Posted June 19, 2005 by publisher in Cuba Business.
By Diana Marrero | The Florida Times-Union
Officially, the 39-year-old woman makes about $6 a month selling produce at an open air market near the city’s famed seaside wall. But when business is brisk, she can more than double her salary.
More customers, she says, means more opportunities to skim a few pesos off the top of each sale.
“This is a jungle,” says Mayda, who, like others interviewed for this story, did not want her last name used. “What’s a jungle about? Survival.”
Lately, however, business has not been good for the many Cubans who rely on American currency and relatives in the United States to survive. Under tougher U.S. economic sanctions against Cuba, fewer Americans are traveling to the island and fewer are sending money to relatives.
In response, the Communist regime has, among other measures, halted the circulation of American dollars, long the coin of the realm here. The recent moves, by governments on both sides of the Florida Straits, are squeezing the ordinary Cubans who are caught in the middle.
But in a country where 1950s Chevrolets somehow keep running, Cubans are finding new ways to survive. They are becoming illicit capitalists.
“In this country, we invent ways to solve our problems,” says Mayda, who has been dreaming up fresh business opportunities to supplement her meager income.
Despite the island’s Communist economy, the city’s streets are teeming with black market “entrepreneurs” like Mayda. Often, they go door to door, selling everything from ham to cell phones, parakeets to stolen eggs.
A number of youths have begun digging in the rubble of collapsed buildings to sell bags of concrete for construction projects. Older people collect cans and plastic bottles from the street to trade back to the government in exchange for other goods.
Some vendors simply stand in the middle of a busy sidewalk holding up T-shirts, gold-plated bracelets or lacy underwear, walking a fine line between promoting their goods and drawing too much attention to themselves. Selling wares without a license is illegal, and these days, the government is issuing fewer licenses.
Cuba had briefly experimented with small free-market reforms following the bleak “special period” of the 1990s, when Soviet subsidies were withdrawn with the collapse of the Soviet Union. But the Cuban government, buoyed by closer ties to China and Venezuela, is now reverting to a more centralized economy and regaining its control over the country’s money.
The tighter U.S. sanctions, imposed a year ago, were designed to block about a third of the American currency—by some estimates as high as $1 billion a year—that flows into Cuba each year. The law limits visits from Cuban-Americans with immediate family members on the island to once every three years and redefines the term “immediate” to exclude aunts, uncles and cousins.
The law also limits remittances to $100 a month for immediate relatives. Last week, by a 216-210 vote, the House refused a bill that would have raised those limits.
For now, however, Cuban dictator Fidel Castro has offset much of the impact of the sanctions by taking American dollars out of circulation—hoarding the hard currency his government needs to buy fuel, food and other commodities on international markets.
The Cuban government is also imposing a 10 percent fee on exchanging dollars for so-called “convertible pesos,” which Cubans now need to buy much of their goods. Those lucky enough to continue receiving dollars from abroad say it is getting more difficult to stretch their money these days.
In recent months, the Cuban government has also artificially strengthened the convertible peso, which had been equal to the dollar in Cuba, by 8 percent. And it strengthened the value of the common Cuban peso by 7 percent, from 27 to 25 pesos to the dollar. Most Cubans earn their salaries in pesos.
The moves are designed to close the gap between those who only earn pesos and those who receive money from abroad, the government says. Cubans who can afford to do so are holding on to some of their dollars in case the regime changes or they find a way to leave the island.
Despite the internal and external hurdles Cuban entrepreneurs face, nearly anything can still be found on Cuba’s streets with the right amount of cash. Soap. Cumin. Puppies. You name it.
Some private “businesses” rely solely on word of mouth, especially those who run movie banks, sell pirated music or offer satellite television connections and Internet services.
Even seemingly ordinary housewives have turned into would-be capitalists, hawking their government-rationed cigarettes on the black market to buy extra sugar for the cakes and cookies they sell to neighbors.
Maria, a computer technician who says she has never been good at business herself, envies her boss, a doctor who manages to double her $20 monthly salary by selling homemade sweets and sandwiches.
