CUBANET ... CUBANEWS

November 12, 2001



American currency builds second tier in communist economy

Florida Today Wires. Nov. 12, 2001.

HAVANA - Ruslan Karell sits in a city park in Old Havana, watching Europeans follow tour guides through cobblestone streets, past upscale boutiques and into colonial mansions-turned-hotels.

A Havana native, he complains the tourists are elitist, ignoring Cubans as they lavishly spend money on large meals and expensive souvenirs. Still, this is where Karell wants to be, for one reason: U.S. dollars.

Karell's family - including his mother, a doctor - earns Cuban pesos, the national currency with much less purchasing power than the widely used dollar.

However, more Cubans now have access to the dollar, either through jobs in the growing tourism industry, where even visiting Europeans pay in U.S. currency, or through family members in the United States who pay messengers to fly to the island with cash.

The dollar's growing availability has created a two-tiered economy in communist Cuba: those with dollars, and those without. The Cuban government, aware of the growing disparity, has said it is trying to pay at least part of many salaries in dollars.

The Labor Ministry says that of the 4.3 million workers across the island, about 1.1 million receive a portion of their salary in American dollars.

Those without access to the U.S. currency point out what they do have: free housing, health care and education, as well as subsidized beans, rice and other basic foods. Nearly everyone can read, and the streets are among the safest in Latin America.

Still, those with dollars and jobs in the better-paid tourism industry are more likely to be able to afford expensive items like shampoo, soap, medicine and diapers. Because of high prices, many such items are also sold on the black market, and nearly every tourist who visits the island packs at least an extra bottle of shampoo to give away.

The growing economic gap prompted Havana's archbishop to warn recently that Cuba may soon see more thefts.

"Lacking what you need can alter the domestic peace and lead to the temptation of crime," Cardinal Jaime Ortega said during a Mass in early September.

The current world recession, and a plunge in tourism to Cuba and elsewhere because of travel fears after the Sept. 11 terror attacks in the United States, appears to be having a somewhat equalizing effect among Cuba's dollar haves and dollar have-nots.

Many who depend on tourism for their livieihoods are seeing a drop in the amount of dollars they get. And although no official figures exist, Vice President Carlos Lage said recently that the amount of cash that relatives regularly send to loved ones on the island also has fallen.

Cuba lost a huge source of trade and aid when the Soviet Union collapsed, and subsequent years were plagued by food shortages and 12-hour daily blackouts.

Looking for other income sources, Cuba promoted tourism and has allowed limited private enterprise, forming partnerships with foreign firms to build hotels and other businesses.

Still, most independent business ventures are not allowed. In September, state-run television featured a story about a family making and selling shoes without government permission. It included mug shots of the criminals and footage of the illegal footwear.

In 1993, the Cuban government lifted the island's ban on dollars, and the currency is widely used throughout the island, especially by the hordes of tourists who flock to Cuban beach resorts and Havana hot spots.

For those without dollars, there are so-called "convertible" pesos - one peso equals one dollar - and there are Cuban pesos, which until recent weeks had an exchange rate of 22 to the dollar but has now weakened to 26 to the dollar.

A person can live in Cuba without dollars, Karell says. But life is much easier with them. That's why he is studying to become a tour guide at the country's tobacco museum.

He considers the behavior of some tourists "contemptible," but says he'll tolerate them "because they have a lot of money." Right now, he spends his free time looking for anyone willing to pay an informal guide.

As an official tour guide, Karell will still receive his salary in pesos. But his job in the tourism industry will make him eligible for "estimulaciones," or bonuses - tips in dollars.

There are also other perks.

Hotel workers have access to left-over soap and shampoo, an item that can cost $6 a bottle here. They also have more access to life off the island, including the opportunity to watch CNN in Spanish or subtitled versions of the sitcom "Friends" while they change sheets or clear restaurant tables.

Tourism employees also generally make more than Cuba's average monthly wage of 250 pesos, which is about $9.60. Because of this, former lawyers or engineers can be found behind hotel desks or selling crafts.

Still, the tourism industry has put parts of Cuba out of reach. Restaurants and stores often now cater to tourists and are too expensive for Cubans or don't accept the national currency.

In a dim apartment of peeling paint, a few blocks from the brightly renovated tourist section of Old Havana, Luis Miguel Ribero used to eat a plate of sausages at nearby La Bodeguita del Medio for 5 pesos, or less than a fifth of a cent.

But the popular bar and favorite haunt of the late writer Ernest Hemingway has raised prices to the equivalent of $1.50 a plate.

Still, he laughs at the tourists, knowing they pay $2 for a beer while he frequents a little-known place that serves it for 50 cents.

"The tourists don't know," he said, and shrugged.

Ribero is among the lucky. Living alone, he said he earns 500 pesos ($19) a month and often receives a bonus of up to $300 working on freight ships.

Around the corner, Caridad Hill and her husband, both of whom work in insurance, are still waiting for at least part of their paychecks in dollars - as officials have promised.

The need for dollars has forced some to peddle everything from counterfeit cigars to prostitution.

"I get offered chicks six times a day," said Dave Hawton, a tourist from Toronto. "You step out of the hotel, and it's like, 'My friend, my friend. You want a really good cigar?' "

Copyright © 2001 Florida Today

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