Two weeks ago, the Cuban Ministry of Finance published a new list of prices for products sold in CUC (the Cuban equivalent of the dollar) and in pesos.

The inventory of prices of food and hygiene products, among others, was included in a list of just 13 pages, which already gives an idea of the tremendous shortage of supplies under the socialist regime, explains El Nuevo Herald. (Spanish only, please use Google Translate) 

In May the Cuban regime had to impose rationing of products such as chicken, eggs, rice, beans, and soap, due to the serious economic crisis facing the country.

The official version to justify this regulation is that it tries to avoid inflation after the wage increase decreed by Cuban President Miguel Diaz-Canel. 

The authorities also announced the forthcoming creation of a Price Observatory, a body that will monitor and assess trends and behavior in the internal market. 

This entity, according to official sources, will be able to remove the trade license from those state or private establishments that do not respect the regulated prices.

Economists inside and outside the Caribbean island have criticized the measure, which they consider punishes the private sector with regulations and obstacles instead of freeing the productive forces, reports El Nuevo Herald. 

“In a country where the minimum wage is 16 CUC, the Ministry of Finance and Prices decrees that the cheapest package of coffee costs about 0.85 CUC and the most expensive—always of national production—costs 14.45 CUC,” explains Cuban journalist Mario J. Pentón.

A 5.3-gallon carafe of oil costs 38.40 CUC while 2.2 pounds of spaghetti costs 1.65 CUC and a box of 48.5 pounds of chicken thighs exceeds 37 CUC.

It should be noted that, according to Panampost, most of the island’s businesses are run by former guerrillas now under the control of MINFAR (Ministry of the Revolutionary Armed Forces). 

So the regime pays wages to employees who then buy all the products they sell. “There’s a total monopoly,” notes Panampost. 

Cuban economist and University of Pittsburgh professor Carmelo Mesa-Lago, consulted by the BBC, believes that the rise in salaries responds to social pressure in the face of Cubans’ loss of purchasing power. 

But the expert anticipates that this nominal increase will not necessarily be reflected in real wages, that is, it will not increase purchasing power.

“To see its importance, we must take into account what it is compared to. If we do it with last year, it is relevant, if we do it with the salary of 1989, with the real power it had then, the current one is at half its value, adjusted to inflation,” Mesa-Lago explains to the BBC.

Tags: Categories: Central America World