Cubans fret, sweat currency reform launch

Cubans fret, sweat currency reform launch
AFP
November 3, 2013, 11:21 pm

Havana (AFP) - Cubans have welcomed news the government will end its
unpopular dual currency system, but they are beyond keen to know when
the change will actually come.

"It should be done already," said retiree Mirtha Graveran, 67, who earns
a monthly pension worth 147 pesos (six dollars) and "rarely" has access
to convertible pesos.

"That would put us on all the same playing field," Graveran said,
echoing the feelings of many Cubans that the system has let social
inequalities widen in the only Communist nation in the Americas.

Many basic necessities here are available only in convertible pesos at
special state-run stores, a source of tension between Cubans who have
access to dollars and the majority who don't.

The government announced October 22 it will phase out the dual currency
system, in place for almost two decades, as part of President Raul
Castro's gradual attempt to streamline the country's Soviet-style economy.

Under the current system, Cubans who have dollars (a minority) can buy
convertible pesos (CUC) at a one for one rate, and use them to buy
scarce goods in well-stocked special state stores.

Cubans' salaries, however, are paid in non-convertible pesos (CUP),
which are valued at 24 to a convertible peso and do not go far in a
country where builders, teachers and doctors, for example, are paid $20
a month.

The government set up the system originally to steer hard currency into
its coffers which it needs to buy bulk food on international markets for
this nation of 11 million.

While Cubans enjoy almost free education and health benefits, housing
and a subsidized food basket, most say they still struggle to put food
on the table.

In state stores, a liter bottle of cooking oil costs $2.40 -- which
might not sound bad except for that average monthly salary at the local
equivalent of about $20.

"Really, I thought the story in Granma would say more. It does not
really have an outline of what is happening now so much as where we are
headed, an outline," said Laura, a 54-year-old economist who asked that
her family name not be given.

The impatience is palpable.

But so far, all the government has said was that this will be a slow and
gradual process.

"Though there has been talk of a timetable, so far no dates have been
mentioned for finally ending the dual currency system," opposition
blogger Yoani Sanchez wrote.

The economist's conundrum is how to make the transition in a country
plagued by such low productivity and high inefficiency, Sanchez wrote.

Sanchez has won awards abroad but is little known at home, a country
where only state media exists and most Cubans cannot afford Internet use.

Cubans who have access to US dollars are mainly those who receive
remittances from relatives overseas, but also locals who work in the
tourism industry, estimated at $2.5 billion a year, unofficially.

"I am hopeful," said Yolanda Rodriguez, a Finance Ministry expert who
makes 41 convertible pesos a month and gets by with help from children
living abroad. "That is, when they are able," Rodriguez said.

Ending the dual system, which has been in effect since 1994, was a key
demand raised at the VI Communist Party Congress in April, 2011.

President Raul Castro, 82, has slimmed down hulking state-run
bureaucracies. But his government has refused to embrace market
economics and political opening.

The gap between the haves and have nots, meanwhile, has become more
noticeable as more Cubans turn to a nascent private sector to make a living.

Some 430,000 Cubans are now privately employed, mostly as owners of
small restaurants, beauty parlors and taxi drivers.

While a medical doctor earns a monthly salary of 500 ordinary pesos, a
mechanic working for himself can make 400 convertible pesos a month, or
9,600 ordinary pesos.

Source: "Cubans fret, sweat currency reform launch - The West
Australian" -
http://au.news.yahoo.com/thewest/business/a/-/world/19663627/cubans-fret-sweat-currency-reform-launch/