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The ultimate stabilizer
REMITTANCES from the Cuban-American community continue to provide an important source of funds for Cuba. They are estimated at approximately US$1 billion per year, including formal and informal flows. Restrictions placed by the US on these transfers are considered not to have succeeded in reducing the total amount sent. At the same time as the US dollar was legalised (in 1993), a number of state-owned retail chains were established or expanded. These stores effectively 'mop up' remittances which flow into the country providing much needed products to the consumer and equally needed profits to the state. Remittances act as an effective stabiliser since in times of economic distress they tend to rise. They will also generally rise in dollar terms following a price rise or re-valuation to cover at least a part of the increase |