Most Cubans make the equivalent of about $12 a month. While their wages are small, they typically don’t pay any rent, are ensured heavily subsidized utility services, public transportation and free health care. They are also guaranteed a monthly, subsidized food ration, which generally lasts only a week.
But what little wages they earn are swallowed up quickly at the grocery stand. A pound of pork can cost 23 pesos, less than $1, at cheap markets, which frequently run out of goods and offer little variety. A pound of ham can cost eight times as much, nearly $8 at a so-called dollar store, available only to people who have convertible Cuban pesos at their disposal. Given the exorbitant costs, a typical Cuban family spends about 90 percent of its income on food, according to some estimates.
“People are always looking for an out,” says Maria, a 46-year-old single mother who barely scrapes by on her $14 salary. “My money goes to eat and badly. With $1 you can’t buy anything. You can buy a soda, a beer, an ice cream cone. Imagine, I have to work two days to buy a soda.”
Like many others, Maria often wonders how much longer she will be able to find ways to survive on her meager salary and the little money relatives send from abroad. She doesn’t buy soda, settling for weak coffee. Often, she waits in line for hours to buy the heavily subsidized goods she can better afford only to learn the stores have run out of eggs or bread.
In her neighborhood, like others in Cuba, friends share what they have with others who are less fortunate and they spread the word daily about where to find the cheapest goods.
Despite the tighter sanctions, Cuban-Americans are also finding new ways to keep helping their relatives in Cuba. (Cuba experts disagree as to whether there has been a significant drop in remittances in the past year.)
Although many are now sending only what is allowed under the new laws, some are skirting the sanctions, using “mules,” people who sneak money and packages to Cuba for a fee, to send prohibited items such as extra money, clothes, shoes or soap to relatives.
When a 29-year-old Havana woman gave birth in January, her father, a former political prisoner who now lives in Miami, sent her everything her infant son needed and more: baby shampoo, lotion, a blue blanket embroidered with the word “baby” in yellow letters and a mosquito net for the crib. But she says it is getting harder to find “mules” who are willing to skirt American laws,.
“[President Bush] needs to leave other countries alone,” she says.
Before the new laws went into effect, her father, a 68-year-old retiree, sent her money or a care package every month with a man who made his living as a mule. The man dropped his illegal profession when Bush strengthened enforcement of the travel ban. The administration is more closely scrutinizing Americans who travel to Cuba through countries like Mexico and those who are caught now face steep fines.
When the 29-year-old’s father sends money now, she has to pay $10 per hundred in Cuban exchange fees.
While some Cubans resent the tighter U.S. measures, others are willing to get squeezed as long as Castro gets choked in the process.
In the meantime, people like Mayda say they feel like they are gasping for air. When she cannot skim a few extra pesos from the market, she steals a few plantains, pineapples and guava.
At her previous job in a chicken coop, stealing goods was a bit messier. She smiles as she recounts how she could pilfer 57 eggs a day by breaking each one and pouring the contents in an empty liter of milk. She could also stash four pieces of chicken on her body, placing one piece on each breast and one on each thigh.
“Life isn’t easy here,” she says. “This is a war.”
On June 20, 2005, I-taoist wrote:
This is obviously a very accurate account of life in Cuba from the standpoint of average Cubans. Our policies of helping to starve average Cubans is both immoral and counterproductive. We only give justification to those in the communist government who rationalize the lack of commodities by our embargo. This insanity, on both sides of the political spectrum—- Bush on the right and Castro on the left, perpetuates itself by its idological extremism. As usual, the poor Cubans are caught in the middle, squeezed by both sides. In the meantime, the fat cats in Miami, lounging in their seaside resorts drinking $7 mojitos, debate the abstracts of Cuba policy. And the politicians in Florida and Washington, completely indifferent to this suffering, keep their brown noses up the fat arses of these political contributors. Que barbaro y que cruel.
On June 26, 2005, Medieval wrote:
I-taoist…I totally agree with you. I was fortunate to travel to Cuba on business several years ago and it is shameful that the U.S. does not end this embargo. It does not hurt Castro, but merely strengthens his position. Give the Cuban people a taste of choice and diversity that we in the U.S. enjoy.