Alert Sounded in the Informal Market / 14ymedio, Rosa Lopez

Photo: Exterior of Terminal 2 of José Martí International Airport

Photo: Exterior of Terminal 2 of José Martí International Airport

Unauthorized vendors welcome new customs regulation with caution as they prepare to redefine strategies

14ymedio, Rosa Lopez, Havana, 3 September 2014 — “Call me from a land line” instructs the classified ad placed by Mauro Izquierdo, vendor of electrical household appliances. He has a wide range of items on offer, from air conditioning units to toasters, but his specialty is flat-screen TVs. This morning, his cautious response to all callers was: “Right now I’m in the midst of redefining my pricing structure until everything settles down with the new customs regulations.”

Mauro is but one strand in the complex tapestry of unauthorized vendors who are living through anxious moments with the new restrictions imposed by the General Customs of the Republic. Price increases are imminent in the black market, given that a good part of the merchandise offered through its networks enters the country via the flight baggage of so-called “mules.” “I have ceased all operations for the time being, because I don’t know if I will get the accounts with new prices that have been imposed on the airports,” the able merchant confirms.

His clients also have been preparing for the increase.”I’m finishing construction on my house and I had to run to buy lamps, bulbs and bathtub plumbing for the bathroom, because all of that might become unavailable very soon,” said Georgina M., looking to the future, as she concludes construction on a new residence in the western township of Candelaria.

14ymedio contacted approximately 20 vendors offering merchandise on classifieds sites such as Revolico and Cubisima. Although previously-listed products remained at their advertised prices, any orders going forward would come “with with new tariffs added to the price,” according to various distributors. Last week, Leticia was offering hair dryers, massage machines, and hair removers. However, now she is planning to raise prices by about 20 or 25 per cent on each product so as to be able to “finance the payments that those who bring the items into the country must make at Customs.”

The advance notice given of the new rules has allowed many people to be prepared. Rogelio, a Panataxi driver who makes trips from Terminal 2 of José Martí International Airport, refers to how even “two days before the new restrictions went into effect, what people brought was incredible — suitcases upon suitcases.” Even so, he noted that since yesterday, “travelers seem more cautious and, among those I have transported, I have seen a decrease in the amount of baggage they’re carrying.” Another taxi driver joined the conversation, saying that “people have now been made to jump through hoops.”

Even so, for other alternative vendors, the new measures barely affect their supply chain. “I buy space in the ‘containers’ of people who are on official missions, working in the embassies and consulates throughout the world, and that is how I bring in my merchandise — therefore the new rules don’t touch me,” boasted a seller of lawnmowers and commercial refrigerators, who enhances his ads with attractive photos of each unit and the guarantee that it’s “all done with proper documentation.”

It is still too early to measure the true impact on the informal market of the new customs rules, but sellers as well as merchants are preparing for the worst.

Translated by: Alicia Barraqué Ellison

Suchel, a State Monopoly With Feet of Talcum Powder / 14ymedio, Rosa Lopez

Suchel at the Havana International Fair

Suchel at the Havana International Fair

14ymedio, Rosa Lopez, Havana, 29 August 2014 — Just outside the Tienda Ultra (Ultra Store), an illegal seller advertises deodorants and colognes. It is precisely in August, this terribly hot month, when the shortage of hygiene products aggravates the bad odors and other annoyances. The problem has made the pages of the official newspaper Granma, which this Thursday published a story looking for answers to the lack of soap, cologne, toilet paper and deodorant. The text reveals the tortuous and inefficient ways of Cuban centralization.

The director general of the Cuban company Union Suchel said that “funding cuts” have limited purchases of raw materials. The statement of this official contrasts with the monopoly status of this well-known industry. Suchel has reigned for decades in the domestic market, given the absence of competitors to push down prices, diversify the product line and improve the quality of the offerings. Instead, the perfume, talcum powder and detergent giant has taken advantage of the privilege of being a State-majority consortium with zigzagging foreign capital.

For 2104, Suchel developed a “reduced production plan” due to the financial problems facing the entity. Even so, the volumes coming out of its factories point to mammoth nature of the company still so influential in its decline. Deliveries for this year in the unrationed market should reach 17 thousand tons of laundry soap, 17.9 thousand tons of hand soap, and 9.6 thousand tons of liquid detergent. Packing, transporting and distributing such quantities has become a real headache, especially in a country where corruption and the diversion of resources act as leaks, sucking dry the sources of products and services.

The position of guard in one of the many company plants trades on the black market for more than 5,000 Cuban convertible pesos

Suchel is undermined by the theft and embezzlement, an issue not addressed by the article published in Granma. The position of guard in one of the many company plants trades on the black market for five thousand Cuban convertible pesos. Working in one of those jobs guarantees the fortunate employee “under the table” earnings that exceed in three days what a doctor earns in a month.

The work of the guard consists of simply looking away, to allow the majority of the merchandise slip away, unregistered in the accounts. These undeclared goods are sold in the State’s own “hard currency collection stores” (as they’re called). The profit is distributed among the managers, drivers and the industry’s own security guards.

In the absence of a free market to test the efficiency of Suchel in competitive circumstances, the monopoly will continue to impose prices, quality standards and high costs, as well as to cause chronic supply problems.

You Can’t Come In / 14ymedio, Rosa Lopez

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This venue reserves the right of admission (14ymedio)

14ymedio, Havana, Rosa Lopez, 27 August 2014 – “You can’t come in,” a young doorkeeper emphatically tells a young man, while gesturing for him to move away from the door. When the target protests, he receives the explanation that in this crowded Havana club, “you can’t enter wearing shorts.” A sign posted at the entrance warns that the place, “reserves the right of admission.”

The story is repeated in many other places in Havana. The Charles Chaplin Cinema downtown posts a sign with entry restrictions. When you ask an employee if the rules are dictated by higher body, she says, “No, no. Management is in charge, there’s no law. We are the ones who decide.” And she adds, “We don’t allow people without shirts, or wearing flipflops, or behaving inappropriately.” It’s not unusual to see, however, flexible rules for foreigners. An Italian in short shorts—which could be confused with a bathing suit—passed through the lobby without being ejected.

In 2010, the Chaplin Cinema refused entry to a group of people trying to attend the premier of the documentary Revolution about the hip-hop group Los Aldeanos. Some of these citizens drafted a legal demand against the entity, charging that the segregation was based on ideological reasons, because they were activists, bloggers and musicians from the dissident scene, but it was unsuccessful in court. Years later, the downtown movie theater still sports a sign with restrictions on entry. Continue reading