Cuban Economy

The exchange rate between the CUP and the CUC has never been an indication of the true value, but more like the government’s way to ensure that the Cubans don't buy too many expensive goods from abroad.

Lately things have been changing rather quickly money wise.

After accepting the US $ for more than a decade, here’s what has happened:

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Nov. 8th 2004 USD is out.
Convertible Pesos (CUC) is in.
One CUC equals one USD
Feb. 20th 2005 The exchange rate between Pesos Cubano (CUP)
and CUC went from:
Before: 27 CUP for one CUC
Now: 25 CUP for one CUC
April 9th 2005 The CUC is no longer tied to the USD. That is
- it’s still quoted to be 1.08 of that of the arch-enemy!
May 1st 2005 The minimum wages for workers were raised from
100 to 224 CUP a month
- aka raised from 4 to 9 CUC a month.
  The minimum social pension was raised from
55 to 150 CUP a month.
- aka from 2 to 6 CUC a month.

Here’s an example of the difference in CUC / CUO value:

5 CUC

A 30 minute bus-ride with the local bus cost me 0.2 CUP - that’s about 5 times less than the smallest Danish coin.

On the return trip I took a taxi, and I paid 9 CUC for the ride.

5 CUC

In other words:

The trip with the taxi cost me more than 1.100 times that of the bus.

The cost of petrol alone by far exceeds the revenue from the bus tickets.

The modern word for this would be “subsidised”, but to me it’s more a consequence of the idea:

If you deny people buying-power,
you'll end up buying power for the people.

Although the GDP per capita is in excess of $ 3.000, the average Cuban only receives about $ 300 in annual salary.

In real life that’s about 90% in tax.

 

Source:
CIA-Factbook 2005
Haiti
Honduras
Cuba
Jamaica
Venezuela
Dom. Rep.
Mexico
Bahamas
 
GDP - per capita
$ 1,500
$ 2,800
$ 3,000
$ 4,100
$ 5,800
$ 6,300
$ 9,600
$ 17,700
Unemployment rate
66.67%
28.50%
2.50%
15.00%
17.10%
17.00%
3.20%
10.20%
Literacy
52.9%
76.2%
97.0%
87.9%
93.8%
84.7%
92.2%
95.6%
 
Infant mortality
per 1.000 live birht
73.45
29.32
6.33
12.36
22.2
32.38
20.91
25.21
Life expectancy at birth
52.92
65.6
77.23
76.29
74.31
67.26
75.19
65.54
 
Telephones
per 1000 capita
16.0
46.2
50.6
162.7
112.0
100.8
150.3
436.4
Cell phones
per 1000 capita
17.2
46.8
1.6
512.5
254.7
236.9
264.8
403.6
Internet users
per 1000 capita
9.9
24.2
10.6
219.6
50.2
55.9
94.5
278.3