CubaBrief: How the Castro Regime Loots Cubans while blaming the United States to maintain absolute control. An old trick and variation of the 62 year old blame game

21st Century Socialism in Havana, Cuba

21st Century Socialism in Havana, Cuba

The Castro regime on June 10, 2021 announced that on June 21st it will “stop accepting cash bank deposits in dollars, blaming tighter U.S. sanctions that are restricting its ability to use greenbacks abroad, although it will still accept transfers.” As usual the dictatorship blames U.S. sanctions, but that is not what is behind the new measure.

If accurate then Havana is awash in U.S. dollars that it cannot spend, but if this is true then why did the Cuban dictatorship on May 21, 2021 announce that it was closing the airport departure lounge exchange booths “that had allowed travelers to change up to $300 at the official rate of 24 Cuban pesos to the dollar — about double the black market rate inside the country.” This would be an avenue for officials to get rid of those dollars at a favorable rate of exchange.

No more dollars in Cuba?

No more dollars in Cuba?

Economist Elias Amor Bravo,president of the Cuban Liberal Union and the Cuban Observatory for Human Rights (OCDH) in the June 11, 2021 essay “The real reason: why the regime is going against the dollar” published in Cubanet reveals that “the regime wants to control and drain the remittances in dollars received by Cubans, and divert them to GAESA, State Security and the hole in the fiscal deficit that does not stop growing.”

Over 62 years of dictatorship, this tactic is not new, and was carried out in the 1980s, but then with silver and gold. Juan Diego Rodríguez in the June 11, 2021 article “ Cuban Government Repeats a 1980s Scam, This Time with Dollars” in 14ymedio describes how “for many the situation has brought back memories of the so-called Houses of Gold and Silver. In the 1980s the government operated stores known as “Houses of Diego Velazquez” — a reference to early Spanish explorers who traded tiny pieces of mirrored glass for gold — in which customers exchanged jewelry, gemstones and precious metal objects for vouchers which could be used to purchase clothing, footwear and household appliances. No figures were ever released on how much gold and silver was ultimately collected but the operation lives on in the Cuban imagination as a kind of institutional scam, especially since the merchandise bought with the vouchers turned out to be shoddy and wore out quickly.”

It is important to recall that Cuba, prior to the arrival of the Castro regime in 1959, was able to feed itself from its own domestic production. Like both the Soviet Union and Mao’s China that ended with the imposition of communist centralized planning applied to agriculture in Cuba. This created widespread misery that persists to the present, but also centralized control wielded to maintain absolute power.  

Juan Juan Almeida reported on February 24, 2021 when his father died, the only black commandant of the Revolution, “they put on that little show in the Sierra Maestra, Raúl Castro promised one of my sisters – who lived outside of Cuba – that, as long as she ‘behaved herself’, he would respect her house.” According to Juan Juan, she complied with her part of the bargain, or so she thought, and she behaved very well. “And now, while the super homage is being paid to our father, she gets the notification from the court. And when someone inquires at the office of Raúl Castro, to find out what’s happened with that pledge, he is informed that she did indeed behave VERY WELL – and for this, the General was most appreciative. However – and this is how they put it – the ‘pledge to Behave Herself also included controlling me and shutting my mouth. Therefore, through my fault, she is losing the house,’” reveals Juan Juan Almeida. She was expected to be able to silence her brother who lives abroad in exile.

This is the power the Castro regime seeks to continue to wield through its complete control of the economy and internal blockade against Cubans.

Chicken imported from the United States continues to feed Cubans across the island.

Chicken imported from the United States continues to feed Cubans across the island.

Today, 80% of Cuba’s food is imported, and much of it from the United States. In the first four months of 2021 the Cuban government purchased $102.3 million in U.S. exports.The top three U.S. exports, by tonnage, in April 2021 “were (1) Chicken and other poultry, (2) Soybeans, and (3) Wood pulp from mechanical, chemical processes. “

Considering the dire need for food in Cuba today, and the Castro regime seizing a humanitarian shipment in August 2020 to discourage others from sending shipments to help Cubans directly, and the regime’s claim that they are flooded with U.S. dollars that they cannot use the greenbacks abroad that they increase their purchase of American agricultural products to the 2008 level that was $711.5 million dollars during the last year of the George W. Bush Administration.

Instead inflation is out of control. “The result of dollarization, scarcity and devaluation: prices have skyrocketed and inflation will likely come in at a minimum of 500%, and as much as 900% this year, according to Pavel Vidal, a former Cuban central bank economist who teaches at Colombia’s Pontificia Universidad Javeriana Cali,” reports Marc Frank of Reuters today. This misery can end through unilateral actions by the regime in Havana: lift the internal blockade on Cubans being able to produce and conduct business in the island, and stop seizing and rejecting humanitarian shipments from Cubans abroad for their compatriots in the island.

