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Posted February 01, 2010 by publisher in Business In Cuba

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Mark Frank | Reuters

Retail outlets selling everything in Cuban pesos are popping up in Santiago de Cuba in what may be the Cuban government’s first steps toward phasing out its unpopular two-currency system.

The opening of the establishments mark a reversal of two decades of national policy that priced most goods and services in a dollar-linked convertible peso widely known by its acronym, the CUC.

“They have opened restaurants, pizzerias, cafeterias and pastry shops and set up areas across the city where they sell sandwiches, snacks and soda,” said retiree Pedro de la Fuente from Guantanamo, the capital city of Cuba’s easternmost province.

“The population has welcomed this because before these things were available only in convertible pesos,” he said.

The change appears to be part of President Raul Castro’s plan to make more goods and services available in pesos in a gradual transition away from the two-currency system, which he has pledged to eliminate.

Since taking over from his ailing brother Fidel two years ago, Raul Castro has pledged to make daily life easier in the communist state, where the government tightly regulates almost all economic activity.

He has taken steps to reform agriculture to increase food production, liberalize the sale of computers, cell phones and domestic appliances and free up the official media to criticize bureaucratic mismanagement.

Cuba adopted the dollar as its second currency to prop up its economy, which spiraled into a deep depression after the Soviet Union, the island’s benefactor for 30 years, collapsed in 1991.

The dollar was eventually replaced by the CUC, which is pegged at a value of US$1.08 to one.

Cubans have complained mightily about the two-tier system, saying it makes too many things unaffordable for them unless they receive dollars from relatives living abroad.

The average Cuban salary is 440 pesos a month, the equivalent of 18 CUCs at the current exchange rate of 24 pesos to one.

SANTIAGO THE PILOT PROJECT

The epicenter of change is Santiago de Cuba, the island’s second largest city, where far more peso outlets have opened than in other cities.

“There is a special plan, where the party and government allocated Santiago a budget to remodel dozens of establishments and open new ones,” a Communist Party cadre and administrator of various eating places said, asking her name not be used because she was not authorized to talk with foreign journalists.

“The idea is for the population to feel good, to have the services they deserve, to be able to sit down in any restaurant, cafeteria or what have you and pay in pesos,” she said.

For the 50 percent of the population with some dollar income from family remittances, state bonuses, tips or other sources, the prices are often a steal, but they are only occasionally accessible to those not so fortunate.

“At least I can go out to eat a few times a month in the money I’m paid with,” said Carmela, a professor of nursing in the central city of Camaguey who earns 600 pesos per month.

An informal survey in Santiago de Cuba found that at Ideal supermarkets, much of what one finds in the convertible peso markets can be had for a price equivalent to up to 20 pesos to a convertible peso, still very expensive but a bit more affordable than the 24-to-one official exchange rate.

Local fish stores sold a kilogram (2.2 pounds) of shelled oysters for 60 pesos, lobster meat for 50 pesos, crab for 15 pesos and salted fish for 50 pesos.

At the restaurant Las Americas, a meal of pork, rice and beans, salad and a local beer or soda, cost around 35 pesos and in the evening the place was packed.

The pizzeria down the street sold a large pie and beverage for 20 pesos to a full house, adding on up to 10 pesos for lobster, chicken, sausage or shrimp topping.

A few doors away a fish restaurant did a brisk business offering a variety of grilled and fried dishes for between 30 pesos and 50 pesos.

The peso establishments were well lit, clean and air conditioned, luxuries reserved for CUC-based eateries since the 1990s.

That was not true everywhere—in the eastern city of Holguin, for example, some remain dark, dirty and hot.

The government has said little about the project or how fast it will move, but Raul Castro has told Cubans it will take several years to return to one currency.

  1. Follow up post #1 added on February 01, 2010 by Goldbuster

    My experience is that the CUC is that its extremely falsified and each stores or bank have to verify the numbers on the bills for larger denominations.

    I personally witness 2 Cubans going into all the street exchange stores with a pile of brand new $10 CUC just to exchange it get a few local pesos.

