This past January 5, in a major speech commemorating the fortieth anniversary of the founding of the National Revolutionary Police, Fidel Castro spoke of some of the criminal consequences of Cuba’s dollarized economy. As he spoke about prostitution, street crime and the drug trade, alert Cubans heard the threat of a crackdown on the unauthorized dollar-based commerce that has become a fact of life for most Cubans since the holding of foreign currency became legal in 1993.
The legalization was a bow to reality, since so many Cubans were receiving dollars either from émigré relatives or by working in the tourist trade, fueling a lively black market. Cuban economists recognize legalization as part of a package of economic reforms which have contributed to greater economic efficiency and an increase in the supply of consumer goods. In this report, for example, Pedro Monreal calls dollarization a “central mechanism” of Cuba’s current reinsertion into the world economy.
But the need for dollars also takes a heavy toll on daily life and forces many otherwise law-abiding and loyal Cubans to do some of the very things Fidel condemned in his January speech. And unequal access to dollars has meant growing inequality in a society that for the first 30 years of the revolution had narrowed the gap between high and low wages, and reinforced equality through the social provision of basic necessities.
Those who earn only the minimum wage in pesos—roughly 100 pesos, or five dollars a month—do not starve, buying everything available to them on a ration card and paying very low or no rent. Even those who earn professional salaries, however—averaging 300 to 400 pesos a month—do little better. Many kinds of goods can only be bought with dollars, including clothes, gasoline and some medicines that used to be available for free or on the ration card. Goods available for pesos are often of lower quality and fairly expensive. Having access to dollars is thus necessary to live with any margin of comfort. Dollars are also typically needed to start small businesses like restaurants, which require some capital investment.
There are several sources of dollars, the most reliable of which are remittances from relatives in the United States and employment in some activity which provides contact with foreigners, notably tourism. In addition, some firms with foreign investors pay productivity bonuses to workers in dollars, and some state firms in key sectors are beginning to do the same. Anyone with a job which produces tips in dollars can live very well, and necessity has forced many well-educated Cubans to leave prestigious positions in health and education for employment as waiters and bartenders. On a recent trip to Cuba, a doctor told me of a colleague who retired from his hospital post and now drives his car as a cab to support the family. This is the only way his son, also a doctor, can afford to keep practicing medicine. Not incidentally, this situation threatens to resurrect social divisions between black and white Cubans. Afro-Cubans are not only less likely to have relatives who have left the country, but are less likely to be hired by managers of the hotels co-owned by foreigners.
Those without a steady source of dollars rely on a variety of hustles, legal and illegal, to pick up hard currency: renting rooms to tourists, preparing food to sell on the street, or opening restaurants in their homes. Skilled workers who can repair equipment or fix up homes can charge dollars and are in heavy demand. Anyone with a car can use it as a taxi. An estimated 22% of the Cuban labor force was working in the private sector in 1994, up from 4% in 1988.[1]
Many of these activities are legal for those who meet bureaucratic requirements and pay a stiff licensing fee, but the many people who do these jobs without licenses are outside the law. There is very little control over them, but since Fidel’s January speech condemning the prostitution and street crime which have accompanied the booming tourist trade, people have expected a crackdown. Reacting to a crime wave that is still very slight by Caribbean standards, many Cubans are favorably disposed to such a crackdown. One of the heralded accomplishments of the revolution in the 1960s was the elimination of prostitution and the retraining of prostitutes for new jobs. Now Fidel promises psychological counseling for prostitutes—whose profession was just criminalized—and draconian measures for other offenders, including life sentences for pimps.
If relatively few Cubans have turned to prostitution or mugging, however, survival requires many of them to commit minor economic offenses. Many workers in state manufacturing and commercial firms supplement their income by pocketing goods on the job and selling them on the street. Pedestrians in Havana are regularly accosted by people offering cigarettes and other goods at low prices. The language people use reflects their feelings about pilfering on the job: they do not talk about goods as stolen but as “diverted.” While Fidel did not call directly for more severe penalties for economic crimes, he did associate them with the more serious crimes by saying that cases of burglary, armed robbery and violence are “often connected with self-employed street vendors,” and that many people who rent out rooms are “turning them into whorehouses.” It was not lost on listeners that the occasion of the speech was the anniversary of the police force.
While the revolution still guarantees free health care, education, a minimum standard of nutrition and—for most—a job, the need to get dollars has had several negative consequences that raise some fundamental questions about socialism. First, the dollar economy has reintroduced inequality. Second, activities that earn dollars are not as economically or socially useful as the production of goods and the provision of professional and social services. Third, having so many people who consider themselves loyal Cubans participating in de facto illegal activity has undermined revolutionary values. Most Cubans accept economic reform as inevitable, but many of them, including some who are surviving by illegal petty hustles, wonder aloud what is happening to socialism.
ABOUT THE AUTHOR
Jack Hammond is professor of sociology at Hunter College and author of Fighting to Learn: Popular Education and Guerrilla War in El Salvador (Rutgers University Press, 1998). He is a member of NACLA’s editorial board.
NOTES
1. Lilia Nuñez Moreno, “Más allá del cuentapropismo en Cuba,” Temas, No. 11 (July-September 1997), p. 42.
