In recent years, tourist income from all over the world has been flowing into the Cuban economy as visitors take in the sights of Havana and stroll along the sunbaked sands of small beach towns such as Baracoa Varadero and Guanabo that lay on Cuba’s golden coasts. As former president Fidel Castro’s health continues to decline and the current Cuban leader, his brother Raul pushes for more reforms to a system that has made economic growth a difficult and tedious process, luxury resorts report that they have few vacancies, and demand for service industry workers is at an all time high. Last year, more than three million tourists visited Cuba, making tourism the country’s number one source of foreign revenue. However, the particular idiosyncrasies of building a robust tourism industry in Cuba have led to a dual monetary system that allows one group (those who have access to money spent by tourists) to take home an exorbitant salary and enjoy luxury items, while most other Cubans struggle to make do with a far less valuable currency and little access to commodities beyond the basics needed for everyday life. This has led to an incongruous circumstance where a waitress serving international tourists at a luxury hotel may earn as much in tips in one night as a medical doctor earns in a month.
A bit of history is helpful to understand how things got this way. Early in the 20th century Cuba gained a legendary and well-deserved reputation as an exotic playground for wealthy Americans looking to indulge every imaginable vice, and spending plenty of dollars in the process. And not surprisingly, money spent in Cuba did very little to improve the living standards for the vast majority of the Cuban population, which struggled in the throes of poverty, ignorance and despair. The Great Depression, the 1933 repeal of Prohibition in the 1930s and World War II put a damper on Cuba as a tourist destination. But by the end of the decade, Cuba bounced back and Americans again arrived in droves to enjoy the agreeable climate, beach resorts, and especially the infamous nightlife of Havana including hotels, food and big-name entertainment. Organized crime came to control many illicit industries around the tourist industry, such as prostitution and narcotics trade. Hollywood celebrities, famous writers and artists visited Cuba. Some, like Ernest Hemmingway, made Cuba their second homes. By the 1950s cheap flights and hotel deals made the once-exclusive hotspot accessible to many more Americans.
After the 1959 Revolution, relations between the US and Cuba deteriorated. By 1961, illicit industries were curtailed, burlesque clubs, casinos and brothels were shuttered, and Cuba embraced Marxism. President Kennedy imposed a trade embargo that included a travel ban by US citizens that is still in effect today. By the mid-1960s Cuba’s government prohibited all private property on the island and outlawed foreign currency. This meant the de facto end of the country’s tourist industry as it existed prior to the Revolution. Those who travelled to Cuba in the decades of the 60s, 70s and 80s were typically powerful elites from Soviet-block countries. Things changed dramatically with the dissolution of the former Soviet Union in the early 1990s. And although the Cuban government continued to provide access to free healthcare and education, during the difficult time euphemistically referred to as "the Special Period," the island experienced a severe economic depression; the decline of the sugar and other agricultural industries led to food shortages, unemployment, a lack of petroleum products, and general insecurity among the population. The government decided that the struggling country needed to patch the hole in its economy by investing in tourism expansion hoping that foreign cash would stabilize the sinking ship. The Cuban Ministry of Tourism was created in 1994, and the Cuban state invested heavily in tourist facilities, including airports, hotels, transportation, and services. In order to accommodate and finance this expansion of tourism, changes needed to be made to Cuba's socialist economic policies. These included allowing foreign held capital to be invested in Cuban ventures, as well as gradual relaxation of the laws prohibiting Cubans from privately selling homegrown foods, and those activities central to tourism such as operating restaurants and guesthouses or serving as guides and interpreters.
However, while many Cubans have enhanced their incomes through private enterprise, those Cubans employed in the tourist industry still work for the state. What makes these employees so privileged? One underlying cause, and the reason why in spite of its Communist ideals Cuba continues to be a society of vast class differences, is the dual-currency system. In August 1993, forced by economic necessity, Fidel legalized the use of US dollars, reversing a decades old law that had made possession of the American currency punishable by prison. Suddenly, it became legal to have a bank account in U.S. dollars, and chains of state-run stores were set up for retail sales in dollars. Four months later, the convertible peso or CUC was created. Although the Cuban government has recently announced the eventual elimination of the dual-currency system, it is still in effect today. Under this system, average Cubans use the Cuban peso, or “moneda nacional,” with which state salaries and pensions are paid. The convertible peso (CUC), comparable to the dollar and whose exchange rate is 25 times that of moneda nacional, is used mostly in the tourism sector and in stores where imported products are sold. Cubans with relatives abroad may also receive remittances from family members, which allow them to purchase goods with the hard currency.
According to Cuba's National Statistics and Information Bureau (ONEI) the mean salary for most Cubans is about $20 a month. This is true even in the rapidly-growing private sector, which Raul Castro has permitted to expand as a way of providing relief for the state's bloated public sector. Even though doctors are among the best compensated professionals in Cuba, and they have received substantial pay raises in the past year, the highest-paid doctors in Cuba now earn from 627 to 1,600 pesos monthly— about twice the average salary for all doctors but still only $61 per month. And since Cuba, which suffers from scarcity on so many fronts, actually has a surplus of medical professionals, many Cuban doctors also are sent to work overseas, notably in Venezuela and Brazil, where they earn somewhat more than their regular salaries, but far less than what is typical in their host countries. The Cuban government takes in many billions of dollars annually from the "export" of doctors and nurses. And even though the Cuban doctors are living and working abroad, they are still paid in Cuban pesos, as other public employees.
Meanwhile, those who have access to the CUC, whether in the form of a tip given for good service at a luxury hotel restaurant, or from dollar-based bank accounts or remittances from abroad, continue to enjoy a relatively lavish lifestyle, which includes the ability to purchase black market items, cell phones, cosmetics, high quality medicines, and a wide variety of commodities that in the US are considered commonplace. And while the dual-currency quandary may be addressed by the eventual dismantling of the system and the elimination of the CUC, the more difficult issues of economic stagnation and scarcity remain. As tourism (including medical tourism!) in Cuba continues to increase, and will certainly spike in the eventuality of a loosening of the US economic blockade, one must certainly wonder how many doctors and nurses aspire to work in the tourism industry.