The black market in Cuba
Translated ‘la bolsa negra’ means ‘the black wallet’. The Cuban workers earns somewhere between 20 and 30 CUC per month in his official job. You cannot lead a decent life on that salary. At least you cannot if you want more than beans, rice and bare feet. So every Cuban has some earnings on the side. For a better understanding of the CUC see MONEY. For now you should know it is the Cuban “hard” currency.
Cubans do not earn as little as you think…
This creates a misunderstanding for most tourists. If we hear that the average salary is 20 CUC and somebody pockets 10 for a days work we calculate and realize that that is half a months salary and thus a lot of money. Sounds like a logical reasoning, but it is wrong.
La ‘bolsa negra’ represents about 80% of Cuba’s economy. So on average a Cuban earns 5 times more ‘on the side’ than with his regular job. Adding to the confusion is the fact that Cuba has a total different economic model that we do. This makes it very hard to wrap your mind around the real Cuban situation.
A friend (let’s call him Peter) is a lucky Cuban. He works for a foreigner as a handyman. The foreigner pays him 15 CUC a day (to your mind, half a months salary per day, what a crazy foreigner!). But his boss understands Cuba and is not crazy. This is a regular market salary. Peter gets his money but has to pay a price to ‘la bolsa negra’. Officially he is a street sweeper, which is about the lowest job you can get and you only get that job if you are good for nothing else. He has to pay his boss 3 CUC a day to not going to work. His boss pays 1 CUC to his boss and 1 CUC to the inspector, who’s job it is to carry out at least 1 surprise inspection a week to see if all street sweepers are doing their job. Luckily for Peter, the inspector only performs his task when the inspector that is charged with inspecting the street sweeper inspectors does his round. If this is the case, the inspector gets a message from somebody he pays for the warning and sends a message to Peter’s boss, who in his turn informs Peter that he is supposed to be at work next Friday. That day is a black day for everybody involved. The foreigner has no handyman, Peter does not get 15 CUC, his boss, the boss of his boss and the inspector all loose a CUC. Thanks to this complicated payoff scheme, they all are fortunate that the weekly surprise inspection only happens every three months or so.
Official salary Cuba
Let’s have a closer look at the official average Cuban salary. A Cuban earns ‘just’ 20 CUC but income means nothing if you do not put prices into the equation. Most necessities are heavy subsidized. Housing cost nothing or up to 80 cents a month. Electricity is very cheap, as is the telephone (landline). Food is partially free, a base supply of rice and beans (although this is changing at this moment). Education is free, as are school meals. Health care… totally free! Cuba has a higher literacy rate and life expectancy than most western countries. Public transport for a few cents, cultural activities for free or a dime. This makes the comparison with our western economy impossible. A Cuban has to work a whole day to pay for his housing, water, electricity and another day or two to get fed. We work more that half of the month for those necessities.
A very different picture emerges with the luxury goods. We in the West have to work about a day or less to pay for the newest sneakers or designer jeans. Cubans have to work (on their official salary) a few months for those goods. We call our friends on our mobile phone without giving it a second thought (I get 600 minutes a month for a few Euros). A Cuban that uses his mobile phone for 20 minutes has just burned his entire months salary.
All this is made possible by the dual currency system. Life’s necessities are paid in ‘Moneda Nacional’ while luxury goods (as in imported stuff) have to be paid for in CUC. We will get to that later, as it can be confusing, and you do not want to be too confused in Cuba.
The conclusion is that you cannot just assume Cubans have a harsh life because they earn so little. Comparing Cuba to its neighbours (Haiti, Dominican Republic or Jamaica) the average Cuban has much better access to life’s essentials and less access to luxury.
Chapter 2 (part of it)
Before you leave.
In the airport, waiting for their flight back home, you encounter roughly two types of people. Those who had a terrible time and will never, ever, even think of going back to Cuba and those who fell in love with the country. The main difference is mental. The people who know where they are going and are well prepared to handle the things that Cuba throws at them are the flexible optimists. They are the ones that got the most out of their stay and want to come back. The other type was ill prepared for Cuba. They had no clue, thought it would be like Aruba or Gran Canaria and were deeply disappointed by the things that don’t fit our Western mentality and life style.
The beauty of Cuba is that it is you that decide to which group you want to belong. And you already made that decision; otherwise you would not be reading this book. So let me help you to get the most out of Cuba.
