Mexico City. – The government has started a new payment method for basic, state-produced, consumer goods: through Visa and Mastercard transfers. In other words, state establishments that have started selling their products only to people who can pay with international credit cards not issued by Cuban banks. The goal here seems to be to once again place the responsibility of feeding and supporting families on their relatives in the émigré community.
For example, if a resident of Cumanayagua, Cienfuegos, wishes to buy dairy products from the dairy plant located there, he or she must ask a friend or family member who resides abroad to pay for them with one of the aforementioned credit cards. Once paid, the Cumanayagua resident will pick up the products purchased. If a Cuban national goes to the dairy plant with his or her hard-currency card or with Cuban pesos to buy products, the plant will not sell him any product that is commercialized through Internet. His or her only option is to have someone abroad pay for it.
How did we get here?
On October 16, 2019, the Economy Minister, Alejandro Gil, announced on the television program Mesa Redonda that changes were coming, but he didn’t quite finish informing the public. At the time, he stated that household appliances and automotive parts would be sold in hard currency (freely convertible currency, MLC), adding that “We do not pretend to eliminate the domestic currency nor increasing sales in US Dollars or any other foreign currency to the retail network, nor to start gaining more space selling in US Dollars.”
Nine months later, in spite of Gil’s words, the director general of Tiendas Caribe, Ana María Ortega Tamayo, announced the opening of 72 state retail stores that would sell in hard currency food products and cleaning-personal hygiene products of “medium quality”, as well as hardware products. Cuban state officials once again alleged that these were necessary measures to meet the economic crisis, but with no future increase in sight.
Fifteen months after the opening of these 72 stores, the country remains severely under-supplied, with shortages, and with prices soaring in the informal market. People wait for long hours on lines to purchase food products even in MLCs. It is in these stores that the majority of basic-need products are sold.
Let us make clear that the citizenry gets its salaries paid in Cuban pesos (CUP), and that it is practically impossible to go to a bank or currency exchange house to trade Cuban pesos for foreign currency. Those cards can only be replenished with transfers from abroad, or with any hard currency except U.S. Dollars. Once funds are deposited to that account, they cannot be withdrawn. The only option is to spend it at these new stores, which are the better supplied retailers.
Cuban-peso stores are practically ghost establishments. Their shelves are often empty or stocked with bottles of water.
Ortega and Gil both lied when they said that the retail hard-currency network would not continue growing, that their opening was a temporary measure. A little over a year since those statements were made, sales in convertible currency have expanded considerably, with little transparency or publicity.
The Inventory Project (Proyecto Inventario) has managed to account for 497 establishments in all of Cuba where one can only shop with hard-currency cards. And although the number of retail stores continues to grow, the Cuban state has looked for new alternatives in its effort to get its hands on hard currency, especially the hard currency of émigrés.
Purchases made with Visa and Master Card
Just as it occurred with the MLC stores, this method of shopping started at purchasing sites in provincial capital cities, and has extended to additional state-owned businesses.
In the western-most part of the country, “El Glykys”, a cafeteria and bakery that has two branches in the city, only sells 20 turns daily in a municipality like Pinar del Río which has 190,000 inhabitants. People must sleep the night before in the vicinity of this establishment if they want to obtain a ticket that will allow them to purchase baked goods, pizzas or bread. The rest of the items available in this store also can be purchased if one uses a Visa or Mastercard.
As can be seen in the map, CubaNet has accounted for 103 establishments –the number could be higher- across the country that sell exclusive products as long as they are purchased with these international cards. We invite you to share the names of any others you might know about.
We are talking mainly about stores for household appliances, or food, cleaning and personal hygiene supplies. But, this payment method has extended also to dairy plants, poultry companies, restaurants, bakeries, and agricultural fairs. Even the well-known Bucanero brand of beer and malt beverage sells its products, which are generally not found in retail stores, on its web page.
