Two Currencies, One Island
For nearly thirty years Cuba ran two currencies and two parallel economies, which put surgeons behind the wheel of taxis. The unification of 2021 removed the duality and arrived alongside shortages, blackouts and the largest emigration in modern Cuban history. A portrait that holds both sets of facts at once.
The paladar occupies the front room of a house in Centro Habana, four tables, a ceiling eighteen feet high, and a wall of shelves holding exactly the ingredients the owner managed to obtain this week. The menu is spoken, not printed, and it is short because it is honest. There is fish today. There may not be fish tomorrow. The rice is guaranteed.
Every economic fact about modern Cuba is visible in that room: the private enterprise that was illegal within living memory and is now the sector everything depends on, the supply chain that cannot be relied upon, and the gap between what a state salary buys and what a meal costs, which is the central problem of Cuban life and the thing a visitor is least equipped to see.
How the money got complicated
For nearly three decades Cuba ran two currencies simultaneously. The Cuban peso, in which state salaries and rationed goods were denominated, and the convertible peso, pegged to the dollar and used in tourism and import-facing sectors. The system was created in the 1990s emergency and became structural.
What it meant in practice was two parallel economies inside one country. A doctor paid in ordinary pesos earned, at the official conversion, a small fraction of what a taxi driver or a hotel worker earned in convertible pesos. This produced the phenomenon Cubans call the inverted pyramid — the surgeon driving the cab, the engineer renting rooms — and it hollowed out the professions that the education system, genuinely excellent, kept producing.
The convertible peso was withdrawn in 2021 in a unification the government called the Tarea Ordenamiento. It resolved the formal duality and coincided with a severe inflationary period, the collapse of tourism during the pandemic, tightened US sanctions, and shortages of food, fuel and medicine that have persisted since. Informal dollar and euro exchange has expanded to fill the gap, at rates that bear little relation to the official one.
For a visitor this means a specific set of practical warnings that change too fast to write down safely. US-issued cards do not work. Other foreign cards work unreliably and sometimes not at all. Cash is essential; which cash, and how it is best exchanged, is a question to ask the week you travel from a source dated that month. Casas particulares and paladares increasingly quote in foreign currency. Anyone who tells you a rate confidently in a blog post from last year is telling you about a country that no longer exists.
The private sector that keeps appearing
Private enterprise in Cuba has been legalised, restricted, re-legalised and re-restricted repeatedly since 1968, and each expansion has been driven by necessity rather than doctrine.
The 1990s were the decisive moment. The collapse of the Soviet Union removed the subsidies and trade arrangements that the economy had been built on, and the resulting Special Period saw GDP fall by a third, transport nearly stop, and average calorie intake decline measurably. In response the state legalised self-employment in a defined list of occupations, permitted family restaurants — paladares, capped at a handful of seats — and allowed households to rent rooms to foreigners as casas particulares.
Reforms since 2010 expanded the permitted categories substantially and, more recently, allowed small and medium private enterprises to incorporate formally. The cuentapropistas — the self-employed — now account for a large and growing share of employment, and in tourism they are effectively the whole visible economy.
This matters directly for how you travel. A casa particular puts money into a household. A state hotel puts it into a state enterprise, often in a joint venture with a foreign chain, with military-linked holding companies involved in parts of the sector. Both are legal; they are not equivalent, and there is no neutral option.
There is no way to spend money in Cuba that is not a political act. The only choice is whether you make it deliberately.
What the revolution built, and what it did not
Any honest account has to hold two sets of facts at once, and most foreign writing about Cuba fails by holding only one.
On one side: Cuba achieved literacy rates and life expectancy comparable to far wealthier countries, built a medical system that trains doctors in surplus and exports them, eliminated diseases that persist elsewhere in the region, and did this while under a US economic embargo that has been in place since 1962 and is condemned annually by an overwhelming majority in the UN General Assembly.
On the other: the country is a one-party state. Independent political organisation is not permitted. Press freedom organisations rank it near the bottom globally. Protests in July 2021 — the largest in decades, driven by shortages and blackouts — were followed by hundreds of prosecutions and long sentences. Emigration in recent years has reached a scale comparable to the largest exoduses in Cuban history, and it is overwhelmingly the young who leave.
