The Price of Lowering Prices in Cuba
By Osmel Ramirez Alvarez
HAVANA TIMES — Yesterday, I tried to do buy some simple things and had to visit the three stores here in my town that sell in CUC. I was unable to find a single jar of jam for my children. There wasn’t any chicken, mincemeat, shampoo or conditioner. Not even ready-made soda which I always used to buy for my kids’ afternoon snack at school.
My wife wanted a lipstick, but they didn’t have that either. My son, who running about broke his flip flops, would still have to wait because the only sizes they had left were too big. I left empty-handed.
I walked through the stands of independent vendors and had a bit more luck. I managed to buy my wife’s lipstick and my son’s flip flops. A seller was also selling pineapple soda, sweets and biscuits. I bought them all. When I did the math, everything cost me about 30% more that it would have done before the government lowered prices.
You used to be able to find jam and ready-made soda almost always in State shops; it was a very rare occurrence when they didn’t have them. The same used to go for chicken and mincemeat. They both used to be sold. However, after the tiny reduction in price, they didn’t even last a week. They disappeared from shops and you’d have to be more than damn lucky to be able to find them again. It’s easier to win a number in the lottery, where the chances here are 1 in 100.
Now, you can only buy chicken at the one State market which attends to the whole municipality (which has 120,000 inhabitants), with just one scale and they only take a little bit out each day. By 9:30 AM, there’s nothing left. You can imagine the line this forms and all the fighting. It costs 19 pesos a pound, but with the price “knock down”, (which is some kind of robbery passing off as nothing out of the ordinary), it now costs 23 pesos.
After having continuously lived in Cuba for all my 41 years, I’m still not used to the lines here and prefer to pay a little extra. Furthermore, I believe that one of the key causes for us not being able to progress as a country is because of all the time we waste waiting in lines. You have to queue absolutely everywhere and these lines are super long and very slow. I prefer to invest this time productively, in my case I work my land, so I can then cover the extra cost of goods I buy from resellers. They have their ways of getting their hands on products and they make a living off of the system’s inefficiency.
On the other hand, we have a saying that says that “whoever made the law, made the scam.” Prices have been knocked down on some products, but they’ve skyrocketed on others. A disposable umbrella, because of its bad quality, recently only cost 4 CUC, but now it costs 8 CUC; a small briefcase manufactured nationally used to cost 10 or 12 CUC and now I see the same ones selling for 16 CUC. And so on. What they apparently stop earning on the one hand, they make up for on the other and even make extra. The 240% traditionally applied on top of the fair and legal price is still applied.
This policy gives us nothing. As I warned in my article “El pueblo recibe falsas migajas”, it was just simple politicking. Its just propaganda directed at the subconsciences of “the popular masses”, who have been cheated and made fun of yet again. As Fidel himself has said on multiple occasions, to solely manipulate and “create conditioned reflexes in the minds of people.” Of course he didn’t use this phrase to criticize himself but to devalue the capitalist system which employs the same methods of building populism so as to boost consumption. http://havanatimes.org/?p=118351
Instead of improving the situation, it’s only created more inflation, more dysfunction in the system and a greater burden for ordinary Cubans. Noone can really enjoy these price reductions because, as I also warned, there is no concrete logic behind this measure, nor are there guarantees of an increase in production which would make it a viable and sustainable practice. Its a bit like the pay rises Maduro implements every so often in order to win popular support in Venezuela, which doesn’t have an economic base to justify it and so only causes more damage and inflation which leads to his own political downfall.
Even if, in the hypthetical case, the price reductions had worked, it would have only helped on a small scale, we wouldn’t have even felt it. Imagine a man who is carrying a bag a 200 lb bags of sweet potatoes on his back and has to walk several kilometers. If we take two or three sweet potatoes out of the bag, we don’t really help him at all. He wouldn’t even be able to feel the difference in weight. We’d only be able to help him if we take out over half of his load, or if we calculate how much he can really carry without passing out and then only give him that to carry, or if we promise him that we’ll take out 10 lbs of sweet potato for every 50m he walks so that his load gradually gets lighter and more bearable, until the day comes when this is a fair amount. I particularly like this last option because it has a tangible, concrete objective linked to a hopeful mindset.
This fed-up, tired and disillusioned man who has to carry such heavy burdens upon his back is representative of the Cuban people. And we’re really over-burdened! And we’ve been waiting decades for a solution! Some of us let go of the sack and flee from our load by traveling over oceans and through forests; but the majority of us call for justice while the debate to figure out how to lighten the load takes years and years for the regime with a divine mandate to think for all of us.
Meanwhile, the price we pay remains high. This article deals with the subject of lowering prices, something which in any normal country would be a cause for celebration, but appears distorted in a dysfunctional social model which builds a socialist utopia that is out of sync with what Cuba really needs.
there is a free market here in the good old u.s.a. corporations are free to steal from people as they wish and businesses take every advantage to do so. you cant get any freer than this. our corporations that control our government that control our schools that control our entire media that control us, make sure our corporations are free to do as they wish.
