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Cuban Prices
Tuesday, November 29, 2005   By: Juan Paxety

Consumer prices lowered

Cuba has temporarily cut prices on certain consumer goods according to an article in Business Week. The goods are food and other products sold in the government operated stores that take the convertible peso.

The temporary markdown added to good news for government workers who recently received pay raises. It covers all stores selling goods in a currency known as the convertible Cuban peso last through Dec. 9, according to a government announcement published by state media over the weekend.

A survey of some stores found that prices on some, but not all products had been marked down by 10 to 20 percent, including canned and other packaged goods. A bottle of cooking oil was marked down from 2.20 ($2.37 or euro2)to 1.95 ($2.10 or euro1.80) convertible Cuban pesos.

The convertible peso replaced the dollar as the unit of trade a couple of years ago.

What's the reason for this, and does it mean anything for the average Cuban beyond the next few weeks? The article offers nothing but ignorant folderol:

The Cuban system offers a broad social safety net, with free health care and education, and heavily subsidized services such as transportation, as well as a ration that includes about a third of the average person's monthly diet. Most Cubans also pay nothing, or very little for housing.

While the minimum wages was more than doubled to 225 pesos (about $10), many Cubans find it difficult to buy many other items, including the rest of their food and other consumer goods.

Minimum wage for what period of time? The BBC reports that the raises go to government employees - folks with masters degrees get a raise of a whopping $4 per month - and medical doctors get a huge increase of $7 per month.  

The raw figures might seem low but in Cuba - where the average monthly salary is around $15, and accommodation healthcare and education are free, the rises will be welcome. Perhaps all the more so because they come at the same time the Cuban government is launching a campaign against those that supplement their salaries through illicit means.

Those illicit means are, of course, any attempt at free enterprise. fidel refers to entreprenuerism as theft from state enterprises. And in a system in which the state, not the person, is the reason for all existence, he's right.

The pile of pablum in the Business Week paragraph about the broad social safety net is just another example of fidel's statism.

We know that fidel has been buying goods from his buddy hugo ch├ívez, el Mico Putumayo, at deep discounts, so perhaps he's passing the savings on to the consumer.  Trouble is, in a closed socialist system, prices are determined by politics, not by market value. And the people of Cuba are not allowed to accumulate wealth during the easier times in order to be prepared for the hard times. So, it seems to me that this is good news for only the short term.

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