Cuba: New Dollar Shops Fuel Division

Economic measures supposed to ease the effects of the pandemic are increasing inequality.

Cuba: New Dollar Shops Fuel Division

Economic measures supposed to ease the effects of the pandemic are increasing inequality.

A shopper wearing a face mask walks in Old Havana.
A shopper wearing a face mask walks in Old Havana. © Eliana Aponte/VIEWpress/Corbis via Getty Images
Illustration. © Baleria Mena

One morning in early November, a crowd gathered in front of Pompa, a shop in a corner of Santa Clara’s central park. Shelves full of perfume and other cosmetic products were clearly visible through the windows. It had been more than six months since the last time residents of Santa Clara could find these products in any state shop. 

News spread fast, causing many people to gather in front of the shop. But just as quickly, disappointment settled in. People could only purchase the new products using a magnetic card linked to a bank account in US dollars.

From one day to the next, Pompa had gone from being a shop where people could buy goods in convertible pesos (CUC), a parallel currency pegged to the dollar, into a so-called MLC store. Only Cubans who receive dollars from abroad are able to shop there. 

These types of shops began proliferating in Cuba last July to help mitigate the effects of economic sanctions imposed by Donald Trump's government and alleviate the pandemic’s disastrous effect on one of the country's most important sources of income: tourism.  

But the new shops have also caused substantial social discontent and boosted a thriving black market. In Villa Clara alone, the number of MLC shops tripled to 13, including most of the province’s key outlets. 

Although the authorities initially said that these shops would just sell non-essential products, in reality they have become the only places where people can buy basic goods. 

Last July, finance and deputy prime minister Alejandro Gil announced that MLC shops would begin raising funds in dollars to import more products to the population in either Cuban or convertible pesos (CUC), an alternative currency pegged to the US dollar.

According to state media, the measure aimed at “increasing the supply of national currency”. 

“In the current scenario, we can’t use hard currency to import higher-end foods and sell them in CUC,” Gil said.  

However, the authorities do not appear to have used the dollars raised in the new shops to increase product availability in the rest of the stores. 

What people have seen time and time again is what happened at Pompa: a shop that used to sell in CUC closing after months of shortages only to reopen again selling in dollars. 

The social discontent caused by these measures has been exacerbated by the inequality it generates. There are now products many people cannot buy because they do not have access to dollars.  

In December, Guantanamo’s provincial newspaper Venceremos published a note explaining that sweets would be removed from shop windows in MLC stores and placed in a less visible area. This was in response to a mother’s pleas on social media that sweets be removed from view so children whose parents did not have dollars to buy them would not cry.

The measures have also strengthened the black market. It is possible for people to find the same products offered in the MLC shops in pesos, but for three times the price. 

When Yumié Corcho, from Villaclara, took her young daughter for a medical appointment at the provincial children’s hospital in November, she recalled that she had to turn to the black market simply to buy her child something to drink. 

“I had to pay 120 pesos for a juice box for her, the same juice box that before had a price of 50 pesos in [CUC shops],” she said. “Now, they only sell this product in dollars. But I don’t have dollars.” 

After the pandemic began, the government imposed a series of restrictions on sales in both CUC and Cuban pesos, limiting the number of products people could buy. In the last few months the authorities have toughened the measures even further.  

One such example is Novedades, a shop belonging to the TRD chain - managed and controlled by the military - which has continued to distribute products in CUC in Santa Clara. 

But Cubans are not free to shop at Novedades whenever they want. Shopping is only possible on a particular day of the month set by the authorities, depending on the customers’ place of residence. The ration card regulates the sale of products, with quantities strictly limited. 

On the assigned day, each family can buy one litre of oil, one tube of toothpaste, a portion of minced meat, two packs of sausages, two bpottles of detergent, one pack of chicken, two soaps and one deodorant. 

But this strict system does not guarantee that the products every family theoretically has the right to buy will be available on the day they are allowed to go to the shop. 

If there is no chicken or soap on that day, then the family has to wait several weeks for a new opportunity to buy them. 

The provincial authorities have warned that certain products, including foodstuffs and toiletries, will only be available once a month, with others available even less frequently.

Queuing in front of the Novedades shop in Santa Clara, homemaker Zoila Barrera explained that as soon as she heard which day shopping was allowed in her area, she ensured she would get to the shop before it opened. 

“At 7 am there are already people waiting,” she continued. “The last time they had chicken for sale, I could not get any because it sold out. I never have problems buying oil, but it is never enough for the whole month. I always have to buy more [on the black market].”

The shops’ opening times also coincide with most people's working hours, forcing them to take time off.  And the system does not take into account families of different sizes; all are eligible for the same number of products. 

Prices also continue to be too high for Cuban salaries. For example, a pack of frozen chicken costs the equivalent of many retirees' monthly pension. Other products such as shampoo, hair conditioner, detergent and deodorant can cost a third of what most state employees earn a month.  

A shop assistant in the Jose Marti neighbourhood in Santa Clara who asked to remain anonymous explained that many elderly or poorer people “can only buy one or two of the products they are entitled to”.

She added, “They have to do without other products, not because they don't need them, but because they cannot afford it.”

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