To implement purchases, there are mainly two web portals: Envíos Cuba and Bazar Regalo. On its pages, one can find all the state retail stores that have activated the online-payment method. Although neither platform accepts payment through Fincimex, only Visa and Mastercard, there are certain differences between what they offer.
At Envíos Cuba, you will mainly find food stores, cleaning and personal hygiene supplies and equipment, all divided by province. For example, Almacén On and Electro Envíos are located in almost all provincial capital cities, and sell through this portal. The others vary, depending on the city.
Another establishment that sells food products in six different cities through this web page is Envíos Agro. The address in Havana and its vicinity where one can pick up the food products purchased is Van Troi Avenue and Final, Finca Alcona S.A., Boyeros. This is a business that belongs to Flora & Fauna, the corporate group under the direction of military VIP, Commander Guillermo García Frías, and his family.
Bazar Regalo, on the other hand, operates like Amazon, or like a Caribbean Alibabá, all differences aside, where one can purchase items from abroad for friends and acquaintances in Cuba. On its platform, state enterprises and a small group of private entities advertise their wares, which include food products (even lobster), refreshments, ceramics, shower curtains (produced by ARTEX), candles, medicinal products, construction materials, motorcycles, and more. The list goes on and varies from city to city.
Just to mention a few of these establishments, it is through Bazar that Glykys in Pinar del Río and the Escambray dairy plant in Cienfuegos, sell their goods; the agricultural and poultry fair “Delio Luna Echemendía” in Sancti Spiritus; El Pinto Bakery in Villa Clara, and the UEB Logistics EPIVILA “Joaquín de Agüero” in Ciego de Ávila.
CubaNet was able to corroborate with residents of these communities that there are exclusive products in these establishments that can be purchased only if someone pays for them from abroad. In their promo ads, they include a scaled graph that explains what it is that they sell to residents in the island and what they sell the émigrés. Cubans in the island have no purchasing options most of the time, or get smaller deals. “At Palenque, in Havana, they sell beef, grapes and apples if you pay from a foreign account. None of those products are available to Cubans who show up to shop. They are simply not for sale, not in Cuban pesos, not in MLCs,” Daneris explains. She eventually does her shopping there; as a resident of the island, without access to a foreign bank account, what she can usually buys is chicken.
Why Visa and Mastercard over Fincimex?
Cuban economist Ricardo Torres explained to CubaNet that behind these measures lies the grave foreign-currency crisis in the country. The lack of hard currency has brought the government to explore all possible avenues for securing it.
This expert explains that there is a clear difference between hard-currency payments through Fincimex cards, and payments received through international accounts. “From the moment that you deposit your money in Cuba, in a bank card, that money becomes co-opted money. This means that the Cuban government is using this hard currency from the moment the funds enter its banking system.”
Torres adds that the difference in collecting through Visa and Mastercard is that they are receiving new money, money that the Cuban government does not have in its system. “Those payments are made from a foreign bank outside Cuba. It’s fresh income. To sell exclusive products only through this method is a way of obtaining hard currency faster.” To this Cuban economist, another aspect that must be kept in mind is the location of the accounts receiving deposits: are they part of the Cuban banking system, or are they accounts in foreign banks.
In 2020, when the government announced the opening of the hard-currency (MLC) stores, many people classified these measures as a form of “economic apartheid.” To sell products in a currency other than the one in which workers’ salaries are paid limited these workers’ access, and that of their families, to basic products. Add to that the reality that obtaining hard currency legally in the island is practically impossible for Cubans that have no émigré friends or family members to make it possible.
If the hard-currency stores divided the country into two main population groups –the haves and the have nots, with respect to possession of hard currency- now with this new sales modality a third category has been created: that of Cubans who have access to a personal foreign account, or that of a family member abroad to purchase products not available to Cubans even with MLC. Cubans in this group are at the top of the social pyramid when it comes to purchasing power and ability inside Cuba.
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