7 ms·

The Cuban Money Crisis

nikanj 12y ago
Looks like in a few short years we'll see another struggle of inexperienced politicians vs international sharks. Cue technically legal schemes, exchange rate manipulation, real estate bubble and the other fun things we've seen lately in Iceland, Greece etc. I wish to remain optimistic, but I don't believe the Cuban government can match the level of cunning and expertise of e.g. Goldman Sachs.
- digi_owl 12y ago
  Given that Cuba is "communist" i expect less Iceland and more 90s Russia... https://en.wikipedia.org/wiki/The_Shock_Doctrine https://en.wikipedia.org/wiki/The_Shock_Doctrine
crazy1van 12y ago
Absolutely fascinating. I'm sure I'm biased by my own philosophy, but this seems to be a good reminder that for all the flaws in capitalist economies, a centrally planned economy really just doesn't function. Also a good reminder that strong individuals can adapt with creative ideas that will always be one step ahead of the central planners.
- api 12y ago
  Agreed. Politics is often not a question of picking the best option, but of picking the least awful option from among a list of very bad ideas. Will you have death by lethal injection, hanging, or being set on fire? I'd pick the first. Being an advocate of the "capitalistic welfare state" (as I am) is a similar sort of choice. Why is this? I don't think it's just intellectual cop-out. I think the problem is that economics and all the other complex systems issues that hide behind politics are things that human beings are just not well-equipped to understand. We're bad at economics and social planning for the same reason we are bad at understanding the genome holistically. We just can't "grok" stuff like that. I sometimes wonder if this isn't a neurological barrier. After all, how often in human evolution did we confront the need to understand parallel auto-adaptive systems with tangled webs of causality, multiple positive and negative feedback loops, and chaotic behavior? This may require neurological hardware that we just don't have, so we try to muddle through by applying linear reductionism. It doesn't work very well, but it's the only cognitive tool we have for decomposing a system that remotely works at all. The free-ish market with a welfare state is a mess of hacks we've come up with through historical experimentation that seems to offer the benefits of certain classes of systems while mitigating their downsides. It's not pretty but it doesn't hurt as bad as being set on fire.
  - aptwebapps 12y ago
    "I think the problem is that economics and all the other complex systems issues that hide behind politics are things that human beings are just not well-equipped to understand. We're bad at economics and social planning for the same reason we are bad at understanding the genome holistically. We just can't "grok" stuff like that." I think we _can_ grok stuff like that, but not easily and not without study. I think that the main reason there are so many arguments about economics is that most people have not done that and because people know where various economic arguments lead and they've already made up their minds on those issues. Economics is just too fundamentally intertwined with public policy to be left to pure economists. Almost (and that's just a hedge) everybody who puts forth economic opinions online, for example, has some sort of political axe to grind.
    - digi_owl 12y ago
      Never mind that economics still insist on modeling as if the system will auto-balance (equilibrium) if left alone. A notion that just about every other science, that is not out there in the lala land of social sciences, have since replaced with dynamic modeling. They insist that debt is just a exchange between individuals, with banks just sitting there passing the baskets back and forth.
- maceo 12y ago
  As much as Cuba's economy is nothing to aspire to, the WWF says that they're the only country on earth that has undergone sustainable development. That is, the have the 2nd highest HDI in Latin America and they've managed to achieve it with a sustainable ecological footprint. Of course, this doesn't outweigh the fact that people on the island have very little freedom, but it does say something about the power of central planning in developing economies that don't destroy the planet. http://assets.panda.org/downloads/living_planet_report.pdf http://assets.panda.org/downloads/living_planet_report.pdf
  - sanoli 12y ago
    What? Cuba kept a sustainable ecological footprint because its economy, with the embargo and collapse of the Soviet Union, just couldn't afford industrialization.
- delackner 12y ago
  In all the negativity of the article, you could easily miss the fact that Cuba has higher life expectancy than all the countries you mention except Chile, and lower violent crime rates by far, universal health care, and universal education. They also have suffered 50 years of a trade embargo by their main natural customer (they were a huge Sugar exporter to the United States before we cut them off).
  - msandford 12y ago