You obviously Dan are ignorant of knowing that one Fidel Castro Ruz when President of Cuba said in an article in Granma (official organ of the PCC, that to him, communism and socialism were one and the same and that he called the the regime’s system “socialismo”. That is why I use the word which he provided. Living in Cuba well away from Havana and tourist resorts, I have to use Spanish as my day to day language, but I understand your need to try to make pathetic cheap shots.
Boy Carlyle, I can’t wait until you learn another Spanish word besides Socialismo.
Shortages are the inevitable result of a socialist centrally planned economy, as are corruption, pilfering and a black market. When the official price is arbitrarily lowered by the government, all that has achieved is to increase the profitability of diverting product to the black market. Fiddling at the margins by raising wages or lowering prices a bit won’t do anything to solve the fundemental problem.
Cuba needs a free market economy, where the market place sets the prices & wages, and where the laws of supply and demand efficiently allocate resources and distributes products to where they are needed. To make this work, the Cuban government needs to protect private property rights, free speech, freedom of association, and the right to form free & independent labour unions. Cuba also needs to allow for a modern banking system and a stock market for investment, entrepreneurship and capital formation.
There’s a already a name for this sort of system: it’s called capitalism. It works. Try it.
Christie, what does your comment have to do with the article?
forgive me for not including the entire u.s. population but, of course, the rest of us are extremely discriminated against as well. less than 30% of the adult population holds a bachelor’s degree. plant that business boy.
I guess that’s about as far as your travels have taken you.
Not true and your sarcasm only reflects your limited capacity to intelligently defend your position.
There are far too many variables to fairly compare the institutional racism in her post to the situation in Cuba. Both are reflective of the worst in our humanity. Yes, both are reason to weep.
Just when I can’t believe you can get any crazier Ermle, you manage to outdo yourself.
Best laugh all day. Thanks.
I am really pleased to observe that you too are now prepared to weep for Cuba!
My home town in Cuba is in a good agricultural area where sadly due to regime policies much of the land is reverting to bush. But although agriculture still plays an important role in the local economy, the local library has one sole book on agriculture, published in Spain in 1966 and oddly containing photographs of British breeds of dairy cattle, beef cattle, sheep, pigs and poultry rather than Spanish ones. The book is very well thumbed. There is however a large section of the library devoted to politics all socialist and communist, with 37 copies of LENIN,
many of Fidel Castro’s “History will Absolve Me” and Of Che Guevara’s “Guerrilla Warfare” all in pristine condition. I offered to donate a few dozen books that I had taken to Cuba, to assist those studying English – including Boris Pasternak’s “Doctor Zhivago”, but they were refused and I then found that none of the teaching staff many very highly qualified, at the Pre-University school had even heard of the book, because it was banned by Fidel Castro.
In Cuba it is obvious that all the general population are discriminated against, but the blacks are subjected to racism.
Why is Christie on the “wrong blog”? Maybe you need to be educated about a few of these things. Read it again. Read it and weep.
Same problem(s) over at Wal Mart.
“Even if, in the hypthetical case, the price reductions had worked, it would have only helped on a small scale, we wouldn’t have even felt it.”
Small changes are simply that, small changes. It would be greta if Cubans could have 50% increase in their purchasing power. But that’a very rare occurence in any country.
I think that you posted to the wrong blog.
here in union city, u.s.a., a densely populated city, the majority of which are spanish, you will not find a single reference librarian at the local libraries like you would in any other library at any other town. do not think this is not deliberately done. in the local schools which have a majority spanish enrollment along with other minority students, you can read about the extremely low community college graduation rates. students at these colleges are deliberately frustrated out of the schools in order to keep the population uneducated for our businesses/corporations. in the u.s.a., the races that are reported as performing the worst academically are blacks and hispanics. these two races are also the races that are least economically advantaged and are the most discriminated against. i know because i have lived here for 51 years.
When will the cuban people realize that this is not living…..just surviving”.????
What happens many times in Cuba is that stores will receive boxes of sweet pickles and sauerkraut but have no cooking oil. Or a clothing store will stock shoe inserts but only in men’s size 13. Government purchasers spend Cuban hard currency on products that nobody needs or wants just to fill the store shelves.
Well if you look very well (Zoom) it’s only sugar and alcohol and the regular Cubans can’t not shop in here because is in CUC and Cubans get a sakary in CUP.
Yes, it is stocked. That’s because it’s a CUC store with insane prices.
You really, really need to visit Cuban so you can see with your own eyes what the real situation is.
It has taken this Castro communist regime fifty seven years to develop this sorry state of affairs in Cuba. Just imagine what they could achieve in another fifty seven when even the shops themselves will be crumbling.
You should read the article before making your implication. Obviously you have little real knowledge of Cuba, of the ‘socialismo’ system, of the Castro family regime and of the Communist Party of Cuba. Time for you to make a prolonged visit to Cuba and to open your mind to the reality which Osmel describes.
Even the regime itself has admitted shortages of some 25 important necessities in the shops, all of which are subsidiaries of GAESA.
Time for you to smarten up!
The people of Cuba are now getting screwed by their own neighbours now as well as the government! What a travesty, neighbours are preying on each others misfortune and all the government continue to do is nothing! o yes they also continue to screw the Cuban people.
According to the picture that store looks well stocked.