Buy Now Because Prices Will Triple in January

Cuban Communist Party official Marino Murillo has indicated that the transition to a single currency “implicitly carries with it a rise in prices because costs will increase and imports will be scarcer.”

14ymedio bigger14ymedio, Havana, 15 December 2020 —  Customers’ eyes scan the wide selection of TV series, films and documentaries that Manuel has available. Manuel is an entrepreneur who sells pirated copies of the most lavish productions in the world. “Buy now because after January everything will cost three times as much.” His pitch is having the desired effect on December sales.

Manuel’s video playlist has everything, including recent Netflix offerings such as Queen’s Gambit, the most recent seasons of The Black List, Selena and Blood of Zeus, and other video releases that, thanks to copy-and-paste technology, Cubans can watch almost as soon as they appear on international streaming platforms.

Manuel works on downtown Havana’s Monte Street, a rundown thoroughfare with balconies on the verge of collapse and hellish traffic. He has been there almost ten years, long enough to see the rise of CDs, DVDs and the growing demand for video and film copying. “I thought I had seen it all but nothing like this December,” he says.

On Sunday, Marino Murillo, head of the so-called Commission for the Implementation of Communist Party Guidelines, told government media outlets that “prices for goods and services offered by the country’s non-state retailers will rise” due to currency unification, not necessarily because of “speculation and price gouging.”

Cuba’s so-called reform czar noted that the process of transitioning to a single currency, which will begin in January, “implicitly carries with it a rise in prices because [wholesale] costs will increase and imports goods will be scarcer. There is no reason to think this would be any different for private businesspeople.”

“By design, the prices of goods and services in this sector will rise as much as three times but no more because, regardless of costs, tax increases will keep them in line,” he added. This led private sector businesspeople to adopt his “three times” statement almost like a mantra.

“If he says it, then we’ll do it,” says a nougat and candy seller in Havana’s Tulipan Street. “In recent months they’ve raised the price of bread from 25 pesos (CUP)* to 35 pesos but we can’t afford even this small increase. With the rising cost of raw materials it’s possible it will be as much as 75 pesos by the first of the year,” he adds.

Others feel backed into a corner. They know that, although they will be paying triple the current price for basic products and other supplies, if they triple their prices, they will not have any customers. “I rent out this very comfortable room with its own entrance for 25 convertible pesos (CUC) a night (roughly $25). Most of my clients are foreign tourists”, says Dania Pineda, owner of a house with several rooms for rent in Havana’s Vedado district.

“With electricity rates going up along with the costs of basic items like soap, toilet paper and toothpaste that I have to provide customers, how much will I have to charge to make a profit?” she asks. She worries she will not remain competitive.”When I tell a customer that he has to pay the equivalent of $75 a night, he’ll tell me he’s better off staying at a hotel.”

“Today I bought a string of onions for 25 CUC, more than 600 Cuban pesos, but I was lucky because the man who sold them to me said it was a special price for Christmas and that by 2021 they would be much more expensive,” reports Isadora González, a retired teacher who supplements her pension with the help of remitances from two children living overseas.”This reminds me of when I was young in the 1970s, after the “Ten Million Ton Sugar Harvest,” one of Fidel Castro’s most resounding failures.

González recalls the months after the end of the ironically named 1971 campaign, which failed to meet its goal and plunged the country into a deep economic crisis. “Up to that point, if it had been a bad year, people used to say, ’There was nowhere to tie up the goat.’ But with everything in ruins, they called it ’the year of the missing goat.’”

But when you said “goats” back then, two things came to mind: the informants for the so-called political police and the depressed agricultural industry, brought down by centralized control, a shortage of animal feed, climatic fluctuations and the reluctance of producers who had no economic incentive to produce more.

Prices for beachside hotel room deals, restaurant dinners, home delivery and even electronic devices all seem to have an impending expiration date. January 1 will mark the end of an era. On that day anything could happen in terms of prices, though many already predict that people will wake up with “pizza at triple what it costs today.”

Translator’s note: Cuba currently has two currencies: the Cuban peso (CUP), which is not  freely convertible, and the convertible peso (CUC), whose value is pegged to the dollar (but which cannot, in fact, be exchanged for foreign currencies). In December it was announced that the CUC will be taken out of circulation on January 1, 2021. The CUP will become the nation’s sole currency, which authorities have indicated will trade at an exchange rate of 24 CUP to the dollar.


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