    I think a very interesting question is "why does Cuba have higher life expectancy?" It might be due to universal healthcare, or it might be that people simply can't afford "bad" food and mostly eat what they're given by the government. And the government doesn't give them fast food, it gives them traditional staples like rice, beans, etc. http://en.wikipedia.org/wiki/Health_care_in_Cuba#Health_indicators_and_issues http://en.wikipedia.org/wiki/Health_care_in_Cuba#Health_indi... Just because the healthcare is universal doesn't mean that it's good. There are differing views of the efficacy. http://en.wikipedia.org/wiki/Health_care_in_Cuba#Contrasting_views_on_Cuba.27s_health_system http://en.wikipedia.org/wiki/Health_care_in_Cuba#Contrasting... The main criticisms are that the government has the power to first game the statistics or outright manufacture them. And because journalists don't have the freedom to report honestly (repeat negative exposure means no more visas) we don't actually know if the stats are gamed a little or a lot.
    - tptacek 12y ago
      The US and Cuba have roughly comparable rates of death due to coronary heart disease and stroke.
    - kenrikm 12y ago
      Or it could be because it's propaganda [1]. Nah can't be that dictitorial communist states have always been known for being extremely honest. I hear they also have a low infant mortality rate.. [2] [1] great healthcare! https://www.youtube.com/watch?v=MK3AnxSgdxA https://www.youtube.com/watch?v=MK3AnxSgdxA https://www.youtube.com/watch?v=TD7mLp9j-3k https://www.youtube.com/watch?v=TD7mLp9j-3k [2] https://www.youtube.com/watch?v=E_wKhXurFyI https://www.youtube.com/watch?v=E_wKhXurFyI
- rdtsc 12y ago
  Interestingly sub-economies of giant corporations are effectively planned economies, with a dictatorial bureaucratic apparatus sitting on top -- the management pyramid. To get away one would switch companies. To get a way from a country one would move to another country (well not always so easy... but you get the gist of it)
- mempko 12y ago
  Capitalism has nothing to do with central or not centrally planned economies. The soviet union was a capitalist society but was centrally planned. In fact most people, even in the USA, spend their days in small centrally planned economies known as corporations.
  - jsprogrammer 12y ago
    The Soviets did not have the computational ability to solve large-scale logistics problems. Their 'central planning' was always doomed.
falsestprophet 12y ago
Is it very difficult for Cubans to move to Argentina, Chile, or Mexico? As troubled as some of those places are, they seem like paradise relative to Cuba.
- drzaiusapelord 12y ago
  Leaving Cuba was illegal until last year or so.
- zzleeper 12y ago
  Very.
- maceo 12y ago
  It was very difficult until recently and remains so. But you're wrong to assume that life for the average person is any better in those countries than it is in Cuba. The UN's Human Development Index has Cuba as the 2nd most developed country in Latin America (behind Chile). http://en.wikipedia.org/wiki/Human_Development_Index http://en.wikipedia.org/wiki/Human_Development_Index
  - adventured 12y ago
    The UN's HDI is as fraudulent as pretending PPP GDP is a good way to judge that someone in western China earning $1,000 / month is as well off as someone in Sweden earning $8,000. It fails to account for a vast number of things that are critically important. The notion of scoring high on the human development index while living under an extremely repressive dictatorship is more than enough to completely discredit it. Equivalent to the UN allowing Saudi Arabia on the human rights council. People that have never experienced any meaningful freedom of speech, press or ideas - can have a high HDI? I think that's inherently impossible. What's the value of an education that occurs in the very narrow box of a dictatorship that doesn't allow for freedom of expression, for competing ideas, etc? I say it's worth very little, and it's a cruel joke to rank Cuba so high. How can anyone properly score Cuba's healthcare system when it almost entirely lacks transparency? http://en.wikipedia.org/wiki/Health_care_in_Cuba#Criticism http://en.wikipedia.org/wiki/Health_care_in_Cuba#Criticism
maged 12y ago
I wonder if tourist places will be able to keep overcharging in CUPs. I think it's a lot easier to sell a drink at 5 CUCs than at 100 CUPs.
maceo 12y ago
The 2 currency system is a mess. The fact that Cuba is abandoning it after 20 years of failure should serve as a warning to the Greek leftists who want SYRIZA to leave the Euro and adopt a 2 currency system.
- krschultz 12y ago
  Those two situations are not comparable at all. SYRIZA wants a separate currency specifically so it will become weaker, allowing their country to be more competitive in the global market than if it was still on the Euro. Cuba is a different situation. There was no flow of foreign currency in exchange for Cuban pesos, so they are worthless. A closer analog to Greece are all of the south east asian countries that have their own currency, but it is weaker than the dollar & euro. Those seem to be working just fine.
