By Dalia Acosta
HAVANA, Jun 5 2002 (IPS)

Cubans have found they need more dollars since Monday to be able to buy clothes and shoes, or refrigerators, washing machines and other goods considered non- essential by the socialist government of Fidel Castro.

After several weeks of rumours and unofficial reports, the rise in most of the prices of products sold in the government chain of stores that only take dollars – the Tiendas de Recaudación de Divisa (TRD) – went into effect this week, accompanied by a “modest” drop in prices of a handful of basic items.

Powdered milk, which used to cost 5.80 dollars a kilo, dropped slightly to 5.70, while half a litre of condensed milk went from 1.50 to 1.35 dollars. But while the price of frozen chicken was reduced from 2.75 to 2.50 a kilo, smoked chicken shot up to 3.05 dollars a kilo.

The prices of several brands of toilet soap, toothpaste, shampoo and detergent, all of which are in high demand, were lowered between five and 15 cents of a dollar. At the same time, a domestically produced hair conditioner rose from 1.65 to 2.00 dollars.

The government legalised circulation of the dollar in Cuba in 1993. Since then, a large chain of TRD or dollar stores has been offering a broader selection of goods than the shops that sell in pesos.

“If you reduce the prices of a few products by 10 percent and impose price hikes of 10, 20 or 30 percent on just about everything else, that’s no price cut,” a saleswoman in a home appliances store – where “the prices of everything have gone up” – told IPS.

The woman, who spoke on condition of anonymity, pointed to a pressure cooker, whose value had risen from 73 to 83 dollars. “It was already expensive. You have to be ‘maceta’ (nouveau riche) or receive a lot of money from (relatives) abroad to be able to afford one,” she said.

An unofficial document that circulated among foreign correspondents reported a 10 percent rise in the TRD prices of beef, cheese, mayonnaise, olives, crackers, chocolate, clothing, textiles, footwear, handbags, home appliances, furniture, non- essential articles of personal hygiene, household furnishings, bicycles and film for cameras.

Hair products, with the exception of shampoo, and shaving products rose 20 percent. The biggest price hike, of 30 percent, was reserved for stereos and batteries for electronic equipment.

The government said the price hikes are necessary to offset the effects of the rise in the prices of oil and other imported products, and of the slump in the prices of Cuba’s main exports, like sugar and nickel.

The Ministry of Economy and Planning stated in a communique Friday that other factors leading to the decision to raise prices were the slow recovery of the local tourism industry in the wake of the Sep 11 terrorist attacks on New York and Washington, and the drop in demand for Cuban cigars.

After studying the prices of 1,092 products for several months, the government reached the decision to modify the prices of items sold in dollars, according to the statement.

“Around 37 percent of sales in TRD stores involve food and 14 percent involve basic personal hygiene products, the prices of which have been reduced, if only slightly,” said the ministry.

The price hikes “are smaller or greater, depending on what kind of product is involved, and do not apply to the same extent to articles of basic necessity,” added the communique.

The government documents did not mention the prices of gasoline or diesel, whose price hikes have apparently been postponed until Jun 10 or even cancelled, according to sources consulted by IPS.

The Ministry of Economy and Planning said the price changes would benefit the majority of the population, whose earnings mainly go to food and personal hygiene products.

According to official sources, around 60 percent of Cuba’s 11.2 million people have access to dollars through remittances sent home by family members living abroad, government work incentives, or legal and illegal private enterprise initiatives.

The peso trades at 26 to the dollar, and the average salary in Cuba is 245 pesos a month. Cuba’s labour laws do not allow the payment of salaries in dollars, with very few exceptions.

Nevertheless, thousands of people flocked to home appliance stores in Havana last weekend to purchase refrigerators, washing machines, gas cooking stoves, irons or VCRs before prices went up.

Magda Pérez, a 64-year-old retiree, visited more than 10 stores in a fruitless search for a refrigerator that cost less than 600 dollars. “There were places where over 100 people were in line, and the model I was looking for was sold out everywhere.

“I have had the same Russian-made refrigerator for over 20 years,” she told IPS. “It produces an enormous buildup of ice, and I have to defrost it every week. I’ve been saving money for I don’t know how long, to replace it with a modern unit, one of those frost-free refrigerators.”

Pérez was one of many people visiting stores in Havana Monday to find out about the new prices. Most were just looking around, commenting on the situation, while a few purchased some of the products whose prices had gone down.

Another was Alba Gómez, 47, who said she felt that she had benefited by the government’s decisions. “At most, I can scrape up five or six dollars a month, which goes towards soap, detergent and cooking oil,” said Gómez.

Experts consulted by IPS said the higher prices might curb consumption and thus lead to a reduction in the flow of hard currency into state coffers, rather than an increase, which was the main objective of the new measures.

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