The Consequences of Cuba’s Monetary Unification

The Consequences of Cuba's Monetary Unification

May 23, 2014

Dariela Aquique



HAVANA TIMES — Several months ago, the Cuban government officially

announced that the gradual process of reestablishing a single currency

system in the country would begin. People have had many expectations and

made numerous conjectures since.



The Cuban Convertible Peso (CUC) is currently valued at 25 and 24 Cuban

Pesos (CUP), for exchanging from and to CUP, respectively. This has been

rather bothersome for most citizens whose incomes are paid in CUP.



For a very long time, thousands of people in Cuba have been forced to

exchange their incomes for hard currency to be able to purchase

essential products such as soap, toothpaste, toilet paper, cooking oil,

razors and other articles.



A few years ago, markets that sell some of these products in Cuban pesos

were opened around the country, but the articles sold there are of lower

quality than those sold at hard currency stores (even though the prices,

calculated on the basis of the exchange rate, are equivalent).



I've always thought that the aim of this is to sell us the idea that

there are markets with differentiated prices aimed at sectors with

different incomes or financial possibilities. This is downright false,

because the prices are the same, the only thing that changes is the

currency. There is no such differentiation.



The only noticeable difference is the décor of the establishments.

Stores that sell products or offer services in CUC are almost always

comfortable and glamorous. Those that sell products in CUP, on the other

hand, leave a lot to be desired.



The existence of the two currencies created stark differences, between

those that could frequent or buy things at such and such a place and

those who could not.



Once there's only one currency in the country again, the CUP, I wonder

whether there will be investments in the restoration, redesign and

refurbishing of many establishments, such as restaurants, pharmacies,

cafeterias, stores and others.



Will prices actually be differentiated according to the quality of these

establishments? Will we begin to see many places fall prey to

deterioration, administrative neglect or, worse, mistreatment and

vandalism by certain customers, who will then be able to frequent and

purchase things at these places?



The reestablishment of a single currency system does not only demand a

monetary study for the fixing of prices or the changing of the exchange

rate, it also entails a number of social questions that will have to be

addressed.



Source: The Consequences of Cuba's Monetary Unification - Havana

Times.org - http://www.havanatimes.org/?p=103834