The dollar determines Cubans' everyday lives

HAVANA, July 26th (DW)  It was still early in the morning when the first customers started lining up outside the specialist foreign exchange shops.

At the start of the week, they began selling food and hygiene products against foreign currencies. After supply shortages gripped the country’s shops for months on end, Cubans were able to enter the new stores with full shelves and overflowing refrigerators, where payment could only be made using euros, US dollars, or other foreign currencies pre-loaded onto a debit card.

Locals were in disbelief when news emerged via the independent press that the government would allow new stores to operate where citizens could purchase products with a currency other than the Cuban peso. Later, when President Miguel Diaz-Canel confirmed the rumours and more details became known, a wave of indignation grew.

The move has seen an economic divide between people across the island. On one side, there are those people who receive their salaries in Cuban pesos, on the other, there are those who have relatives abroad and are able to get money transferred to them.

There is an enemy that remains at the center of Cuba’s propaganda war, but whose banknotes have become a lifeline and support for the country’s failed economic model.

The party leaders, who boast of national sovereignty, have been defeated by reality. Their own money is an only worthless coloured paper. It is green dollar notes which allow them to stay sitting on government benches until their pressed linen shirts burst open at the navel.

Growing distrust amongst the population

Now locals have been forced to place their hope in foreign countries, which they have long criticized, as they turn to them for promises. They claim that income from foreign exchange shops will allow them to supply other government businesses where pesos are still being used. But it is not easy to minimize public distrust.

On the streets, Cubans are aware that the dollar has completely replaced the local currency. It is the mainstay of the black market, plays a vital role in informal transactions, but at the same time excludes a large proportion of the island’s population from being able to make purchases.

The percentage of the population able to shop at these 62 new stores is difficult to predict. Bank-issued debit cards, which can be used to purchase products in the new stores, barely exceeded 15,000 in number at the end of last year — granting only a tiny proportion of the 11 million-strong population access to the shops.

However, there are over two million Cuban emigrants and a large portion of those who send money back to the island to family and friends.

In 2018 alone, Cubans received $6.6 billion (€5.7 billion) in goods or cash from abroad, according to the US-based Havana Consulting. It is expected that some of this money will be included in the national accounts — along with income from healthcare workers working in foreign missions or goods imported by travellers, the so-called mules, for resale on the black market.

Not allowed

But the distribution of the dollar, which is either brought onto the island personally or through remittances, is still limited. Outside its radius are the people employed by the state without family members abroad, pensioners whose children haven’t emigrated, or those who do not own a company which allows them to draw banknotes with portraits of Abraham Lincoln or Benjamin Franklin. For them, products sold in foreign currency are virtually unobtainable.

The shampoo, beef, the vast selection of tinned food, the cereal boxes for all ages, the various cold meats, the good coffee, the olive oil, the dried fruits, the sauces and dressings, the different sorts of pasta, the yoghurt, and the long-life milk displayed on the shelves in these shops are light years away from being in their hands.

When customers filled their shopping carts at the start of the week, went to the checkout and paid with their magnetic cards loaded with a foreign currency, it marked a decisive point that everyone in Cuba felt, one which continues to tear rifts through society and one where its long-term consequences are unimaginable.