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Capitalism in Cuba

Video:  An economist at the University of Havana explains why dollars were authorized.

Capitalism has come to Cuba, but not in the form one might find in a capitalist country.

During the Special Period, Fidel Castro allowed some farmers to begin selling excess crops in farmers' markets, and farming cooperatives were formed where the cooperative sells their crop to the state each year.

In the major cities, you will find arts and crafts markets and an occasional book market.

One thing we noticed was that though capitalism has arrived through these markets, their is little sign of competition and consumer choice.

Many of the crafts vendors sold exactly the same products for exactly the same price.  In fact, there was not much overall variety in various stands' selections.

Most small capitalist groups, like these craft sellers, seem to rely on tourist money.  Most Cubans have no desire to own an engraving of De La Punta Castro on a little plate, much less pay US$2 for it.

When approaching a book stand in the Cathedral Mall in Havana, tourists are showered with attention by the vendors while locals are ignored (and free to browse without disturbance).

Another recently allowed business is the private restaurant, or paladar.   These restaurants are noticeably more expensive than the state-owned ones, at least for tourists.

Since we were visibly tourists, we were always charged in dollars.  Cubans may be, for example, served at private restaurants and charged much less in pesos.

Dollar stores, which are state-owned, are present to try to soak up the dollars entering the country.  The Cuban Government is greatly in need of hard currency.  The government's strategy is that tourism will bring dollars into the economy and the hands of citizens, who will spend them at state-run dollar stores. In this way, the government is essentially using capitalism to fund its social programs.

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