Discuss as:

Cubans struggle to enjoy new economic freedoms


Cubans can strike another complaint off their laundry list of grievances about life's daily grind.

Sunday night, the Cuban government ended its decade-old ban against ordinary people staying at tourist hotels and renting cars. This is Raul Castro's third edict in less than a month aimed at loosening government controls over consumer spending.

Previous rulings allowed any Cuban to buy a cell phone and pay for cell phone service and anyone with enough money in their pocket to walk into a government store and legally buy electronic items like computers, microwave ovens and DVD players.

Bellhop opens door to the Hotel Nacional de Cuba in Havana.
Roberto Leon / NBC News
Bellhop opens door to the Hotel Nacional de Cuba in Havana.

The old regime of Raul's brother Fidel Castro strictly limited these luxury items to foreigners or the upper echelon of Cuban society holding privileged jobs. The only way regular consumers gained access had been through purchases on the black market.

Lucy Alvarez, a retired electrical engineer who learned to cut hair to supplement her pension, doesn't expect to take advantage of her new economic freedoms anytime soon. "We live hand-to-mouth," she said.

Under Cuba's dual economy, people receive their salaries in national pesos (NP) while nearly all imported goods are priced in a convertible peso (called the CUC) that is tied to the U.S. dollar – valued at 24 times stronger than the national peso (NP). In practical terms, foreign goods are well beyond the reach of most Cubans.

For example, a 26" Panasonic flat screen TV, which went on sale Tuesday for the first time in a Havana electronics store, sells for 1,961 CUC, equal to $2,120 – more than double its retail price in other countries. And a Chinese-made moped costs some 795 CUC, a little under $860.

Nora Alonso would like a cell phone, but the 400 national pesos she earns a month working as a physical therapist in a state hospital barely covers her everyday expenses like food and clothing. A cell phone and a year of service would cost Alonso the equivalent of approximately two years of her salary.

Still she welcomes the change. "It doesn't cost anything to dream," she said.

Alonso hopes more reforms are in the works – she wants better wages and a national currency with real purchasing power.

Hoping for real economic reform

In fact, many working people in Cuba think their government should dump the convertible money and return the island to a one-currency economy.                       

Reforming the island's economy demands structural changes, argues Dr. Jaime Suchlicki from the University of Miami, changes far beyond what currently is taking place -- everything up to now, he said, is "not important."

He believes the motive behind the new measures is an "aim to appease the Cubans and give them a little hope about more things to come. They are also for external consumption to show the world that there are some changes happening in Cuba."

Suchlicki also warned that this could backfire. Instead of bridging differences in access between Cubans and foreigners, the measures might lead to more economic and social disparity between Cubans.

One government source who asked not to be named does report that government planners are considering various ideas that would lead to a stronger Cuban peso – enhancing what it could buy.

Rapid change unlikely

But most local economists agree that an across-the-board wage adjustment at this time is just not in the cards.

A recent front-page editorial in Granma, the Communist Party daily, tried to dampen public expectation of seeing any considerable improvement in the standard of living. It stressed, instead, that the workforce concentrate on improving labor discipline.

Many people employed in government-run enterprises readily confess they have little incentive to put in an 8-hour day when their pay envelopes provide little purchasing power.

In fact, there's even a joke here that ends with the punch line, "the state pretends to pay us, so we pretend to work."

Countless workers admit that their personal goal is to find some outside source of income that will either supplement their state salary or supplant it all together. It's currently estimated that some 60 percent of the Cuban population has regular access to hard currency – some through family remittances and others through direct earnings.

One thing that is clear is that people resent being told how they can spend their money.

That complaint surfaced last year when Raul Castro encouraged people to publicly air their grievances in controlled official settings. Upon taking office this past February, he personally pledged that his government would respond to public demands and lift its "excessive" controls -- controls that not only irritated consumers but led to discrimination.

People complained that Cuba was the only nation on earth where foreigners enjoyed more rights than the local population.

With their uncanny ability to poke fun at the surreal, Cubans even turned the ugly truth into the butt of popular jokes:

A first grade teacher asks her student Pepe, "What do you want to be when you grow up?"

"A foreigner!" he replies.

But government critic and free speech advocate Manuel Cuesta Morua never found the subject funny: "Maybe now we can begin to erase our feelings of national inferiority."