Friday, February 5, 2016

Last week, I noted that the popular ice cream store Coppelia illustrates a problem posed by  Cuba’s dual currency system. 

Coppelia illustrates another problem as well. It offers fewer flavors than it used to offer. And, as the photo shows, the lines can be long, especially for people buying with nonconvertible pesos. The line looks jagged, because Coppelia has a different way of doing this than we have in the U.S. When you show up, you shout “Ultima!” or “Last!” The last person in line raises his or her hand, letting you know who you follow. While you are waiting for that person to reach the window, you can wander around, go to the restroom, or just sit around waiting. But you don’t have to stand in line. When the other guy shows up at the window, you just fall in behind him.

Given the opening of relations with Cuba, it is likely that foreign ice cream chains will want into the Cuban market. How will Coppelia survive if it has to compete with well-run companies like Ben and Jerry or Dairy Queen? Customers at a well-run Ben and Jerry Ice Cream Shop probably won't put up with the long lines at Coppelia.


This problem will expand beyond Copelia. As Cuba engages more fully with the world, the government will lose its ability to protect its state-run industries from competition, Huge swaths of the economy will come under pressure.

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