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Cuba? It's Already Changed!

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"When you're ready to do business, come back!"

It was the last thing I expected to hear from a Cuban street vendor, but there was no doubt about the depth of his intention to sell me an old Cuban pocket watch for a little more than $250.

The Fathom Adonia had arrived from Miami only a few hours earlier with nearly 700 passengers, many of whom were already on a walking tour of the city. The first square we visited, Plaza de Armas, was packed with vendors and their displays. The spirit of capitalism was clearly alive and well, and living in the Plaza del Armes.

Tables were set up with books, art work, jewelry, watches. One enterprising Cuban had even laid out an American nickel for sale. Not a particularly old one, mind you. Just a nickel. (I could not bring myself to ask him how much he wanted for it.)

Our HavanaTur guide, Daniel, explained that Cuban families receive monthly food rations that are only good for about a week, and government workers are paid only $20 to $30 a month. Since food is the most expensive thing on the island, that money won't cover anyone's expenses. "Owning a business," he said, is pretty much the only way for Cubans to survive.

Driving the Economy

The most visible of the entrepreneurs were the owner-drivers of Havana's trademark, colorful, old American cars. Every day, they cruise the streets, hunting for passengers willing to pay for an out-of-town half-day tour... or, for those on a tighter budget, to pay $30 for a 20-minute spin through Old Havana for a glimpse of the city.

Everywhere, Cubans are hustling (in both the positive and negative sense of the word). Artists, musicians, and taxi drivers ply their wares to the tourists. Sketch-artists draw small (4" X 6") caricatures of passers-by. Strolling musicians follow tour groups, either playing classics or making up their own songs, using whatever information they can glean from the group they are following (names, points of origin, etc.). Drivers of taxis -- government, private, and human-powered -- stand on the corners, offering their services.

In Havana's large indoor tourist marketplace, the atmosphere was reminiscent of a Middle Eastern bazaar. Hundreds of small booths were dressed like the store windows of a tourist shop and squeezed together in a building the size of an airplane hangar. The barkers competed for the attention of tourists trying to navigate the narrow, crowded aisles. Inside the booths, sales people negotiated prices for their wares - which were just like the goods in the booth next door.

Negotiating With Communists?

At one booth, I asked the merchant how much her tee-shirts cost. Her eyes lit up as she started to explain that her products had many prices. "For you, they will be different than for someone else."

At first, I mistook her comment as an attempt to flatter me, to convince me that she was about to offer me a uniquely low price. As she continued, however, her meaning became clearer. With words and motions, she acted out the process of offer and counter-offer, demonstrating that the price of anything I wanted to buy would depend on my bargaining skills.

Every transaction seemed to include some amount of negotiating. The evidence of a free-market mentality was so prevalent throughout Havana that one could easily have concluded that Cuban Communism was a thing of the past... until it was time to pay.

Two Different Cuban Pesos: Tourist & Local

The duality of Cuba is most clearly represented in its currency system. On the one hand, the infusion of money spent by visitors from other countries is too valuable to turn away. On the other, a communist government that doles out rations, provides education and health care, and tightly controls the economy cannot afford to let the value of its money rise and fall with an open market. Cuba seems to have solved the problem by creating two parallel pesos.

The pesos earned and spent by Cubans are of one variety, called CUP (pronounced "coop"). They have very little value outside Cuba, but locals use CUPs when dealing with each other.

Foreigners, however, are required to use a different peso, called the CUC (pronounced "kook"). CUCs cost about 25 times more than CUPs, and they fluctuate with the worldwide currency markets.

The exchange rate for the CUC is approximately even with the U.S. dollar, except that converting U.S. money triggers a 10% tax at the start of the transaction. Well-informed American tourists exchange their U.S. dollars for Canadian dollars or Euros before leaving home. Those currencies don't trigger the 10 percent tax, leaving the visitor with more money to spend.

By creating a second tier of currency, Cuba has created a hybrid economy. The local currency allows the communist government to finance food distribution, schools, and hospitals, while giving residents access to stores, restaurants, and supermarkets where they can spend CUPs to supplement their rations. Meanwhile, in the parallel Cuban universe, an economy for foreigners (in CUC) is filled with products and services few Cubans can afford. Within this second-tier economy, Cubans are encouraged to generate an income stream of their own, and many appear to have done so.

The video below is a look at 30-seconds of the stroll through a Cuban street market on the way back to the Adonia in Cienfuegos, Cuba.

My Cuban Education

The recent thaw in U.S.-Cuban relations has provided an opportunity for Americans to visit the island, but only under certain conditions. The U.S. government requires its citizens to sign an affidavit saying that we are "traveling for the purpose of participating in people-to-people and educational exchanges." I certainly learned a lot in my week-long visit.

Contrary to popular (American) belief, the Cuba I visited has not been cut off from the world for the last five decades. Instead, the U.S. has been isolated from Cuba, while the island has matured -- developing a tourist trade and transforming its economy in a way that gives individuals an opportunity to benefit from their own work.

Essentially, my first Cuban lesson was a big one: Everything I thought I knew about Cuba was wrong.