Double currency, a financial marina that lasted the Cuban economy for 26 years

Cuba finally ended its 1st year in its double currency system, a complicated tragedy that during a sailing quarter has provoked large economic distortions and failed to know the real accountability of the island due to the change of different bags of cambio.

Since 1994 circulaban in the country of the months: the official division, the Cuban Peso (CUP), in that the State pays the salaries, and the convertible Peso (CUC), a single currency parity with the dollar, equivalent to 25 CUP in the open official market and used above all for tourist services and the sale of imported goods.

In addition to the salary, among the few things that have already been paid in CUP in the island figuraban basic services, purchased foods in agropecuarial markets, antiquated rent and taxes, albeit with exceptions.

The creation of the CUC was decided by the Cuban president, Fidel Castro, in anticipation of the need for a “strong” currency that would allow tourists and foreigners to work in Cuba., where the position and use of foreign divisions -in special dollar- was illegal during the years and ended in 1993 in response to the economic embargo imposed by the United States on the island, without vigilance.

During the year the foreign exchange division had a similar bank contribution to the Cuban peso, but in the black market the value of the dollar was much mayor. In the finals of 2004 the dollar of circular officially in the island.

As of 2005, the official CUC exchange fee has been 25 CUPs, but there are several variants of this contribution.

In Cuba, different taxes are applied in the accounting of state-owned enterprises, in mixed and common-law enterprises in the Mariel Special Zone, the east country project to attract foreign capital.

The official exchange rate used by Cuban state-owned enterprises to record transactions during each month is from 1 CUC to 1 CUP.

This is the case with various cases in many cases where it is impossible to know what the real accountability of a company is, and in the end, wherever the country is, in the case of a very centralized socialist economy.

Since this year 1, the dollar has officially changed to 24 CUP in all sectors, which implies a devaluation for the state, at least for the population and the private sector.

“The distortions derived from a Cambrian multiplicity, which include an irrational official tax of 1 USD = 1 Cuban peso (CUP), transform into futile and disorient the economic medicine in the country”, said economist Pedro Monreal in an article published on the Cuba Posible socio-economic analysis project.

Según Monreal, “The profitability and profitability issues that it creates, especially in state-owned enterprises, are an obstacle to the reform of the operation of these enterprises” and “while the unification of the bags of change is not going to matter planning, prescribing and managing the foreign inversion ”.

Monetary unification was one of the principals and also one of the most complex issues pending within the process of economic reforms to update the socialist model initiated by dictator Raúl Castro.

Although the process began in 2013 with the creation of a chronogram of media, the “close day” was taking place. Since five years ago, every month in December, rumors have been circulating in the island that unification was imminent, but there will be another one in no time.

In March 2014, the state-owned businesses that only accept CUC will start accepting the payment in the two months, although the population will be aware that there will be more conversions and prices, will take place in CUC or CUP, followed by disproportionate Cuban medium, which currently rose to 30 monthly dollars.

In December 2017, the Cuban Parliament, Castro reproached the reversal of the reunification and call for the elimination of the double currency as “the most decisive process” to advance in its reforms.

“Nadie can calculate the cost increase that has meant for the state sector the persistence of duality, the one who favors the unjust pyramid scheme, giving the mayor responsibility, is receiving a lower fee”, sostuvo entonces the governor.

Alertó también de que la situación propiciaba mer migration de trabadadores qualifiedas al sector na statat, con mayors salores y pagados además en CUC.

Another of the problems of the marina generated by the use of the months is that the foreign investors are attracted, a very small effect for Cuba, with an urgent economic need for foreign capital and more in the last hours of the effects of the crisis and the new sanctions of EE.UU.

Además, as anecdotally, the Cuban lees are strictly forbidden to visitors to the CUC of the island, which is the only cost that other tourists have to leave the country with a numismatic “souvenir” on the map.

(With EFE information)

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