The Cuban embargo?
Posted: Tuesday, June 05, 2007 7:50 AM
Filed Under:
Havana, Cuba
By Kerry Sanders, NBC News Correspondent
Editors note: Kerry Sanders is reporting from Cuba as part of NBC News Today Show’s special coverage: Today in Cuba.
Coke. Johnson’s Baby Shampoo. Duncan Hines cake mix.
It’s all available at the grocery store here in Cuba. Not exactly the picture of a country economically pinched by a 45-year U.S. embargo.
The U.S. embargo is designed to prevent American companies from doing business, while at the same time, denying most U.S. citizens entry into this communist country.
The theory: Keep hard U.S. currency out of the Cuban economy and it’ll help bring about democratic change.
VIDEO:
What's next for Cuba?
But why then is the grocery store here full of these American products?
And why did I meet a group of 18 Californians in Havana on vacation?
The devil is in the details.
Twisted economy
The Coke, and other items are produced in third countries, like Mexico. Coke doesn’t sell its product here. A middleman buys the Coke in Mexico and ships it to Cuba. Welcome to the global economy.
The third-country element adds layers and drives the costs up to ridiculous levels: $8.40 for a standard sized bottle of "no tears" Johnson’s Baby Shampoo.
Still, to my surprise, Cubans crowded the store on Sunday.
Locals here tell me you never quite know what to expect on the shelves. One shopper looking for Crazy Glue says he checked for weeks until one day, it mysteriously showed up on the shelves.
How does a Cuban, who earns the equivalent of $25 a month, buy an $8 bottle of shampoo?
Therein lies the twisted economy that is Cuba.
Cubans who work in jobs where they come into contact with tourists earn hard currency: tips. Cubans who work for foreign companies routinely earn a substantial income in "under the table" payments.
And then there are routine gifts of money to Cubans from family overseas. It’s estimated that Cubans who no longer live on the island send upwards of $800 million a year to their family members here. Most of those so-called remittances come from Cuban-Americans in Florida.
That side economy once vexed the totalitarian leadership here and threatened to become something beyond their control.
Government officials regained the upper hand when Cuba introduced the CUC (pronounced kook). It’s a second Cuban currency. The primary currency is the peso.
Visitors to the island change their euros, dollars, pounds into CUC’s at a steep 20 percent exchange fee.
Cubans acquire their CUCs and off they go shopping.
Not everyone has CUCs. Some are more privileged than others, and thus, some live better off that others here.
What about all the tourists?
Yes, there are American tourists here, but they are few. It’s estimated -- and it’s a very rough estimate since statistics are not officially gathered for release -- that as many as 20,000 Americans illegally come to Cuba each year on vacation.
The majority of the almost 2 million tourists who come here arrive from Italy, Great Britain, and Canada.
One study by an association of U.S. travel agents suggests that if U.S. citizens were permitted, as many as 2 million Americans would travel here. A quarter of all vacationers would come on cruise ships.
Today Show travel editor Peter Greenberg says, "None of the cruise line executives will go on camera, but they’ve charted the harbors, they have identified eight ports, as soon as the travel restrictions are dropped, American ships are in Cuba."
Other Americans come here posing as humanitarians. They apply to the U.S. Treasury Department for a religious exemption, and then fly off to Cuba for a vacation.
American farmers are allowed here too. Ten percent of the rice eaten in Cuba is grown in the United States.
Under the embargo, there’s an exception for food sales like rice, corn and chicken. The idea is that those items are humanitarian. It’s how a Florida salesman last week signed a deal to sell 5,000 utility poles. Those poles are from trees, thus an agricultural product.
And the humanitarian need? Folks need electricity, and those poles are essential. The poles snapped and were destroyed in hurricanes in recent years.
But it’s a little harder to conclude some of the other items really are to benefit the Cuban people. One Georgia farm representative, licensed by the U.S. government to be in Cuba this week, is working a deal to sell grass. Not just any grass, but salt-resistant grass.
What’s the humanitarian need for that?
The U.S. salesman hopes to sell his grass to a seaside golf course here.
Ah yes, the "Embargo on Cuba."
The devil is in those details.
