[Marxism] Paolo Spadoni: "Uphill battle to curb flow of U.S. cash to Cuba"

Walter Lippmann walterlx at earthlink.net
Tue Nov 29 06:57:37 MST 2005


(You might think that Washington's supposedly "pro-family" radical
rightist ideologues would understand that family ties are extremely
important to Cubans, and that Bush's attempt at starving Cuba into
submission by punishing Cuban-Americans and their families who are
still residing on the island would be doomed to fail, but doomed it
evidently is. This author has written several highly-informative
commentaries on the Cuban economy. He knows whereof he speaks!)
=================================================================

FOREIGN AFFAIRS

Uphill battle to curb flow of U.S. cash to Cuba
Paolo Spadoni
Special to the Sentinel

<http://www.orlandosentinel.com/news/opinion/orl-cuba2805nov28,0,1216435.sto
ry?coll=orl-opinion-headlines>

November 28, 2005

It has been almost a year and a half since the Bush administration
intensified its sanctions program with respect to Cuba by allowing
Cuban-Americans to visit relatives on the island only once every
three years, instead of annually, and limiting remittances just to
immediate relatives.

Mainly intended to deprive the Castro government of U.S. dollars,
Washington's new regulations consistently target a specific group of
U.S. citizens who channel into Cuba more hard currency than any other
group. In the past decade, remittances sent or personally delivered
by Cuban-Americans to family members on the island, and mostly used
for purchases in state-owned hard-currency stores, have provided an
economic lifeline to the same government U.S. policy was supposed to
undermine.

There is little doubt that President Bush's recent measures have
significantly reduced the number of U.S. visitors to Cuba, thus
depriving the latter of the hard currency that deterred travelers
would have brought for their personal expenses and for relatives.
Curbing the overall flow of remittances to Cuba, however, is a much
more difficult task.

Here is why U.S. authorities face an uphill battle in trying to
curtail money transfers to Cuba from the United States:

Instead of making use of formal wire-transfer services,
Cuban-Americans tend to rely on relatively inexpensive and more
user-friendly informal remittance channels. It is well known that a
huge flow of remittances arrive on the island in the luggage of
entrusted agents, or "mules," who travel to Cuba through third
countries and carry money for cheaper fees than the ones charged by
official agencies such as Western Union.

Cuban-American mules, who are generally U.S. citizens who hold a
Cuban passport, can easily circumvent restrictions by using the U.S.
passport to enter and leave the United States and the third-party
country, while using the Cuban passport for the rest of the journey.
And even placing U.S. inspectors in several third-country airports
won't help much. Cuban-American cash can be sent or personally
transferred to citizens of other countries (some mules are Mexicans
and Colombians), who will then travel to Cuba and deliver the money
to recipient families.

In the past year, mules' operations have become increasingly
sophisticated, especially since late 2004 when Fidel Castro put an
end to the commercial circulation of the U.S. dollar in Cuba in favor
of the convertible peso or CUC, a local currency that has no value
outside the island. Cubans who receive dollars from abroad must now
exchange them for CUCs in order to make purchases in hard-currency
stores. Their purchasing power has been greatly reduced after the 10
percent fee on dollar-CUC exchanges introduced in November 2004 and
the re-evaluation of the CUC by 8 percent against all international
currencies last May.

Currently, most Cubans are receiving remittances in CUCs rather than
in dollars or other currencies. Given that mules carry substantial
amounts of cash in single trips, and now probably even more money
than before as travel to the island has become riskier due to Bush's
new restrictions, the key issue is where they acquire CUCs before
delivery. Cuba's strict financial controls make it unlikely that
mules exchange tens of thousands of U.S. dollars, or eventually Euros
or other major currencies, at local banks or exchange houses. One
possibility is the existence of an unofficial organization in Cuba
that dedicates itself to these exchanges, or perhaps ghost companies
outside the island engaged in these transactions. Mules might also
rely on local intermediaries to split the money and exchange smaller
sums at different locations. After all, there is evidence that some
remittances are delivered by Cuban nationals rather than foreign
residents.

Remittances to Cuba are also facilitated by the emergence of
third-country-based money-transfer services that allow funds to be
transmitted to the island from the United States through the
Internet. As transactions are routed via foreign banks, it is
extremely difficult for U.S. authorities to exercise effective
control. For instance, funds transferred to Cuba via Canada-based
Transcard (used by an ever-increasing number of Havana residents) are
credited to secure bank accounts in Canada. The recent proliferation
of similar businesses located in Europe, such as Spain and
Italy-based SerCuba and Switzerland-based AWS Technologies, further
complicates the U.S. attempt to curtail remittances to Cuba.

After almost 18 months since the enactment of a new U.S. policy
toward Cuba, most Cuban-Americans and their relatives on the island
might be physically apart but still economically tied.

Paolo Spadoni is a Ph.D. candidate in the Department of Political
Science at the University of Florida. He wrote this commentary for
the Orlando Sentinel.

Copyright C 2005, Orlando Sentinel | Get home delivery - up to 50%
off






More information about the Marxism mailing list