Cuba relying more on dollars

Cuba’s economy is so low for a number of reasons that it now relies far more on the US dollar to prop up its economy.

Lines that stretch back hundreds of metres along Third Avenue in Havana's Playa district are a daily occurrence to stock up on essentials. Many queue for hours in the blazing sun.

They are shopping for much-needed essentials including baby milk, shower gel, meat, cheese, cleaning products and personal hygiene items. However, the catch is that the only acceptable form of payment is in US dollars.

For years, an inefficient, centrally controlled economy and a decades-long US economic embargo have made scarcity and queuing regular features of daily life in Cuba. Recently, though, things have become especially tough.

Cuba is overly dependent on imports, which account for some 80 percent of what the nation consumes. Despite largely controlling the coronavirus outbreak, lockdown has brought halted tourism in Cuba and the resulting drop in foreign exchange earnings means fewer dollars to pay for imports.

Meanwhile, the Trump administration has spent the past four years ramping up the embargo and imposing harsher sanctions on shipping, travel and remittances.

To make up for the shortfall in dollars, the government took a step it would probably have avoided under normal circumstances and turned 72 of the nearly 5,000 state-run shops in Cuba into "dollar stores".

Inside the stores, customers do not hand over foreign banknotes at the tills. Rather, they must pay by card - either one linked to a Cuban bank account with deposits in a foreign currency or using an international debit or credit card, except those from US banks.

But most people on the island do not have a regular income in hard currency, especially those without family members abroad. It has led to a disparity in who can afford essentials and who can’t.