    The problem is the Cuban government does guaranty its CUC versus other foreign currencies, having its CUC been printed and falsified in the USA does have a terrible effect on its foreign reserve.

    Thats the type of terrorism that Cuba is facing every day by their own people.


  2. Follow up post #2 added on February 01, 2010 by publisher with 3905 total posts

    “having its CUC been printed and falsified in the USA”

    Please quote the source of this information.



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  3. Follow up post #3 added on February 01, 2010 by Goldbuster

    No one in Cuba is equipped to produce quality reproduction of their currency.

    It have to be imported, local distribution networks set-up and controlled.

    Germans couldn’t do it

    Source: Logic and common sense


  4. Follow up post #4 added on February 01, 2010 by publisher with 3905 total posts

    So you are saying the US prints all the Cuban currency?

    That’s logic and common sense?

    Do you read your stupid comments?



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  5. Follow up post #5 added on February 01, 2010 by Goldbuster

    Tell me who is most able and politically motivated to flood Cuba with fake currency, and yes Cuba is been flooded

    Think hard, no its no Wazyland


  6. Follow up post #6 added on February 01, 2010 by publisher with 3905 total posts

    1. You make the statement that the US prints Cuban currency because it is “common sense”.

    2. You say Cuba is flooded with fake currency, again some crazy statement with no proof or even granma source.

    You are being stupid for the purpose of being argumentative and disruptive and you won’t be around here for much longer.



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  7. Follow up post #7 added on February 01, 2010 by Goldbuster

    1- You have make that statement, not me
    Im telling you it is Logic that it is the US not the Germans who are behind the fake currency scandal.

    2- I have spend time in Cuba and all the 50 CUC and up are number and listed by every store in the country, you have to give your ID when you use those bills.

    If Cuba wasnt flood with fake currency, why are the are taking those measures?

    Yes it is simpler to believe in the Boogieman

    How you guys be so ignorant of Cuba reality just gets to me
    Yeah you been dying to find a reason to ban me, just do what you are good at, just make one up!


  8. Follow up post #8 added on February 01, 2010 by publisher with 3905 total posts

    You are on a VERY VERY short leash.

    Contribute with rational thoughts, opinions and some references to back up those thoughts and opinions or you will be banned because of your own actions.

    ... and no, I don’t think your crazy guess that Cuba is flooded with fake money let alone the US did it.

    So, cut the crap and try to be intelligent and contribute to the discussion. Don’t come in here and drop “stupid” bombs just to get attention.

    Remember… VERY VERY short leash.



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  9. Follow up post #9 added on February 01, 2010 by Goldbuster

    Yes you are right Cuba dont have fake currency, it the only country in the world who dont have to deal with fake currency.

    The US cant do something like that they dont have any contact with the Cubans.

    You are right, how naive and stupid I am.

    Maybe I shouldnt go back to visit Cuba, I get all confused, I should stick with the Miami Cubans and starved my own people.


  10. Follow up post #10 added on February 01, 2010 by John

    The CUC is completely worthless outside of Cuba. I would imagine the vast majority of CUC notes and coins (aside of natural attrition) are still within Cuba.
    They are afraid of rampant inflation and the possibility of Cubans being flush with CUC (real or not) and the ability to clean out the govenment stores.
    The idea of retreating to the Cuban National Peso has a possiblity, was it not in circulation before the robolution? If so, it has some chance of world recognition (after the embargo’s demise of course)

    Rob, Please don’t banish Goldblunder, he makes very lively entertainment!


  11. Follow up post #11 added on February 02, 2010 by John

    On second thoughts, if the embargo disappeared tomorrow and all political and economic relations between USA and Cuba were amicable, the US Dollar would become the currency of choice in Cuba. Like it or not, business and industry would shy from Fidel’s fiat fiscal experiment.
    It’s the only way the sad state of the fragile infrastructure can be rebuilt.


  12. Follow up post #12 added on February 02, 2010 by Goldbuster

    Once again some “agent” propaganda Bull “The CUC is completely worthless outside of Cuba” let me tell you how scums rolls:

    As I said I WITNESS IT WITH MY OWN EYES when you and pub where drinking Latte in you Miami tacky bungalows planing your next myth.