Cubans themselves discuss all of this with a directness that surprises visitors expecting caution, and with a range of views that resists any summary. The one thing almost everyone agrees on is that the current situation is not working and that their children are leaving.
Sugar, and the reason for everything
Cuba’s entire history is a single crop and the labour used to grow it. Understanding that makes the rest legible.
The Haitian revolution of the 1790s destroyed the world’s largest sugar producer overnight, and Cuban planters — many of them French refugees from Saint-Domingue arriving in the east — moved to fill the gap. The island became the dominant sugar exporter on earth, and it did so on the backs of an enormous forced migration: several hundred thousand enslaved Africans were landed in Cuba, with the trade continuing illegally for decades after formal abolition of the traffic. Slavery itself was not abolished here until 1886, later than almost anywhere in the hemisphere.
That demographic history produced Cuban culture directly. Santería — more properly Regla de Ocha — mapped Yoruba orishas onto Catholic saints in the same defensive manoeuvre used in Brazil, and remains widely practised; the white clothing worn for a year by initiates is a common sight in Havana. Rumba, and later son, mambo and salsa, came out of the same populations and the same ports.
After independence the crop stayed and the dependency changed shape. The Platt Amendment gave the United States a right of intervention and a naval base at Guantánamo; American capital took a large share of the mills; and by the 1950s Havana was a playground economy of casinos and hotels with a rural interior of seasonal cane-cutting poverty.
The revolution nationalised the mills and then sold the crop to the Soviet bloc at above-market prices under long-term agreements — which was a subsidy in the form of a trade deal, and which meant the economy remained a sugar monoculture with a different buyer. When the Soviet Union dissolved in 1991, the buyer vanished, and the Special Period followed within months.
The industry has since collapsed to a fraction of its former output, and the countryside is scattered with dead mills and the towns that served them. Cuba, for most of two centuries the world’s sugar bowl, now imports sugar in some years. There is no more compact illustration of what the island’s economic problem actually is.
The physical country
Havana is the reason most people come and it does not disappoint, although not in the way the photographs suggest. The Malecón, eight kilometres of sea wall, is the city’s living room. Habana Vieja has been restored building by building over decades under the city historian’s office, funded substantially by tourism revenue reinvested locally — a model that was unusual and effective. Centro Habana, immediately west, has not been restored and buildings collapse there with regularity, which is a fact of the housing stock rather than an aesthetic.
The American cars are real and are a consequence of the embargo: no imports after 1960, so what existed was kept alive with fabricated parts and, frequently, Soviet diesel engines. The mechanical ingenuity involved is genuinely remarkable and is the same ingenuity applied to everything else on the island.
Beyond the capital: Viñales, where tobacco is grown in a valley of limestone mogotes and cured in palm-thatched barns; Trinidad, a sugar-boom town frozen in the 1850s when the industry collapsed, cobbled and UNESCO-listed; Santiago de Cuba in the far east, hotter, more Caribbean, more African, and the birthplace of son, which became salsa. Baracoa, at the far end, was cut off by land until a road was cut over the mountains in the 1960s and cooks with coconut in a way the rest of the island does not.
Travelling here without lying to yourself
The practical advice is unusually consequential. Bring everything you need — medicines, toiletries, batteries — because shortages are real and the pharmacy will not have it. Expect power cuts. Expect the internet to be limited, expensive and sometimes restricted. Expect plans to change.
Stay in casas particulares, eat in paladares, hire private taxis, and tip in hard currency, because that is how money reaches households rather than institutions. Bring things to leave behind — the specific requests you will hear are for medicines, vitamins and school supplies.
And resist the framing that the whole tourism industry pushes, in which Cuba is a place preserved in amber, charmingly stopped in 1959, to be photographed before it changes. The cars are old because of an embargo. The buildings are crumbling because there is no material to repair them. Nothing here is preserved. It is enduring, which is a different verb, and the people doing the enduring are not a backdrop.
Diego is a bogotano journalist who has covered his city’s reinvention for fifteen years — transit, food, altitude and all. He rides Ciclovía every Sunday and will defend ajiaco against all comers.