Havana is Cuba's commercial center. Provincial capitals are marketing and distribution centers of lesser importance. Camaguey is a cattle and sugar center, Santa Clara lies in the tobacco belt, and Santiago is a major seaport and mining city. Holguin has been transformed into a major agricultural and industrial center.
By May 1960, the National Institute of Agrarian Reform was operating about 2,000 "people stores" (tiendas del pueblo) , and by the end of 1962 all retail and wholesale businesses dealing in consumer essentials had been nationalized. In 1984 there were 27,301 retail establishments in Cuba. As of 2002, there were only about 200,000 independent farmers and only 100,000 private business owners. These private businesses are strictly controlled by the government.
Due to the US-organized trade boycott and the inability of production in the then-USSR and Cuba to meet Cuban demands, rationing was applied to many consumer goods in the 1960s and 1970s. By the mid-1980s, rationing had been reduced and accounted for about 25% of individual consumption. Allocation of major consumer items after 1971 was by the "just class" principle, with the best workers receiving priority. The availability of basic consumer items increased noticeably after 1980, when the smallholder's free market (mercado libre campesino) was introduced. Under this system, small-scale private producers and cooperatives could sell their surplus commodities directly to consumers once their quotas had been filled. However, the peasant markets were abolished in May 1986, allegedly because they led to widespread speculation and profiteering. It has been estimated that nearly 40% of the domestic economy operates in the "informal" sector, or black market.
Between $800 million and $1 billion per year is added to the domestic economy in the form of remittances from expatriates. Much of this comes from families residing in the United States, who are permitted to send a total of $1,200 per year. The Cuban government acquires these funds by allowing consumers to purchase products in state-run "dollar stores."