Cuba's economy.. blog #6

The Cuban state has experienced a growth in demand for wages, social security, and subsidies, imported goods have been shortened,such as food, and other goods. Cubans have to stand in long lines to obtain limited amount of food supplied. Most needed items cannot be obtained with pesos and were obtained only on the black market with U.S. dollars. Inflation resulted because the government kept making more pesos, even though there were almost no goods available. In order to restore the value of the peso, a program was initiated to reduce the excessive amount of money in circulation. Part of this program was that the government increased the prices of many consumer goods and services, and also created a new tax law, and ended subsidies to businesses that were not economically successful. While these changes occurred, it increased the difficulty of daily living for the average Cuban, but the government have gradually restored the value of the peso.
Before 1993, the U.S. dollar, even though illegal, was used widely on the black market to obtain necessary goods for daily survival. In 1993, the dollar was legalized and Casas de Cambio, (houses of exchange) were established to exchange pesos and dollars. Cuba has created a dual system—a dollar economy and a peso economy—that has certain places where pesos can be used and others where the convertible pesos only are accepted. Since 2005 The US dollar stopped circulating in Cuba and now it is exchanged for the Cuban convertible peso. The Cuban pesos have always been very unstable which is very hard for the Cuban people because they get paid very low and the Cuban pesos lose more value every time a change is made in the currency of Cuba.
Since 1993, foreign banks had been allowed to do business in Cuba to supply financial services such as insurance, foreign commercial investments, and savings accounts. In 1997, a new central bank, the Banco Central De Cuba, was created to supervise and regulate Cuba's growing banking sector. The old bank, Banco Nacional De Cuba, had performed both the roles of central bank and state-owned commercial bank, but would now operate only as a commercial bank. Nevertheless, a very narrow sector of the Cuban population requires banking services. Very few people earn enough money to be able to invest or save.
Hope this information is useful for whoever reads it. Hope you learn something from it. I found this information in a research through google.com and a couple of magazines and newspapers.


I know this has nothing to do with macroeconomics but since we are talking about certain countries i would like to add something else about Cuba. Cuba is very well known not only for their cigars and rum but also for their salsa music along with guaguanco, timbales, charanga, bolero, cha cha cha, danzon, and many other types of music that are very famous among Latin people and people who are interested in Spanish music. Also, Cuba is very famous for baseball since they are the best in the world with the most Olympics won, and the most world championships won in baseball way ahead of any other country like Japan, Korea, USA or Puerto Rico and Dominican Republic. Also boxing, which Cubans are the best amateur boxers in the history of boxing with the the highest world championships, and Olympics gold, silver, and bronze medal counts, and volleyball which the females are also the best in the world with the most medals in Olympics and world championships. Below I posted some videos for your entertainment. Again i repeat, i know this has nothing to do with macro but i thought it would be cool for whoever does not know, to find out. Enjoy...