Since February 1, the cost of petrol per liter has gone from 30 Cups ($0.12) to $1.10 per liter regular and $1.30 a la especial. Now you pay in currency, no longer in pesos. An increase of about 500% which affects, in addition to motorists, public transport and electricity, which will double. On the other hand petrol and electricity bill a Cuba were the cheapest on the planet, although local oil is too heavy to be used for transport and does not even cover local electricity needs, so the government must buy abroad the raw material.
However, the spark struck two years ago, with the advent of MSME.
Economic counterrevolution
In September 2021, the Cuban government – fresh from the disastrous pandemic – opened the doors to private entrepreneurship, inaugurating a new register of self-employed activities, under the acronym MSME
(Micro, small and medium enterprises). An epochal step, in the wake of the one taken in 1993, when Castro authorized individual businesses, the self-employed.
Since then the group of new entrepreneurs, who started with small family businesses bed & breakfast and restaurants – has made great strides, conquering the import food sector, thus replacing the State in retail trade, today confined to a few structures where you can only pay with a debit card in MLC – Freely convertible currency – a sort of virtual currency with an exchange rate at par with the dollar and euro.
From the 35 pioneering micro-enterprises of two years ago, today Cuba has almost 9,000 MiPyme (of which over a third in Havana) who work in good and bad weather, in the absence of a government price cap. So the prices in local currency they go to the stars.
The figures vary from one neighborhood to another: for example al Tight, the most sought after barrio due to the presence of hotels and upper class residents, the goods generally cost more. The average expense is around 7000 Cups ($28), the salary of a doctor or a teacher, categories uninteresting for traders. Their clientele is based on Miami supported families, government, foreign residents and diplomats. Those with plata.
Rates for Cuban on foot I am impractical: one kg of powdered milk $8, 8 two kg of chicken, 5 a packet of raw beans, 3 a can of tomato. With a dollar-peso exchange rate that went from 1:115 to 1:260 in less than a year, the selection is quickly made: two out of ten Cubans can afford the good life and the others make dotrudging through one notebook halved and the frantic search for primary genres at an accessible price.
Regarding taxes, they are calculated according to the personal income of the owners: under 40,000 pesos per month, ($160) exemption total. From 40,000 to 75,000 ($300) you pay 3%. 75,000 to 150,000 ($600) 5%. Figures negligible for those who have a continuous turnover. No annoying receipts, so the calculation of the contributions due to the State is at the total discretion of the owners.
Elite Uova
The most odious speculation is about egg, an essential protein food to replace the lack of red meat. Shops sell a carton for 3000 Cup, 12 euros. And prices continually rise due to the terrible exchange rate. In the province of Artemisa the farms private and government (farms) where the MiPyme get their supplies.
At Empresa Avícola Artemisa they tell me that traders buy a carton of 30 pieces of white shell for $9 and $10 for brown. The government pays in dollars for the imported corn feed, so the eggs are sold as is.
Read Also
The American embargo crushes the Cuban economy. The UN says “enough” for the 31st time. Only the USA and Israel vote against
Version contradicted by Aviart, the state farm which produces only for popular books. According to the manager, MiPyme pay 7-8 dollars max for the cartoon. But shopkeepers prefer family fincas that sell 30 eggs for $5, so that in a few hours a week’s production disappear. Due to these raids, the monthly libreta quota was cut from 12 to 7 pieces.
Government farms are trying to accustom chickens to eating chicken-based feed local compounds, thus bypassing import costs. Thus, 24 million eggs were produced, of which a third ended up in state shops that collect in dollars and then pay for the imported corn. It’s a cat chasing its tailand the retail cost continues to rise.
The End
The State, after having carried out harakiri on its sources of income, tolerating that the cuentapropistas took control of more than half of the tourist services (bed & breakfasts and restaurants) and the MiPymes of commerce, has less money for welfare and subsidized energy tariffs will soon be a thing of the past. Furthermore, due to debts incurred abroad, prestigious hotels such as the Melia Cohiba and car rentals have changed hands, primarily to Spain. However, Cuba must continue to pay salaries, which remain the same most miserable ever.
Members of the party, many owners of MiPyme, including – according to rumors confirmed by the staff – the daughter of Mariela Castro. What hope can the poor have when their own leaders are compromised by private commerce?
Photo credit © F.Bacchetta