The discount in food prices on the network of Cuba’s retail commercial establishments caught Cubans by surprise a few days after the conclusion of the 7th Congress of the Communist Party, held April 16-19.
Though it awoke controversies like all economic measures, the news was well-received by the majority of the population. A similar price discount had not been applied in Cuba since the economic crisis broke out in the 1990s.
According to the official note, the government reduced by around 20 per cent the price of a group of basic food products sold in the so-called chain of hard currency collecting shops and in other commercial establishments.
The list of products includes a basic cereal in the Cuban diet, rice, which went from 5.00 to 4.00 pesos a pound in the shops selling in national currency, while that of national production went from 3.50 pesos to 3.000 pesos. The authorities applied the same cut for peas, also a classic legume in the country’s diet.
Other discounts came into force on the same day, April 22, for chicken, turkey, ground beef and ground foul, soy, sunflower and canola cooking oil, instant broths, seasonings and candies and preserves, among others. Linked to the National Energy Saving Programme, the authorities added to the list the 18-20 watt fluorescent light tubes.
The shops selling these goods accept payment in any of the two currencies circulating in Cuba: the Cuban peso (CUP) and the Cuban convertible peso (CUC). While the business and wholesale sector adjusts to an official rate of parity between both currencies and the dollar, consumers face an exchange rate of 1 CUC x 25 CUP in the Cadeca Exchange Chains.
The dual exchange rate and currency is one of the problems pending solution in the programme of the country’s economic transformations.
The press release of the Finance and Prices Ministry (MFP) argues that this step follows “the political will” to adopt “measures geared at gradually increasing the Cuban peso’s ability to purchase in the short term.” It also cites as a reason “the decrease in the price of food products on the world market.”
Wages in the state-run sector are still low in Cuba compared to the prices in force, though there is a tendency for them to increase: at the close of 2015 the mean monthly wage was 640 pesos.
While well-received, the lowering of prices also created expectations that the benefits to consumers’ pockets will continue. The press took care of feeding these hopes. “Incomes continue being insufficient to meet basic needs”, the daily Granma, the official organ of the Communist Party, affirmed, “though everyone recognises that this is the first step.” (2016)
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