Cuba starts to ease out the dollar

[Mika]

Cuba starts to ease out the dollar
http://news.bbc.co.uk/2/hi/business/3084711.stm

Cuba has restricted certain dollar transactions, in what some are seeing as the twilight of a decade of economic liberalisation.

From Monday, state firms will no longer be allowed to use the US currency, instead being obliged to deal in the convertible peso, which was created in 1994 as a proxy for the dollar.

The central bank was keen to stress that the reform would not affect the general population, and was aimed purely at fostering "fiscal discipline".

But some observers suggest it could be the first step in the gradual disappearance of the dollar from Cuba, where it has become an economic fixture since 1993.

I guess that that one billion+ dollars that gets funneled to Cuba's "independent" and "dissident" via the US funded Miamicubano foundations and family remittances will be drying up.

[DUreader]

1. Probably wont 'dry up', might be awitched to euros

[Mika]

3. Thats funny

The US government dollars (our tax money) sent to "independent" journalists and "dissidents" will have to be converted to Euros first. :7

[Robbien]

2. Cuba better be careful, Iraq was switching from dollars also

and look what happened to them.

[Barrett808]

4. Yes, Saddam switched to the Euro in November, 2000

Iirc. Probably the final nail in the coffin.

[guajira]

5. This Seems like a move that will bring more "rafters" to Miami

Dollars were illegal in Cuba until about 10 years ago. Now the people are used to having dollars sent to them by relatives, and getting dollars in tips, etc. I can't imagine they will be too happy to have those dollars become illegal again.

Seems like a big step backwards. My first trip to Cuba (before dollars were legalized), 1 dollar was worth a hundred pesos on the street. Nobody wanted pesos! Dollars were the underground economy, and that would most likely happen again.

[DeathvadeR]

6. We need a statue of liberty

sitting on the banks of key west.

[guajira]

7. It's There -- You Just Can't See it. Now if WE could travel to Cuba.....

Cuba welcomes Americans, but thanks to Miami Batistianos and their Republican votes, we are not allowed to see Cuba, socialize with REAL Cubans, or have any trade with Cuba. We can't visit there, we can't live there, we are told what to think and believe about Cuba.

This is a disgrace and Americans should be emailing, calling and writing all congresspersons, letters to editors, etc. to tell B* we want our freedom to travel.

[joshcryer]

8. Heh, just for the record...

...many Americans can't afford to travel anywhere, much less Cuba... though I probably admit that Cuba is a fairly cheap destiniation (in fact, the price of going there could potentially go up if demand went up- a real conundrum, eh?).

[guajira]

9. Lots of Americans Take Cruises and Would love to stop in Havana!

Cruise companies are itching to get to Havana - it would certainly be a popular destination!

The House of Representatives has approved travel to Cuba at least twice, but the Senate won't approve it (so poor little King George won't have to veto the bill!!).

The very best thing Democrats can do is make sure it passes, then make the little king have to veto a bill that most Americans want to pass!! Unfortunately Dems seem to be gutless right now, but they could really put B* on the spot if they wanted to!!!

[robcon]

10. I think Cuba has a dilemma.

As I understand it, dollars are far preferred to the local currency by the Cubans. The government certainly wants to stop the spread of this phenomenon. So, although the country is in desperate need of dollars (or euros) to finance imports (the Cuban peso is not convertible) they want to avoid the embarrassment of the dollar being a semi-approved secondary currency. So the government is taking this modest step to save face, while still accepting dollars wherever it can.

edit:spelling

[Mika]

11. Free is almost always "preferred"

{edit: some serious spelling problems}

"As I understand it, dollars are far preferred to the local currency by the Cubans." <--Posted by robcon

"Preferred" in the sense that its free money. Anyone would love free money. Cubans who receive remittances get their dollars for free, from family in the US, and from US taxpayer funded organizations, free.

One thing, Cubans who receive free dollars via family remittances, or get dollar tips from American tourists, immediately convert the dollars to pesos @ 26 Cuban pesos per US dollar. It is not the "preferred" currency for conventional use in the local economy. Although, there is a black market that functions on dollars. (Few Americans know any of this because so few have actually been there.)

If Americans could get their hands on free Euros (for example) I'd be willing to bet that Euros would many Americans "preferred" currency. They would convert it to a more usable currency for the local economy.. dollars, just as Cubans convert their free money to pesos.



"The government certainly wants to stop the spread of this phenomenon." <--Posted by robcon

Then why did the government legalize the dollar if it is such an "embarrassment"?

FYI, President Castro was dead against the dollarization in Cuba, he lectured all over the country as to why it wasn't to Cuba's benefit (long term), but the evil dictater Dr Castro was out voted in the Cuban parliament.



Its pretty easy to blather nonsense when you have never been there, nor taken time to understand how Cuba works.

[guajira]

12. Actually, it's not nonsense.

Mika, I know you speak from first hand experience and I respect your opinion. But my first hand experience is a little different because my friends in Cuba do prefer dollars to pesos. As you know the well stocked stores are the dollar stores with the American products.

I think my friends will not be happy if those dollars become illegal again!

[Mika]

13. OK

{edit: having trouble spelling tonite. :shrug: }

Guajira, I respect your 1st hand experiences also. I guess that the differences reveal some of the variety in the way Cubans live. My last trip was in 2000 and I have to say that the economy was much better than in the early 90's. The Cuban (peso) stores are well stocked too, now. This is one of the ways to wean the people off of dollars I guess. I agree that there might be reasons for some (those who have access) to use dollars, but that is leading to a two tier system that the government is working to alleviate. Not all Cubans have access to dollars.

If Euros end up having more value to Cubans than dollars, well..

But that still doesn't change the fact that a majority of dollars in Cuban's hands come free, from family remittances. In those cases, of course the dollar will be very much liked.

(BTW, the nonsense I was referring to was the "embarrassment" part of robcon's post.)

[Judi Lynn]

14. Thanks for pointing out that Cuban government has been known

to make choices Fidel Castro simply doesn't like, and that he gets overruled.

I"ve heard this before from posters who go to Cuba frequently and maintain contacts with their friends there.

Our media simply never report anything which doesn't toe the propaganda line.

If only people will keep their ears and eyes open, and start deliberately looking for more information, they will be surprised at what they are actually learning about Cuba. They should NEVER simply believe everything they are told. Engage the brain, right?