Cuba and The Right-Hand Rule

By Alejandro Langape

“There are things we don’t even know what they are used for,” says Elina in one of the government stores. The customers explain it to us. Foto: Ronald Suarez Rivas / Granma

HAVANA TIMES – One of the worst memories I have from my time as a student has to do with my Physics classes at pre-university, especially the ones when we were told what the right-hand rule was. It’s not like I’m left-handed or anything, or that I was particularly bad at Physics, but I must admit that I had a hard time applying that law properly.

But I didn’t only learn how to place my hand properly so I could draw arrows on quizzes, but I also learned later on that laws shape our universe, even if we don’t like them; be that in Physics, Chemistry, Biology or Grammar.

Why am I mentioning what I learned at school? Well, because I’ve been thinking about the laws that shape a country’s economic development and that, whether we like them or not, they are followed to a T here in Cuba, in China or Bulgaria.

After years of modest economic growth, shocking news continues to appear in the national press, because we don’t have any statistics on inflation growth or consumer price index. In the edition of Granma, the Party-line newspaper, published on June 17th, there was an article that proves that there are people who resist understanding laws that seem quite clear, like me back when I was a student.

This article was called The pending matter of idle stock, written by journalist Ronald Suarez Rivas, from Pinar del Rio. The journalist writes about all kinds of products that have been kept locked up in warehouses for years, without companies finding a use for them.

According to the statistics he offers, the cost of importing these items which are now stranded in warehouses, is approximately US $750,000 (and we’re only talking about one province!). Looking at these numbers, you wonder who purchased them? Why? And who supervised these purchases?

How can materials and products be bought that aren’t used for years? How can you explain buying technology that can’t be installed here because it’s unfeasible and its components sleep for eternity in places that don’t always have the best conditions for them?

In any other country in the world, the owner of a company with products that have no use, or are only rarely used, would draw up strategies, campaigns, organize sales days to try and sell them off, aware that the profit margin will drop and even be negative, but at least they would try and recover the original expense and won’t lead to the company going bankrupt, or taking up space in warehouses which could be used for other things.

But, sales here in Cuba are overthought, even when they are minimal, ignoring the fact that except for paintings, antiques in general and wine, everything else goes bad over time; in other words, it loses value.

So, the Cuban State’s solution has been to give this idle stock to stores to sell for a price that is 42% higher than the original price, which would leave a profit margin of double the original cost of the product in question. Hell, they aren’t selling it even close to the original price, they need to profit off an old thing that has no use whatsoever, even if it goes against all logic.

The worst thing is that this mentality of making a profit, even on things that aren’t used and things they aren’t even sure how they can be used, is deeply rooted in the minds of our state business executives and any voice that disagrees and calls for reason, when it comes to laws that have prevailed over social systems and ideological tendencies, is crushed by government authorities.

The hashtag #BajenlospreciosdeInternet (lower the internet prices) on Twitter that has been retweeted hundreds of times in recent days, calls into question the fact that Cubans’ communication with the rest of the world shouldn’t cost a minimum monthly wage (a 1 GB mobile data package, which is only valid for 30 days, costs 250 Cuban pesos, which was the minimum wage a few years ago). The government considered the tweets a provocation.  

Clothing and shoe prices in state-run malls continue to be more expensive than the prices set by small business owners who sell you what they buy in Ecuador, Panama, the Dominican Republic, Guyana or distant Russia, while some food products manufactured here are sold as if they were exotic delicacies, proving that the State continues and will continue to chase after profit margins that at least double the price whether they are nationally produced or imported.

According to the article in Granma, many products seem destined to return to warehouses, like 3/2 floppy discs which are completely out-of-date now, or add-ons that even sellers have no idea what they are used for. Is opening these stores really an alternative then? Can stock be sold without reducing prices? Why do they continue to buy things without knowing what they are used for? What planned economy are we talking about?

Let’s suppose that the situation in Pinar del Rio is similar to everywhere else in Cuba. We’d be talking about goods that cost over US $6 million staying in warehouses, which are surely at risk of going bad and losing their properties.

In a country where the final disposal of waste seems a dead-end crossroads and the capacity to import is limited because of a lack of money, a quick and smart solution needs to be found. But anyhow, expecting this from a regime that refuses to understand the fact that the world is changing at a dizzying pace seems to be harder than explaining the right-hand rule to a pre-university student.

One thought on “Cuba and The Right-Hand Rule

  • Decentralization could be the cure, coupled with unleashing some of the market forces necessary to unwind the back lot.

Comments are closed.