There is everything in Cuba but for dollars
With the opening in Cuba of shops only in US dollars, the government hopes to fill the treasury with a foreign currency, but creates the risk of increasing inequality, writes France Press.
Prime Minister Manuel Marero Cruz announced in December 2024. The gradual entry into the market for Dollar Supermarkets. According to him, this is a « necessary process » to remove the light foreign currency, which circulates « illegally » in the country and feeds a parallel currency market.
Cuba, which is subjected to an increased economic embargo by the United States, suffers from a serious lack of liquidity and therefore seeks to « acquire » the American currency that residents receive from their families abroad – the second largest currency source for the country.
The big news about these stores is that they are already taking dollars in cash – something that has not happened since 2004.
« This is not for us »
A 40 -year -old father, accompanied by his son, said that as he was passing through the rich Havan neighborhood of Miramar, he entered a brand new supermarket of a luxury hotel – the first to take only dollars since January.
« As soon as I went in, they told me that (the payment) was in dollars, » he says.
| « It was difficult to explain this to my son, » the man said, adding that « this is not for us, » as he has only a few dollars in a prepaid card with an internationally convertible currency (Moneda LibremeNte Convertible (MLC) exchanged against peso on the black market. |
This freely convertible currency was established in 2019 by the government when it began to dollar the retail trade, but has since lost much of its value, France Press added.
There is everything but not for everyone
Since the store has been open, locals have filled their shopping carts with food – an unusual view of Cuba, where the shortage of products and low salaries ($ 42 average salary) forces residents to search for new retail outlets to shop.
| « Every time we come, we find what we are looking for, » said 24-year-old Enzo Puebla. « There are eggs, oil and lots of meat products, » says Puebla, who receives money from his family who lives outside the country. |
According to Cuban economist Mauricio de Miranda, « the main problem with dollarization is that it is partial, since only the cost of consumption of the population, including essentials, are dollarized. »
« But not the income, » adds the researcher at the University of Haveriana in Kali, Colombia, while most of the Cubans receive a fee in Peso. « This necessarily leads to the exclusion of people who do not have the opportunity to have dollars, » he adds.
The US dollar was banned on the island for the first time in 1959 after Fidel Castro’s revolution, and the possession of an American currency could have put its holder in prison.
In 1993, Castro finally decriminalized the possession of dollars and foreign currency stores were opened. The aim was to overcome the deep economic crisis that affected the country after the collapse of the Soviet Union, the main ally of Cuba. In 2004, the US currency was again withdrawn from circulation.
Without electricity, with too little food and fuels: Tourism in Cuba is under pressure
The government’s new strategy for restoring foreign currency is « almost a partial dollarization of the 1990s, » says Cuban economist Tamaris Bamende, a lecturer at the American University in Washington.
The Covid-19 pandemia, the decline in tourism and the unsuccessful monetary reform in 2021, including the devaluation of the peso, created an explosive combination that led to the price of the dollar on the black market while the state was desperate to restore liquidity.
The government is now defending its « dollar » strategy as an essential step in stimulating the flow of foreign currency before moving on to the « department » of the economy.
