The Cuban Economy

Clearly this isn't a Warton dissertation, but here are some simple obversations about what I've seen so far. The average Cuban has a salary of less than $20 per month. But Cuba is nothing like North Korea or China during the Great Leap Forward, the people are not starving and for the most part everyone lives comfortable, albeit modest lives. Here is how it is possible.

First, there are two currencies: the Cuban Peso (aka Moneda Nacional, or just peso), and the Convertible Peso (CUC). 25 Pesos equals 1 CUC, and 1 CUC is $1 USD. Each Cuban citizen is assigned a ration card that allows them to buy certain items each month using Moneda Nacional. These include rice, beans, bread, small quantities of meat, soap, simple clothing, and other basic foods and amenities. There are also a number of food stands in every town that sell sandwiches, personal pizzas, coffee, and sweets in moneda nacional. Once I made the discovery that I could buy essentailly the same ham and cheese sandwich for 15 pesos that I had paid $5 CUCs the previous day, I've become a strict pesotarian. Brendy and I even managed to find a beer stand in pesos which we visited once or twice.

Any item outside of the basics - electronics, furniture, almost all alcohol - has to be paid for in CUCs. From what people have told me the ration card covers just enough to meagerly get by. Once the supplies from the ration cards is gone people have to use CUCs for everything. Unless someone works with tourists in some way (as tour guides, in restaurants, taxi drivers, and most recently homeowners with a spare room to rent) people are paid in moneda national.

People affiliated with tourism covers a decent amount of the population but is by no means a majority. So how do the rest of the people get by? Many get by with a little help from their friends (or more likely a family member) in the US. Tell 10 people on the street that you are from the US, at least 5 of them will happily exclaim they have friends or family in Miami. Even $50, an amount that most people would consider nominal spread over the course of a month, almost triples the average salary.

Finally, there are those that don't have family who can send them money and do not work in an industry that pays in CUCs, and quite frankly these people are just have a tougher time. The obvious irony is that this system has created a dichotomy anathema to Fidel's dream: the population is divided into those who have access to CUCs, and those that do not. CUCs are king, and if you don't have access to any you are going to live a significantly less comfortable life style.