
A day using money in Cuba - jpkoning
http://boazsobrado.com/blog/2020/05/22/a-day-using-money-in-cuba/
======
lordnacho
I actually went to Cuba on holiday, and I used the tourist dollars.

It's incredible how this separates society into haves and have-nots. Basically
everyone wants to be near the tourists. They'll invite you into their homes
for food, they'll offer to take you around town, sell you some cigars, and so
on.

Since you have tourist bucks, you also have access to the tourist nightclubs,
where you run into some regional celebrities. Or you can find some nice
rooftop bars to lounge in.

But walk around a bit, and you realise most of town is not like this. There's
a lot of run-down places and a fair bit of desperation. Women will come offer
themselves up.

Driving around it was apparent that most of the island is mired in poverty,
with only a few places that are like a mediterranean club or hotel. Everywhere
else is empty shelves and rudimentary technology. You'll see industrial trucks
used as buses, for instance. And famously the cars tend to be really, really
old.

~~~
riffic
> most of the island is mired in poverty

the elephant in the room is the 60 year old embargo and its third-rail effect
on American politics.

~~~
pwned1
They can trade with the rest of the world, right?

~~~
freeone3000
It's an exclusive-or. You can trade with Cuba, and other companies that trade
with Cuba, or you can trade with the US, and other companies that trade with
the US.

------
WalterBright
The US had an official dual currency from 1914 to 1933. There were gold
dollars, and fiat (inflated) dollars. There was an official, fixed exchange
rate between the two. The two started out at parity in 1914, but things
diverged steadily until in 1929 a gold dollar was worth 85% more than a fiat
dollar.

Like all such systems where the relative values float but there's an official
exchange rate, this eventually collapses with runs on the banks, as people try
to profit by buying the higher valued currency at the discount guaranteed by
the exchange rate.

This persisted until Roosevelt suspended all those exchanges. Then we had a
fiction of a gold exchange rate until Nixon finally dispensed with it.

We have a dual currency today - when you pay a "convenience fee" for using a
credit card instead of check or cash, that's what is going on (as the credit
card taker gets charged 3% for those transactions, and passes it on to the
credit card user).

~~~
ceejayoz
> We have a dual currency today - when you pay a "convenience fee" for using a
> credit card instead of check or cash, that's what is going on (as the credit
> card taker gets charged 3% for those transactions, and passes it on to the
> credit card user).

Barring a few gas stations that give a cash discount, that's very much _not_
the way it works. It's the cash users getting screwed; they pay the same price
as credit card users, but they don't get the rewards you'd get as a credit
card user (I get 2-5% cash back on virtually any purchase, for example).

~~~
WalterBright
Oh, many times I've seen the same price for cash or credit, asked for a
"discount for cash", and got it.

The times they won't give a discount, I pay with the credit card and get the
"cash back".

The proprietor, though, will nearly always give a discount for cash, because
it's money ahead for him.

~~~
ceejayoz
That may be an attribution error.

[https://www.thisamericanlife.org/515/good-
guys](https://www.thisamericanlife.org/515/good-guys)

> Producer Ben Calhoun tells Ira about a secret move his friend uses all the
> time — the "good guy discount" — that gets Ben's friend money off all sorts
> of items when he's shopping. (6 minutes)

More often than not, if you ask someone with the power to give one for a
discount - for any polite reason - there's a decent chance they'll do it.

~~~
WalterBright
You might be right. A cash discount should be 1-3%. But I've often gotten 10%
off just by asking. Even at department stores like Macy's.

------
fennecfoxen
Went to Cuba with my girl. (She really wanted to go; I was the skeptic.)
Walking around the ruins of the Centrum, and someone invites her in to get a
haircut. Sure, she says, why not? $5 (convertible), but all we had on hand was
a $20.

Little Cuban girl heads out running through the neighborhood to scrounge up
change for a $20 because that’s almost a month’s salary.

~~~
stevenjohns
Similar situation, although not as intense.

I bought a skewer of grilled meat from a poor elderly woman in central
Colombia. The skewer was 5,000 COP and all I had was a 50,000 note (which I
discovered when the food was ready) which is about a day’s wage.

She had to leave the grill and go out in the search for change. Felt terrible.

~~~
guythedudebro
God forbid either of you let them keep the change

~~~
fennecfoxen
Random over-generosity is not a particularly effective charity pattern. If you
feel that Hacker News denizens like ourselves happen to have too much money,
there are a variety of organizations which can transmit sums of money to those
in need: not just a one-time $15 at random with a special tax diverted to prop
up the Cuban government, but on a recurring basis, every month, as part of a
program to help eliminate worldwide poverty in a targeted manner, and
sensitive to the dislocations that can come about as a result of carelessly
deployed aid.

I use WorldVision to do this, personally (some of their non-evangelizing
programs) as I appreciate their efficient organization, but there are other
ones out there too. I can supply links to
[https://www.worldvision.org/donate](https://www.worldvision.org/donate) and
suggest interested parties consider a $40/mo sponsorship of a child's health
and education at [https://www.worldvision.org/sponsor-a-
child](https://www.worldvision.org/sponsor-a-child)

~~~
empath75
Who cares if it’s an effective form of charity. It’s nothing for you and a big
deal for that person. Not everything needs to be minimaxed to death. Same deal
with haggling in the developing world. It’s just a gross thing to do when
there is a big wealth inequality.

