of the Seville hotel, near the Capitol in Havana. The smell of cleanliness, the air conditioning and the shelves full of products were a hard blow for this Cubanita who, until then, had only known about state-run businesses and the rationed market. Since then it has rained a lot, but it also seems that history moves in circles on this Island.

This week, after the independent press leaked that stores were being prepared sell food and toiletries in foreign currency, many emphatically denied that possibility on the premise that “something like this cannot be.” Curiously, until Miguel Díaz-Canel confirmed, this Thursday afternoon, that the network of businesses managed by Cimex was going to offer food in dollars, euros or other foreign currencies, some clung to the conviction that such a segregationist measure could not be implemented in this country.

Memory is a slippery animal. This is exactly what Fidel Castro did when, in August 1993, he authorized the possession of dollars and fired the starting gun for the appearance of a vast network of state stores where you could pay only in that currency. The time came when those lacking US banknotes looked on – salivating – as others bought cookies, frozen chicken, sausages or soda in a type of store that, soon after, began to introduce the convertible peso (CUC) into its operations.

We have already experienced this, but many do not remember or do not want to remember. The dual monetary system became something so ordinary that, little-by-little over the last 20 years, we “normalized” the idea that to acquire merchandise of better quality and variety you had to have convertible pesos. The only difference now, with respect to recent years, is that the currency that once again governs the country’s destinies, and that guarantees a certain personal comfort, is the one with the faces of Lincoln and Franklin, one that had already determined our life in the 90s but that, this time, operates through magnetic cards.

This is nothing new: every time in the last half century that the Plaza of the Revolution has felt that the critical economic situation could shake its power, it has allowed certain winds of the market to flow over the Island and a social group to find accommodation in some shots of consumption. Nothing should surprise us in that strategy, which they have repeated so many times, although the double talk of proclaiming one political model and applying another that is so different, must not fail to outrage us.

Among those who until Thursday doubted that foreign exchange stores would include food, at a time of brutal shortages of food in the markets that sell in local currency, most were from my son’s generation. Cuban youths who were born after the shoppings opened, and the free circulation of the dollar allowed and the subsequent appearance of the commonly called chavito, the Cuban convertible peso (CUC).

For them, state commerce operated in two currencies: the CUC and the CUP… but they forgot – or could not remember due to age issues – that under the skin of those colored pieces of paper called convertible pesos there was always the bristling hair of a wolf named the dollar, a wolf which is now about to become the owner of the new hard currency stores. Any other version is bedtime story about Little Red Riding Hood.

 

[LLC]

So food can be purchased with debit cards.....
All I want to know is when I can use a US or Canadian credit or debit card to get my cigars

I use Canadian credit cards all the time to buy cigars in Havana.


Sent from my iPad using Tapatalk

[Chas.Alpha]

On 7/22/2020 at 10:04 PM, 1LegLance said:

So food can be purchased with debit cards.....

All I want to know is when I can use a US or Canadian credit or debit card to get my cigars

God help me if Cuba starts accepting Capital One... ?

[StogieSteve23]

On 7/23/2020 at 8:31 PM, LLC said:

I use Canadian credit cards all the time to buy cigars in Havana.
 

But you're Canadian, so that makes sense.  US credit/debit cards have not worked in Cuba. 

[Viva Vegas]

Just being able to use US bills at LCDH in Havana would be great.

[Nino]

7 hours ago, Viva Vegas said:

Just being able to use US bills at LCDH in Havana would be great.

Might be practical thinking but not a very smart move.

You'd get the official rate while meanwhile the US Buck gets you 1,20 to 1,50 CUC on the street market ... so basically you're giving away 20 to 50% value while the prices at LCDH are in CUC.

[Nino]

On 7/23/2020 at 5:53 AM, NSXCIGAR said:

...to each according to their relatives or friends abroad who are ready to send remittances.

Now that's the true communist creed.

And what does the "true commnunist" Cuba do ?

Exclude the currencies of their best "communist brother states" from being accepted  in the island as they only want TRUE & REAL hard currency ...

No Chinese Yuan, no Russian Ruble and no Venezuelan Bolivar accepted in Cuba - just give us the "real money" ...

https://www.14ymedio.com/economia/monedas-aceptamos_0_2917508232.html

 

[Viva Vegas]

6 hours ago, nino said:

Might be practical thinking but not a very smart move.

You'd get the official rate while meanwhile the US Buck gets you 1,20 to 1,50 CUC on the street market ... so basically you're giving away 20 to 50% value while the prices at LCDH are in CUC.

$1.20 to $1.50 never heard that before . I don't change money on the street either.