    1- All 50 and up CUC bills are tracked by taking the bill number on a separate sheet and the bill owner ID number. So the good times are over

    2-a young cuban ouple with brand new stack of “allegedly fake’’ $10 (That they flash at me) were getting each one 1 of them to the street exchange booth to get the equivalent $240 Real Cuban Pesos en moneda national.

    Street money exchange booth are quite common and no paperwork or any type of video security exist there.

    3-After getting rid of their fake $10 CUC they go convert the full real stack of real pesos to any bank or change boot to receive real CUC

    4-CUC are convertible to any foreign Currency by the Central bank of Cuba so all banks and some change boot will give you USD CAN AUD EUR…

    5-You wait the proper signal of your terrorist cell and you pull out the foreign Real currency out of the country all together at the same time creating a fatal blow to Cuba purchasing power.

    This is how psychopaths works and they been working for the Cuban people demise for 51 years now.

    You know who they are.


  13. Follow up post #13 added on February 02, 2010 by publisher with 3905 total posts

    Oh, that makes sense… NOT.



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  14. Follow up post #14 added on February 02, 2010 by Goldbuster

    The flood of fake CUC is spread like wildfire by the Miami Mafia

    For a second time in history they would have stolen the people’s wealth.

    Its Castro fault of course.


  15. Follow up post #15 added on February 02, 2010 by Goldbuster

    Now I understand why they so uptight with any type of control and security…It does affect their criminal enterprise.

    Only when the criminals are on top that they “Patriot Act” the rest of us


  16. Follow up post #16 added on February 02, 2010 by Goldbuster

    “free up the official media to critiI free up the official media to criticize bureaucratic mismanagement.”

    I wonder when was the last time our Canadian/Israeli corporate media did criticize bureaucratic mismanagement?

    When you live in a fail democracy (Like Canada) you can only blame those who were suppose to alert you.

    PS: Canada is under a Coup d Etat since December 2008, you didnt know? The media didnt tell you?


  17. Follow up post #17 added on February 02, 2010 by publisher with 3905 total posts

    One stupid post after another, off topic and a useless waste of time with no regard for other readers.

    Goodbye goldbuster. You are done.



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  18. Follow up post #18 added on February 02, 2010 by DavidDeming Rodriguez

    Whatever Goldbuster says does noy affect other readers, but his info will not be taken on face value; research will be done, if anyone cares enough to research.


  19. Follow up post #19 added on February 02, 2010 by manfredz with 464 total posts

    First allegation I’ve heard that Cuba has a counterfeit currency issue…
    Am sure the idea has/had been considered by the CIA etc as destabilization of castro and Co was being tried, but think those days are over.
    Am sure if there was a problem with counterfeit CUC even a tourist would have to show his passport when buying CUC to help track them, something that doesnt happen.
    Also they would stop you from exporting/importing CUC as a tourist (think the limit is 100 CUC now)


  20. Follow up post #20 added on February 02, 2010 by publisher with 3905 total posts

    Manfredz,

    Thanks for your insight. Goldbuster was just a bomb thrower just to be disruptive. He really had no knowledge or rational thought.

    His IP address has been banned.

    We see people like that on a regular basis and judging by his behavior, it might be the same person coming in from a different IP address and email.

    We give everyone a fair shot here with their opinions and arguments but they eventually self destruct in the debate.

    This is why Castro does not like freedom of the press, freedom of assembly, freedom of speech etc. TOO dangerous because his ideas and ideals don’t hold up in debate.

    That’s why the Fidel lovers always revert back to blaming the US.



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  21. Follow up post #21 added on February 02, 2010 by manfredz with 464 total posts

    Well I feel that the US is definitely responsible for many of Cuba’s ails, but to me its greatest harm is in its track record in both Cuba and the whole region which gives people like the Castros the boogyman they need to distract from their shortcomings.
    I really believe that when the Castros took over they were better for the majority of the population than Batista and co were (just like I believe Lenin was better for the majority of the Russian people than the Czar was), but rather than delelop with time and offering the people a continuing better life it stagnated into what it is today. And unfortunately the USA has done little to help change that (bearing in mind it takes two to tango and there is also no inclination from the castros to change)


  22. Follow up post #22 added on February 02, 2010 by John

    #21
    What is your point?

