Cuban government reduces prices on 24 basic goods

Posted on Tuesday, 08.11.09
Cuban government reduces prices on 24 basic goods

The Cuban government has reduced the price of 24 basic goods sold at
foreign-currency stores, and experts say the measure is a result of the
fall of money remittances from abroad.
BY WILFREDO CANCIO ISLA
El Nuevo Herald

The Cuban government is implementing a price reduction of up to 20
percent on 24 basic goods sold at foreign-currency stores, including
food products like ground meat, chicken and canned milk, as well as soap
and toothpaste.

According to documents obtained by El Nuevo Herald, last Wednesday trade
officials began implementing ``centralized discounts'' from five to 27
cents per CCP (Convertible Cuban Peso) on most items. The markdown could
be as high as 2.85 CCP on some products and brands.

One CCP equals $1.24 in the official currency exchange, representing a
savings of between six and 33 cents per dollar, which in some
exceptional cases could go as high as $3.50.

Besides hamburgers, sausages and hot dogs, the goods to be marked down
are yogurt, detergents and disposable diapers for babies and adults.

The Ministry of Finance made the decision official on July 20.

``So far I've seen very few discounts at the stores,'' economist and
independent journalist Oscar Espinosa Chepe said from Havana. ``Though
many products have been missing from the shelves for too long now, there
has been a visible shortage in the last few days and people are skeptical.''

While the measure has been official since last week, its implementation
has been gradual in state markets in Havana and in other cities.

The price cuts come one year after Raúl Castro's government announced in
May 2008 an increase in food prices at the foreign-currency stores,
blaming the global financial crisis impact on Cuban imports.

In his recent speech before the Cuban parliament, Castro announced that
the country had been forced to reduce its imports by 20 percent as a
result of the increase in food prices and raw materials caused by the
global economic crisis.

Since early this year, Cuba has substantially reduced its purchase of
agricultural products from the United States, the main supplier of foods
to the island.

Experts consider that the new measure is inevitably linked to the
scaling down of money remittances from Cubans abroad and the need of the
government to increase the circulation of foreign-currency in the
internal market.

``There is a certain logic in raising people's purchasing power to
encourage family remittances from abroad,'' said economist Jorge
Sanguinetty, president of DevTech Systems, based in Miami. ``Both the
person making the remittance and the one receiving it feel that they can
get more for their money.''

Cuban government reduces prices on 24 basic goods - Breaking News - Dade
- MiamiHerald.com (11 August 2009)
http://www.miamiherald.com/news/miami-dade/breaking-news/story/1180466.html