Cuba moves to become dollar-free

W T Whitney Jr

Up against sharpened threats against Cuba's revolution and a 
reduced flow of US dollars to Cuba, the government there has 
acted dramatically to move towards a dollar-free domestic 
economy. The goal is to prioritise dollars for use in 
international trade.

The Cuban Central Bank ruled that, as of October 28, stores, 
providers of personal services, and commercial enterprises are 
not allowed to accept payments in US dollars from Cuban citizens 
and foreign visitors. Banks are exchanging dollars for 
convertible Cuban pesos on a 1-to-1 basis. To speed the process 
along, they put off a 10 percent tax on such transactions until 
November 8.

The official rationale for the tax is to cover Cuba's increased 
risk in trading abroad in dollars. The possession of dollars at 
home remains legal, as are dollar withdrawals from individual 
bank accounts.

Cuba has long depended on dollars to conduct its foreign trade, 
and Cubans themselves have relied upon them to buy goods 
unaffordable on their peso salaries and unavailable through the 
rationing system. Half of all Cubans have access to dollars, 
mostly from relatives living abroad.

Appearing October 26 on a television round-table, six days after 
injuring his right arm and left knee in a fall, Cuban President 
Fidel Castro emphasised his government's resolve to "guarantee 
Cuba's economic independence" and protect itself from "external 
economic aggression".

The US State Department has just created an interagency task 
force to pressure foreign banks and commercial institutions into 
rejecting dollars used in Cuba's overseas trade. Washington 
recently imposed a US$100 million fine on a Swiss bank for dollar 
transactions carried out for nations embargoed by the United 
States, among them Cuba.

It cracked down also on a company serving Cuban Americans by 
helping them forward remittances to Cuba. From now on, they will 
have to change dollars into other foreign currencies before 
sending money on to their relatives in Cuba.

* * *

People's Weekly World