You do not want to go to Cuba for shopping or excellent food. If one of these is your favourite pastime on your holiday, please familiarize yourself with the socialist system. Havana has a Paul & Shark shop and an Adidas store. They are about 2 miles apart. The shops in-between sell stuff you do not want at the prices they charge, that does not fit you (No Hay, your size) in a colour you do not like. Even finding deodorant can be a chore. The practical conclusion is that you should take with you all the stuff you might need. All consumables like shaving foam, tampons, toothpaste, sun cream, dental floss, mosquito repellent and shampoo should be brought with you, to avoid frustrating afternoons being sent from shop to shop for a lighter. It is much easier to get all of that in one stop at your supermarket at home.
Good food can be found in Cuba but it is not easy. To find the right restaurants you need inside information, and I will not list them here to prevent the “Lonely Planet Effect”. Most good restaurants are Paladars (small privately owned places) but not all Paladars are good restaurants. It is like finding a needle in the haystack. If you want to have a culinary holiday I would say: “Do not go to Cuba”.
Lobster and beef are for export or tourist consumption. Cuban law forbids the locals to eat it and butchering a cow results in a longer prison time that murdering a man. Beef is thus the ultimate illegal delicacy with a high street value.
Since farmers are not allowed to butcher their own cows (which in the socialist system means that you take care of the state’s cow) they developed a technique to kill the animals in a clean-cut way. The cow that is about to become delicious meat is attached to the train track with a long rope. The rope is attached to a wooden pin a few meters from the track. Now if a train comes, the cow starts running away from the track, pulls the pin out of the ground and the rope guides it neatly towards the track, where the train causes an accident and the farmer has a dead cow on his hands.
This is how you get your hands on beef, without slaughtering a cow.
Still want to go to Cuba? Then let me give you some general travel tips and advice:
Your mobile phone works in Cuba. All the cities have good coverage. Using your phone is quite expensive or better, extremely expensive (see your providers’ website for details). There is no 3G network and no Wifi anywhere so the best phone to take is an old one which you can give away at the end of your holiday. Just leave your state of the art Smartphone at home; it does nothing more that that any other phone and can attract unwanted attention. A phone is a status symbol, so are very useful if you want to make somebody happy. The same goes for MP3 players and digital cameras so empty your drawer of electronic toys that you never use any more and take them with you to give away. However, do not take too many. 4 mobile phones, 5 MP3’s and 3 cameras can cause trouble at the airport coming in.
Electricity in Cuba is 110 volt and they use the American plugs. If you want your electronic toys to keep functioning, take an adapter with you. Some Casas have 220 volt, European style outlets, but most still function on 110.
Get yourself a basic medical travel kit and do not rely on Cuban pharmacies for your medication if you need any. I always take the following: Broad-spectrum penicillin and anti diarrhea pills, Aspirin and some multivitamins. Except for the diarrhea stuff and the Aspirin I never used any of it so don’t forget to walk into a hospital and give it all away before you leave.
Take a few packs of paper handkerchiefs with you. Toilet paper is not always available and you could blow your nose in them too.
You do not need any sheets or towels since all the places you will be staying provide for them.
You do not need a fresh shirt for every day as washing service is available at a small price (see pitfalls).
My suitcase is almost empty when I get back, except for some rum and cigars. Cubans are very happy if you give them quality clothes or a pair of shoes. If you plan to give away your excess wardrobe, you should realize that Cubans are relatively poor but proud. You do not make them happy with worn T-shirts with deodorant sweat stains under the arms. People are very sensitive to respect, so treat them with it!
Personally I think that ‘giving’ sends the wrong message. I always make it a trade. Nowadays, if I say to friends that I want to make a deal, they already start smiling. I trade a telephone for a meal, A a camera for a bag (I never buy boxes) of cigars, a bracelet for a kiss or a watch for a home-made pie. Not because I smoke cigars, long for a kiss or like the home-made pie, but to show respect and to guard equality between friends. Cubans have a fine understanding of this and will appreciate your approach very much.
