Dual economy of Cuba

The dual economy of Cuba was developed after the dissolution of the Soviet Union, which caused major economic changes on the island.

Tourism was regarded as the only stable sector of the Cuban economy and became the subject of policy changes to enhance its development.

To try to revitalize the economy the CUC currency was eliminated in 2021 and instead the Cuban peso is directly convertible to US dollars.

After condemnation by human rights groups, Cuba changed policy and now associating with tourists is an informal taboo that often results in police harassment.

These protests had been built up by years of Cuban nationals receiving visits from their exiled relatives who were observed to be much more financially successful, as well as the luxurious lifestyle possessed by many of the island's new tourists.

These factors had driven in the idea that Cuban nationals were suffering under a worse standard of living not experienced by those outside the island.

[13] In January 2021, a process of currency unification began, with Cuban citizens being given six months to exchange their remaining CUCs at a rate of one to every 24 CUPs.

[16] The emergence of the dual economy had a major impact on the underlying egalitarianism espoused by the Cuban revolution.

[17][18][19] Two parallel economies and societies quickly emerged, divided by their access to the newly legalized U.S. dollar.

As such, many of the citizens who flood tourist areas turn to illicit alternatives such as prostitution or unlicensed self-employment (often offer taxi services, currency exchange, host casas particulares, etc.

This legalized practiced had led to allegations of informal racism since most workers at tourist enterprises end up being most often white Cubans.

Most of the resort enclaves outside Havana are on the islands of northern archipelagos, which are a good geographic distance from the mainland and often have no permanent residents.

This redevelopment has come at the expense of the relocation of many locals who had their apartments turned into hotels, as well as a total lack of revitalization efforts elsewhere in Havana or Cuba in general.