Dual Economy
    Cuba's economy is pretty weird. Like most (all?) communist countries, it doesn't have a "hard" currency (which are trader on the international market) -- it has its own peso which currently exchanges with the US dollar at 26:1. However, unlike most (all?) other communist countries it is now legal for Cubans to possess and use US dollars -- a move that became necessary after Cuba lost its support from the USSR when it collapsed. Consequently, these days, foreigners coming to Cuba, although technically allowed to use pesos, are expected to pay the equivalent in dollars. Thus, if you buy coffee from a vendor on the street, a Cuban would pay one peso, a foreigner would pay one dollar.

    You could get indignant about this but, I like what Lonely Planet has to say on the matter:

      With the exchange rate around 20 to one, some travelers get indignant if asked to pay in dollars when Cubans can pay in pesos. Although it may seem like the foreigner is paying 20 times more, tourists are contributing only their money to society while most Cubans also contribute their labor by holding peso-paying jobs. Few Cubans earn more than 200 pesos a month (about US$10) and the Cuban government provides many services at corresponding price levels. When a tourist obtains these services at Cuban prices, he or she is getting a tremendous bargain, often at less than the cost of production.


    This disparity however is starting to cause a really strange social dynamic in addition to fostering a class difference as you might expect. Imagine a beggar or a hustler in a tourist area of Havana -- if by harassing a hundred tourists a day, they manage to get US$1 a day, they will be making upwards of three times as much as an academic or doctor or any labourer.

    Like with all things, I came away not being really sure how I feel about this. Undeniably its negative that this class distinction is forming based on who has access to dollars. People with family in the US are basically set -- if their family sends them the $1200 a year they're allowed to, that's a fortune in Cuba. And there's a sense of the unfairness of the Cuban government restricting so much personal ambition BUT at the same time social programs in Cuba are some of the most advanced in the world.

    Health care is 100% free for citizens. Emergency health care is even free for foreigners, and extended health care is extremely high quality and cheap. In fact, Lonely Planet lists surgery and dental care as one of the highlights of going to Cuba. Outside of North America, Cuba is best known for the doctors that it ships around the world, particularly to Africa. The birthrate is lower than the US. Everyone has a ration card which allows them to get access to a certain amount of food and goods every month -- no one is as destitute as they can be in North America. Instead of having people pay rent on their homes, the government turned the payments into mortgage payments and so everyone is basically on a rent-to-own system.

    I also appreciate the irony. The US has this trade embargo with Cuba, and yet their currency has become one of the national currencies of the country and keeps their economy afloat. Not because of illegal US tourists but because other tourists from all over the world take US money into Cuba and leave it there, almost a free injection of capital into the system. Delicious.

    So... what to think?

    I read somewhere that we should plan our government and our laws and our economies as though we were ethereal souls, not yet born into the world, and so didn't actually know what station or circumstance we'd have to live our lives in. I think there's something to that -- and I think that if we were able to construct our society that way, it would look more like Cuba's and less like the US.