The Convertible Peso Appreciates 8 Percent
Against the U.S. Dollar
By Anett Rios Jauregui and José A. de la Osa
President Fidel Castro announced last night that the Monetary Policy Committee of the Central Bank of Cuba has adopted an agreement to increase the exchange rate of the convertible peso in relation to the U.S. dollar and other hard currencies from next April 9. This revaluation will stand at 8 percent for the moment.
Besides this, an exchange rate for the purchase and sale of U.S. dollars is to be fixed, as well as for other hard currencies. Following the Revolution’s policy of providing full guarantees for funds deposited in the banks, the agreement states that bank accounts in U.S. dollars—both existing accounts and those opened between now and April 9—will not be affected by this measure.
Holders of accounts in convertible pesos will benefit from the revaluation of this currency from that date. Likewise, the Cuban peso—which will maintain its rate of exchange with respect to the convertible peso—will similarly increase its value in relation to the U.S. dollar.
“Last week we revalued the peso,” said Fidel, “this week we’re going to revalue the convertible peso,” and he underlined that the value achieved “by our modest little peso” will be conserved in its totality.
He explained that each time the convertible peso is valued or revalued, the Cuban peso is revalued, but that the Cuban peso can be revalued independently of the convertible peso. “There are two mechanisms and both of them lead to Rome: All roads lead to a currency that has value and all those who are receiving an increment in social assistance, their pensions, or wages, will receive an increase in the revalued currency.”
“We are entering a new stage,” Fidel stated, “and now we will see what they [the U.S. government] are going to do, what they can do. The only thing I’m going to say is that we are not doing that for ‘for their money,’ because we can do without their money.” He emphasized that this new measure seeks to strengthen our convertible peso and is not directed at harming anyone.
“Within our economy are the orders of the sovereign people of Cuba,” emphasized Fidel. “We can do without the dollar,” he reiterated. “They are the ones who cannot do without it.
“We will continue forward with our convertible pesos and our Cuban pesos; we will continue to move forward and both will continue to move closer; that is their destiny: They are brothers, born of the same mother called Revolution. And the day that brings the miracle of complete unity between the two,” he added, “we will have then scaled to a place of honor high above the road of the Revolution towards the most just and humane society in the world, the most socialist and almost communist that has ever existed in the world.
“I clearly see this objective which our people will achieve some day,” stressed Fidel, “and for this reason we are battling today and we will not rest.”
During his speech at the International Conference Center, he observed that he was not against high wages, but asked what would happen to those who have less today. In his assessment, if the formula is a socialist one, those who contribute most according to their abilities will receive according to their work.
“We have to strongly defend this formula within a spirit of social justice and assistance for those that need it,” he emphasized. “Because if anyone has a need and cannot resolve it, they should not be left without food because of their situation; if someone has a problem from birth, some accident or illness, or were not born blessed with special qualities, we have to help them, because it’s for this reason we belong to a species with the capacity to think, a sensitive species. We cannot fall into that repugnant system or principle of “sort yourself out the best you can.”
“The Revolution has to seek this equality,” underlined Fidel. That’s what communism has always sought to do, he recalled, even in terms of distribution, on the day that the necessary means exist to satisfy needs.
Fidel planted the idea that he increasingly feels attracted by the ideas of Marx, Lenin, and Engels, because they teach us a great deal; they have opened up the road to thought. We are not going to say that those ideas are dead, he specified. “We are who we are before the challenge that these ideas are advancing over enormous obstacles; obstacles that perhaps were not imagined by the very creators of the doctrines of Marxism and Leninism.
“This is what has brought us to this point,” he specified, “and from now on we will see how it is going to help us better because we are now enjoying all the benefits and possibilities of having a socialist regime—not measured in terms of automobiles, he clarified, but through real possibilities of doing things for the wellbeing of our people, for wellbeing in all senses of the word, and in part also, for the wellbeing of humanity.
“Our success is something helpful,” he continued. “Our battle against this powerful and seemingly unstoppable empire is showing many peoples that “They Can Do It!” as the slogan for the literacy campaign in Venezuela goes. And we can also say: “We can do it, and we’re demonstrating that we can do it!”
Fidel announced that, in four months’ time, starting from April, all refrigerators lacking seals will have been repaired. Also, before December 31, some 12.5 million items of cookware will have been distributed amongst Cuban families, including new pressure cookers, rice cookers, electric pressure cookers and electric hotplates with a variable power of 1,200, 900 and 600 watts.
He commented that only a war, a great international conflict, could prevent those objectives from being fulfilled. And it is possible that before the year ends, four out of every five families that have electricity but cook with kerosene will cease using this costly, inefficient, and harmful fuel; and that no less than 50 percent of those who today consume liquefied gas will also be cooking using electricity.
The president described as “a black hole of electricity” the range of breakdowns, irregularities, and inefficiencies in the functioning of electrical equipment (such as refrigerators), electricity plants, connections, and transformers, amongst others. The cost of this lost electricity is equivalent to $100 million, “but we are going to convert this ‘hole’ into a great reserve at minimum cost,” he stated.
“We are short of dollars to pay for soap, sanitary towels, and toothpaste, and we are going to make up the shortfall using government savings; that’s what we’re doing in this context,” he added.
At the beginning of his speech Fidel said that he had a long list of views on his previous special addresses expressing optimistic sentiments from the vast majority of our people. Nevertheless, he affirmed that he would prefer critical opinions irrespective of whether they were correct or not.
He noted that the country is making a great effort to carry out what he called “an economic and social countercoup of the Cuban Revolution,” in the face of attempts to strangle and liquidate us. He likewise emphasized that it is necessary to give information to the population to help to clarify problems, reflect and understand, and “fight, fight, and fight!”
Opinions expressed by the population refer favorably to improvements in the family shopping basket and the idea of handing over packaged goods, given that that should ensure that everybody receives what is due to them.
There is concern over problems related to the drought that is affecting various territories of the country, making food production more difficult and increasing prices. At the request of the president, Carlos Lage and Bárbara Castillo, secretary of the Executive Committee of the Council of Ministers and minister of domestic trade, respectively, explained the government policy of providing additional quantities of foodstuffs for the population of the eastern provinces, which have been distributed for a number of months now via the ration system and parallel market.
Opinions were reiterated on the need to increase state control over the water-distribution structures and to keep people constantly informed on methods of addressing that problem and actions underway to overcome it.
It was also proposed to center attention on the control of produce and prices in the farmers’ markets, a basic outlet for the population, as well as concerns that certain foodstuffs do not meet people’s expectations.
As was the case last time, Party, state and government, and Young Communist League leaders were present at this third address by the president, as well as representatives of the mass and official organizations and combatants from the Revolutionary Armed Forces and the Ministry of the Interior.
—Granma International, March 25, 2005