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ECONOMY-CUBA:
Cost of Living
Continues to Climb
Dalia
Acosta
HAVANA, (IPS) - It has
been years since Ana Gutiérrez
and Carlos García tried to
scrape by on just the salaries
they earn in Cuban pesos as
professionals working in
state-run companies.
But now they don't know what
they're going to do, because the
few dollars they earn on the
side "slip through your fingers
like sand."
"People used to say life wasn't
easy," said Gutiérrez, 39, an
economist who cleans houses on
the weekends, charging two or
three dollars per cleaning job.
"Now everyone knows without a
doubt that it's not only hard,
but that it's going to get much
worse."
"The pesos I earn in my job
don't stretch far at all. My
brother lives in the United
States and sends me something
once in a while, but it's only
sporadic, and dollars are worth
less and less in Cuba," said the
economist.
In the past few months, the
socialist government of Fidel
Castro has raised the minimum
wage, the salaries of teachers
and health care workers, and
pensions, besides adopting
measures to assist the poorest
families.
But the steps taken have fallen
far short in a country where
many essential goods can only be
purchased with "convertible
pesos" or CUCs, popularly known
as "chavitos", which trade for
25 pesos or 1.20 dollars.
And prices have not stopped
rising.
"Prices go up five cents here,
10 cents there. Taking a 'maquina'
(collective taxi) in the city
costs double what it did a year
ago. Everyone, including doctors
or dentists, expects you to give
them a dollar or two when they
attend to you," complained
García, an engineer who like
Gutiérrez has had to turn to odd
jobs on the side to get by.
An economist who preferred to
remain anonymous told IPS that
the buying power of Cubans has
been shrinking fast, to judge by
the marked drop in food
purchases in the farmers
markets, which were opened
around the country in the
mid-1990s and operate according
to the laws of supply and
demand.
Official sources indicate that
between January and April,
Cuba's 11.2 million people
bought 42.6 percent less food
than in the same period in 2004.
The figures include purchases
from state-run companies,
cooperatives, and farmers
selling their own produce in the
markets.
The prices of meat, beans, fruit
and vegetables have risen around
the country. "The increase in
prices in the free farmers
markets counteracts the effects
of the improvements that the
government was aiming for with
its wage and pension hikes,"
said the economist.
Although no new across-the-board
price rises have been
implemented in the government's
chain of stores that only accept
hard currency, the cost of some
products, like nationally
produced tomato sauce or
imported instant coffee, has
gone up.
Cubans receive their state
salaries and pensions in regular
pesos, which they use to buy a
very limited range of subsidised
rationed food items, or to
purchase fresh produce in the
farmers markets.
The CUC, meanwhile, provides
access to a much broader range
of often essential goods,
including food, clothing,
footwear, and personal hygiene
and household products in the
hard currency stores.
Although health care and
education are free, and utility
rates are extremely low, a
survey conducted in Havana at
the start of the decade found
that an average family of four
would require seven times the
average salary - which is
roughly 260 pesos, equivalent to
10 dollars a month - to meet
their basic needs.
Government sources estimate that
60 percent of the Cuban
population has access to
dollars, mainly through
remittances from relatives
living overseas, but also
through work in tourism-related
or other activities.
Since the crisis that broke out
in the early 1990s with the
collapse of socialism in eastern
Europe, social differences have
become more pronounced in Cuba.
Today, hotel doormen, taxi
drivers, and others who work in
the tourism sector, and thus
have access to dollars or euros,
can make as much in a day as a
doctor or other state-employed
professional earns in an entire
month.
Cuban families who enjoy neither
privileges of any kind nor large
incomes - the great majority -
have been hit hardest by the
measures adopted by the United
States last year against Cuba,
and by the Cuban government's
response.
A programme intended "to hasten
the transition to democracy" in
Cuba, announced in May 2004 by
the administration of President
George W. Bush, limited travel
to Cuba to visit family to just
one trip every three years, and
under a specific licence only
valid for immediate family
members.
Furthermore, the amount of money
that visitors from the United
States can spend on food and
lodging in Cuba was sharply
reduced, and recipients in Cuba
of remittances and gift parcels
were limited to immediate family
members.
Washington also made it even
more difficult for non-Cuban
U.S. citizens to visit the
island, such as academics or
professionals who had previously
been able to attend activities
like international conferences
or trade fairs.
In response, Havana raised
prices in the hard currency
stores, removed the dollar from
circulation, and slapped a 10
percent tax on exchanging
dollars for CUCs.
The reality is that salaries in
pesos just barely cover the
utility bills - power,
telephone, cooking gas and water
- the most essential food
products, and public transport.
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