Apart from ripping pockets and emptying refrigerators, he exchange rate whirlwind that a few days ago devastated the Island made something very clear: Castroism has less money than shame. The Government, like a knocked out boxer, could only watch, helplessly, how its currency was beaten, without even the strength to try to calm a market that had gotten out of hand.
They have been announcing for years an ordering of the exchange market that never arrivesand not because they don’t want to do it, well ordering, controlling, regulating are intrinsic features of totalitarianism. Nor is it that it is not necessary to structure this market since, in economies like Cuba’s that are so exposed to international trade, a financial mechanism is essential—normally a central bank injecting or withdrawing foreign currency from circulation—that cushions spikes in exchange rates to avoid undesired consequences in the real economy.
But it happens that Castroism does not have the resources to do what it would like, nor the courage to do what it should.
What he would like to do (he just doesn’t have the dollars to indulge himself) is to return to that haven of peace of when CADECA monopolized the exchange market thanks to the fact that, in complicity with Western Union, GAESA plundered the dollars from remittances forcing Cubans to use tokens called CUC with which the Government happily looted the people by charging them a 240% premium.
What you should do is legalize private agents in the financial business —Cuban and international— just as it has opened the ban on other activities, in order to institutionalize a market, the currency market, which today is adrift when it is essential for the better functioning of an economy that is sustained more than what happens outside. than what is done within borders.
However, Castroism does not overcome its fear, its panic of a private bank in Cuba. They know that those who start today as money changers will soon evolve into lenders and nothing goes from there to investors, thus giving rise to a parallel mechanism for raising and placing resources that would overshadow the poor performance of state investment. And not, Castroism He does not want to be less than anyone, rather dead (us) than simple (them).
Legalizing those who today are dedicated to the purchase and sale of currencies would allow, if not controlling the exchange rate, at least to reflect the real value of the currencies with respect to the peso, a very important service that today provides The touch, with the inevitable limitation of sampling only announced supply and demand, a method that is necessary at the moment because these are illegal transactions, but from which a different value is obtained than what would be obtained if actual purchases and sales could be sampled in an official market.
That the true value of currencies in Cuba is unknownconsidered illegal today and in the face of a State incapable of modulating speculative peaks, is a huge barrier to foreign investmentgiven the economic calculation problems generated by this unpredictability of the exchange rate, which adds to the risks of investing in a bankrupt property where the owner can pay you when he owes… or can take that money to fix a breakdown in a thermoelectric plant and decide to pay when it occurs to you in a currency that was invented the day before yesterday saying that it is worth 24 to a dollar.
He current fixed exchange rate dictated by the central bankapart from being totally disconnected from economic reality, in practice it represents a capital control mechanism that scares the few delirious people who, at some moment of psychotic crisis, hallucinate with the bad idea of investing in socialist Cuba.
The currency instability, the natural opacity of the illegal exchange market and the irrelevance of the officialplus the obtuse insistence on maintaining a fixed exchange rate—a financial antique practically eradicated from the face of the Earth—are an obstacle for Cuba to be as attractive an investment place as it should begiven its resources, its good, beautiful and embarrassingly cheap labor force, and its geographical position.
Thus, the cost of the Castro regime does not finish regularizing this situation by doing what it should, is huge for Cubans trapped in this land off the world investment map. “The most social Government in the world” once again behaves like the most scoundrel, putting its interests as a mafia group before the needs of 11 million hopeless souls, who They tremble every time they hear that the dollar, once again, it’s going back up.
