14ymedio, Madrid, September 19, 2023 — Over the last three decades, Cuban emigrants have sent their relatives on the Island, a total of 52.252 billion dollars in remittances and another 50 Billion in consumer goods. The data is included in the most recent report by the organization Cuba Siglo 21, signed by academic Emilio Morales, who points to the military directors of the state monopoly Gaesa as responsible for “undermining” the Cuban economy, while highlighting the “potential investor” of the exiles in a future democratic reconstruction of the country.
Morales prepared a historical study of the sending of remittances to Cuba since its authorization by Fidel Castro in 1993, after the Soviet debacle, and concluded that this constant injection of money has served as a “financial basis” for the dollarized infrastructure that the Island maintains today.
A network of corporations and senior officials diverts the flow of capital from its starting point – the shipments of emigrants – to its destination. Morales supports his conclusions with official data that his academic group, Havana Consulting Group, based in Miami, has extracted from documents of the judicial disputes between the American company Exxon Mobil and the Cuban state company Cimex, as well as other sources such as the Departments of State and Treasury of the United States.
The regime’s need for dollars, Morales believes, softened the official discourse on the exiles, who went from being “worms” to forming the “Cuban community abroad”
Furthermore, the academic explains, remittances have not only had an economic impact but also a cultural and diplomatic one. The regime’s need for dollars, Morales believes, softened the official discourse about the exiles, who went from being “worms” to forming the “Cuban community abroad.” On the other hand, it has been one of the main topics of the bilateral conversation between Havana and Washington.
However, the flow of remittances to Cuba has not been regular, and to explain it, Morales divides it into three stages. The first, from 1991 to 2006, was defined by Fidel Castro’s management during the crisis known as the Special Period — after the collapse of the Soviet Union and the loss of its support for Cuba — and the urgent need for foreign currency. The second, from 2007 to 2018, corresponds to the economic reforms promoted by Raúl Castro and the thaw with the United States. The third, from 2019 to 2023, has marched to the rhythm of the so-called ’Ordering Task’* and other “unpopular measures,” such as the implementation of stores that only accept payment in freely convertible currency.
In Morales’ opinion, both the regime and Gaesa, who had thought of remittances as a “temporary” solution to counteract the loss of the Soviet Union subsidies, ended up becoming increasingly dependent on emigrants’ money and multiple channels have been created so that this capital never reaches the pockets of Cubans, but rather flows to companies managed by the military of the conglomerate.
“At the time, authorizing the sending of family remittances to Cuba implied a very big risk for the Cuban dictatorship from a political point of view,” diagnoses the academic. “However, allowing remittances, as well as foreign investment and international tourism, were calculated risks that the Government decided to take in support of the survival of the regime.”
During the presidency of Raúl Castro, when 31.311 billion dollars were received, half of it informally
With the authorization of remittances, small businesses – which the Revolution had annihilated early, in the 1960s — under what was called the “Revolutionary Offensive” – they saw the opportunity to establish an incipient private sector that has been the first affected by economic instability and that, in addition, has remained in the sights of the Government, which keeps its growth and investment possibilities at bay.
As of 2006, Morales details, 11.751 billion dollars entered Cuba – of which, more than 10 million came through informal channels, he specifies – which made Castro realize the enormous potential of remittances. But the growth of this first stage cannot be compared with that of the next, during the presidency of Raúl Castro, when 31.311 billion dollars were received, half of it through informal channels.
However, the regime viewed the rise of self-employment with concern – there were more than 600,000 entrepreneurs operating with a license on the Island, and an equal number without, explains Morales – and attacked the sector. For its part, Havana tried to curtail the opening achieved with the ’thaw’ — during the Obama presidency — in time for the arrival of Donald Trump to the White House, the academic believes.
It is during this stage that Gaesa consolidates its power, under the direction of Luis Alberto Rodríguez López-Calleja, Raúl’s former son-in-law who died in 2022, and a clan of military figures who manage companies such as Cimex and American International Services (AIS) – both registered outside of Cuba, in Panama – in addition to remittance shipping companies such as Va Cuba, Cubamax and Caribe Express.
If before the emigrants tried to help their relatives on the Island, now their main objective is to get them out of the country
Among the Cuban military behind these operations are currently, Morales lists: Ana Guillermina Lastres, current president of Gaesa; the Minister of the Armed Forces Álvaro López Miera; the Prime Minister, Manuel Marrero Cruz; and Colonel Héctor Oroza, director of Cimex and AIS. They are all sanctioned by the US.
However, starting in 2019, the number of remittances experienced a radical drop of 45%. Only 9.18 billion dollars arrived in the country, which Morales interprets as a change of intention among the diaspora. If before the emigrants tried to help their relatives on the Island, now their main objective is to get them out of the country. This process has bled the Cuban population and its ability to achieve economic improvement.
The only hope, the report emphasizes, is a transition to democracy that allows the Cubans who left to contribute, in an initial period of 24 to 36 months – it estimates – and with a “potential” investment of 20 billion dollars, to the financial recovery of the country.
“It is the Cubans themselves residing on the Island – in alliance with their relatives abroad – who can truly be the co-owners of a new business fabric that, being truly free, would be the immediate and surest driving force to recover the well-being of the population, as well as promoting reconstruction and national development,” concludes Morales.
*Translator’s note: The “Ordering Task” [Tarea Ordenamiento] is a collection of measures that include eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy.
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