Back to a Single Currency - Preparing Cubans Psychologically for What’s to Come

Back to a Single Currency: Preparing Cubans Psychologically for What's

to Come

October 28, 2013

Vicente Morin Aguado



HAVANA TIMES — The recent decision of Cuba's Council of Ministers to

re-establish a single currency system in the country has, first of all,

a psychological aim with a clear political motivation: getting us used

to the high retail prices we will be seeing when this one currency, most

likely the Cuban Peso (the "CUP", in bank jargon), becomes generalized.



In practice, however, it makes no difference whether one pays 500 Cuban

Pesos (CUP) or 20 Convertible Pesos (CUC) for a pair of shoes. The

self-employed, in fact, do not object to being paid in pesos. They even

exchange the CUC for 24 pesos and, after some haggling, they may end up

selling the article in question for a few less CUP so as to end the day

with a good sale.



Let us imagine that a hard-working man from the countryside (a guajiro,

as they are known in Havana) has sold four well-fattened pigs and

arrives at the capital with twenty thousand Cuban pesos. Nowadays, he is

forced to go to a currency exchange locale (CADECA) in order to acquire

Convertible Pesos. There, he exchanges his money for 800 of the latter,

which circulate throughout the country (as do the regular pesos).



The gentleman heads to a hard-currency store (known as TRDs) to purchase

a variety of products, today sold exclusively in CUCs. Quite a different

story is that of a pensioner who receives maybe 250 CUP a month, the

equivalent of 10 CUC. Mathematics has no feelings and, in both cases, we

have a common denominator which does not alter the earnings of the

self-employed or the TRDs in the least.



The psychological effect of this measure, however, is very real,

because, in the course of many years, we Cubans became used to paying

for things in Cuban pesos and are totally put off by the notion of

having to pay, say, 25 thousand pesos for a plasma TV, which would be

the rough equivalent of the one thousand Convertible Pesos this TV costs

today.



The numbers are shocking, they get to you, they remind you how screwed

you are, that they've hit you with the double currency, paying you for

your day's work in one and selling you products in the other.



So, now they are giving us the option – first on an experimental basis,

before the measure is implemented throughout the country – to pay for

products and services in any of the two currencies, as though they were

actually changing the country's economic situation with that, when, in

fact, it's a simple mathematical equivalence, in a world where everyone

has an electronic calculator at hand.



What they are in fact doing is accustoming our minds to what we will be

heading towards in the near future. We will have a single currency, it

doesn't matter whether it's the CUP or CUC (though, for

"prestige-related" reasons, I suppose it will be the old Cuban Peso).

The point now is to accustom us to thinking in high figures, something

common in other countries, but until now unthinkable under the

revolutionary government.



As they do in Venezuela, Mexico or Japan, we will speak in hundreds or

thousands of pesos about things we regard as having a small value, a

pack of candy, a chocolate bar, a fan or a bicycle. The idea is to

prepare Cubans psychologically for the hard reality that there are no

magical solutions out there, that things cannot be changed by

presidential decrees. We've had a single currency for a very long time,

now we're simply giving this reality legal expression.



Before concluding, however, I would like to point out that, in addition

to the "prestige" I mentioned, there are a number of services that

Cubans pay in CUP (like electricity, gas, water, subsidized products

offered at ration stores, bread and others), which justify the choice of

the CUP as the single currency that will remain.



Cuba is slowly moving towards a limited market economy whose subsequent

growth appears unavoidable. There are no magic-wand or immediate solutions.



For the time being, they're "preparing" us for the coming step, the

implementation of a single currency system, without altering the current

relations between consumer item prices and salaries (as a government

decree cannot change a country's economy). It is a question of softening

the psychological impact of things to come.



Another aspect of this measure is actually positive, even though it has

nothing to do with the purchasing power of the population: the

unification of the country's accounting system will give rise to more

reliable financial mechanisms, which will henceforth have a single referent.



This will put an end to numerous arbitrary phenomena which today result

in conflict, embezzlement, scams and other contradictions inherent to

the absurd two-currency system.



A single price for Cubans and tourists, a single payment obligation in

any establishment: this will close the door on blackmailing inspectors,

eliminate a double accounting system for the payment of products, their

preparation and sale and do away with a number of prerogatives enjoyed

today by the bureaucracy that has become enthroned in Cuba.



I applaud the measure aimed at re-establishing a single currency system

because it will legalize what is already a reality and will curtail the

"swindles" of those who take advantage of the sweat of workers. I

realize this is still too little, but it is nonetheless a step forward.

I can only hope we won't be seeing any steps backward, as tends to

happen in my unpredictable country.



Source: "Back to a Single Currency: Preparing Cubans Psychologically for

What's to Come - Havana Times.org" - http://www.havanatimes.org/?p=99664