Cuba: Existence of currency controls limiting individuals' ability to possess or exchange American dollars; currency in which Canadian companies operating in Cuba pay their Cuban employees
| Publisher | Canada: Immigration and Refugee Board of Canada |
| Author | Research Directorate, Immigration and Refugee Board, Canada |
| Publication Date | 27 November 2003 |
| Citation / Document Symbol | CUB42237.E |
| Reference | 2 |
| Cite as | Canada: Immigration and Refugee Board of Canada, Cuba: Existence of currency controls limiting individuals' ability to possess or exchange American dollars; currency in which Canadian companies operating in Cuba pay their Cuban employees, 27 November 2003, CUB42237.E, available at: https://www.refworld.org/docid/403dd1f00.html [accessed 29 May 2023] |
| Disclaimer | This is not a UNHCR publication. UNHCR is not responsible for, nor does it necessarily endorse, its content. Any views expressed are solely those of the author or publisher and do not necessarily reflect those of UNHCR, the United Nations or its Member States. |
The Cuban authorities legalized the possession of American currency in 1993 (Financial Times 17 Oct. 2003; Reuters 5 Mar. 2002; AFP 9 July 2002), and dollars are now widely used throughout the island (CubaNet 12 Nov. 2001a). It is estimated that between 50 and 60 per cent of the population has access to American currency (Financial Times 17 Oct. 2003; Reuters 5 Mar. 2002), which can be used to purchase a wide range of products in shops that deal only in dollars (ibid.). According to the Financial Times, individuals whose income is limited to non-convertible pesos are in an increasingly difficult situation, since "more and more consumer products are only available for dollars. Dollars are needed not just to buy imported butter, cheese, ham, wine and toiletries, but also for many standard Cuban-made goods such as cola soft drinks or Cristal beer" (17 Oct. 2003).
Cubans wishing to buy or sell either American dollars or convertible pesos, a currency created by the Cuban authorities in 1994 whose value is on par with that of the dollar and accepted throughout the country as a dollar equivalent (Canadian Dimension 10-23 Apr. 1999; Frommer's n.d.), can do so at state-owned banking facilities known as Exchange Houses (Casas de Cambio, CADECA) (AFP 9 July 2002; Embassy of Cuba 18 Apr. 2003; CubaNet 12 Nov. 2001b). Although there are reportedly no laws in place restricting Cubans' right to buy and sell American currency, CubaNet cited an incident in which CADECA employees in the City of Camagüey allegedly refused to sell dollars to a local man on the grounds that he had already changed money there on a number of occasions in previous days (15 Nov. 2001). Other criticisms of CADECA facilities include long queues (CubaNet 12 Nov. 2001b; ibid. 23 Nov. 2001) and the non-availability of convertible pesos in some locations (ibid.).
Since the approval of a new foreign investment law in 1995 (Cuba First n.d.; LatinTrade.com n.d.), foreign companies have been allowed to invest in all sectors of the economy with the exception of those related to education, health care, national defence and national security (ibid.). While the provisions of the law also allow foreign companies to hire Cuban employees for their operations, they must do so through a state-owned employment agency appointed by the Ministry for Foreign Investment and Economic Collaboration (Ministerio para la Inversión Extranjera y la Colaboración Económica, MINVEC) (Travieso-Diaz and Trumbull Nov. 2002, 28-29). Under this regime, the agency takes responsibility for "all aspects of the hiring, employment conditions, and termination of the Cuban worker" (ibid., 29). Furthermore, the company does not pay employees' wages directly (ibid.; Havana Journal 11 Mar. 2003; UF News 2 Aug. 2002). Instead, it pays their wages in American dollars to the employment agency, which then pays the workers in non-convertible pesos at a rate "comparable to the national average for that type of work set by the Labor Ministry" (Travieso-Diaz and Trumbull Nov. 2002, 29). However, according to the authors of a November 2002 study on the prospects for foreign investment in Cuba, workers employed in foreign-owned operations "generally receive two salaries: an official salary paid by the employment agency in Cuban pesos and an unofficial salary paid directly by the employer in U.S. dollars and in consumer goods" (ibid., 40). The authors add that
These payments are widely made but rarely talked about because unregulated bonuses are usually illegal, since the government controls and dictates workers' salaries. However, the government knows that workers' salaries are inadequate. Thus, in order to keep workers productive (and often to prevent them from stealing), foreign investors commonly pay the Cuban employees a "stimulus" bonus (ibid., 39).
A number of other reports also refer to the practice of paying employee bonuses in American dollars, although they do not specify whether or not the companies involved are foreign-owned (Reuters 5 Mar. 2002; CubaNet 12 Nov. 2001a). On 12 November 2001, CubaNet cited the Cuban labour ministry as saying that approximately 25 per cent of the country's labour force receive part of their salary in American dollars (ibid.).
This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.
References
Agence France Presse (AFP). 9 July 2002. "Cuba: Central Bank Reports Money in People's Hands Increased in 'Unprecedented' Way in 2001." (FBIS-LAT-2002-0710 15 July 2002/Dialog)
Canadian Dimension [Winnipeg]. 10-23 April 1999. Vol. 16. No. 8. C.P. Chandrasekhar. "Cuba: Dealing with the Dollar."
Cuba First. n.d. "Welcome to Cuba First: The Indispensable Guide for Foreign Investment in Cuba."
CubaNet. 23 November 2001. Juan Carlos Linares. "Surge competencia privada ante mal servicio de las casas de cambio estatales."
_____. 15 November 2001. Mario Enrique Mayo. "Funcionarios impiden que ciudadano compre dólares al Estado."
_____. 12 November 2001a. "American Currency Builds Second Tier in Communist Economy."
_____. 12 November 2001b. Juan Carlos Linares. "Tres arrestados por compra-venta de dólares."
Embassy of Cuba, Mexico City. 18 April 2003. "Nota oficial."
Financial Times [London]. 17 October 2003. Richard Lapper. "Greetings from Cuba."
Frommer's. n.d. "Planning a Trip: Money."
Havana Journal. 11 March 2003. John Downing. "Working for the Yankee Dollar."
LatinTrade.com [Miami]. n.d. "Foreign Investment Law 77."
Reuters. 5 March 2002. Isabel Garcia-Zarza. "Shopping for Cubans a Complicated Saga."
Travieso-Diaz, Matias and Charles Trumbull. November 2002. "Foreign Investment in Cuba: Prospects and Perils."
UF News [Gainesville, Fla.]. 2 August 2002. "Cuban Economy Benefitting from Foreign Investment."
Additional Sources Consulted
IRB databases
Internet sites, including:
Association for the Study of the Cuban Economy
Cuba First
CubaNet
Embassy of the Republic of Cuba, Ottawa
World News Connection (WNC)