  - maceo 12y ago
    First, SYRIZA doesn't want a separate currency, only the most radical members do. And their rationale has nothing to do with being competitive in the global market. Its widely described by their leadership as a dreaded last resort if its creditors continue to be unrelenting and force a default.
brownbat 12y ago
The parallels to other socialist countries are interesting: http://en.wikipedia.org/wiki/North_Korean_won#History http://en.wikipedia.org/wiki/North_Korean_won#History In the 80s, North Korea issued separate types of "foreign exchange certificates" based on whether you were from a socialist or a capitalist country. Andrew Holloway describes the arcane system in "A Year in Pyongyang." Local currency could buy a few simple things. The red won used by visitors from GDR or USSR could buy substantially more, but the blue won from capitalist countries was at a premium and allowed access to the best shops for tourists. It reflects the awkward North Korean currency paradox: a hatred for the capitalist West but a deep need for Western capital. It's fascinating and frustrating to me how much more there is to unwind from the Cold War. Lingering soviet satellites like Cuba, North Korea, Belarus, maybe Vietnam... all very different situations, but each has to grapple with its own basket of leftover problems from that era. Hopefully Cuba will prove that softening relations provides a way out of some of these dilemmas.
- digi_owl 12y ago
  I wonder how much of this came out of the USD being the international trading currency, thanks to the Bretton Woods system.
  - brownbat 12y ago
    It'd be particularly ironic if Harry Dexter White nearly single handedly won the Cold War for the US while spying for the Russians. http://en.wikipedia.org/wiki/Harry_Dexter_White http://en.wikipedia.org/wiki/Harry_Dexter_White But you're right, I don't think it's completely far fetched. On the other hand Bretton Woods probably wouldn't have had the same effect with just any global currency, the US did have a few perks (intact infrastructure, great mix of labor and capital, rising consumer class, demographic dividend, etc.)
    - digi_owl 12y ago
      It may have had an effect in the long run, but i think that in the short run the Marshall plan did more by getting Europe back on its collective feet.
krebby 12y ago
The dual currency system is fascinating. When I was there a few years ago almost all of the local business exclusively took CUP, although a few vegetable or meat markets would accept CUC and give CUP in change. As an American tourist (with a French bank account), we were restricted to taking out CUC exclusively at ATMs, and most tourist-facing places would accept only CUC from us (though a few of the paladares and casa particulares preferred USD). The National Museum for the Arts in Havana, for instance, charged the same price in CUC as CUP but only accepted CUC from us (25x the "locals rate").
brownbat 12y ago
Radiolab just had a story on another aspect of Cuban life most outsiders might not know about, "Los Frikis," metalheads and rockers in Cuba: http://www.radiolab.org/story/los-frikis/ http://www.radiolab.org/story/los-frikis/
guard-of-terra 12y ago
Whoa, this looks painfully like 1991 Russian money reform but more devastating (however I expect cuban money to fair much better than russian rouble). "Normalization of relations with the U.S." is to be expected after Russia wrote off multi-billion-dollar Cuban debts. Who wins? Cuba a lot, USA a bit. Who won't get anything? Same side that never got any good deals in the last hundred years.
graeme 12y ago
I lived in Cuba. The two currencies, at a consumer level, was less significant than it was made out to be. It was very, very easy for anyone to trade CP for CUC at a rate of 24 to one. The real issue, for consumers, is that they were given almost no money. People would earn something like 480 CP per month. If you were doing well, you had access to another source of income (foreign remittance, black/grey market, tourists, etc) But for consumers who did have enough money, it was very easy to convert back and forth. Everyone had stocks of both CP and CUC on hand and used them as needed. Of course, people would complain "CP is worth nothing, this is a problem!", but effectively the real issue is that salaries were nothing. People wouldn't have been happier receiving 15 CUC per month. Where the real issues happened was at the level of state enterprises. I worked with an NGO working with agriculture. Capital investments were in CUC. Yet enterprises were forbidden from using CP earnings to finance CUC purchases. IIRC, enterprises had to balance their budgets in both currencies. This led to major inefficiencies. Note: 15 CUC is a pittance. The way people survived was through the other benefits of the state. Ration cards, subsidies, etc. I don't really know how that worked. People certainly were very poor, but not as poor as "15 CUC" sounds.
- graeme 12y ago
  Note: the comment above applies to the situation pre the changes they're making now. I have no info on what's going on now.