If you want to give things away, you have to realise that most Cubans are very happy with your gifts but others make a good living from being happy with gifts and selling them…
You will be a tourist
Pedro is the best Cuban that ever lived. He dies and goes straight to Heaven. St. Peter welcomes him like a royal guest and shows him his personal cloud, right next to God. Heaven is just heavenly. Temperatures are nice (between 23 and 24 degrees Celcius), conversations interesting, angels play soothing harp music and after a month or so, Pedro is getting bored with milk and honey. He asks God for a holiday. God says that there is only one other place to go… Hell.
Pedro thinks it over and decides he wants to go for a spring break in Hell.
When he arrives at the great golden gates of Hell, they slowly swing open and Pedro walks in. Soon he is standing at a cliff so steep that he hardly sees the bottom. Approaching the cliff a red carpet spreads out for him and he walks into Hell. On the left he sees a big party, on the right he hears the best Salsa, on the right again they smoke the best cigars and on the left all the girls beckon him to have a rum with them and maybe more. For two weeks Pedro really lives it up! He parties like there is no tomorrow. Drinks, smokes, flirts, dances and drinks some more. When it is time to go back home, he aches. Back in heaven his mind is soon made up. He wants to live in Hell! ‘That can be arranged’ says God. ‘it is a bit more complicated, give me two weeks. And two weeks later Pedro arrives at the great golden gates of Hell again. They swing open, he walks onto the red carpet and… falls right through it. Down and down he tumbles, to land in a big pot, full of boiling oil. Screaming with pain he pulls himself out of the pot. Right in front of him sits the Devil, laughing his head of.
‘What happened?’ asks Pedro.
‘Pedro’ says the Devil; ‘you are a Cuban. If somebody should understand the difference between a tourist visa and permanent residence, it should be you!’
You are the tourist, you are the lucky one!
The best way to get to know Cuba by staying at a Casa Particular. You can either pre-book them by Internet (Google ‘Casa Particular Cuba’) or just go where you want to go and find yourself one. If you knock on the door of a Casa and it is already occupied, they will gladly find you another one because they get a commission. In all my time in Cuba only once I did not find a Casa. I arrived at Holguin and all Casas were full. But this was in December, which is het (the, but no article needed) peak season.
More about the Casa Particular in the chapter 7.
Never ever use an ATM, even if you find one. Your bankcard does not work and your credit card might be swallowed. Just figure out your budget and take cash. Large bills are no problem at all and can be changed at the bank or Cadesca. I always take 500 euro bills and put them in a money belt. This is a belt that looks like a normal belt, but has a zipper on the inside. It perfectly hides the fact that something could be concealed inside. The compartment holds enough money for an entire holiday. And it is no problem at all to change the big bills
Do not take US Dollars with you, as they are charged with an 10% penalty. (Remember, Cuba is at war with the US, although I doubt the US knows about this.)
You change your money into the local hard currency called the CUC. This is the ‘Convertible’ Pesos. However it is only convertible in Cuba. All the CUCs you take home are useless.
Disposable income is a oxymoron in Cuba. It just does not exist. At least if everything went according to the rules and principles that guide the socialist economy. All official income is spent on life’s necessities. Cubans do not have a savings account. Actually very few Cubans have a bank account at all. Which does not mean there are no lines at the bank. People have to cash their pension and salary checks at a bank.
The CUC is highly overvalued, even after de the depreciation in April 2011. The Moneda Nacional means nothing in terms of purchasing power. Mortgages do not exist and a loan is almost impossible to get.
In the opinion of the IMF, Cuba is broke. Luckily the Cubans are not aware of this bad news and carry on living.
Plastic money is quite useless. Cash is king in Cuba.
Everything that is not a primary necessity is paid for in CUC. The CUC rules. For Cubans there are in principle two sources of this currency:
47% of Cubans have family abroad and nobody knows exactly how much money they send home to help their relatives. Depending on the generosity of those relatives, Cubans have access to a better life and are able to buy luxury goods.
The other source of CUC, that is you. (and the other tourists of course). A complicated system called ‘Bolsa Negra’ takes care of the distribution among the Cubans of your CUCs, until eventually they end up in the hands of the government.
There is a retail chain that is called TRD (tienda de recuperacion de divisa).
This means ‘Hard currency recuperation shop’ and that is what those shops do.
They sell cheap rubbish, made in China for exorbitant prices. Every day armoured trucks recuperate the currency thus recuperated.
More about money in Chapter 5.
You think you want to read the rest of the book?