The Business of Cuban Government Sponsored Street Fairs

By Elias Amor Bravo (14ymedio)

HAVANA TIMES – Cuba’s communist regime seems hell-bent on phasing out the use of cash and replacing it with electronic payment platforms, specifically Transfermóvil and Enzona. To these ends, it organized a “trade fair,” a kind of Saturday street market along Galiano Street in Central Havana, where all transactions had to be done electronically. Cash was not accepted. To some extent, it was an absurdity since this type of fair, which has widespread popular acceptance, including in major European capitals, typically relies on cash, not electronic payments, given the itinerant nature that many of them have. As always, Cuban communist exceptionalism quickly takes it from the sublime to the ridiculous.

From the moment it opened, Havana residents were surprised by the relative abundance of products — different varieties of meats, clothing, footwear, produce, mobile phone accessories and cleaning products— for sale at prices lower than those at the better stocked informal markets.

And as is often the case at these kind of events, the government made sure Cuba’s sole political party the star. Employees from Xetid, Etecsa, the Youth Computer Club and other entities were called upon to inform and advise customers on the use of electronic payment gateways. In other words, to make sure the regime’s objective — obedience — was fulfilled.

This mousetrap of a fair was all about recruiting customers for electronic payments. Banks offered 10% bonuses on the purchase of goods and services through POS terminals and QR codes using Transfermóvil and EnZona apps. In other words, the same song and dance the communist regime has been performing since it launched what it is calling bancarización* – banking reform.

The state-run press gave the event extensive coverage. The deputy-minister from the Ministry of Communications, Wilfredo Gonzalez, declared, “What is happening here is very good, especially because it demonstrates in a physical space the usefulness of digital payment platforms, a viable alternative for the public due to the issues we are having these days with cash and ATMs.” He had only to say that what is happening is good to make sure the mandate from on high was obeyed. The rest didn’t much matter. If everyone follows orders, everything should be fine. Or maybe not?

Onsite observers of the fair, especially those who witnessed transactions, highlighted two aspects that deserve consideration. First, the event was not well attended despite the wide variety of items for sale at good prices. Second, a significant portion of the transactions were done in cash. The deputy-minister’s argument that the use of electronic payment platforms will become more viable as they become more common, and as the public sees that they work well and grows to trust them, was not borne out. Based on Saturday’s results, this seems more like propaganda and manipulation than anything else.

This Galiano Street trade fair was organized by the municipal government and led by the local branch of the communist party. Open-air markets and street fairs certainly do not seem to play any role in communist doctrine. Yet party leaders were unsparing in their praise, saying that it was “a good, useful experience that we should systematize, not treat as a one-off, and begin little by little to promote this type of event.” The truth is that, for communists stuck with a ideology completely at odds to commercial life, these fairs and markets must seem like an insult.

Though the communists may be licking their wounds, most people view street fairs and pop-up markets favorably, even if their purpose is to promote electronic payment systems. Some private-sector vendors reported that sales were good, with most being done through electronic transfers (though a not insignificant number were still cash transactions). Still, an average of twenty transfers seems relatively little for an entire day’s work but it is what it is.

The communist party tried to lure customers by offering inexpensive food items like croquettes, or basic foods like bread with oil. Electronic payment apps have been a disaster for minor transactions like these so people paid for them with cash.

The government’s partner in bancarización — the Defense Information Technology Company (Xetid), the developer of EnZona, as well as EnZona and Etecsa themselves — spent the morning offering advice to attendees on the benefits of their electronic payment platforms which, contrary to what government officials believe, the public knows little about and which arouse widespread misgivings and fear. So, between all the self-congratulatory messaging and crowd-pleasing sales, some attendees noticed foreign tourists were nowhere to be seen.

At European markets like these, tourism generates a large percentage of earnings. It was at a much lower level at the Galiano Street market, where the population was segmented, something communists typically do to achieve their objectives, never to improve living conditions.

Thought private-sector vendors were especially hard hit by the lack of tourists, they are already looking forward to  participating in future of events of this type, if they are allowed to do so.

*Translator’s note: “Bancarización” is a term used in Cuba and other Latin American countries that refers to government efforts to reduce the role of cash through a greater reliance on banks’ digital payment options. The term does not seem to have a counterpart in English so the Spanish term is used throughout this translation.

Translated by Translating Cuba

Read more from Cuba here on Havana Times