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Almost everyone

paladares), salsa bars, or sexual companions are

goods can be found besides in a flourishing

often harassed and sometimes arrested. (It is

black market that illegally offers everything

needs to moon-

true, as some Cubans argue, that hustlers and

from foods to cigars to services. It is common

light to get dol-

omnipresent beggars can become a nuisance

to meet highly trained doctors or educators

lars so he can buy

to visitors, so cops on every corner may also be

driving taxis, renting out rooms in their

there in part to "protect" the tourists.) Private

houses, acting as travel guides, or involved in

food and other

restaurants in people's houses, which operate

prostitution. One Cuban who rents a couple

items in "dollar"

under strict (but not always enforced) guide-

of rooms in his house, and pays about half

lines, open and close frequently depending on

the earnings to the state in taxes, still makes

stores.

the whim of the government. Many paladares

20 times what he did before as a geological

engineer.1 8 And an attractive lady can earn

have closed in recent months in Havana, and

over the past year the number of paladares in

more in two nights than a state-paid neuro-

Cienfuegos, according to residents of the area,

surgeon does in a month. Many of the lithe

has declined from 19 to 3, in large part

and lovely mulatas at the world-famous

because the cost of licenses was increased to

Tropicana nightclub in Havana are available

more than $800 per month.1 6 Private art gal-

after hours for gentlemen who will supple-

ment their meager state-paid salaries. The

leries on the popular Obispo Street in Havana

division between the people with and the

were closed between our visits in February and

people without dollars has created major

April. Economy Minister José Luis Rodríguez

problems for the government. The country's

said on television in April: "We believe there's

leaders know U.S. dollars keep the economy

no reason for the self-employed sector not to

moving and, when they are sucked in by

exist, if it follows certain regulations. But we

state-run dollar stores, provide the state des-

don't stimulate it because we don't think it's

the solution to our economic problems."1 7

perately needed hard currency. But only half

to three-quarters of Cubans have access to

The government strategy seems to be to allow

those dollars, in very differing amounts,

a certain amount of free enterprise but never

whether from family abroad or dollar-earn-

let practitioners take their income for granted.

ing activities in Cuba. Government employ-

The Economic Reality

ees, who are paid in pesos, are particularly

hard hit, and so the state has established pro-

While GDP comparisons are complicated,

duction and other bonuses to reduce but by

particularly since Cuba only recently moved

no means eliminate income discrepancies.19

from Soviet-style statistical methods to inter-

national standards, there is no doubt that the

One criticism often leveled at the Cuban

economy, which was heavily dependent on

government is about how it controls salaries

the Soviet bloc until it collapsed, still has not

received by Cubans who work for foreign

regained 1990 levels. Cuba has a dual-curren-

employers, including the U.S. government.

cy economy, and a foreigner can travel all

When a foreign employer attempts to hire

over the island for a month and never touch

Cuban employees, he must select workers

a peso. (Cubans call their currency "paja-

from a prescreened pool of candidates offered

mas," because it is "for indoor use only.") The

by a Cuban state agency. The agency then

average monthly salary of a government

requires the foreign employer to remit a

worker is about $12, up some 7 percent over

"salary" in hard currency--usually around U.S.

last year. A monthly pension may be no more

$300 per month, payable to the state agency,

than $4. Rationed items, sold at very low

not the individual employee. From this salary,

prices for pesos only, generally last the typical

the state pays the employee with an equal

family considerably less than a month.

number of Cuban pesos, not in convertible

Thus almost everyone needs to moonlight

pesos that in Cuba are equal to one U.S. dollar.

to get dollars so he can buy food and other

This exchange translates into an effective tax

items in "dollar" stores, the only places many

rate of about 95.5 percent, which the govern-

5