~~~
danlugo92
I live in Venezuela (which is Cuba lite) but earn a foreign salary.

"It’s nothing for you" compromised around half of my expenses before I started
budgeting.

I hate forced charity.

~~~
pepy
@danlugo92 never disclose your income to anyone. This goes for anyone who
earns a foreign salary in any country

------
smallstepforman
And as a tourist, you’d always get change back in the wrong currency (worth
1/25 the original). And to make matters worse, the change will also be wrong
in their favour. Hated being assumed that I’m a dumb foreigner.

~~~
quesera
> Hated being assumed that I’m a dumb foreigner.

I believe they assumed you were not _dumb_ , but that you were _willing_.
That's what I told myself, at least.

And since the prices were about about half of what I would pay at home, I was
totally OK with that.

Some markets are only open to foreign currency, and if that currency is worth
25x more to someone else than it is to me, and they're selling a product to me
at what feels like a 50% discount, then I am a willing participant in that
economy!

------
maniatico
As a Venezuelan, it is interesting to see how the Castro's used the CUC to
save face from the defacto dollarization they had.

Also, it's interesting to see the parallels with the Petro. I'm thankful that
it mostly failed, minus some money laundering by the government and pensions
(this is Maquiavelian, they pay part of the pension and bonuses in a
controlled electronic currency to elderly people who mostly don't have access
to the internet and maybe even electricity, but good for propaganda). From the
last quarter of 2018 we went from talking about dollars being illegal to a
heavy push towards defacto dollarization where a lot of party and army people
opened bodegones (mostly imported good stores, they pay 0% taxes by
presidential decree) where they mainly accept USD (sometimes EUR) and
sometimes Bolívares (the official currency). The government tried to push the
Petro to them, but failed to convince even it's own people who want hard
currency and not useless monopoly money. And now even some state run stuff is
marking prices in USD (some elite government places stopped accepting
Bolívares)

------
Mengkudulangsat
As I'm reading through this I'm fascinated about the character's "write
russian articles for Bitcoin gig". Perhaps internet infrastructure isn't that
good yet in Cuba, but with Starlink and other LEO internet projects underway,
that might change in the medium term.

Once basic ingredients are there, we might see an explosion of, for lack of a
better term... "digital sweatshops". Things like data annotation / game
grinding / SocMed content moderation etc.

~~~
sneak
Starlink’s first version will require ground relay stations within the
overlapping spot beams (the inter-spacecraft relay lasers aren’t until later)
and also likely intends to comply with local laws in all places it is offered
for sale.

I had high hopes here too, initially.

~~~
teruakohatu
I think they have outright said that they will only operate through local
resellers and local ground stations, so all laws will need to be complied
with. Even then I think US-hostile nations would ban starlink on suspicious of
eavesdropping, or simply because they don't want everyone connected to the
internet.

~~~
Mengkudulangsat
What about resellers on a boat? You can set up the business in Panama, sign
the the Starlink contract, dock in Havana and just share your wifi password.

~~~
unnouinceput
Good luck with that. If local government don't want you, I bet you'll end up
in jail and your fancy boat in the country's dictator collection.

------
sremani
China also has dual currency CNY-CNH system.

[https://www.nasdaq.com/articles/cnh-vs-cny-differences-
betwe...](https://www.nasdaq.com/articles/cnh-vs-cny-differences-between-two-
yuan-2018-09-12)

~~~
4cao
China used to have a similar system with Foreign Exchange Certificates until
the 1990s [1] but nowadays it's not really the same. CNH/CNT/NDFs are an
artefact of foreign-exchange controls but as a visitor to China you're
unlikely to even know they exist.

1\. [https://www.china-briefing.com/news/15-years-in-china-
foreig...](https://www.china-briefing.com/news/15-years-in-china-foreign-
exchange-certificates/)

------
coldtea
Not that arcane. Tons of places have a de-facto dual-currency system... (any
country with big inflation, for one)

------
fit2rule
The situation with Cuba is where I find myself widely differing with the
viewpoints of my American colleagues - I just cannot see any justification for
the way that the USA treats Cuba. It is inhumane and un-just, and I think
Americans suffer more for having to live in a repressive system that does not
have their best interests at heart. What does the American people get out of
the restrictions placed on Cuba by their government, other than cheap sex
tourism and a medical haven not offered within their own borders?

I really have to wonder if we'll ever see relations normalised .. so many
problems in the world, if only Americans would change their state policies,
quit arguing about scary orange puppets, and start paying attention to exactly
who is running the CFR ...

------
TMWNN
Reminiscent of Argentina's Blue Dollar, the real exchange rate between the
peso and the US dollar and usually very different from the official rate.

