Demand and Supply

Another day, another shocker from the AP.

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This one from someone I've harshly criticized for candy coating conditions in Cuba, Anita Snow.

President Raul Castro has lifted restrictions on consumer goods and hotel stays, but most Cubans get paid in virtually worthless pesos, which can't buy basic items like toilet paper, let alone a DVD player or poolside mojito cocktails at the Hotel Capri.

Nearly everything Cubans want or need must be bought with a separate currency created for tourists and foreigners. So, until the regular peso increases in value, Castro's moves will be bittersweet gestures.

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According to Snow, Cubans are now eagerly awaiting Raul's next trick-unifying the currency.

The new leader's solution, now the talk of the island: merge the two currencies. But this turns out to be much easier said than done.

This is Raul's great problem. He has created expectations that he is going to institute significant "structural changes" and everyone is waiting..i.mpatiently and the clock is ticking.

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In her piece, Snow is skeptical that Raul, the non magician, will be able to pull this trick off. Frankly, so am I because the Castro brothers have never been able to create any wealth which is really the only way to have economic growth.

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The unfulfilled expectations for change might lead to even more frustration and eventually lead to demands, then protests and then demonstrations which Raul will try to brutally squash. By all accounts, the Cuban people, not particularly known for our patience, are already beginning to demand changes-i.e.the university student video, for example.

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The title of Snoew's article: Cuban Demand: Power to the Peso!

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Interesting times.