The Government of the Republic of Cuba is proceeding with a monetary unification policy that will eliminate the convertible Cuban peso (CUC), leaving the Cuban peso (CUP) as the only functional currency on the island.
This matters a lot to Cuban people because they are paid in CUPs while most consumer goods are priced in CUCs – worth 25 times as much!
Monetary unification was first announced in 2013 but the government has now said it really will happen before the end of this year.
A reform in wages and pensions will also take place. It is expected that salaries will grow 4.9 times and pensions will increase five times. On the other hand, the price of goods and services is bound to increase; no one knows by exactly how much.
Currently the monthly earnings of many Cubans equate to US$20. But since 1963 poverty level wages have been offset by the government-issued ration book which entitles Cuban citizens to basic goods such as rice, beans, coffee, sugar and toiletries. However, the ration book is also due for elimination.
The cost of providing every citizen with basic supplies has risen and President Raoul Castro has been trying to get rid of the ration book for years. Meanwhile Covid-related economic depression has made more Cubans even more reliant on the basic supplies which the ration book provides.
“I am not sure how we will cope without out safety net. On our salaries only we wouldn’t be able to get by,” said 32-year-old Rondon, a factory worker from Havana.
It’s ironic that ‘communist’ Cuba is moving more towards a market economy just when capitalist countries such as Britain are introducing state subsidies which would previously have been decried as ‘socialism’.
