Money, Power, and Capitalism in Cuba

Our tour bus bounced through the streets of a small Cuban city, and our national guide craned his neck to look out the window.

“I can tell you,” he said, “just by looking at the houses, who works in tourism and who doesn’t.”

Back in the States, hospitality and service jobs are not held in high prestige. Maybe if you work at a fancy restaurant you can make bank on tips, but your basic tourism job is not considered a moneymaker. In Cuba, it’s a different story, in part due to the dual currency system.

The dual currency started in 1994, when the government tried to control the amount of foreign money flooding into Cuba. There is the Cuban peso (CUP) that the locals use, and the convertible peso (CUC) that tourists use. The CUC is tied to the US dollar at a one-to-one exchange rate, while the USD – CUP exchange rate is roughly one to twenty-six.

Yeah, you can probably see where this is going.

According to our guide, a Cuban working for the state (as most Cubans do) makes between twenty and twenty-five CUCs a month. He tried to assure us that this is enough to live on in Cuba. A lot of services and goods are subsidized or completely free. Healthcare, education, sports, culture, basic staples, they’re all accessible – to the highest quality the state can afford. But still. That’s twenty to twenty-five US dollars a month. So when tourists come in – from any country – and pay for goods and tip in CUCs, people in the service industry rake it in. You can literally make hundreds more dollars a month as a tourist bus driver than you can as a doctor.

Even renting out a room in your house can bring in more money than working for the state. These private houses are called casa particulares. Locals rent out rooms for around twenty-five CUCs a night. That’s a whole month’s salary working for the state.

One evening in Havana we went to a new paladar, a private restaurant. It was tastefully decorated with a chic, minimalist design, and the service was excellent. Entrees were generally between twelve and fifteen dollars – amazing compared to New York City. I glanced around the classy restaurant, noting the other (tourist) patrons. It’s wonderful that there’s more private business growth in Cuba, but who’s going to these new restaurants where a dish costs half a month’s salary?

And then there’s the embargo, the other hand in Cuba’s complicated economy. The US embargo has caused an unimaginable amount of damage to the Cuban people. It has also made them some of the most inventive and creative people in the world. Without access to many goods and resources, they’ve demonstrated ingenuity that’s resulted in everything from the vanguard of urban farming to creating art by recycling discarded products to making their own replacement parts for their antique cars.

But even that has a dark side. On the documentary “Yank Tanks,” one Cuban mechanic showed how he made replacement car parts from scratch using whatever materials he can get his hands on – including asbestos. He casually ran through the process for the cameraman, and he so flippantly mentioned asbestos that I wondered if I had heard him wrong. It wasn’t until the director sat a few of his featured car enthusiasts down for an interview that it even came up. The director asked about the asbestos, and the mechanic’s jovial mood evaporated. Did he know it would shorten his life? Yes of course. But that was what he needed to do for his family.

Is that capitalism? A private individual taking on the risks and rewards of trade for himself, without the state? Thinking about his long-term investment instead of the short-term cost? And if that’s how capitalism works in a communist state, how is it possible to fix the broken system?

Money and resources aren’t the only causes of class gaps in Cuba. Despite the message of equality that’s constantly rolled out to the people, connections and reputation still carry weight. Our Cuban guide told us a story from his childhood, about a friend who got to go to special camp because his father fought in the mountains.

“I knew, when I was six years old,” he said. “Why did he get to go to this special camp? His father fought in the mountains for all of us to be equal.”

Special privileges are one thing, but when those privileges rollout into material wealth… How does the message of the revolution stand? We visited an artist in Havana as part of our people-to-people program and toured his house to look at his art – typical in Cuba, where many artists use their homes as galleries. And while his art was interesting, what floored me even more was his gorgeous house and mint-condition classic car. Our local guide looked thoughtful as we left the demonstration.

“An artist, to live in that house,” he mused. “His father was a doctor in Africa. Who do you think he was the doctor for? A diplomat.”

He said it as a statement, not a question, even though he didn’t know for sure. What did seem obvious is that Cuban socialism hadn’t made everyone equal.

Money is about to flood into Cuba. And that money has great potential. There are gaps in industries, infrastructure, people’s lives that could be filled by the resources about to come to Cuba. But as always, there is also a great threat – that the money will just widen the gap between the have’s and the have-not’s and that more of Cuba’s educated and inventive citizens will abandon much-needed positions for more profitable work in tourism or to emigrate.

I wanted to believe that Cuba’s economic situation was just misunderstood. I wanted to go down there and see the message of equality and sustainability lived out in practice, the spirit of the revolution multiplying its benefits. I never thought of Cuba as a third-world country until our Cuban tour guide said it — repeatedly. And while the tourism dollars could really help, I don’t want to see Cuba become a Disneyland for Americans.

But the relationship between independence and money is confusing. With the investments about to pour into the country, I hope the Cuban people will be able to keep their footing in the deluge.

Have you traveled to a country with a complicated economy? Maybe trade sanctions or an unhealthy relationship with tourism? What were your experiences?

Have more insight into Cuba’s economy and society? Please share! I’m no economist but I’m happy to learn and discuss more about Cuba’s situation.