[Marxism] Cuba Ends Use of Dollars in Businesses

["Walter Lippmann" <walterlx@xxxxxxxxxxxxx>]

("The trick will be to force Cuban citizens to accept the
Cuban convertible peso and be just as comfortable putting
them in their mattress as their dollars," Kavulich said.

(Walter says: trust me, this will not be a trick. This is
going to be accomplished, and it isn't the first time we
have seen big currency changes in Cuba. The biggest was
in 1960, but there have been others. It simply won't be
possible to use the U.S. dollar in ordinary transations.
As recently as two years ago, coin change from the U.S.
was accepted here in business, but it was quietly phased
out without any difficulty whatsoever.

(Those who wish to keep the U.S. dollar under the mattress
will be free to do so, but they won't be able to spend it
if needed for a rainy day without paying the 10% surcharge.

(We'll probably be learning a great deal in the days ahead
about the international currency system, how it works and
how it impacts on Cuba. The Cuban government will now be
working hard to explain these matters to the Cuban people
so the shock will be cushioned by an understanding of the
reasons for it. This won't prevent a mixture of confusion
and resentment, of course. That's normal. Keep in mind
that it was Cuba which first publicly raise the issue of
the unsustainability of the debt to which the third world
is in thrall ("thrall" is that fancy word for chains!) and
which made the debt a topic of world discussion and debate.

(Perhaps Cuba's new action will help to clarify, educate and
inspire others to learn about the international monetary
system and its effects on people everywhere. We will know
if this happens in very short order. I can already tell you
this: people who normally have little interest in public
affairs, and who don't watch the Mesa Redonda, are today
finding themselves drawn to such programs. This is good.)
==========================================================

Posted on Tue, Oct. 26, 2004
Cuba Ends Use of Dollars in Businesses
ANITA SNOW
Associated Press
SAN JOSE MERCURY-NEWS

HAVANA - Moving to wean its communist economic system from
the U.S. currency, Cuba said that dollars will no longer be
accepted at island businesses and stores in a dramatic
change in how commercial transactions have been done here
in more than a decade.

The resolution announced Monday by Cuba's Central Bank
seemed aimed at finding new sources for foreign reserves
and regain more control over its own economy as the U.S.
government steps up efforts to prevent dollars from
reaching the island as part of a strategy to undermine
Fidel Castro's government.

Cuba's national currency, the peso, cannot be used with
international partners.

"Beginning on November 8, the convertible peso will begin
to circulate in substitution of the dollar throughout the
national territory," Castro said in a written message read
by his chief aide Carlos Valenciaga.

In his message, Castro asked Cubans to tell relatives
living abroad to send them money in other foreign
currencies, such as euros, British sterling or Swiss
francs.

The move was likely to hurt mostly those Cubans who receive
American dollars from relatives living in the United
States.

Cubans and others on the island can still hold dollars in
unlimited quantities and can change them into pesos before
the new policy takes effect. But they will have to pay a 10
percent charge to exchange dollars afterward. There will be
no such charge on changing other foreign currencies, such
as Euros, into convertible pesos.

"In the short term, there may be a slip in the
remittances," said John Kavulich, president of the
U.S.-Cuba Trade and Economic Council, which tracks business
between the two countries. Some estimates on annual
remittances to Cuba are as high as $1 billion.

"But going into the holidays, people in Miami and New
Jersey won't want the holidays for their families on the
island to be even more miserable," he said, predicting
remittances from those major Cuban American communities
would pick up again, despite the difficulty of sending them
and the 10 percent charge.

Kavulich said the timing of the announcement seemed aimed
at drawing attention to Cuba shortly before the U.S.
presidential election.

"The Cuban government is hoping that Kerry will win and
that by announcing this a week before the election it will
keep Cuba in the news and relevant," said Kavulich.

He said that because Havana is blaming this new economic
measure on the American sanctions, the debate over the U.S.
trade embargo will be in the public eye when the elections
occur.

Cuba also has been seeking to draw attention to the U.N.
vote scheduled for Thursday on condemning America's trade
embargo against the communist nation.

"The trick will be to force Cuban citizens to accept the
Cuban convertible peso and be just as comfortable putting
them in their mattress as their dollars," Kavulich said.

The U.S. dollar has been a primary form of currency in Cuba
since the early 1990s, when the island government was
forced to implement liberal reforms to cope with the loss
of Soviet aid and trade. The possession of dollars was
legalized in 1993 to draw hard currency from tourism and
from family purchases at state stores.

The government said the change is necessary to protect its
economy as the administration of President Bush seeks to
punish banks and businesses that ship American dollars to
Cuba, which has been under a U.S. trade and financial
embargo for more than 40 years.

Earlier Monday, the U.S. Treasury Department announced in
Washington that it had identified an electronic money
transfer business that it suspects is linked to Cuba and
thus will not be allowed to do business in the United
States.

It alleged that the company, Sercuba, allows people in the
United States to send money to Cuban nationals via a third
country or through Sercuba's Web site in violation of the
U.S. embargo.

Castro looked animated, despite the bright blue sling he
sported over his olive green uniform to support a broken
right arm. Castro has made a point of remaining involved in
government affairs since accidentally falling Wednesday at
a speech, also shattering his left kneecap.

The measure was tied to the U.S. Federal Reserve's decision
in May to fine Switzerland's largest bank, UBS AG, $100
million for allegedly sending dollars to Cuba, Libya, Iran
and the former Yugoslavia in violation of U.S. sanctions
against those countries. UBS agreed to pay the fine without
admitting the allegations.

The U.S. embargo was imposed in 1963 in the wake of Fidel
Castro's defeat of the CIA-backed assault at the Bay of
Pigs two years earlier. Americans are barred from traveling
to the Caribbean island nation except with a U.S.
government waiver.





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