Foreign Policy Research Institute A Nation Must Think Before it Acts Field Notes: Havana, Cuba

Field Notes: Havana, Cuba

  • August 1, 2013

I never liked avocados.  Despite their increasing popularity as a health food, to me they taste like an oily vegetable butter.  Nevertheless, my recent week long trip to Cuba gave me a new perspective on this fruit.  Although the trip was organized by the Cuban government, my visit offered clues to the inner lives of this socialist country’s everyday citizens.

As part of the group visit, I sat through a local priest’s lecture on Santería, Cuba’s odd mix of Catholicism and the Yoruba religion.  At the presentation’s end, the priest and several of his assistants presented our group with large, ripe avocados in appreciation for our visit.   I had no interest in mine as we returned to our government-selected 5-star hotel, so our native Cuban professor suggested that I simply donate it to a hotel employee. 












Exterior and Interior shots of our government-selected 5-star hotel

I offered an avocado to our 35-year-old male, European-descended hotel clerk, who had a shaved head, a club bouncer’s build and a bus driver’s friendliness.  I expected him to either politely decline the offer or accept the two-pound berry with awkwardness since he was at work. But as soon as he realized I was serious, he joyfully accepted the gift, beaming with immense gratitude. Stunned, I retreated to my room wondering why that innocent gesture – re-gifting an avocado – had made his day.  Although I thought he was doing me a favor, in reality I was helping him circumvent Cuba’s dual currency system.

The Cuban monetary system, designed in 2004 to help remove foreign (mainly US) dollars from circulation in the country, uses the traditional Cuban Peso (CUP) for every day expenses. Tourists, however, are required to convert their money into the Cuban Convertible Peso (CUC), which is valued at one USD and twenty-four CUP.  According to the government pay scale, an average hotel worker earns 367 CUP a month, equal to $16 or 16 CUC. This gives him or her enough money – despite the ration system – to purchase food, but not for any luxuries beyond the basic necessities.  For example, the country’s national beer, the Bucanero Fuerte, costs 1 CUC or 24 CUP – an amount equal to two days’ salary for government employees who comprise 75% of the Cuban workforce

Despite his meager salary, a hotel employee is very lucky. His job in the tourist industry puts him near foreigners who tip in CUC, allowing him to live above a bare minimal existence.  For everyone else, the dual-monetary system keeps prosperity out of local hands and ensures dependence on and obedience to the government.  In Cuba, an avocado costs 0.50 CUC, internet access costs 4.50 CUC per hour, and the departure tax costs 25 CUC.  This immense, mandated disparity between the purchasing power of a Cuban income and the costs of a comfortable life leaves ordinary Cubans with little access to basic luxuries, let alone outside information or international travel.  Is the regime aware that it is hurting the Cuban people in its attempt to preserve Cuban socialism against supposed American imperialism?  Yes, but the Cuban monetary system also works to the regime’s advantage by hindering access to information critical of the one-party state.

10 Cuban Pesos (CUP) – About half a day’s salary or the price of an avocado

 10 Convertible Cuban Pesos (CUC) – Equal to 10 USD or 240 Cuban Pesos (CUP)

President Raul Castro has pledged to eventually do away with the two-currency system, but like other reforms, the regime alone will determine the pace and necessity of such change.  Nevertheless, a hasty simplification of the system has the potential for disastrously high levels of inflation.  A sudden executive decree reducing the CUP:CUC ratio from 24:1 to 1:1 would immediately increase demand for CUC-priced goods with the subsequently higher prices wiping out workers’ incomes and savings. 

As Cubans continue to debate the current reforms, few at the moment seem eager to acknowledge the elephant in the room:  Raul Castro announced he will step down as President after his current term ends in 2018.  The culmination of the Castro brothers’ 60 years of power could very well bring with it changes far more drastic than a simplified monetary system.  While the future holds both political uncertainty and economic hope, in the meantime, ordinary Cubans will continue to covet the brighter, cleaner, and more colorful CUCs—and the better life that they can buy. 


James Midkiff is a Research Assistant Intern to FPRI Senior Fellow David Danelo.