Peso or CUC? The double economy of Cuba

One of the interesting features of the Cuban economy that our class
has encountered is Cuba's double economy. A double economy means
exactly how it sounds: there are two formal economies in effect here
and there are two formal currencies in circulation. One is the Cuban
peso and the other is the convertable peso (CUC, pronounced "kook" by
the locals). Cubans generally use the Cuban peso while foreigners like
us change our money into CUCs. Since Cuba's economy is cash-based (our
credit cards don't work here), we mainly carry CUCs to pay for our
meals and other necessities (no souvenirs!)

Because there are two currencies, we found that some merchants only
accept either the peso, CUC, or both. For the most part, we have been
able to use our CUCs in restaurants that accept both currencies. There
are, however, some places that only accept pesos and not CUCs. To buy
things in pesos, we would need to find a way to change our CUCs to
pesos. Some of us have simply asked for change in pesos after buying
something in CUCs so we would carry both currencies simultaneously in
case we need it. These different economies also mean that the peso and
CUC are valued differently: 1 peso is equivalent to about a quarter of
1 CUC. When we take a taxi in a car that accepts CUCs, we normally pay
about 5 CUCs for 5 of us to ride. In a taxi that takes pesos, however,
it would cost less than 0.50 pesos.

Cubans purchasing in pesos may not have access to the same goods
offered in the CUC market, therefore creating unequal access to goods.
Cubans who do have access to CUCs, like those working in the tourism
industry, may have greater purchasing power than those who don't
receive CUCs at all. This double economy could lead to a widening
income gap in Cuban society.

The CUC cannot be converted anywhere else outside of Cuba, so our
class is finding creative ways to spend before we leave...mojito
anyone?

By Livia Macias