Sunday, August 8, 2010
Cuba's double currency
One unusual fact about Cuba which I had already heard about before going there, but whose significance I didn't realize before arriving, is that the country has two different currencies in use. There is the National Peso and the Convertible Peso. The Convertible Peso (CUC) used to be pegged to the same value as the US dollar, although it is nowadays slightly more valuable. The National Peso is exactly 25 times less valuable than the CUC. This system with two different currencies has basically created two parallel economies within the country. As I understand it, basic goods and services are bought using the national peso, while any luxury items can only be bought with CUC. Items sold in national pesos tend to be extremely cheap by Western standards, while items sold in CUC tend to have similar prices to what you might find in Europe. Basically, the CUC is the currency of the rich, and the national peso is the currency of the poor. Most ordinary Cubans are paid in the national peso, which means that a whole host of goods and services are off-limits to them. Foreign tourists generally only use the CUC during their stay. The result is that Cuba is not a particularly cheap country to travel around in for foreigners, since taxis, hotels and good restaurants have prices in CUC and are no cheaper than they would be in a Western country (although the service is not necessarily as good).
Personally I only used national pesos during the last two days of my stay, and that was only because I and the other foreigner I was with wanted to do things in Havana like taking public transport and going to the cinema, which require the national currency. Both services tunred out to be extremely cheap: the bus cost less than one peso (remember, 25 national pesos make up one dollar), and the cinema cost exactly one peso. When my friend went into a bank in Havana and said he wanted to exchange two CUC for national pesos (that being quite enough for all our needs), the bank clerk gave him quite a surprised look, since very few foreigners ever use the national currency.
The moment when I got a real inkling into what it is like to live in Cuba only using the national peso came when my friend and I went to Coppelia, a famous ice-cream parlour in the middle of Havana. There is a large hall where the ice-cream is sold in national pesos, and a stand outside where it is sold in CUC. On the first day we went to the CUC stand, where there was almost no queue and lots of different flavours, although the price was 1 CUC (in other words one dollar) for a scoop. The next day we went to the section where the prices are in the national peso. We had to wait one hour (literally) in a queue just to get in, since the place is extremely popular with Cubans and there are huge queues to enter the building. When we did finally manage to get in, we sat down in the hall and had to wait quite a while for a bad tempered waitress to come and serve us. When she did we found out that there were only two available flavours (and since one of them was chocolate which I don't eat, I had to settle for one flavour). Apparently, the two flavours vary from day to day. On the other hand, the ice-cream was extremely cheap, with about five scoops costing 5 pesos, or 20 cents.
Basically, when you pay in national pesos the service and the queuing times are reminiscent of the former Soviet Union, while if you pay in CUC you get Western standards and Western prices. Most Cubans' wages are in the national peso, and the average wage amounts to around 400-700 pesos a month. This would translate to only 17-30 CUC or dollars a month. That is why using the CUC is out of reach for many Cubans. It also gives you an idea of how precious tourists' tips are to Cubans. When I was staying in a resort in Playa Jibacoa, I gave a maid a 10 CUC tip to wash my clothes for me (admittedly it was a very large tip). She was extremely grateful and told me "esto me va a ayudar mucho" (this will help me a lot). Later on I realized that I had given her about half her monthly wage just to wash a few clothes.