Tuesday, June 24, 2014

With Cash And Fat Fryers, Americans Feed Cuba's Growing Free Market

With Cash And Fat Fryers, Americans Feed Cuba's Growing Free Market
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By Greg Allen
With more people traveling between Cuba and the U.S., money and goods
are moving, too. The influx has allowed Cuban-Americans to become
investors in the island's emerging private sector.
Tuesday, June 24, 2014

Every day, you can see signs of a subtle change in relations between
Cuba and the U.S. at Miami International Airport.

More Cubans than ever before are coming to the U.S. to visit, and the
number of Cuban-Americans traveling back to the island is also at record
levels. With all the visitors, money and goods are now traveling to the
island from the United States.

It's a legal loophole in the 50-year-old trade embargo — one that's
having a real impact on Cuba's economy, and allowing Cuban-Americans to
become investors in Cuba's emerging private sector.

'A Big Deal'

Shortly after taking office, President Obama made it possible for more
Americans than ever before to travel to Cuba. He began by lifting
restrictions on Cuban-Americans. Before the change, they could travel to
Cuba only once every three years.

Last year, Cuba's government made an even more unexpected move: It began
allowing its citizens to visit the U.S., with few restrictions.

Now, eight or nine regularly scheduled charter flights leave Miami daily
for Havana and other Cuban cities. At the airport, nearly everyone
waiting in line is carrying packages and large suitcases, even
flat-screen TVs and other appliances.

Ana Dilla was waiting in line recently with her two in-laws, who were
returning home to Cuba after a short visit. Their bags were full of
goods they purchased to take home.

"Hair items, clothing, shoes, hygiene items, makeup," Dilla says — all
items that are hard to get in Cuba.

Traveling from the U.S. to Cuba is still a hassle. There are
restrictions on the type of goods you can bring and how much. Over a
certain limit, and travelers pay a penalty. Cuba also assesses customs
duties on some goods.

But Dilla says the new freedom to travel has made a big difference to
her in-laws and others in Cuba.

"It was a big deal for them, absolutely," she says. "It was much easier
than in the past so it's a good thing. Things are getting a little bit

Because of the changes in regulations in both countries, travel between
the U.S. and Cuba is at record levels — and growing. That includes
so-called people-to-people travel, trips that are organized by groups
for education or cultural exchange.

But by far, most of the travel to Cuba is by Cuban-Americans, and it's
having an important economic impact on the island.

"The presence of the Cuban-Americans is just undeniable," says Joe
Scarpaci, who heads the Center for the Study of Cuban Culture and the
Economy and has co-authored a book on Cuba's emerging consumer culture.

Perhaps even more important than their travel are the unrestricted
remittances Cuban-Americans can now send back to family on the island.
Scarpaci estimates that goods and cash sent by Cuban-Americans now is in
the range of $5 billion a year, making it the nation's second largest
source of income.

Using a Cuban slang term, he calls it, "Gusanos carrying gusanos."

"Gusano is the derogatory term that the folks of the island refer to
when the Cubans left the revolution — they crawled away from the glories
of the revolution. Now they're bringing back these duffel bags that are
long and shaped like worms, or gusanos," Scarpaci says.

The goods carried in those duffels aren't just clothing and cologne.
Deep-fat fryers, power saws, electric drills and soldering irons are in
great demand in Cuba. Scarpaci says he knows of many small businesses
there that have started up with goods and cash supplied by Cuban-Americans.

"From small restaurants to home body repairs to plastic-mold makers for
use of children's toys. In every one of those instances, the capital for
that has come from family members abroad," he says.

Free Market Activity

Nearly 600,000 U.S. travelers — mostly Cuban-Americans — visited Cuba
last year. Polls show a majority of Cuban-Americans now support
unrestricted travel to Cuba. A majority also believe Americans should be
allowed to invest in Cuban businesses.

There are some, though, who believe unrestricted family travel has led
to abuses. Mauricio Claver-Carone is the director of the U.S.-Cuba
Democracy PAC, a lobbying group in Washington that takes a hard line
against any move to weaken sanctions on Cuba. While he believes that
taking a trip back to Cuba once a year to see family qualifies as
humanitarian travel, he says others are gaming the system.

"People that are going back to Cuba more than once a year is not
humanitarian. They're essentially residing in Cuba. They have some type
of business practice that they've established by taking goods back and
forth. They're called mulas," he says.

The Miami-to-Cuba "mules" carry goods and cash, and, at least for some
Cuban-Americans, it's a legal end-run around the trade embargo.

"And essentially, they charge per pound or they charge per package,
things that they take to Cuba, so they've established a business
practice ... traveling to the island back and forth," Claver-Carone
says. "That is not the purpose of the regulations. That's a business
practice. And that should be illegal."

There are others though who say this is the kind of thing unrestricted
travel and remittances were intended to accomplish. By traveling
frequently to the island and helping — maybe even investing in —
businesses run by family members, Cuban-Americans are helping spur the
kind of free market activity long sought by the U.S.

Those who favor engagement between the U.S. and Cuba say the next steps
should include lifting all restrictions on travel to the island and
allowing U.S. visitors to use credit cards there.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Source: With Cash And Fat Fryers, Americans Feed Cuba's Growing Free
Market - capradio.org -

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