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GOOD BYE TO DUAL CURRENCY IN CUBA

Cuba announced today it was ending an unpopular 19-year-old dual currency system that has contributed to a growing wealth gap between Cubans with access to dollars and those without. The official Communist Party newspaper Granma said the new unified currency would be phased in over time. Under the current system, Cuba exchanges dollars received through tourism, trade and overseas remittances into convertible Cuban pesos at a rate of one for one. But the state pays workers' salaries and charges for services in ordinary pesos, which are worth far less, 24 to one convertible peso. Many basic necessities here are available only in convertible pesos at special state-run stores, a source of tension between Cubans who have access to dollars and the majority who don't. Ending the dual system, which has been in effect since 1994, was a key demand raised at the VI Communist Party Congress in April, 2011. Under President Raul Castro, Cuba has been slowly overhauling its Soviet-style economy, allowing private enterprise on a small scale as it tries to slim down hulking state-run bureaucracies. Granma said Cuba's council of ministers approved a timetable for implementing "measures that will lead to monetary and exchange unification." While it was not clear how long the changeover will take, Granma said it would begin with companies operating in Cuba and extend to individuals at a later date. Granma said the change would contribute to efficiency, improve the way economic events are measured and serve as a stimulus to enterprises that export goods and services, as well as to those that produce for local consumption.

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