November 18, 2010
Fernando Ravsberg
HAVANA TIMES, Nov. 18 — Responding to one of my posts, some readers
said that some Cubans living in Cuba spend their vacations in five-star
hotels in the cays, paying for their expenses with money sent to them
from émigré relatives in Miami.
I found the comment very original, and it also gave me the idea of
dealing with the issue of family remittances by trying to discern their
true social impact and economic repercussion in Cuba, going beyond any
politically motivated myth.
When I raised this possibility with researchers at Havana's Center for
the Study of the Cuban Economy, everyone smiled. "It's difficult to
find a Cuban who sends more than $100 USD a month, and I assure you that
those who receive it can't pay for their vacations with that," they told me.
I verified with friends and neighbors that this was true, but it still
remained for me to discover the total amount of remittances received.
That task is not easy because almost half of this money arrives hidden
in the pockets of "mules" who travel to Cuba.
In any case, there are serious approximations, such as those of Manuel
Orozco, a specialist in remittances with Inter-American Dialogue, a
think tank headquartered in Washington D.C. He calculates the annual
value of Cuban remittances as being between $830 million and $985
million USD.
This figure concurs with the International Fund for Agricultural
Development of the United Nations and with the Multilateral Investment
Fund of the Inter-American Development Bank. Both estimate the amount
of remittances to be $983 million USD.
Havana photo by Petra Hacavska
Math was never my strong suite, so allow me to round the figure up to $1
billion to facilitate my accounting. Supposing that 80 percent of
Cubans receives remittances, this would then result in each of them
getting around $0.28 USD a day.
I can assure you that the life in Cuba is not so cheap as to permit
someone to eat, dress and pay their electric bill, etc. on a quarter a
day. Nonetheless, there are optimists who suppose that the money is for
vacationing in five-star hotels!
There are those who assure that the quantities sent are well above those
received by people in other countries of the region, with this
demonstrating the success of the Cuban community that emigrated.
However, I have the impression that the Cuban émigrés are much more
detached.
Let's again compare Cuba to El Salvador, a country with half the number
of residents. In January 2010 alone, $236 million USD was received in
that small Central American nation, which means that annually this
community sends their families almost three times more than Cubans do.
In the poorest homes in Cuba, remittances can end up doubling the family
income. However, this proportion is not produced because of the large
amounts that are sent, but because of the low wages the government pays
to its employees.
In some families this aid is the key to making it to the end of the
month, and family members would go hungry if this were not sent. In
other cases it means that this indispensable extra money allows people
to buy a TV or a washing machine, or to repair the house or throw their
daughter's "sweet 15" birthday party.
But there are also those who don't need remittances, those who pay their
own way, including on vacations. Reading my post from last year titled
"Pobrecitos los cubanos" (Poor Little Cubans), can help one understand
who these national tourists are and where their money comes from.
Entrance to Havana Chinatown. Photo: Petra Hacavska
It's only when those 28 cents filter into the hands of the government
that they turn into $1 billion USD, cash that winds up in the nation's
coffers thanks to a 240 percent tax placed on all products sold in hard
currency.
Putting this into context is to say that remittances represent a revenue
stream similar in magnitude to that of tourism. However, the million
Cuban emigrants barely send a fourth of what is obtained abroad from the
labor of 50,000 Cuban aid workers.
During the economic crisis of the 1990s, the transfer of remittances
into the country was a matter of life or death for the government and
also for the population. Today its importance has decreased, but it
continues to be a significant source of hard currency for the economy.
Trying to drown Cuba, US political leaders and exile groups tried to put
limits on remittances, but it was a futile struggle. Even an
anti-Castro radical like the late Celia Cruz sent money to the island
all her life, as his sister admitted to me.
But not even the amounts that the singer sent were enough to pay for
five star hotels. So those who send remittances can sleep soundly, no
one in Cuba is blowing the money that required so much sacrifice for
them to earn.
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