From Havana, Martina Kunovic takes us to department stores, where things are for sale in two differently valued currencies. The most valuable, however, is about to be eliminated after barely a decade and a legacy of visible social stratification. What are people’s expectations? What will happen to their savings, sometimes obtained in somewhat unorthodox ways?
“Véndeme CUC.” I looked up. There was a woman in front of me clutching a crumpled 10 peso bill, apparently talking to me. We were standing in front of a small kiosk in Vedado that sells soda, rum, and packaged snacks, items typically sold in convertible pesos or CUC. I took out my wallet and dug out a 0.50 CUC coin, the equivalent to the 10 CUP (the plain Cuban peso) she was holding out, and we made the swap.
Two currencies have been operating on the island since 1993, when, finding itself strapped for hard currency after the collapse of the Soviet bloc, the Government of Cuba legalized the U.S. dollar. (Up until that point, possessing USD meant heavy fines or jail time.) It also kept the national peso, the idea being that the USD would primarily be used by tourists and to buy exclusive imported goods, while national salaries would continue to be paid in the national peso and standard (more often substandard) goods offered in this tender. In 2004, a new currency called “CUC” came to replace the USD, continuing to operate alongside the national peso at an exchange rate that fluctuated over time, 21-25:1.
When I arrived in Havana back in February of this year, I was surprised to find prices listed in both currencies—CUP and CUC—in what were previously hard-currency only establishments. This included both private establishments like paladares (private restaurants) as well as state-owned shopping centers like La Época, Carlos III, and 5a y 42, and applied to everything from toilet paper and toothpaste to washing machines and televisions.
By May 2014, there was clearly a preference for the CUP in state establishments. At La Epoca, like in most state stores, stickers by the cash registers notified customers that they could pay for products (with prices still listed in CUCs only) with their debit cards, which contained CUP balances. The conversion would use the official exchange rate of the CADECA.
These are all steps toward the CUC’s elimination in favor of the CUP. The policy was announced in October of 2013, but to this day details are sparse. No timeline has been announced. But rumors have been circulating that the change will be implemented by next month, November 2015.
Waiting at a bus stop in Marianao, a woman in her fifties speculated about what this might mean. “Dicen,” she told me, “that they are going to get rid of divisa and just keep the peso.” The best case scenario, as she sees it, is that the government would respect the current 25:1 exchange rate, such that people would go to the bank, turn in their CUC, and receive the equivalent in CUP. A worst case scenario would be that the government would devalue the currency, so that those possessing CUC would be embarcados (screwed). She’s not too worried for herself, though, because she doesn’t have much in the way of savings. What she wonders about is What would it mean to once again have only one currency on the island? She started reminiscing about the days when the national peso was “actually worth something,” when 100 CUP (the equivalent of 4 CUC) was “a fortune.” She told me about how when she got married in the early 1980s, the government provided her with coupons that allowed her to buy sheets, towels, underwear—everything a newlywed couple requires, plus boxes of beer—for “practically nothing.”
This is a chorus sung by many Cubans: prices are higher every day and salaries ya no alcanzan. they are not enough. My uncle, a card-carrying Party member, was recently asked on a psychometric test to list three wishes. Being the good communist that he is, he answered:
- Qué quiten el bloqueo. (That the blockade comes to an end.)
- Qué prospere el país. (That the country prospers.)
- Qué bajen los precios. (That prices go down.)
We’ll see if, with the end of the CUC, at least one of his wishes comes true.
All images by Martina Kunovic. All Rights Reserved.