Inequality and the Informal Market in Cuba

Abstract: This research focuses on Cuba’s economic changes that have been unraveling since the 1990s but has had significant impacts in the past decade. The removal of economic restrictions paired with a rise in tourism has had several outcomes including economic growth for the country but a dismantling of the equality for which it has been previously praised. The changes in the economic atmosphere of Cuba have especially affected the Cuban minority of Afro-Cubans. The empirical research attempts to understand the limitations of income distribution contributing to the rise of inequality as well as a larger informal market due to the dual currency system that operates to capture hard currency. The research shows that barriers are ultimately a result of inheritance patterns and racist ideology that limits Afro-Cubans’ participation in the emerging sectors of the economy. This has particular relevance as Cuba continues to slowly transition into more capitalist ventures under a communist regime.