Mai Perso - Travel adventures

A Tale of Three Economies

June 1, 2012

Here is a story for you. Say you need to get from Havana to Trinidad. A five hour travel crossing Cuba from North to South, on roads passing by scenery varying from long stretches of sugar cane fields, “The heart of the radiation and feeding the Revolucion” as one sign quoted Fidel. Mango, Avocado and Coco plantations. The road you take is a combination of freeway, smaller provincial roads and a few connecting streets through local towns or elsewhere.
If you are a tourist, you have exchanged your money, preferably Euros, since US dollars get a 10% hair-cut just because, to CUCs or Convertibles as they referred to locally.
You buy a ticket at the “Via Azul” Station for 6 CUC per person, by no means an expensive trip for a decent air conditioned bus and a 250-300 km trip. This is your Alternative economy. Managed by the Revolution, which is how Cubans refer to the central government, tourist pricing is controlled through a parallel currency.
Now if you are a regular hard-working local Cuban person, you have a few options.
Since your monthly salary is somewhere between 250 and 1,000 local Pesos. Conversion rate is 1:25 CUC, so you are making 10CUC a month if you are a worker and four or five time as much if you are a doctor at a hospital. Remember, it’s socialism. Give what you can and get what you need.
Back to our Trinidad road trip, if you are Cuban and want to travel in grand, you will pay a week’s salary and board the bus at the station with the tourists. Your luggage will be stowed and off you go. Alternatively, you will board a locals only bus, the trip will take closer to 10 hours, changing busses often and sharing the equivalent of a mini bus with two hundred other passengers. I kid you not, I lost a couple of bets on the question if all these people will fit In a bus at the station, and they always did…
This is the second economy, still state owned but tailored to the local means and supported by the Revolucion. Running on the local currency that allows the government to control subsidies, “distribution of wealth” or more like “sustainability of poverty…”
And then there is the parallel economy. We all know that many countries are run on a combo of corrupt officials or non taxable transactions, barters and the likes. In fact, Greece is about to go under for the same reason.
In Cuba, it’s a necessity since there is no other way for you, even if you are a very talented and enterprising individual, to make more money and avoid living in poverty.
Our trip to Trinidad was strewn with the triciary economy. A couple on the bus boarded in Cienfuegos at the last minute, ushered to the bus by the via Azul ticket master, with no tickets. The bus driver got a cut, the inspector may get a cut if they board the bus for control, and the ticket master will pocket the rest. Six CUCs, not bad for one tourist couple, a boost of 50% to his monthly income. The guy had Adidas shoes on…
At the edge of town, a small group of people were standing and waving with bills of local pesos. The driver stopped and picked them up. He dropped them off again at the edge of town before we arrived. Another hundred plus Pesos pocketed.
The bus stopped a half dozen times along the way, picking up Milk, Pineapples, Mangos and other produce from farmers along the way, which will be sold later today on the streets of Havana. An enterprising bus driver is a very profitable commerce profession in Cuba. You get the profit and the government picks up the tab for the cost of distribution (the bus… ), free of tax.
So here you go. Capitalism in a Social sheepskin. The entrepreneurs thrive, the “people” live a tight economical life, and people in powerful government position profit from all three economies. Kind ‘a like in the US isn’t it?
The difference, if you live in the west, you have a false sense of freedom and endless possibilities. That is if you are well off. Not the case for some hopeless family among the millions of western families, American in particular, who live at or below the poverty line.
In Cuba, you know it’s hopeless, so you just try and make the best out of it and if you are smart and quick on your feet, you have a pretty decent life.
Oh by the way, School, all the way through university, is free and so is the healthcare system. Literacy is high and kids birth mortality is low. Families have fewer kids and see them through school and into higher education more often then not.

Don’t misunderstand me. I am not promoting socialism, even though my belief is that the western European Social Democratic formula is a pretty good balance between democracy and sharing of wealth. More like social responsibility then socialism. But the interesting aspect of seeing Cuba, is that since the revolution, the rich are a little less rich and the poor are a lot less poor. They support each other through life.
I don’t believe the model will last past Fidel and Raul, but the people here who are older then 54 and have experienced Totalitarian Cuba, and then Socialist Cuba, may end up opening up in a way that is closer to the European model then the “survival of the fittest” that is the core of the social economical mantra of the US.
Pardon my digression. A trip to a socialistic country tends to get me there…
It’s raining in Cuba. We are here inn June, during the rainy season. Avishy Cohen is playing a mellow jazz tune on my iPad, offset by a song by the Buena Vista Social Club. Both seem suitable to the passing by lush terrain.
I like Cuba in a special way. Reaching the final stage of this trip, back in Havana, I got all I was imagining I will. Including the three economies. It left me with a taste of more. Next time probably earlier in the season, to avoid the humidity and heat.