01/05/14 - Al Jazeera America - Cubans allowed to buy cars for the first time in decades
Cubans awoke on Friday for the first time in half a century with the right
to buy new and used vehicles from the state without special permission, but
price markups of 400 percent or more quickly dashed most people's
A new Kia Rio hatchback that starts at $13,600 in the United States sells
for $42,000 in Havana, while a fresh-off-the-lot Peugeot 508 family car,
the most luxurious of which lists for the equivalent of about $53,000 in
the U.K., will set one back a cool $262,000.
"Between all my family here in Cuba and over in Miami, we couldn't come up
with that kind of money," said Gilbert Losada, a 28-year-old musical
director. "We're going to wait and see if they lower the prices, which are
really crazy. We're really disappointed."
The average monthly wage in Cuba, where four out of five of the 5
million-strong labor force work for the state, is $20. Some make
significantly more as musicians, artists, diplomats, employees of foreign
companies and doctors sent on foreign missions. Many others get financial
support from relatives overseas.
But some who had managed to scrape together some savings said they're now
priced out of the market.
"Let's see if a revolutionary worker who lives honorably on his salary can
come and buy a car at these prices," said Guillermo Flores, a 27-year-old
computer engineer. "This is a joke on the people."
Cuba's Communist-run government traditionally has placed huge markups on
retail goods and services paid for with hard currency, a policy that
amounts to a tax on people who can afford such goods. The practice applies
to everything from dried pasta to household appliances to Internet access.
The astronomical sticker prices on the cars will likely mean fewer sales
and the state leaving money on the table, noted Philip Peters, a longtime
Cuba analyst and president of the Virginia-based Cuba Research Center.
"There's a lot more money to be made at lower price points," Peters told
The Associated Press. "It's a short-sighted tax-man's mentality. ...
Paradoxically, they mark it up so much that they're not going to make any
money. But that's the mentality."
Under a reform two years ago, Cubans could buy and sell used cars from each
other, but until Friday had to request authorization from the government to
purchase a new vehicle or second-hand one, usually a rental car, from state
Before September 2011, only automobiles that were in Cuba before the 1959
revolution could be freely bought and sold, which is why there are so many
1950s or older cars, most of them American-made, rumbling through Cuban
Along with Cuba's famous rolling museum of vintage U.S. cars, there are
also many Soviet-made cars, dating from the era when the Soviet Union was
the island's biggest ally and benefactor.
Newer models are largely in government hands and were sold used before
Friday at a relatively low price to select individuals such as Cuban
diplomats, doctors and teachers who served abroad.
Al Jazeera and wire services
Original Source / Fuente Original:
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