Back to a Single Currency: Preparing Cubans Psychologically for What’s to Come

Vicente Morin Aguado

HAVANA TIMES — The recent decision of Cuba’s Council of Ministers to re-establish a single currency system in the country has, first of all, a psychological aim with a clear political motivation: getting us used to the high retail prices we will be seeing when this one currency, most likely the Cuban Peso (the “CUP”, in bank jargon), becomes generalized.

In practice, however, it makes no difference whether one pays 500 Cuban Pesos (CUP) or 20 Convertible Pesos (CUC) for a pair of shoes. The self-employed, in fact, do not object to being paid in pesos. They even exchange the CUC for 24 pesos and, after some haggling, they may end up selling the article in question for a few less CUP so as to end the day with a good sale.

Let us imagine that a hard-working man from the countryside (a guajiro, as they are known in Havana) has sold four well-fattened pigs and arrives at the capital with twenty thousand Cuban pesos. Nowadays, he is forced to go to a currency exchange locale (CADECA) in order to acquire Convertible Pesos. There, he exchanges his money for 800 of the latter, which circulate throughout the country (as do the regular pesos).

The gentleman heads to a hard-currency store (known as TRDs) to purchase a variety of products, today sold exclusively in CUCs. Quite a different story is that of a pensioner who receives maybe 250 CUP a month, the equivalent of 10 CUC. Mathematics has no feelings and, in both cases, we have a common denominator which does not alter the earnings of the self-employed or the TRDs in the least.

The psychological effect of this measure, however, is very real, because, in the course of many years, we Cubans became used to paying for things in Cuban pesos and are totally put off by the notion of having to pay, say, 25 thousand pesos for a plasma TV, which would be the rough equivalent of the one thousand Convertible Pesos this TV costs today.

The numbers are shocking, they get to you, they remind you how screwed you are, that they’ve hit you with the double currency, paying you for your day’s work in one and selling you products in the other.

So, now they are giving us the option – first on an experimental basis, before the measure is implemented throughout the country – to pay for products and services in any of the two currencies, as though they were actually changing the country’s economic situation with that, when, in fact, it’s a simple mathematical equivalence, in a world where everyone has an electronic calculator at hand.

What they are in fact doing is accustoming our minds to what we will be heading towards in the near future. We will have a single currency, it doesn’t matter whether it’s the CUP or CUC (though, for “prestige-related” reasons, I suppose it will be the old Cuban Peso). The point now is to accustom us to thinking in high figures, something common in other countries, but until now unthinkable under the revolutionary government.

As they do in Venezuela, Mexico or Japan, we will speak in hundreds or thousands of pesos about things we regard as having a small value, a pack of candy, a chocolate bar, a fan or a bicycle. The idea is to prepare Cubans psychologically for the hard reality that there are no magical solutions out there, that things cannot be changed by presidential decrees. We’ve had a single currency for a very long time, now we’re simply giving this reality legal expression.

Before concluding, however, I would like to point out that, in addition to the “prestige” I mentioned, there are a number of services that Cubans pay in CUP (like electricity, gas, water, subsidized products offered at ration stores, bread and others), which justify the choice of the CUP as the single currency that will remain.

Cuba is slowly moving towards a limited market economy whose subsequent growth appears unavoidable. There are no magic-wand or immediate solutions.

For the time being, they’re “preparing” us for the coming step, the implementation of a single currency system, without altering the current relations between consumer item prices and salaries (as a government decree cannot change a country’s economy). It is a question of softening the psychological impact of things to come.

Another aspect of this measure is actually positive, even though it has nothing to do with the purchasing power of the population: the unification of the country’s accounting system will give rise to more reliable financial mechanisms, which will henceforth have a single referent.

This will put an end to numerous arbitrary phenomena which today result in conflict, embezzlement, scams and other contradictions inherent to the absurd two-currency system.

A single price for Cubans and tourists, a single payment obligation in any establishment: this will close the door on blackmailing inspectors, eliminate a double accounting system for the payment of products, their preparation and sale and do away with a number of prerogatives enjoyed today by the bureaucracy that has become enthroned in Cuba.

I applaud the measure aimed at re-establishing a single currency system because it will legalize what is already a reality and will curtail the “swindles” of those who take advantage of the sweat of workers. I realize this is still too little, but it is nonetheless a step forward. I can only hope we won’t be seeing any steps backward, as tends to happen in my unpredictable country.