Cubanet, Miriam Celaya, Havana, 24 August 2020 — A note recently published by the official Cuban press discusses once again the much harped on and, so far, unresolved issue of monetary unification, through an interview conducted by its author with various specialists from the Central Bank of Cuba.
Said officials agreed on the importance of monetary and exchange unification as a “necessary, although not sufficient, condition to reorder and update the national economy,” and offered their vision on the origins of the dual currency and its historical antecedents, with an explanation about what would be the ideal economic environment of the country for (finally) money to fulfill its functions.
It would be useless to repeat what was said by the experts, who are, after all, government officials whose speech does not differ from the countless explanations poured out on this controversial issue since 2011 when the then General-President had an epiphany and declared that it was time to unify the two national currencies. Almost ten years later, the miracle has not yet to take place.
It would be expected that these senior bureaucrats of the national coffers, protagonists of the reference note, would have offered us some advance on the solution strategies that — supposedly — are being applied to cut the Gordian knot of the monetary and exchange rate duality. Or, at the very least, they should have clarified where we stand in the steps and stages that were supposedly planned in the “Guidelines,” and that would be taking place to make possible (if only!) the long-awaited unification.
We would have appreciated being enlightened in the midst of a reality so chaotic and obscure that the currencies — far from being unified — continue to diversify. The recent irruption of foreign currencies in the national trading system multiplies the distortions, deepening the devaluation of Cuban currencies, strengthening the black exchange market and reinforcing the already large social gaps existing between the poorer sectors, who have no access to foreign currency and those who are better off (the “privileged”) and may rely on some source of income in foreign currency.
In other words, the most damaging thing at a social level today, beyond the financial, is no longer the old problem of the existence of two currencies, but the coexistence of two types of currencies: on the one hand, the local ones (CUP and CUC), with a physical presence in the depressed national commerce, without real value and without financial backing, a sad imitation of the old tokens issued by sugar mills with colonial heritage. On the other, foreign currencies, with real value but with only virtual presence (overlapping dollarization), and privileged within the national trading system itself (commercial apartheid) with the provision of markets exclusively for those who have access to them through debit cards attached to bank accounts in freely convertible currency.
Obviously, although the urgency of gaining control over hard currencies foreign exchange is undeniable, which, according to vernacular experts, should theoretically help accelerate monetary unification, this would be an extremely long process in practice, due to the internal economic crisis aggravated by the severe global economic one related to the COVID-19 pandemic, concurrent with unpredictable social costs. All that, taking into account the tension and the growing discontent in Cuba, the increase in repressive measures and police and para-police controls, and the evident distancing between “the government” and “the governed”.
So, in the midst of such a storm “cleaning up internal finances” and “creating an ideal environment for Cuban money to fulfill its functions” will be quite unlikely — to use a nice adjective — unless the hierarchs have some trick up their sleeve, which has never been favorable for common Cubans.
Despite all this, and with regard to the illusory monetary unification, Karina Cruz Simón, a specialist in the Directorate of Economic Studies, offered premises that constitute pure chimeras in light of the current situation. The “key”, the expert suggests, is to stabilize the national currency. This may be achieved, among other factors, by “ensuring that the money issuance processes correspond to the evolution of the real or productive economy.”
What this official does not mention is how she thinks such a spell can be performed. As if it had not been sufficiently proven throughout the entire Castro experiment that a “real or productive” economy urgently requires promoting a profound transformation of property relations in Cuba without further delay: another equally complex and long-standing distortion that began since the very dawn of the so-called Revolution which has been the basis of the national economic disaster.
Achieving this “favorable scenario so that the Cuban peso can fulfill its functions and preserve macroeconomic balances” does not depend only (or magically) on the factors mentioned by Cruz Simón, which is also unattainable if Cuba does not open up to the market economy and if, simultaneously, the economic, political and social rights of its citizens are not recognized so that they can participate as protagonists and not as hostages in the new economic scenario.
The fundamental obstacle to advancing on both sides of the necessary unification and revaluation of the national currency — economics and finance — is the obsolete and proven failed principle of “general economic planning”, which is the new euphemism when referring to a centralized economy.
In reality, all the “renovating” proposals launched so far by the political Power in order to “get the economy moving” only tend to shield this failed official centralism and to perpetuate the privileges of Power. It is this stubbornness that prevents the economy from advancing in the first place and, in the last place, makes monetary unification possible. When you have lived 60 years in totalitarianism and uninterrupted economic disasters, it is not necessary to be a specialist in the field to understand it that way.
However, so we are not faulted as unfair, it will be necessary to recognize some coherence. Already the very heading of the state-owned newspaper Granma’s note announced it bluntly: the monetary unification of Cuba is “on the horizon”… And it is known that the horizon is an imaginary and unattainable line. It is on this line that Power has always placed all its promises of prosperity, and where our destinies continue. At least they have never lied to us about that.
Translated by Norma Whiting