COST OF LIVING

18 01 2011

 

The subject of the cost of living in Cuba is a complex one, difficult for outsiders to comprehend. This is principally due to the existence of a dual currency system. The first currency – the Cuban peso (CUP – or MN, moneda nacional) – is the main currency and the one in which most people receive their salaries or pensions. 1 CUP = £0.03. The second currency – the Cuban Convertible peso (CUC) – replaced the dollar as legal tender in the 1990s. Its value is pegged to the dollar. 1 CUC = £0.72, or 24 CUP.

Cuban people can convert one currency into the other, at a bank or a chain of money exchange outlets called CADECAs (Casas de Cambio). The problem is that nearly all imported products and some domestically produced ones – not just luxuries – are sold in CUC.

As is often reported, the average Cuban salary is somewhere around $20 per month. In almost any other country in the world it would be impossible to live on that amount. In Cuba it is very difficult, but not impossible. Healthcare and education are free. Most people own their own house (which they cannot sell, only exchange). Therefore they have no rent to pay. For those paying rent, it is fixed at a maximum of 10% of salary.

All Cuban people receive a ration card (called a libreta), which entitles them to a certain amount of food products each month at highly subsidised prices. For example, 20 bread rolls would cost 1 CUP. Unlike rationing systems that have existed elsewhere (such as in the UK in the 1940s and 50s), Cubans can freely buy additional food. However, it costs much more than the rationed food. The Cuban Communist Party Congress this April will discuss phasing out the libreta, which is causing much consternation amongst the population, particularly pensioners and those on below average salaries.

Other services are also subsidised and cheap, such as public transport. My friend’s household received their electricity bill this week, which for three people for a month came to 13.20 CUP (about £0.40). The calor gas which they use for cooking costs them about another 7 CUP per month.

Prices in the fruit and vegetable markets are also much cheaper than other countries. For example, I bought oranges this week for 1.70 CUP per kilo; and plantains for 0.80 CUP per pound. An ice cream cone in the street costs 1 CUP; the daily newspapers (there are two) cost 0.20 CUP; a small pizza from a street stall cost 5 CUP; a glass of a cold drink made from powdered flavour costs 1 CUP. A litre and a half of draught beer (known here as dispenzada) costs 30 CUP.

However, imported goods in shops that are priced in CUC can cost as much – or even more – than in the UK. Stereo systems for instance are priced between 470 and 1100 CUC. A blender will cost between 40 and 60 CUC. A litre of fruit juice costs 2 CUC. Clothing is not much cheaper than in the UK. Amazingly, many Cuban people are buying these products, which shows that many people have alternative forms of income other than official salaries, such as remittances from abroad; scams at work; tips from tourists; or the proceeds of small businesses, both licensed and unlicensed.

The existence of the dual currency system is a cause of much concern amongst the Cuban people. It is an objective of the Cuban Government to phase it out. However, this is seen as necessarily being a medium to long-term aim.

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3 responses

19 01 2011
John Abbotsford

Thanks Leyton That is the second mention of rent at 10% of salary that I have read recently. Where did you hear/learn this? And who would rent i.e. how does someone find themself in the renter category rather than the owner?
Household utilitities are also highly subsidised – water, electricity, phone(for those who have it). My formerly Cuban wife is amazed at how much our (Oz) water/gas/electricty bills are in comaparison to her (professional) salary here.
Saludos
john

26 01 2011
leytono

John, I got the 10% figure from a piece written by a guy from the US called Circles Robinson, who set up the Havana Times web-site whilst living and working in Cuba. I think that it was called “Some notes on an untypical economy” or something like that and was printed on the HT web-site. Try and google it – it was very good.

7 11 2011
The low Cuban workplace productivity – 4 thoughts « octobersunincuba

[…] that money per month is a moot point, if possible, its certainly not easy. A view of one tourist is here but there is far more on the net as […]

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