For more than 60 years, Cuba supplied at least some rice, milk, beans, sugar, chicken, electrical power and even cigarettes to its people nearly free of cost regardless of whether they worked, allowing many to survive without a job or depend solely on remittances.
But this year, the government is implementing a deep financial reform that reduces subsidies, eliminates a dual currency that was key to the old system and raises salaries. It hopes to boost productivity to alleviate an economic crisis and reconfigure a socialist system that will still grant universal benefits such as free health care and education.
“It’s a major shift in focus for a society that has lived and functioned one way for 62 years,” said Cuban economist Ricardo Torres. “This sends a message: If you want to be in a fairly comfortable situation, then you have to get a job.”
The changes come as Cuba struggles with the pandemic, an 11% drop in gross domestic product and the loss of what the government estimates is nearly $5.6 billion as a result of economic sanctions imposed by outgoing U.S. President Donald Trump.
Until Dec. 31, Cubans would pay 75 cents for a monthly basket filled with 19 basic products including meat, coffee, eggs and soap. Now that will cost them $7, according to Betsy Díaz Velázquez, minister of internal trade.