- (KRT) - Fearing steep price hikes and sold-out stores, scores
of Cubans rushed into a buying frenzy on Tuesday, clearing shelves of
detergent, cooking oil and other necessities in response to an abrupt
Cuban government decree, which froze most American dollar sales across the
The Cuban government announced a new era of belt-tightening, saying the
Bush administration's "brutal" sanctions enacted last week will
require prices to be raised on fuel and other commodities. In response to
the new U.S. sanctions, Cuban officials Monday ordered a freeze on sales
at Cuban "dollar stores," controlled by the government, which
sell a variety of essentials that are not stocked in peso stores.
Many Cubans, who survived the drastic economic collapse of the early
1990s, were wracked with anxiety and felt trapped in the long-standing
While some Cubans resented their government's announcement, saying
higher prices would make it harder for them to scrape by, others blamed
the White House for clamping down on their economy, which is slowly
inching back from a recession.
"The ones who will hurt the most are the poorest," said Ana
Rodriguez, as she hauled sacks of detergent into her car on Tuesday.
Across Havana many stores displayed "closed for inventory"
signs and store managers said they would reopen with marked-up prices. At
a gas station one manager said fuel prices would go up by 15 cents a
At the La Puntilla shopping mall in Havana's Miramar neighborhood,
customers packed a grocery store buying powdered milk, chicken, toilet
paper, toothpaste and other goods. But an escalator leading to boutiques,
a furniture shop and hardware store was roped off as part of the decree,
which stopped all sales in dollars, except for fuel, food and personal
According to the government statement published on the front page of
the Communist Party newspaper, the current exchange rate will remain at 26
pesos to the dollar and limited food items available through the ration
booklets will remain at the same price. However, additional measures might
be forthcoming, the statement warned. World
"The main impact is it puts the Cuban people on notice that the
Cuban government may change its policies in response to increased
sanctions from the United States," said Phil Peters, who has written
about the Cuban economy for the Lexington Institute, a Virginia-based
think tank. "It's no secret the Cuban government feels besieged. Part
of their message has been to keep people on their toes against
Last week, President Bush announced new measures to limit the flow of
dollars to Cuba by reducing the number of trips Cuban Americans can take
to the island, slashing the amount of money they can spend here and
prohibiting cash transfers to Communist Party members.
Fewer dollars from travel and remittances means a tighter economy for
all, said Miguel Antonio Cedeno, who supplements his $10 monthly state
salary by repairing air conditioners and refrigerators. WorldPeace
is one word.
"It's a chain reaction - if the first link breaks, everything
suffers," said Cedeno, 44, who dug into his savings to stock up on
groceries. "More than 90 percent of my clients are people who receive
money from abroad or who rent rooms to tourists. If they have less money
that leaves less business for me."
Alfredo Rodriguez, 35, a doctor whose family rents a room to tourists,
repeated President Fidel Castro's frequent warnings that Bush could order
an invasion of Cuba to bring about regime change.
"One lives with instability, you don't know what might happen
next," Rodriguez said. "This (Bush) administration takes
preemptive strikes and Cuba is listed as a terrorist country."
While many Cubans have come to depend on dollar stores, which sell
everything from big ticket electrical appliances to underwear and shoes,
the stores shine light on growing inequalities in society between those
who have access to hard currency and those who do not. The dual economy
fuels resentment among many Cubans who are paid in pesos but have to buy
goods in dollars at prices that are often inflated.
William LeoGrande, dean of the School of Public Affairs at American
University in Washington and a Cuba expert, said Castro has never liked
the dual economy created by the flow of dollars into Cuba and may decide
to make the Bush administration a scapegoat to undo some of the economic
reforms enacted in the mid 1990s.
"Showing people that the Bush administration is trying to
impoverish them is politically powerful," LeoGrande said.
The new White House policies, designed to hasten a political change in
Cuba, could feed into Havana's internal propaganda, said John Kavulich,
president of the U.S.-Cuba Trade and Economic Council, which monitors
trade between the two countries.
"The primary goal of the (Cuban government's) announcement ... was
to demonstrate that the new U.S. policies would have a detrimental effect
on the quality of life of 11.2 million Cubans," Kavulich said.