Looks like in a few short years we'll see another struggle of inexperienced politicians vs international sharks. Cue technically legal schemes, exchange rate manipulation, real estate bubble and the other fun things we've seen lately in Iceland, Greece etc. I wish to remain optimistic, but I don't believe the Cuban government can match the level of cunning and expertise of e.g. Goldman Sachs.

digi_owl 12y ago
Given that Cuba is "communist" i expect less Iceland and more 90s Russia... https://en.wikipedia.org/wiki/The_Shock_Doctrine https://en.wikipedia.org/wiki/The_Shock_Doctrine

crazy1van 12y ago

Absolutely fascinating. I'm sure I'm biased by my own philosophy, but this seems to be a good reminder that for all the flaws in capitalist economies, a centrally planned economy really just doesn't function. Also a good reminder that strong individuals can adapt with creative ideas that will always be one step ahead of the central planners.

api 12y ago
Agreed. Politics is often not a question of picking the best option, but of picking the least awful option from among a list of very bad ideas. Will you have death by lethal injection, hanging, or being set on fire? I'd pick the first. Being an advocate of the "capitalistic welfare state" (as I am) is a similar sort of choice. Why is this? I don't think it's just intellectual cop-out. I think the problem is that economics and all the other complex systems issues that hide behind politics are things that human beings are just not well-equipped to understand. We're bad at economics and social planning for the same reason we are bad at understanding the genome holistically. We just can't "grok" stuff like that. I sometimes wonder if this isn't a neurological barrier. After all, how often in human evolution did we confront the need to understand parallel auto-adaptive systems with tangled webs of causality, multiple positive and negative feedback loops, and chaotic behavior? This may require neurological hardware that we just don't have, so we try to muddle through by applying linear reductionism. It doesn't work very well, but it's the only cognitive tool we have for decomposing a system that remotely works at all. The free-ish market with a welfare state is a mess of hacks we've come up with through historical experimentation that seems to offer the benefits of certain classes of systems while mitigating their downsides. It's not pretty but it doesn't hurt as bad as being set on fire.
- aptwebapps 12y ago
  "I think the problem is that economics and all the other complex systems issues that hide behind politics are things that human beings are just not well-equipped to understand. We're bad at economics and social planning for the same reason we are bad at understanding the genome holistically. We just can't "grok" stuff like that." I think we _can_ grok stuff like that, but not easily and not without study. I think that the main reason there are so many arguments about economics is that most people have not done that and because people know where various economic arguments lead and they've already made up their minds on those issues. Economics is just too fundamentally intertwined with public policy to be left to pure economists. Almost (and that's just a hedge) everybody who puts forth economic opinions online, for example, has some sort of political axe to grind.
  - digi_owl 12y ago
    Never mind that economics still insist on modeling as if the system will auto-balance (equilibrium) if left alone. A notion that just about every other science, that is not out there in the lala land of social sciences, have since replaced with dynamic modeling. They insist that debt is just a exchange between individuals, with banks just sitting there passing the baskets back and forth.
maceo 12y ago
As much as Cuba's economy is nothing to aspire to, the WWF says that they're the only country on earth that has undergone sustainable development. That is, the have the 2nd highest HDI in Latin America and they've managed to achieve it with a sustainable ecological footprint. Of course, this doesn't outweigh the fact that people on the island have very little freedom, but it does say something about the power of central planning in developing economies that don't destroy the planet. http://assets.panda.org/downloads/living_planet_report.pdf http://assets.panda.org/downloads/living_planet_report.pdf
- sanoli 12y ago
  What? Cuba kept a sustainable ecological footprint because its economy, with the embargo and collapse of the Soviet Union, just couldn't afford industrialization.
delackner 12y ago
In all the negativity of the article, you could easily miss the fact that Cuba has higher life expectancy than all the countries you mention except Chile, and lower violent crime rates by far, universal health care, and universal education. They also have suffered 50 years of a trade embargo by their main natural customer (they were a huge Sugar exporter to the United States before we cut them off).
- msandford 12y ago
  I think a very interesting question is "why does Cuba have higher life expectancy?" It might be due to universal healthcare, or it might be that people simply can't afford "bad" food and mostly eat what they're given by the government. And the government doesn't give them fast food, it gives them traditional staples like rice, beans, etc. http://en.wikipedia.org/wiki/Health_care_in_Cuba#Health_indicators_and_issues http://en.wikipedia.org/wiki/Health_care_in_Cuba#Health_indi... Just because the healthcare is universal doesn't mean that it's good. There are differing views of the efficacy. http://en.wikipedia.org/wiki/Health_care_in_Cuba#Contrasting_views_on_Cuba.27s_health_system http://en.wikipedia.org/wiki/Health_care_in_Cuba#Contrasting... The main criticisms are that the government has the power to first game the statistics or outright manufacture them. And because journalists don't have the freedom to report honestly (repeat negative exposure means no more visas) we don't actually know if the stats are gamed a little or a lot.
  - tptacek 12y ago
    The US and Cuba have roughly comparable rates of death due to coronary heart disease and stroke.
  - kenrikm 12y ago
    Or it could be because it's propaganda [1]. Nah can't be that dictitorial communist states have always been known for being extremely honest. I hear they also have a low infant mortality rate.. [2] [1] great healthcare! https://www.youtube.com/watch?v=MK3AnxSgdxA https://www.youtube.com/watch?v=MK3AnxSgdxA https://www.youtube.com/watch?v=TD7mLp9j-3k https://www.youtube.com/watch?v=TD7mLp9j-3k [2] https://www.youtube.com/watch?v=E_wKhXurFyI https://www.youtube.com/watch?v=E_wKhXurFyI
rdtsc 12y ago
Interestingly sub-economies of giant corporations are effectively planned economies, with a dictatorial bureaucratic apparatus sitting on top -- the management pyramid. To get away one would switch companies. To get a way from a country one would move to another country (well not always so easy... but you get the gist of it)
mempko 12y ago
Capitalism has nothing to do with central or not centrally planned economies. The soviet union was a capitalist society but was centrally planned. In fact most people, even in the USA, spend their days in small centrally planned economies known as corporations.
- jsprogrammer 12y ago
  The Soviets did not have the computational ability to solve large-scale logistics problems. Their 'central planning' was always doomed.