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Reuters, June 16, 2021

Roaring inflation compounds Cubans’ economic woes

By Marc Frank

HAVANA (Reuters) – Cubans woke up all last year wondering where they could find basic goods such as milk, pork, rice, beans, medicine or shampoo. These days, they also ask themselves: “if I do, what on earth will it cost?”

Amid widespread shortages, the near-bankrupt, import-dependent country has increased sales of goods in convertible currencies here like the dollar over the last year, even as it stopped exchanging pesos for those currencies.

That has forced many Cubans to acquire convertible currencies on the black market where they have surged to as much as threefold the official rate since the government sharply devalued the peso here in January.

Alternatively, Cubans must purchase the products “at even higher peso prices from resellers,” said Cuban economist Omar Everleny.

Many goods are simply no longer sold in peso shops despite billions more pesos now being in circulation.

The result of dollarization, scarcity and devaluation: prices have skyrocketed and inflation will likely come in at a minimum of 500%, and as much as 900% this year, according to Pavel Vidal, a former Cuban central bank economist who teaches at Colombia’s Pontificia Universidad Javeriana Cali.

“Every day becomes much more difficult because the prices of everything continue to rise,” said Arisleidis Blanco, who works at a private cafeteria in Havana.

Cuba’s government largely blames U.S. sanctions, which were ratcheted up under former President Donald Trump, and the coronavirus pandemic that has ravaged Cuba’s tourism industry, for its economic woes. Some critics say the main issue is the inefficiency of the state-run economy, despite some market-style reforms.

The Communist-run state retained its World War Two-style ration card that offers some highly subsidized goods. It also increased state wages and pensions, up to five times, when it devalued the peso by around 95% in a bid to cushion the blow.

But that covers only some 60% of the population and leaves many Cubans struggling to navigate wildly fluctuating prices to cover their needs.

“The government used to sell LED light tubes for 30 pesos,” state bakery employee Ana Rebeca Labrada said. “On the informal market they now cost 400 to 500 pesos and there are none in the government stores, not even for convertible currency.”

INFORMAL MARKET BOOMS

Cuba’s government says there is no money in the bank to exchange or import the goods and sell them for pesos which cannot be exchanged outside the country to buy more.

The economy declined 11 percent last year after years of stagnation and according to Cuban economists has continued to fall so far in 2021.

Inflation should just be a temporary setback, authorities say, with the economy due to pick up as the pandemic subsides and reforms yield results. The devaluation for example aims to boost exports and reduce imports in the medium term.

That is little solace though for Cubans struggling to shop for basic goods as COVID-19 cases hit new highs.

Economists like Everleny say the U.S. embargo is real but the government needs to implement long overdue reforms to boost supply and until then, the informal market, and with it surging prices, will continue to flourish.

Last week, the state was selling rice only on the ration card for 10 pesos a pound and on the informal market it was 60 pesos, said Havana resident Miriam.

A 50 peso bottle of cooking oil fetched 200 pesos and a pack of hotdogs 80 pesos compared to the 27.50 pesos when available at the stores, she said. Powdered milk was being rationed for children and the elderly at 2.5 pesos a bag and sold for 300 pesos on the street, she said.

Reporting by Marc Frank; Additional reporting by Reuters television; editing by Grant McCool

https://www.reuters.com/article/cuba-economy-inflation/roaring-inflation-compounds-cubans-economic-woes-idUSL5N2NX4OT

14ymedio, June 14, 2021

Cuban Government Repeats a 1980s Scam, This Time with Dollars

Long lines began forming in the early hours of Friday morning in front of bank branches. (14ymedio)

Long lines began forming in the early hours of Friday morning in front of bank branches. (14ymedio)

By Juan Diego Rodríguez

14ymedio, Juan Diego Rodríguez, Havana, June 11, 2021 — “I deposited everything I had: eighty dollars.” Reinaldo waited in line early Friday morning outside the Banco Metroplitano on Infanta Street in Old Havana to hand over his modest hard-currency fortune that he has been saving for emergencies.

Thousands of Cubans like him woke up worried, after learning the night before that the government would suspend cash deposits of dollars on June 21. “What’s the use of having this money if I can’t use it after that date?” a young man in the doorway of the bank asks.

“The bank really planned ahead,” he notes. “Normally there are only two or three tellers available but today everyone was there, ready to take people’s deposits.”

On the TV news/interview program Roundtable, officials described the decision as a necessary step to deal with obstacles created by the U.S. embargo. But the official explanation has failed to convince either ordinary citizens or economists, who expressed astonishment the day after the announcement.

At the end of May, the government suspended currency exchange services at the country’s international airports, claiming it had run out of cash. It indicated that, despite a “significant shortage” of hard currency, it had been able to continue operating within established limits but that a “lack of liquidity” had made those operations unsustainable.

Long lines formed again on Friday outside stores that only accept freely convertible foreign currency, especially those selling home appliances. Outside the Plaza de Carlos III shopping mall in Central Havana, dozens of people were already in line by 5:00 AM, when the pandemic curfew ends, eager to spend their dollars on a refrigerator, air-conditioning system or rice cooker.

