After four months that saw the highest rise in the dollar since the Ordering Task stirred up the economic filth in Cuba, the last two weeks of May we witness a meteoric collapse of currencies which excited millions of Cubans who, in vain, waited for this drop to be reflected in the prices of MSMEs. But to no one’s surprise, the strength of the peso lasted less than a footprint on wet sand, and on June 5 the dollar began to rise more strongly than before until, just five days later, the tables have turned again in favor of the peso.
It is extremely unlikely that the Government would be interested this exchange market turned into a roller coaster without seat belts or brakes, a troubled river where some people who, in theory, should not be doing so, are fishing with great profits.
A documented article by Cubanet demonstrates—as much as anything can be demonstrated in Cuba—that Notorious micro-businesses lurk behind this monetary instability., recognized front men who dominate the wholesale import sector with state financial and logistical support. The fact that these shady characters are the ones who have stirred up the exchange rate whirlwind can be read in two ways, both of which are very compromising for the future of the system.
The first is that through superior guidance they used their market dominance to make money—for the Government. selling expensive dollars that they later repurchased cheap. But has Castroism reached this level of misery? If the Government has to resort to this ruse to scrape a few dollars, it means it is even weaker than it seems.
The The second possible reading is that the front men acted at their own risk and expense. taking advantage of the power they have obtained from above for personal benefit, prioritizing their interests over those of the State, knowing for a fact that Castroism is weaker than it seems.
It would be as problematic for the Government to be scraping for a few foreign currencies to settle accounts that are suffocating it, as for its front men to be doing business at the expense of the credibility of the State itself. A State that, in the face of this exchange rate whirlwind, portrays itself as incapable of protecting its own currency remaining as a pathetic State at the mercy of an illegal market, pathetic being a very dangerous description for any dictatorship.
Recently, a Cuban official newspaper conducted a survey that makes it clear that The depreciation of the peso is the most worrying economic distortion for Cubans. This data would support the idea that there was no higher order to stir up the exchange rate hornet’s nest by injecting a frustration that worsens this state of popular opinion, now that the dreaded summer and its demonstrations are approaching. It makes more sense that the front men played it with the people… and the Government.
If in the coming days we do not see a punitive movement against these characters who, putting Castroism in check, coordinated a financial attack to artificially lower and raise the value of the dollar, profiting from it, it will not be because the PCC lacks sticks to give or justification to do it.
The absence of punishment will indicate how fragilely dependent the system has become on these “private” structures. created to replace hyper-inefficient socialist companies that only function in the constitution and the speech of some cadres too obese to change.
After months of saying that the Cuban peso is being attacked from outside, the real enemy is inside. Castroism would have fallen into its own trap, feeding some figureheads so much that it has turned them to big to fail (too big to fall). If the largest chicken importer in the country ends up in Villa Marista, wouldn’t it create a significant gap in the distribution chain? How much personal money would some camajans of the system lose if a character like that is prosecuted?
A rebellion – although temporary – of the figureheads, ccorroborates the fears of Castroism so as not to embrace the Chinese model of allowing a very deregulated private system —much more than in some capitalist countries— since the conditions of an island with a small market intrinsically linked to the United States make the rise of a business class that accumulates power and influence independent of the all-embracing designs of the PCC dangerous.
It is probably these businessmen linked to the Government—either to Castroism as an institution or to a Castroite personally—who know best. the weakness of the system and how dependent it is on the economic structures delegated to them as figureheadsand therefore, they felt confident enough to earn a few hundred thousand dollars without the slightest effort… even if the Government remained like a puppet incapable of defending its currency, which is no small feat, but a message with telluric effects for any investor aware now that the only thing in the vaults of the Central Bank of Cuba is silence and cobwebs.