falsestprophet 12y ago

Is it very difficult for Cubans to move to Argentina, Chile, or Mexico? As troubled as some of those places are, they seem like paradise relative to Cuba.

drzaiusapelord 12y ago
Leaving Cuba was illegal until last year or so.
zzleeper 12y ago
Very.
maceo 12y ago
It was very difficult until recently and remains so. But you're wrong to assume that life for the average person is any better in those countries than it is in Cuba. The UN's Human Development Index has Cuba as the 2nd most developed country in Latin America (behind Chile). http://en.wikipedia.org/wiki/Human_Development_Index http://en.wikipedia.org/wiki/Human_Development_Index
- adventured 12y ago
  The UN's HDI is as fraudulent as pretending PPP GDP is a good way to judge that someone in western China earning $1,000 / month is as well off as someone in Sweden earning $8,000. It fails to account for a vast number of things that are critically important. The notion of scoring high on the human development index while living under an extremely repressive dictatorship is more than enough to completely discredit it. Equivalent to the UN allowing Saudi Arabia on the human rights council. People that have never experienced any meaningful freedom of speech, press or ideas - can have a high HDI? I think that's inherently impossible. What's the value of an education that occurs in the very narrow box of a dictatorship that doesn't allow for freedom of expression, for competing ideas, etc? I say it's worth very little, and it's a cruel joke to rank Cuba so high. How can anyone properly score Cuba's healthcare system when it almost entirely lacks transparency? http://en.wikipedia.org/wiki/Health_care_in_Cuba#Criticism http://en.wikipedia.org/wiki/Health_care_in_Cuba#Criticism

maged 12y ago

I wonder if tourist places will be able to keep overcharging in CUPs. I think it's a lot easier to sell a drink at 5 CUCs than at 100 CUPs.

maceo 12y ago

The 2 currency system is a mess. The fact that Cuba is abandoning it after 20 years of failure should serve as a warning to the Greek leftists who want SYRIZA to leave the Euro and adopt a 2 currency system.

krschultz 12y ago
Those two situations are not comparable at all. SYRIZA wants a separate currency specifically so it will become weaker, allowing their country to be more competitive in the global market than if it was still on the Euro. Cuba is a different situation. There was no flow of foreign currency in exchange for Cuban pesos, so they are worthless. A closer analog to Greece are all of the south east asian countries that have their own currency, but it is weaker than the dollar & euro. Those seem to be working just fine.
- maceo 12y ago
  First, SYRIZA doesn't want a separate currency, only the most radical members do. And their rationale has nothing to do with being competitive in the global market. Its widely described by their leadership as a dreaded last resort if its creditors continue to be unrelenting and force a default.

