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Posted May 25, 2004 by publisher in Business In Cuba

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ANITA SNOW | Associated Press

HAVANA - Cuban stores selling goods in dollars reopened Monday, two weeks after the communist government abruptly shut them down to raise prices, blaming U.S. measures aimed at squeezing the island’s economy.

The reopening of more than 5,000 dollar stores across the island was announced in a full, front page article in the Communist Party daily Granma.
An increase in gasoline prices also went into effect Monday morning. At one local station, the cost for regular gasoline had been raised to 80 cents from 75 cents per liter.

The newspaper article, entitled “Information for the People,” said prices at the dollar stores were increasing an average of 15.4 percent.

“The brutal measures adopted by the United States government to pummel the country’s economy as part of its murderous and genocidal plans against the Cuban people has obliged us to immediately restructure the list of products and prices,” read the message from the government commission overseeing the price hikes.

The government similarly raised prices at dollar stores two years ago, but didn’t close the stores.

The U.S. proposals aim to reduce hard currency on the island by limiting how often Cuban-Americans can visit relatives and decreasing how much they can spend

The government newspaper article said that in the two weeks since the stores closed, workers changed prices on dozens of thousands of items.

During that period, dollar food stores remained opened, but prices on many items in those stores will be raised 10 percent as well, the article said.

Cuban leaders are worried that the shops, which only accept U.S. dollars, are creating social inequality.

In justifying the price hikes, the government’s Monday message said that the products affected “are obtainable by a reduced part of the population.”

“There are great differences in income between a small part and the immense majority of the population,” the message said.

Cubans have free rent and receive free health care, university education and other services. Some receive meals at work.

But wages average the equivalent of about $20 a month and monthly rations of nearly free food have dwindled in recent years.

Cubans who can get dollars that filter through the economy from tourism and family remittances from abroad turn to hard-currency shops for food products and other goods difficult - sometimes impossible - to obtain for pesos.

Cubans with dollars can easily buy everyday goods that a doctor cannot on a salary equivalent to $25 a month.

Cuba was forced to implement liberal reforms in the early 1990s to cope with the loss of Soviet aid and trade. Possession of dollars was legalized in 1993 to draw hard currency from growing tourism and family purchases at the state stores.

The government has steadily offered more and more goods in U.S. currency while the Cuban ration book of items available in pesos has dwindled.

According to a document obtained last week by The Associated Press, some of the steepest increases will be imposed on leather goods, which will rise up to 20 percent; imported cigarettes, up 20 percent; alcohol, up 25 percent.

The document issued by the Domestic Trade Ministry to managers of dollar-only stores says prices of laundry detergent will cost between 12 percent and 20 percent more, and hand soap will cost between 20 cents and 80 cents, up from 15 cents and 70 cents.

Prices of clothing, shoes, electrical goods and furniture will increase between 10 percent and 15 percent.

  1. Follow up post #1 added on May 27, 2004 by mario parent

    Je reviens de voyage (de la Havane ), et j’ai constaté à quel point le peuple Cubain se divise en 2 clans… Ceux qui ont accès au dollar U.S et les autres qui vivent une réalité tout à fait différente en n’y ayant pas accès…  C’est incroyable à quel point les gens ne parle que de DOLLAR… C’est complètement fou !!!  En tant que touriste, je me suis fait harcelé dans le petit magasin en face du bar Oasis… et sur le Prado,face au capitolio…  Sans ça les gens sont gentils mais après quelques minutes,on réalise que tout ce qu’ils veulent de nous, ce sont les Dollars que nous possédons… Monsieur Fidel je vous respecte,mais faites quelque chose; pour le peuple, et pour ceux qui comme moi aime Cuba .

    Merci & bonne chance

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