Remittances support budding Cuban economy

Remittances support budding Cuban economy
BY JACK EVANS
evansjm4@miamioh.edu

Despite the U.S. trade embargo on the island of Cuba, many
Cuban-American families are supporting the economic recovery and growth
of their relatives through remittances.

The total value of Cuban remittances in both cash and goods in 2015 was
estimated to be over $3.3 billion by The Havana Consulting Group, a
business consulting firm specializing in Cuban marketplaces. This figure
places remittances as the largest source of cash in the Cuban economy.

The U.S. Department of State estimates the value of remittances at a
significantly lower $2 billion annually. The exact dollar amount of
remittances can be difficult to track, says Karell Acosta Gonzalez, a
PhD researcher at University of Havana's Center for Hemispheric and U.S.
relations.

"It's difficult to talk about those figures because many of those
remittances get to Cuba with people," says Acosta. "They are carried in
with bags."

According to Western Union, 90 percent of remittances sent to Cuba
through their corridors — estimated at $2.8 billion in 2013 — come from
the U.S. Nearly 62 percent of the Cuban homes receive remittances,
according to the Economic Commission for Latin America and the Caribbean.

The use of U.S. dollar was legalized in Cuba in 1994 during a time of
severe economic hardship known as the "Special Period" that followed the
collapse of the Soviet Union and loss of all Soviet subsidies. The move
was an effort by the Castro regime to bolster the Cuban economy.

"It was approved in that moment to use the dollar because we knew that
if we approved the use of the dollar here in Cuba, the families would
help the Cubans," says Karina Marron Gonzalez, the national newsroom
department head of Cuba's communist party newspaper Granma. "It was a
decision because we needed it."

The effect of that decision and subsequent explosion of remittances as a
source of income for Cubans with family in the United States is
currently a major factor in the changing Cuban economy.

"They are important, especially to some sectors of the Cuban society
—those who have a relative in Miami or New Jersey or other areas of the
U.S," says Acosta.

In 2013, 8.6 percent of all Cuban workers, or about 424,000 people were
self-employed, reports the Pew Research Center. This number is up from
144,000 Cubans in 2009.

A significant portion of the funding of these entrepreneurial
enterprises, labeled "cuentapropismo" by the Cuban government, comes
from remittances.

Thirty-two percent of a sample group of 768 self-employed Cubans
received funding through remittances, according to a 2014 survey
conducted by the Association for the Study of the Cuban Economy.

Within the last several years, the U.S. government has made it
significantly easier for remittances to be sent to Cubans. Since Sept.
21, 2015, the U.S. Treasury has removed all dollar limits on donative
remittances to Cuban nationals, except for some prohibited officials of
the Cuban government. The removal of this restriction applies to both
electronically wired remittances as well as carried ones.

This entrepreneurial drive represents an effort by many Cubans to carve
a better life for themselves out of the recent poverty in their country.

"Right now we are paying many debts we have to many different countries.
It is a surprise to so many people — how did we survive during that
time?" says Marron. "We asked for money from everyone to pay those
things because it was important for us. Right now, we are trying to
change that."

This article is part of the series Stories from Cuba, produced by
students from Miami University. Information from InCubaToday was used to
supplement this report.

Source: Remittances support budding Cuban economy | In Cuba Today -
http://www.incubatoday.com/news/article88891152.html