brownbat 12y ago

The parallels to other socialist countries are interesting: http://en.wikipedia.org/wiki/North_Korean_won#History http://en.wikipedia.org/wiki/North_Korean_won#History In the 80s, North Korea issued separate types of "foreign exchange certificates" based on whether you were from a socialist or a capitalist country. Andrew Holloway describes the arcane system in "A Year in Pyongyang." Local currency could buy a few simple things. The red won used by visitors from GDR or USSR could buy substantially more, but the blue won from capitalist countries was at a premium and allowed access to the best shops for tourists. It reflects the awkward North Korean currency paradox: a hatred for the capitalist West but a deep need for Western capital. It's fascinating and frustrating to me how much more there is to unwind from the Cold War. Lingering soviet satellites like Cuba, North Korea, Belarus, maybe Vietnam... all very different situations, but each has to grapple with its own basket of leftover problems from that era. Hopefully Cuba will prove that softening relations provides a way out of some of these dilemmas.

digi_owl 12y ago
I wonder how much of this came out of the USD being the international trading currency, thanks to the Bretton Woods system.
- brownbat 12y ago
  It'd be particularly ironic if Harry Dexter White nearly single handedly won the Cold War for the US while spying for the Russians. http://en.wikipedia.org/wiki/Harry_Dexter_White http://en.wikipedia.org/wiki/Harry_Dexter_White But you're right, I don't think it's completely far fetched. On the other hand Bretton Woods probably wouldn't have had the same effect with just any global currency, the US did have a few perks (intact infrastructure, great mix of labor and capital, rising consumer class, demographic dividend, etc.)
  - digi_owl 12y ago
    It may have had an effect in the long run, but i think that in the short run the Marshall plan did more by getting Europe back on its collective feet.

krebby 12y ago

The dual currency system is fascinating. When I was there a few years ago almost all of the local business exclusively took CUP, although a few vegetable or meat markets would accept CUC and give CUP in change. As an American tourist (with a French bank account), we were restricted to taking out CUC exclusively at ATMs, and most tourist-facing places would accept only CUC from us (though a few of the paladares and casa particulares preferred USD). The National Museum for the Arts in Havana, for instance, charged the same price in CUC as CUP but only accepted CUC from us (25x the "locals rate").

brownbat 12y ago

Radiolab just had a story on another aspect of Cuban life most outsiders might not know about, "Los Frikis," metalheads and rockers in Cuba: http://www.radiolab.org/story/los-frikis/ http://www.radiolab.org/story/los-frikis/

guard-of-terra 12y ago

Whoa, this looks painfully like 1991 Russian money reform but more devastating (however I expect cuban money to fair much better than russian rouble). "Normalization of relations with the U.S." is to be expected after Russia wrote off multi-billion-dollar Cuban debts. Who wins? Cuba a lot, USA a bit. Who won't get anything? Same side that never got any good deals in the last hundred years.

graeme 12y ago

I lived in Cuba. The two currencies, at a consumer level, was less significant than it was made out to be. It was very, very easy for anyone to trade CP for CUC at a rate of 24 to one. The real issue, for consumers, is that they were given almost no money. People would earn something like 480 CP per month. If you were doing well, you had access to another source of income (foreign remittance, black/grey market, tourists, etc) But for consumers who did have enough money, it was very easy to convert back and forth. Everyone had stocks of both CP and CUC on hand and used them as needed. Of course, people would complain "CP is worth nothing, this is a problem!", but effectively the real issue is that salaries were nothing. People wouldn't have been happier receiving 15 CUC per month. Where the real issues happened was at the level of state enterprises. I worked with an NGO working with agriculture. Capital investments were in CUC. Yet enterprises were forbidden from using CP earnings to finance CUC purchases. IIRC, enterprises had to balance their budgets in both currencies. This led to major inefficiencies. Note: 15 CUC is a pittance. The way people survived was through the other benefits of the state. Ration cards, subsidies, etc. I don't really know how that worked. People certainly were very poor, but not as poor as "15 CUC" sounds.

graeme 12y ago
Note: the comment above applies to the situation pre the changes they're making now. I have no info on what's going on now.