~~~
asciimike
I thought the Blue Dollar was mostly phased out when they let the peso float
at the end of 2015?

~~~
TMWNN
I did too, but reading recent news reports, it still exists.[1] I presume that
the spread grows when the country is in times of crisis (inb4 "When is
Argentina ever not in crisis?"), such as the recent default.

[1] [https://www.explica.co/dollar-today-the-blue-dollar-rises-
to...](https://www.explica.co/dollar-today-the-blue-dollar-rises-to-120-while-
the-trickle-of-deposits-and-reserves-continues/)

------
peter_d_sherman
> _" She discovered that she can use bitcoin to top up people’s phones on
> bitrefill.com, and she can charge for this. For every 100 dollars she
> receives in bitcoin, she gets 120 CUC in cash from her friends whose phones
> she tops up. Ira is quite pleased that she has found to a way to arbitrage
> the currency exchange. If she got paid via Western Union, she’d lose 15% of
> what the agency pays her. This way, she makes 20%."_

Amazing, because modern economic theory states that arbitrages should not
exist, and if they do (for whatever quirky reason), then they will disappear
just as quickly as they appeared...

------
m0zg
This is what the Soviet Union had, except, of course, all prices were quoted
in "internal" rubles. The dollar was always 70 "foreign" kopecks, but you
couldn't get dollars, or convertible rubles unless you were a party
apparatchik who could shop in "Beryozka": a network of stores that sold
Western goods to those who imposed socialism on others, but did not live in it
themselves, which it how it usually works. Foreign currency was illegal, and
you'd land in prison if you had it.

[https://en.wikipedia.org/wiki/Beryozka_(Russian_retail_store...](https://en.wikipedia.org/wiki/Beryozka_\(Russian_retail_store\))

~~~
danlugo92
>to those who imposed socialism on others, but did not live in it themselves

I'll violate the rule but I'll comment you were probably downvoted because of
this part of your comment.

~~~
kmonsen
I don’t really see why though? I’m a socialist (the Scandinavian kind), but
that seems a petty good description of what happened back then.

~~~
vinay427
> socialist (the Scandinavian kind)

Surely there exists better terminology for this than a highly regionally
contextual qualifier. Perhaps democratic socialist, or social democrat, or
something involving welfare? Overloading the word with other meanings just
adds fuel to the fire of inaccuracy and hyperbole in political discourse,
perhaps recently most often in the US.

~~~
Taniwha
I think the word you wanted to describe the USSR was "communist", there west
is full of countries with socialist social welfare systems that genuinely care
for their citizens

~~~
vinay427
Yep, I replied to the other comment but I'll concede that I was using this
term too specifically and inaccurately.

In any case, my point wasn't in opposition to the social welfare systems in
Scandinavian countries, for instance, as I'm at least reasonably familiar with
the services they provide to citizens which generally seem to genuinely work
as you said.

------
pmiller2
North Korea actually has 3 versions of their currency: one for North Koreans,
one for “socialist” visitors, and one for “capitalist” visitors. They’re
distinguished by having either 0, 1, or 2 stars on the coins, or different
color seals on the notes. I don’t know how this has affected the economy of
North Korea, but it sure is interesting.

[https://en.wikipedia.org/wiki/North_Korean_won](https://en.wikipedia.org/wiki/North_Korean_won)

------
hogFeast
Ah, I live in the UK and it is still fairly common to hear people enviously
tell you how successful Cuba is (this is people of a certain age, the same
people usually think China was a great success under Mao because much of the
Cultural Revolution didn't become apparent until the 90s)...people are weird.

------
sm4rk0
Isn't 10k with a 15-20% premium 11.5-12k?

 _Bitcoin trades at a 15–20% premium (e.g. if the Bitcoin spot price is 10k
USD, Cubans will pay 15k–20k CUC for it)._

------
ajuc
Communism tends to create these patterns. It was the same in pre-1989 Poland.
Owning USD was illegal, you were supposed to turn them to authorities and get
"Polish issued USD" instead. It was a separate kind of currency different from
the regular (worthless) Polish currency. But the official exchange rate was
order of magnitude worse than the real USD-Polish złoty exchange rate, so
nobody did that if they could avoid it.

There were special shops "Pewex" that had all the foreign goods and the best
Polish export products - you could only buy that stuff there for Polish USD.
It was a way for the state to extract hard currencies from the population.

There was a whole class of people that exchanged USD to Polish currency on the
black market (with the real exchange rate). They were called cink-ciarz
because they stood in touristy places and whispered "ex-change" in broken
English to tourists. It sounded like cink-ciarz to Poles. Lots of fortunes
were made that way, and people were in prison because of that.

------
unnouinceput
Quote (end of article): "The question is: can Cuba avoid this, and if not,
will Cubans stoically accept another Special Period?"

1 - No.

2 - Hopefully not, and hopefully they'll finally get rid of Communism.

------
Dahoon
Good lord, look at the size of those pictures.

------
ken
As an American, this doesn't seem any stranger than our dual-units-of-measure
system. One is defined in terms of the other. One is what we (mostly) use
locally, and the other is what we use with anyone from any other country in
the world. People living here know from experience and context which system is
implicitly attached to a bare number.

~~~
NikolaeVarius
They are in no way equivalent. Countries generally do not modify the
conversion between metric and imperial for the purpose of obfuscating
measurements of things,