“People are going crazy because they’re afraid they’ll be hit with more measures like this in a few days,” says one young man waiting in line to buy clothing at a foreign currency store in the capital’s biggest shopping center. “What this has done is create more doubt and given people the impression that the those at the top don’t know what they’re doing.”

Lines outside hard-currency stores were especially long after the announcement that banks would not be accepting deposits of U.S. banknotes for the foreseeable future. (14ymedio)

Lines outside hard-currency stores were especially long after the announcement that banks would not be accepting deposits of U.S. banknotes for the foreseeable future. (14ymedio)

For many the situation has brought back memories of the so-called Houses of Gold and Silver. In the 1980s the government operated stores known as “Houses of Diego Velazquez” — a reference to early Spanish explorers who traded tiny pieces of mirrored glass for gold — in which customers exchanged jewelry, gemstones and precious metal objects for vouchers which could be used to purchase clothing, footwear and household appliances.

No figures were ever released on how much gold and silver was ultimately collected but the operation lives on in the Cuban imagination as a kind of institutional scam, especially since the merchandise bought with the vouchers turned out to be shoddy and wore out quickly.

https://translatingcuba.com/cuban-government-repeats-a-1980s-scam-this-time-with-dollars/

Translating Cuba, June 14, 2021

Cuban Regime Expropriates My Sister’s House, But Celebrates My Father’s Birthday / Juan Juan Almeida

Monument to Juan Almeida Bosque in Santiago de Cuba: “No one surrenders here” (EFE)

Monument to Juan Almeida Bosque in Santiago de Cuba: “No one surrenders here” (EFE)

Juan Juan Almeida, 24 February 2021 — When my father died and they put on that little show in the Sierra Maestra, Raúl Castro promised one of my sisters – who lived outside of Cuba – that, as long as she “behaved herself,” he would respect her house.

He gave her a hug, they exchanged tears, and the pledge was settled at the feet of the deceased.

So then, complying with her part of the bargain, my sister behaved very well. And now, while the super homage is being paid to our father, she gets the notification from the court.

And when someone inquires at the office of Raúl Castro, to find out what’s happened with that pledge, he is informed that she did indeed behave VERY WELL – and for this, the General was most appreciative. However – and this is how they put it – the “pledge to Behave Herself also included controlling me and shutting my mouth. Therefore, through my fault, she is losing the house.”

Translated by: Alicia Barraqué Ellison

https://translatingcuba.com/cuban-regime-expropriates-my-sisters-house-but-celebrates-my-fathers-birthday-juan-juan-almeida/

Reuters,  June 10, 2021

Cuba suspending cash bank deposits in dollars, citing U.S. sanctions

Cuban and U.S. notes are seen in this illustrative photograph taken in Havana March 14, 2011. REUTERS/Desmond Boylan/File Photo

Cuban and U.S. notes are seen in this illustrative photograph taken in Havana March 14, 2011. REUTERS/Desmond Boylan/File Photo

HAVANA, June 10 (Reuters) – Cuba said on Thursday it would temporarily stop accepting cash bank deposits in dollars, blaming tighter U.S. sanctions that are restricting its ability to use greenbacks abroad, although it will still accept transfers.

The move came shortly before the government was due to present its annual resolution to end the crippling, decades-old U.S. trade embargo on the Communist-run country at the United Nations General Assembly.

Some Cubans and analysts speculated it was an attempt to control the black market price of the dollar. That has risen to more than twice the official exchange rate since the import-dependent country started opening stores selling in hard currency and stopped selling greenbacks due to a cash crunch.

Cuban bank account holders will have until June 21 to deposit dollars before the suspension takes effect.

“It is ever more difficult for Cuba to find international banking or financing institutions willing to receive, convert or process U.S. currency in cash,” the Cuban Central Bank said in a statement shared by state-run media.

It added that the measure would not affect operations carried out by transfer or deposits in other currencies that are freely convertible and accepted in Cuba.

More than 20 banks have stopped processing transactions involving Cuba since former President Donald Trump tightened U.S. sanctions on the island nation, Central Bank Vice President Yamile Berra Cires said in a roundtable discussion on state television.

For many years, Cuba had a 10% tax on dollars, citing how difficult it was for the government to use them because of the U.S. embargo. But it lifted that tax last year as it opened more shops selling in hard cash rather than in the local currency.

U.S. President Joe Biden, a Democrat, vowed during his campaign to reverse some of Republican Trump’s Cuba measures that “have inflicted harm on the Cuban people and done nothing to advance democracy and human rights.”

But he has yet to roll back any measures and his administration has said a shift in policy toward Cuba is not among its top foreign policy priorities.

Reporting by Sarah Marsh; Editing by Peter Cooney

https://www.reuters.com/world/americas/cuba-suspending-cash-bank-deposits-dollars-citing-us-sanctions-2021-06-11/