One town's experiment gives Cuban peso real value
BY WILL WEISSERT
Associated Press
BAYAMO, Cuba -- A communist experiment is letting average government
workers in this eastern city enjoy a few things only foreigners and
monied Cubans can usually afford: a good burger, a kicking jazz bar and
stiff cocktails.
Across the rest of the island, average monthly government salaries of
408 pesos, about $19.50, don't cover grocery bills, let alone a night
out. But in Bayamo the central government has made a special effort to
support peso businesses, giving the lowly currency actual buying power.
Along the stylish pedestrian mall known as Paseo or ''The Boulevard,''
six blocks of restaurants, barber shops, ice cream parlors and
department stores give Cubans a taste of tourist life at local prices.
Jazz bands jam for free until 2 a.m. at the Piano Bar, where mojitos go
for just 5.50 pesos, or 30 U.S. cents. A 1950s-style diner serves up
tasty meatball sandwiches for about half a peso -- the equivalent of
three cents -- and four scoops of the richest ice cream in Cuba for
about the same price.
''Almost everyone who comes in is surprised at first. The music is good.
The cocktails are strong,'' said Ernesto Aldana of the Piano Bar, where
the Cuba Libre -- copious rum pours with ice and splashes of cola and
lime -- costs 4.80 pesos, the equivalent of less than 25 cents.
''It's like you're paying in dollars,'' Aldana said. ``But you're not.''
Under the country's dual currency system, most things Cubans want and
need are not available in the money they earn -- the regular Cuban peso
which is worth a little more than 4 cents. Virtually all upscale
businesses across the island are priced for foreigners in so-called
convertible pesos worth $1.08 each, 24 times as much.
Cuba has had two currencies since the collapse of the Soviet Union
wrecked its economy and spurred its turn to tourism. Tourist businesses
took U.S. dollars and charged U.S. prices, while the peso was maintained
for everyday transactions.
The convertible peso, also called hard currency, was born around the
same time but took on its current value in 2004, when the government
banned the use of the U.S. dollar.
Cubans have long hoped the government would merge the two pesos and
close the gap between the goods and services they and foreigners can
afford. But so far, nothing has changed under Raúl Castro, who took over
as president from his ailing brother, Fidel, earlier this year.
Cuba's government historically has chosen provincial areas to test
potential economic policy changes. In Bayamo, a city of 140,000 and the
capital of Granma province, leaders of the regional Communist Party
began expanding peso businesses in 2005.
''Normally, there's a gap between quality of service to foreigners and
service to Cubans,'' said Isidro Alonso of Bayamo's Communist Party's
Committee on Ideology. ``We are working to erase that.''
Huge government subsidies are needed. Paseo businesses here take in only
1,000 to 1,700 pesos a day, or $50 to $80. And the program only took
shape after Bayamo communists asked central government planners for
special autonomy and won the right to sell regionally produced items
such as rum, seafood, beer, yogurt, beef, ice cream and cheese to local
residents, rather than shipping them elsewhere on the island.
''We would see products like powdered milk made here and sold somewhere
else and we said, 'How is this possible? If we make it in Granma, we
should be selling it in Granma,''' Alonso said.
However, rising global commodity prices have made Bayamo's government
subsidies more costly, while hurricanes Gustav and Ike in recent weeks
dealt serious blows to Cuban food production.
The government recently ordered all provinces to contribute more food to
all parts of the country and reduce Cuba's dependence on foreign
imports, said Humberto Rondon, technical director for production at a
state cheese and ice cream factory outside Bayamo. In Granma's case,
officials will now have to ship about 80 percent of its cheese to points
elsewhere in Cuba.
Despite the hurricanes and rising food prices, the Bayamo experiment is
so successful that the central government in Havana is continuing to
devote $10 million this year to reopen some peso businesses and cover
operating expenses of those already established, Alonso said.
There are ordinary peso businesses all over Cuba, but the products are
shoddy and service is mediocre. Shortages of everything from potatoes to
pasta mean most of the dishes listed on peso restaurant menus aren't
available, while peso stores have long lines of customers for mismatched
inventory on largely empty shelves.
Contrast that with Bayamo, where the raw juice bar offers freshly
squeezed mango or papaya juice for the equivalent of less than a nickel.
The fully stocked dairy stays open until 11 p.m. on Saturdays. Ground
beef is often hard to come by elsewhere, but here two hamburger joints
serve up double patties heaped with ham for about $0.40 in pesos.
There's an office supply store, a flower shop, two beauty parlors, a
pair of seafood restaurants, a Spanish eatery and a place offering
passable vegetarian dishes.
''Usually, without hard currency, you never go to restaurants, you never
go out on Friday nights. But here you can,'' said Vilna Lopez, who rents
rooms in her home three blocks from Paseo.
Out-of-towners even brave long bus rides to spend their pesos in Bayamo.
''I would like to take this place home with me, and I'm from Havana,''
said Alexey Rodriguez, visiting from the capital 460 miles to the northwest.
But the Bayamo experiment is too expensive to work on a larger scale.
And it has not done enough to soften the sting of the dual currency
system for many.
Ana Luisa Gonzalez earns 225 pesos a month as a street sweeper on Paseo.
Her son works at a tampon factory. A portion of his pay comes in
convertible pesos.
''We live on that,'' Gonzalez said. ``Salaries in (regular) pesos have
no value.''
When asked about all there is to buy along Paseo, the 50-year-old shook
her head and said even here, her salary isn't enough. One large block of
cheese is 80 pesos.
''If I buy two cheeses and two yogurts here, there goes all my salary,''
she said. ``Then what?''
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