Cubans Face Declining Purchasing Power

Daisy Valera

Basic hygiene products are no longer available at low prices.

Some supposed it would never happen.  Others expected it would be later.  But by the beginning of the year there was no room for doubt.

Personal toiletries had disappeared from the ration book, exactly on January 1, 2011.

Body and washing soap as well as tooth paste, a basic item by everyone, vanished forever at subsidized prices.

Liquid detergent also disappeared to the sorrow of Havana residents, who were the only citizens in the country who enjoyed that privilege.

The transfer of products from the ration book to the network of retail suppliers appeared to have been contemplated in one of the guidelines to be dealt with in the upcoming congress of the Cuban Communist Party (PCC) slated for April.  The guideline states:

Guideline 289: Restructure the selection of goods and services, revising the retail prices of products that form a part of the family shopping basket and which could be transferred from the ration book to their unrestricted sale without subsidies in regular Cuban pesos.

However, on December 17, 2010, the Council of Ministers approved Resolution 230, which resulted in the termination of the sale of hygienic and toiletry products on the subsidized market starting the first day of January.  In addition they approved the new prices for these products.

Although it was supposed that the guidelines were for analysis by the general public and that approval or disapproval would be determined in the party congress, it appears that nothing even remotely resembling this is occurring.

They have already put into practice measures that should have come out of discussion with the masses of party members and the people in general.

Toiletry products that were previously sold through the ration book will now go for prices that have increased as much as 250 percent.

Regulations for their commercialization do not yet exist, which means there could be the hoarding and re-selling of products at even higher prices.

It’s not known if the products will maintain their quality or if this will decline.

Moreover, the lack of raw materials for the production of these articles for the peso market may cause thousands of families to buy them in the hard currency market, which is considerably more expensive.

Faced with this measure there exists only great uncertainty and discontent among the lower-income sector of the population.

Instead of improving the current situation, the elimination of these products from the ration book is causing a decline in people’s real purchasing power because the wages of Cubans have not increased.

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Daisy Valera

Daisy Valera:Soil scientist and blogger. I write from Mexico City, where Havana sometimes becomes so small that it disappears. However in others, the Cuban capital is a city so past and present that it steals your breath.

Daisy Valera has 208 posts and counting. See all posts by Daisy Valera

5 thoughts on “Cubans Face Declining Purchasing Power

  • I read some of the comments posted on this page, and a lot of questions pop up in my head. Do the cubans and the rest of the world forgot that Cuba was a capitalist, or a non-communist nation since 1492? Is the ration book, or similar measures due to communism, or is it a measure taken by countries during war like conditions: 1942-45 France, England, Germany, Japan etc.
    Progress does not come alone by liberating the market. So far I am seeing not a very compassionate, or a well thought beginning. The cubans are using the same old language of the past, bring back and targeting again the old new poor( the old, the black). There is not a good new blood in their system. To achieve change they must revolutionize not only the market, but the way they think, work, study and approach life.

  • John: I appreciate your several comments. You really get it.

    Julio: Once again you state the plain truth.

    An enormous problems that has developed within socialist ideology is the incorrect idea that socialism is some sort of altruistic give-away of society’s wealth to people at the bottom of the economic ladder. This mis-conception is common in capitalist countries. The idea becomes ultra-toxic when socialists themselves partake of the concoction.

    Socialism is not a banging down of the doors of the capitalist storehouse and a generous distribution to the people. It is the laboring people achieving ownership of the productive forces, working hard and making all of society prosperous and happy.

    I don’t know where the caricature of socialism that the PCC has “mismanaged” over a half-century is going to wind up. The practical Chinese got rid of the constipation of the Marxian mode of production by fomenting a new capitalist class. Cuba may try to get rid of it by doing the same thing. Who knows how it all will end!

  • Thanks Daisy,

    pay close attention to the real problem in a fair and balanced society, property is..”private property is noty only legal but is also highly rerspected” and has to be recorded in a “record property book” open to the public. good luck.

  • Daisy

    The problem for the rush is that Cuban state can not afford anymore to pay the subsidies. Too many nonproductive people had been living off the state. This is the result of half a century of mismanagement and it has finally got to the point of no return.

    The good old days of subsidies for everyone are over and of earning money without working.

    The subsidies for everyone even those that never should have gotten them was a dream that turned into a nightmare soon. Scarcity is the end result of such policies and of the fixing of prices.

    Here we go back to the essential problem of distributing limited resources to a group of people.
    The old paradigm was to distribute according to their unconditional support of the ruling elite and whatever remains in equal parts to the rest.

    The new paradigm is money just like in any other capitalist country. Demand and offer.
    You have the money you get it, you do not have the money you will not be able to get it. It is just that simple and it works!

    People will find ways to get the money they need. Except for some people that are old or other particular situations that really need subsidies from the state the rest should do their best to produce more and be compensated base one what you really produce.
    If you produce nothing you should be paid nothing.

    That just how instead of the president asking you for being more productive as Raul has done a few years back you will understand that producing more is of your own tangible benefit and therefore a benefit to society as a whole.

  • Good article, Daisy. Thanks.

    Commodities should never have been subsidized in the first place. The ration book is an absurdity that would never be needed under a truly functional socialist system.

    Cubans don’t need ration books. They need a socialist system in which the direct, primary owners of major enterprise are the cooperative workers, not the state.

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