Cuban Shops: the Great Inequality Between the MLC and the CUC

Inequality was institutionalized in Cuban society, since not all citizens are able to access this currency to obtain basic services, most citizens are still left outside of the dollar economy

With the expansion of the novel coronavirus surging across the world, the global economy has recently experienced a general crisis, and our country was not spared from it. When this crisis reached the island in July of this year, the Cuban regime took some economic measures to minimize its effect. One of the measures concerned retail sales in Freely Convertible Currency (MLC) within a network of 72 stores that were created for this service, the eradication of the 10% dollar tax, the creation of small and medium enterprises (state and non-state ones) with exporting and importing capacities and the improvement of the non-state sector by removing some obstacles, among others.

The arrival of the retail stores in MLC, however, set in place a duality of chain stores, the ones for Cuban Convertible Pesos – CUC and the ones for MLC and a trilogy of currencies (with the Cuban Peso – CUP being the third beside the CUC and MLC) . Thus, inequality was institutionalized in Cuban society, since not all citizens are able to access this currency to obtain basic services, most citizens are still left outside of the dollar economy.

One major difference was quickly seen between the two types of stores in existence, in the so-called Currency Collection Stores (TRD) and between the new MLC stores. The latter were supplied with a different level of basic necessities, most of which were collected from the TRDs at the beginning of the crisis. Government leaders in Havana alleged that these goods were necessary to attract hard currencies essential for the purchase on international markets of some products and raw materials vital for the people. Therefore, the so-called TRDs were facing shortages throughout the country of just about everything to the point that almost all of them sold only 4 or 5 products.

Juan, a 79-year-old retiree from Guantanamo, with a pension of 260 CUP (at the official exchange rate 10.4 CUC) doesn’t have access to foreign currency, confirmed that he barely uses the stores that use CUC, which are also known as TRD shops, since the last time he went to one he had to wait in a long queue even before entering, there were only a few goods for sale, some detergent, cloth for mopping floors, disposable napkins and two types of honey.

The Cuban State has not had the capacity to maintain the supply for the two types of purchasing options, so the TRDs have been left out of the supply chain, and with this began rationing and the crowds of people that were forced to buy the few products that these establishments offer. While the few citizens who have hard currency do not have to go through any of the aforementioned hassles, because with this option there is neither rationing nor the crowds. On the contrary, in this new type of commercial establishments [that take MLC], good service reigns supreme and there are ample products that can be obtained within them.

Odális, a 35-year-old woman who receives money from the United States, said: “On the one hand, the dollar stores are good because they contain almost all the basic necessities that are needed at home, and products such as the ham (serrano) and various types of beef, which are no longer available in the CUC stores, but the bad thing is that for the Cubans who do not receive remittances, they have to buy their dollar at 1.65 CUC [on the black market] to be able to enter these stores,” she concluded.

Even without the approval of the majority of the people in Cuba, the regime has resorted to this form of sale with the intention of facing the difficult situation, because this new system of offers in MLC the one who is benefiting the most is the government itself, which is obliged to seek convertible currencies that allow it to access the international market in order to be able to make purchases of food, raw materials and other items necessary for feeding the people and for the operation of the island’s economy.

Leave a comment