14ymedio, Havana, October 18, 2019 — The line extends all the way to the entrance of the Carlos III shopping mall. People are not in it to buy frozen chicken, powdered milk or even laundry detergent, a product in high demand here. Everyone is waiting in line to collect a remittance sent by a relative through Western Union, a service which has been impacted by a shortage of cash and new U.S. government regulations.
Most of those in line get between 50 and 100 dollars once a month, never more often unless it is “the end of the year or Mother’s Day,” notes Katiuska, a 39-year-old Havana woman who is waiting at the office under the yellow and black logo to collect money that her emigree sister has sent to pay the private caregiver of their bedridden mother.
Katiuska is not among those affected by new restrictions imposed by the Trump administration on money sent to the island by Cuban exiles. “I have never received more than $300 every three months, which is far below the new limit,” she points out.
Last week a series of measures took effect in the United States which limit remittances and financial operations in Cuba as part of a policy of tightening the embargo and imposing economic sanctions on the Cuban government.
The new regulations announced by the Office of Foreign Assets Control (OFAC) cover four areas of restriction, most notably family remittances, which are now capped at $1,000 per quarter. It is a restriction that can feel like a serious blow to private business owners while others, such as Katiuska, may not feel affected at all.
But she is only one part of a wide spectrum of beneficiaries of this aid. The items purchased with these remittances has changed greatly since 2009. They are no longer used only to buy food but are used for various purposes as well according to studies done by The Havana Consulting Group (THCG), a consulting firm based in Miami.
“From 2009 to 2016 remittances grew by two billion dollars compared to the previous period, from 1993 to 2008. In just eight years the number of consumer categories in which remittances were most often spent went from six to fourteen,” writes Emilio Mores, president of the group, in an article.
In the last decade remittances from overseas have also paid for telecommunication services in Cuba, including mobile phones, wifi and home internet. They have gone to pay for private tutors, home purchases and auto repairs. They have also provided the start-up capital for new privately owned businesses, whose growth has surged since the expansion of the private sector under Raul Castro.
Since long before the period of economic liberalization, remittances received through channels such as Western Union have served as the main economic pillar for hundreds of thousands throughout the island. But financial services companies now face a variety of difficulties getting money to their Cuban customers and the not all the problems originate in the White House.
Cash shortages, the closure of numerous offices and the irregular business hours have been plaguing Western Union for months. Weeks before the Trump administration’s measures went into effect, lines to collect remittances were already growing longer outside company offices. When exchanged legally, customers receive 97.01 convertible pesos for every $100 sent.
Western Union’s website mentions having more than 300 branches on the island. But customers often complain that these offices often do not have have enough cash on hand, especially in small towns. “Western Union isn’t like it used to be when you could get your money within a few minutes,” laments Guillermo Casas, a retiree whose son punctually sends his remittance to Morón, in Ciego de Avila province.
“Now you go there over several days and leave with empty hands because they haven’t been supplied with enough money to give the people who are expecting it. What Trump has done doesn’t bother me. My son can only afford to send me $60 a month so a reduction to $1,000 every three months is no big deal to me.”
Others fear that additional new restrictions will be introduced in the coming weeks or months. Twenty-two-year-old Alicia Fundora, whose birthday is this month, fears that money an aunt from Miami intends to give her will not arrive.
“She always sends me money on my birthday but she called me this week, worried because she got a message from Western Union about new restrictions on sending money. She called me yesterday to give me the pin number I need to collect it and said everything had gone well but she had to do it online. She has always gone through a bank that could do it but told me that’s no longer possible.”
Several Cuban emigrees in the United States have reported problems sending money from Western Union offices in the U.S. but so far they have not had major difficulties doing transfers over the internet as long as they respect the new limits.
Reactions among businesspeople have varied. One pizza vendor claims he has so far received “everything the business needs.” Others believe the U.S. measures are impacting the private sector but not Cuba’s political leaders in spite of the fact that they include prohibitions on Communist Party members and military personnel from receiving remittances from the U.S. Others are finding their own way to get cash reliably.
“People who get remittances through legal channels such as Western Union are the ones who don’t have other options. But anyone who needs large amounts to open or maintain a business will, of course, not use these services,” says the owner of a hostel with nine rooms and a pool for rent in Guanabo, a town east of Havana.
“Anyone who operates a real business does not use these services,” he says, “because everthing that comes through Western Union or a Cuban bank is controlled and monitored by the state.”
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