Herald.com Posted on Thu, May. 26, 2005

Flow of funds to Cuba holds steady

The amount of money sent to Cubans by relatives in the United States has not changed a year after new restrictions were implemented, according to pollsters.

WASHINGTON - Cubans living in the United States still send an estimated $460 million a year to relatives on the island despite restrictions tightened by the Bush administration last summer, according to a poll released by a Coral Gables firm Wednesday.

But a portion of the Cubans on the island who receive the cash transfers believe they are getting less money, according to a separate and less scientific survey conducted inside the island by a Washington-based think tank.

The assumption: That Fidel Castro's government is taking a bigger bite of the remittances, one of the key sources of income in an island where the economy was devastated by the 1990s collapse of Soviet subsidies.

''Now that it is clear to them how much money is arriving, [the Cuban government] is now getting a higher and higher percentage of that money,'' said pollster Sergio Bendixen of Bendixen & Associates.

The results of the Bendixen survey, presented during a forum at the think tank Inter-American Dialogue, indicate that 69 percent of respondents continue to send the same amount of money as before President Bush tightened restrictions on remittances to Cuba last June as part of a larger effort to keep U.S. dollars out of the government coffers and hasten a transition to democracy.

Bendixen's survey was conducted Feb. 8-14 and results were based on telephone interviews with 1,000 Cuban adult immigrants throughout the United States. It has a 3 percentage point margin of error.

But a separate survey by an Inter-American Dialogue researcher, based on interviews with some 200 people who live on the island, showed that while 58 percent of recipients said they continue to receive the same amount of money from relatives abroad, 29 percent reported that they are getting less funds.

The island respondents were nearly evenly split in their views on what prompted changes in cash flow: 13 percent blamed new measures imposed by the Cuban government while 11 percent pointed to tightened U.S. restrictions.

According to the Bendixen survey, some 440,000 Cuban Americans send $150 an average of seven times per year -- about $1,050 a year -- providing the island with a steady cash flow of at least $460 million. Other estimates have placed the annual flow of all remittances to Cuba -- from all countries -- at as high as $1 billion.

Among the other highlights of the Bendixen poll:

  76 percent of remittance senders interviewed said they left Cuba in 1990 or later;

  70 percent said they have an income of less than $30,000;

  77 percent said they are not U.S. citizens;

  83 percent use international companies, such as Western Union, to send money to the island;

  48 percent of the money goes to people in Havana.

Although the Bendixen survey appears to compromise the Bush Administration's effort to further constrict the flow of dollars to Cuba, the level of remittances, the survey found, fell well within the U.S. limits.

The tightened rules allow for up to $1,200 a year in cash remittances to immediate family members -- no longer including grandparents, cousins or more distant relatives.

The Bendixen survey showed that 89 percent of the Cubans interviewed claimed their remittances were going to parents, siblings or children, and that 97 percent of the funds went to basic needs.

But Manuel Orozco, a senior associate at the Inter-American Dialogue, estimated that the Cuban government now pockets up to 20 percent of the U.S. dollar remittances, in part because of a 10 percent fee imposed last year by the government on exchanges of dollars and kickbacks from transaction fees charged by wire transfer companies. The Cuban government also recently ordered strengthening of the peso.

Based on the estimate of $460 million in annual remittances, the government's 20 percent cut would amount to about $92 million.

Cuba analysts have said that Castro imposed the exchange fee and revalued the peso in order to close the gap in the purchasing power of those who earn only pesos and those who receive U.S. dollars from abroad.

Cubans who lived only on peso incomes -- average salaries on the island amounted to the equivalent of about $10-$12 per month -- always lived much worse off than those who got even as little as $50 a month from abroad.

Bendixen said both the Bush administration and Cuban measures are just a few more obstacles that Cubans on both sides of the Florida Straits will learn to overcome.

''No law is going to get between family members,'' he said.



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