Two Systems: Modern Cuban Economics

While in Taiwan during part of 2009, I felt obviously different as a foreigner, but also integrated into the flow of the community and local economy. There I was a tourist, but survived through adopting local customs and means of transport (scooter) while also walking further alone much more than most natives. I was part of the same system as everyone.

However, I felt that in Cuba I was viewed from afar by most Cubans. They might see a glimpse of me when whisking through their neighborhoods on the bus. Most casual interactions I had on the street were of the same variety I find in Portland, Memphis, Chicago, New Orleans or New York; hustlers, beggars, prostitutes, passed-out drunks, tourists, locals, police, plain clothes police, workers, entertainers and other assorted lost souls. Yes, we mingled, but without truly mixing.

The reason behind this is obvious, and if not intentional, then potentially beyond repair to the point of subdued acceptance. The split economic system, one for locals and another for tourists. The "Covertable Peso" (CUC - pronounced like "kook") has displaced the Cuban Peso as the preferred currency. The original goal was to bring the CUC and the Peso into roughly equivalent values over time following its 1994 issuance. The CUC opened at 5 Pesos and quickly shot up, inflating to the nearly 25 Pesos it is today. This has devastated the local economy and created the beginnings of an overtly two-tiered society.

This new class system, with those benefiting from the new Tourism economy, which accounts for roughly 50% of GDP, operates in ways that differ vastly from the previous societal order. In the old days, loyalty to Party and involvement with the Army was the difference maker. Now, it’s being able to get in on the vast amounts of income available through tipping from tourists.

My ongoing questions on this topic include:

1. How can the Cuban economy be sustained and diversified in conjunction with increasing Tourism, which already accounts for over 50% of GDP?
2. What impact would lifting part or all of the US Blockade have on the Tourist/CUC economy?
3. What plans are in place (or being formulated) to address the widening gap between those connected to Tourism and those on the outside looking in?

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The 2011 BGI Global Perspectives on Sustainability study abroad experience took 24 BGI students, faculty and alumni to Cuba for two weeks. The trip was hosted by Global Exchange and sanctioned by the US Department of State. All opinions expressed in this blog are solely those of the author and do not necessarily reflect the views, opinions or experiences of BGI, Global Exchange, the US Department of State or any other individual participant on the tour.