Cuba’s Economic Crisis Falls Heavily on the Retired
HAVANA TIMES – “If it’s hard to get along on a salary, imagine living off a pension,” says Clara Velasco. Like most retirees in Cuba, she faces additional barriers to accessing food, medicine, and services on her minuscule monthly income.
Velasco is 70 and worked as a mid-level accounting. She tells IPS: “There’s not a lot you can do with 1,628 pesos a month,” the amount she receives “after nearly 40 years working for the State.”
In Cuba, the minimum retirement pension is 1,528 pesos, equivalent to US $12.70 according to the official exchange rate of 120 Cuban pesos to a dollar. However, its estimated value shrinks to less than five US dollars if you go by the informal market – the reference point for a large part of the products, goods and services people must recur to for their basic needs.
In 2022, former Minister of the Economy Jose Luis Rodriguez stated that over half of the 1.6 million retirees in Cuba were receiving the minimum pension.
After paying the electric, gas and water bills, Velsaco emphasized: “there’s barely enough left to get the errands done.” “Errands” is the term used for purchasing the individual quota of limited rationed food and personal hygiene products the government sells each month to the eleven million residents of Cuba.
“It’s well known that the quota of rationed products doesn’t last the month. Currently, it doesn’t even come complete at the beginning of the month, like it did before. Food must be purchased on the street, at ever higher prices. No one who’s living only on their pension can eat well,” Velasco confesses. She herself lives alone and buys and sells different products on the illicit market to obtain additional income.
Although the quantity and variety of rationed products has diminished since the system began in 1962, this distribution channel is considered a needed support for food, especially for people of low income. In this way, they have access, when available, to small quantities of rice, sugar, beans, eggs, coffee, cooking oil, bread, and meat products.
Over 59,000 low-income older adults, along with those with disabilities and social problems, receive lunch made daily in food kitchens establishments in the country, through the so-called System for Family Attention, founded in 1998.
One of the effects of the deepening economic crisis and the shortage of foreign exchange in Cuba has been the frequent irregularities in the sale of the rationed items at subsidized prices. Assuring a consistent supply of these requires some US 1.6 billion dollars annually, government authorities maintain. In recent times that money has not existed, thus the shortages.
Further, the scarce harvests, along with structural problems in farm policies, mean that the demand for different products remains unsatisfied.
Vulnerabilities
After the rationed products, the rest of Cubans’ nutritional needs, including fruits, vegetables, and hygiene products, must be acquired in the State stores, which only accept hard currency deposited abroad, which Cubans do not receive for their salaries or pensions. The alternatives are poorly stocked agricultural markets and private businesses all at greatly elevated prices in Cuban pesos.
Low-income people and families who don’t have access to USD or Euros have great difficulty accessing these markets, which in turn increases their vulnerable situation.
At the beginning of 2021, the government decreed a nominal raise in salaries and pensions, as part of the process known as Ordenamiento [Putting in Order]. The process included the elimination of the CUCs [a Cuban currency equivalent to one dollar], an end to a whole range of subsidies, and increased prices for most services.
The buying power of the salary and pension raises evaporated rapidly in the face of the dizzying rise in prices, the deficient supply of food and goods, and a partial dollarization of the economy. Some social scientists estimate that at least a third of the island’s population face unsatisfied basic needs.
Large families, single parent families and women heads of households without stable employment, and pensioners comprise that low-income category, along with older adults who live alone without family support as well as people with disabilities.
Ramon Tellez assures that he needs to seek a new work contract, “because after 37 years as a university professor with a Master’s degree, I retired on a pension of 2,230 pesos [less than seven dollars on the street], which is like saying nothing.”
Tellez, 73, reminded IPS that where he lives in the Cuban capital, a pound of rice on the open market costs approximately US $0.68 cents – close to 10% of his monthly pension. A carton of 30 eggs sells for US $8.00; a liter of cooking oil for US $2.00; and a pound of raw sugar for US $0.91 cents.
“My wife, also retired, has health problems like myself. We both need to take diuretics and high blood pressure medications, as well as insulin and digestive aids and these must be bought on the illicit market, because none of them have been available in the pharmacies for months,” Tellez lamented.
Aging and a lack of medicines
For the aging with health problems, the persistent lack of medicines and other medical supplies in pharmacies and hospitals, and the need to resort to the informal market to access a large part of these, are among the main concerns for a number of Cubans consulted by IPS.
Resolving such issues is an essential task for a country with an increasingly aging population and an increase in non-contagious illnesses.
At the close of 2022, 22.3% of the Cuban population were 60 or over, according to official statistics.
Further, it’s estimated that some 221,000 older people on the island live alone. The majority of them are women, whose life expectancy is over 80, while men have an average lifespan of 77 years.
Among the current senior population, with an average age of 71, over 82% rely only on their salaries or retirement pensions. That means they’re without access to hard currency, in a context of growing dollarization of the economy. These were some of the revelations from the 2017 National Census of the Aging Population whose data was published in 2020.
With respect to this population, those whose only source of income was their retirement or other pension affirmed that this income wasn’t enough. Seventy percent said they faced privations and shortfalls.
Moreover, the survey revealed that 6.5% of those 60 or older who lived alone stated they had special needs that required the assistance of another person to realize their daily activities – 1.8% were in need of round-the-clock care.
According to the Cuban Public Health Ministry’s 2020 Annual Report, nine out of ten of the major causes of death in Cuba are related to non-contagious conditions, such as heart disease, malignancies, cerebrovascular diseases, blood vessel problems, diabetes, cirrhosis, and other chronic liver disease, among others.
Care and support needed
The National Census of the Aging Population additionally revealed that some 31% of caregivers in Cuba are themselves over 59, which they identify as a form of participation, but also a vulnerability due to the physical and psychological wear and tear of that often unpaid work, especially in the current context of growing economic privation.
Several studies insist that, despite the government’s actions, the services and support systems offering care for families are insufficient, especially for the elderly. Likewise, the reality is that in recent years the situation has only gotten worse.
The studies recommend the establishment of a comprehensive care system that – in addition to an increase in care homes for the elderly – prioritizes the training of more nursing, medical and specialized aide personnel in the geriatric field to confront the challenges of dementia and disability. They also recommend additional health and psychological attention for caregivers, to maintain their quality of life.
Researchers also advocate for promoting further investigation into systems of attention to care providers, including personal training, social conditions, and services for protecting their own health and well-being while offering care.
“Just as we have a comprehensive Strategy against gender violence, a similar plan is needed to serve retired people who are a significant part of the population as the birth rate decreases, aging accelerates and emigration grows,” Ofelia Martínez, a 64-year-old former librarian living in Havana, told IPS.
Martínez insisted that the possible strategy should: “include urgent and specific actions that can be measured in the short, medium and long term.”
In addition to the large volume of the population needing services, another challenge lies in the need to overlap the transversal policies related to demographic aging, care, and emigration, among others.
Another factor lies in the impossibility of offering significant pension increases, given the structural crisis of the Cuban economy, which projects a GDP deficit of 18.5% in 2024. This crisis, in the opinion of economists, will prevent the government from adequately tackling inflation and will negatively impact the population’s standard of living.
During a television interview in November 2023, President Miguel Díaz-Canel maintained that his government is studying a methodology for subsidizing people and not products, “so that no one is left helpless.” What such a strategy might look like remains unspecified.