Cuba’s dollar stores stoke anger, division amid economic crisis

Michel López, a 41-year-old Cuban businessman, spent the night on a sidewalk in Old Havana lining up to buy an inexpensive package of chicken that could feed his family for several days. His life would be easier if he earned in dollars.

Cubans with access to hard currency, through tourism or remittances, can buy everything from diapers to refrigerators to auto parts at convenience stores. dollar well-stocked but more expensive, known as “MLC stores” on Cuba.

The rest of the Cubans who do not have foreign currency must wait in lines at basic markets that accept payments in the national currency: the Cuban peso.

“I’ve been here since midnight and I haven’t bought anything yet”López said, pointing out that he had no other option without access to dollars. “It’s crazy”he pointed.

The cash-strapped Cuban government maintains that stores “MLC”or hard currency, are needed to raise much-needed foreign currency to import food and fund social programs in times of crisis.

Yet these stores are increasingly driving a wedge between Cubans, stoking anger in a socialist country that has long prided itself on equality.

During the anti-government demonstrations in July last year in various parts of the country, the largest since the revolution in Fidel Castro in 1959, Cubans threw stones at stores MLC and, in several cases, looted them, shouting “Down with the MLC shops”.

“Stores are a palpable sign of inequality”affirmed the Cuban economist David Pajón. “They are a source of discomfort in the population”he added.

The stores that sell in dollars were reactivated in 2019 after a 15-year pause, but the economic situation this time is different, said Pajón and two other economists consulted by Reuters.

To make purchases, Cubans use special cards loaded with foreign currency to purchase goods marked in dollars. But a tourism industry affected by the pandemic and the sanctions of United States that restrict remittances, have made it hard to get hold of dollars.

That situation leaves many with no other option than the black market, says Cuban economist Oscar Fernández. Many basic goods, from powdered milk and cooking oil to toilet paper, can often only be found in hard currency.

The government does not sell dollars in banks or exchange houses. And Cubans who exchange pesos for dollars on the black market face prison sentences of up to five years.

“If I have income in pesos, and I want to go to a store in MLC, I have no way, it is prohibited for me, it is illegal for me. That is a very strong source of discrimination.”Fernandez said.

The Cuban government did not respond to a request for comment on this story.

“Genuine concern”

The Minister of Economy, Alexander Gilsaid in February that he understood the “genuine concern” of Cubans by the shops in MLCbut warned that the alternative was worse.

The stores aim to capture remittances from abroad, he said, and then use that hard currency to buy much-needed goods, from fuel to food sold at discounted prices in peso stores.

“We understand the genuine concern of revolutionary people who consider that we are not completely fair, we ask for understanding, at this moment it is a lifeline”Gil declared on state television.

Last year, some $300 million raised from currency stores was used to buy products for peso stores, Gil said. This year, Cuba expects that 23% of sales in hard currency will help subsidize approximately 77% of sales in pesos.

The dollar stores, much of it run by companies supervised by the Cuban military and which are on a blacklist of Washingtonhave become a magnet for the few Cubans with tourism dollars or remittances to spend.

Economists argue that this could complicate the efforts of the government of the US president Joe Biden to develop a way to send remittances to Cubans and keep the money away from blacklisted companies.

“How can the remittances that reach the Cuban people not be spent in State institutions?”warned the economist Fernández. “Is the (United States government) going to set up a store in the American embassy, ​​so that Cubans can go there to buy an air conditioner?”he added.

A US State Department spokesman told Reuters the government is still weighing alternatives to remittance restrictions imposed by donald trump

“The Government encourages channels for remittances that directly benefit the Cuban people and avoid – as far as possible – the benefits for the regime and its military and security services, in compliance with United States regulations”Held.