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The Honolulu Advertiser
Posted on: Monday, November 12, 2001

Dollar influx creates dual economy in Cuba

By Traci Carl
Associated Press

HAVANA — Ruslan Karell sits in a city park in Old Havana, watching Europeans follow tour guides through cobblestone streets, past upscale boutiques and into colonial mansions-turned-hotels.

In Old Havana, costumes worn by Caridad Suarez, right, and her sister Lazara evoke Cuba's colonial period. Tourism has helped create a two-tier economy in Cuba.

Associated Press

A Havana native, he complains the tourists are elitist, ignoring Cubans as they lavishly spend money on large meals and expensive souvenirs. Still, this is where Karell wants to be, for one reason: U.S. dollars.

Karell's family — including his mother, a doctor — earns Cuban pesos, the national currency with much less purchasing power than the widely used dollar.

More Cubans now, however, have access to the dollar, either through jobs in the growing tourism industry, where even visiting Europeans pay in U.S. currency, or through family members in the United States who pay messengers to fly to the island with cash.

That has created a two-tiered economy in communist Cuba: those with dollars, and those without. The Cuban government, aware of the growing disparity, has said it is trying to pay at least part of many salaries in dollars.

The Labor Ministry says that of the 4.3 million workers across the island, about 1.1 million receive a portion of their salary in American dollars.

Those without access to the U.S. currency point out what they do have: free housing, health care and education, as well as subsidized beans, rice and other basic foods. Nearly everyone can read, and the streets are among the safest in Latin America.

Still, those with dollars and jobs in the better-paid tourism industry are more likely to be able to afford expensive items like shampoo, soap, medicine and diapers. Because of high prices, many such items are also sold on the black market, and nearly every tourist visiting the island brings along at least an extra bottle of shampoo to give away.

The growing economic gap prompted Havana's archbishop to warn recently that Cuba may soon see more thefts.

"Lacking what you need can alter the domestic peace and lead to the temptation of crime," Cardinal Jaime Ortega said during a Mass in early September.

The current world recession, and a plunge in tourism to Cuba and elsewhere because of travel fears after the Sept. 11 terror attacks in the United States, appears to be having a somewhat equalizing effect among Cuba's dollar haves and dollar have-nots.

Many who depend on tourism for their livilihoods are seeing a drop in the amount of dollars they get.

Although no official figures exist, Vice President Carlos Lage said recently that the amount of cash that relatives regularly send to loved ones on the island also has fallen.