Cuba has had two currencies since the collapse of the Soviet Union wrecked its economy and spurred its turn to tourism. Cuban tourist businesses took US dollars and charged US prices, while the Cuban peso was maintained for everyday transactions. Under the country's dual currency system, most things Cubans want and need are not available in the money they earn. The regular Cuban peso, in coins or paper money, is worth a little more than four cents. Virtually all upscale businesses across the island are priced for foreigners in so-called "convertible pesos" worth US$1.08 each, 24 times as much. This is the currency the tourists must spend.
How this works in practice is spelled out in an article in a Jamaican newspaper, Jamaica Gleaner, published Sunday, November 9th. It reveals how one tourist town plays the Cuban Currency Caper game.
An experiment in the eastern city of Bayamo is letting average government workers enjoy a few things only foreigners and monied Cubans usually can afford: a good burger, a kicking jazz bar and stiff cocktails.
Across the rest of the island, monthly government salaries of 408 pesos, about US$19.50, don't cover grocery bills, let alone a night out.
But in Bayamo the central government has made a special effort to support peso businesses, giving the lowly currency actual buying power.
"Almost everyone who comes in is surprised at first. The music is good. The cocktails are strong," said Ernesto Aldana of the Piano Bar, where the Cuba Libre - copious rum pours with ice and splashes of cola and lime - costs 4.80 pesos, the equivalent of less than 25 cents.
"It's like you're paying in dollars," Aldana said. "But, you're not."
Despite the hurricanes and rising food prices, the Bayamo experiment is so successful that the central government in Havana is continuing to devote US$10 million this year to reopen some peso businesses and cover operating expenses of those already established, Alonso said.
There are ordinary peso businesses all over Cuba, but the pro-ducts are shoddy and service is mediocre. Shortages of everything from potatoes to pasta mean most of the dishes listed on peso restaurant menus are not available, while peso stores have long lines of customers for mismatched inventory on largely empty shelves.
Contrast that with Bayamo, where the raw juice bar offers freshly squeezed mango or papaya juice for the equivalent of less than a nickel. The fully stocked dairy stays open until 11 p.m. on Saturdays. Ground beef is often hard to come by elsewhere, but here two hamburger joints serve up double patties heaped with ham for about US$0.40 in pesos.
To read the complete article, see: Experimenting with the peso: One town's experiment gives Cuban peso real value (http://www.jamaica-gleaner.com/gleaner/20081109/business/business7.html)
Wayne Homren, Editor
The Numismatic Bibliomania Society is a non-profit organization promoting numismatic literature. See our web site at coinbooks.org.
To submit items for publication in The E-Sylum, write to the Editor at this address: firstname.lastname@example.org
To subscribe go to: https://my.binhost.com/lists/listinfo/esylum
All Rights Reserved.
NBS Home Page
Contact the NBS webmaster