    #19
    Correct. Physical ‘tracking’ of banknote serial numbers and ID verification is stupidity and will pretty much halt tourism in it’s tracks in a vain attempt to catch ordinary Cubans with ‘fake’ CUC.
    Not much point of imposing 100 CUC export limit for tourism, why would the average tourist hoard CUC’s? it only serves as lively discussion piece outside Cuba but has zero monetary value.
    Every nation with printed banknotes has a counerfeit problem.


  23. Follow up post #23 added on February 02, 2010 by publisher with 3905 total posts

    The Havana Times (a quasi Cuban government website) is reporting that a new Cuban peso store has opened in classy Vedado at 23 and 12 streets.



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  24. Follow up post #24 added on February 03, 2010 by CubanMikeyM

    The Havana Times do not ban IPs of dissident voices/comments like you just did.

    Its Castro fault again


  25. Follow up post #25 added on February 03, 2010 by publisher with 3905 total posts

    Hey Goldbuster, I see you have come back.

    The havana timed does not ban IP addresses, you are correct.

    They delete the comments before they are even posted. I gave up posted there because they refuse to post ANY of my comments.

    Dissident voices are welcomed here with open arms until they are intentionally disruptive or delusional. Two qualities you repeatedly displayed. You were not banned until after your second warning so don’t give me that innocent crap.



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  26. Follow up post #26 added on February 03, 2010 by CubanMikeyM

    Maybe your comment was disruptive and delusional and that why Havana Times refuse to post it.

    You justified repressing free speech, you have no business pointing fingers.


  27. Follow up post #27 added on February 03, 2010 by publisher with 3905 total posts

    My comments were questions asking for facts.

    In Cuba that is disruptive. I agree.

    Communists always have trouble with facts and investigative reporting.



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  28. Follow up post #28 added on February 03, 2010 by John

    Getting back on topic, it would seem that if the Cuban National Peso (MN) became the defacto currency of Cuba again it would naturally gain more domestic purchasing power and strength in foreign exchange at home and abroad.
    Perhaps Fidel and Raul know the true extent of counterfeit CUC and have devised a plan to stop CUC forgery completely; remove it.


  29. Follow up post #29 added on February 03, 2010 by Yeyo with 411 total posts

    Right now you can exchange CUC for Cuban Peso freely at 1 to 25 rate.  You can buy a beer for 25 pesos or for 1 CUC, is the same.

    I saw numerous places selling in Cuban Pesos but the problem is not to get rid of the CUC or the double currency, the problem is to raise the buying power of the average Cuban and I cannot see how they would do it.


  30. Follow up post #30 added on February 03, 2010 by pipefitter

    If you look at Cubamania site for a post by Sherry5851, she has a link to a Reuters story from Feb1/2010 about the new stores that are opening in Santiago. they say the stores are selling items in regular Cuban pesos and they seem to be valueing the regular peso at about 20 pesos to the 1 CUC. If they are doing this they are in effect raising Cuban wages. Now this could be a move to eventualy get rid of the CUC and also give Cubans more acsess to goods in regular pesos or in other words the currency that most Cubans earn. It also says that the average wage now is 440 pesos per month up from the 220 pesos so often quoted by many.


  31. Follow up post #31 added on February 04, 2010 by publisher with 3905 total posts

    Yoani has posted a great article about living with dual currencies in Cuba.



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  32. Follow up post #32 added on February 05, 2010 by John

    #29
    Raise the buying power by raising worker’s pay, allowing free enterprise, scrap the food rationing program, introduce worker incentives, allow overtime, encourage farmers to form markets and end dependance of selling to the state, begin a civil infrastructure rebuilding program, encourage ‘open’ tourism whereby Cubans can open businesses in competition with the state, bring all Cuban doctors, teachers and scientists home to build a solid future…....


  33. Follow up post #33 added on February 05, 2010 by publisher with 3905 total posts

    John,

    Nah… that’ll never work.



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