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Beyond Remittances, Emigration Role In Cuba’s Economy

Illustrations: Patricio Herrera Vega


While a son by Los Van Van plays on the studio’s speakers, a Cuban professional dancer who emigrated1 to Warsaw several years ago instructs Polish women and men on the elementary steps to follow the music of Juan Formell. She started these classes with a dozen students as a means to survive in a country she barely knew, and the language even less so. Today she has more than 4,000 students; many have learned Spanish a lo cubano and others have traveled to the island to visit the original site of the music and dance that they so enjoy. In Warsaw, in the middle of winter, she disseminates our culture, our way of speaking Spanish, and the customs and places of her homeland. It’s perhaps one of the best ways to promote our country: face to face, body to body, because this is what dancing demands. Thanks to these skills, she also manages to earn an income, part of which she sends to Cuba to help out her parents and so that her younger sister can realize her dream of being a lawyer. She also saves a little each month because she aspires to have her own business in Cuba one day.

As a worldwide phenomenon that marks this era, mass migration became a pandemic and an individual right, as well as an economic resource for many countries. In Cuba, emigration—by virtue of the idea that time can change everything both here (“inside”) and there (“outside”), as well as the factors of generational advancement, the country’s and families’ urgent economic necessities, individuals’ desire to find better opportunities, the need for family planning for survival, the increased attraction of what’s “foreign,” or the repeated disappointment at failed attempts to continuously pull oneself up by the bootstraps—has become, as opposed to the political stigma it used to carry, a daily occurrence that while it hasn’t ceased being heartbreaking, it’s no longer particularly tragic2. Today, everyone is a child, grandchild or great-grandchild of immigrants and, at the same time, parents, grandparents or great-grandparents of real or potential emigrants.

Cuban emigrants are in every corner of the world, from Alaska to Patagonia, from the east coast of the United States of America to the land of the rising sun. Neither the impressive Russian Siberia, nor the warm and always mythical islands of the Indian Ocean, are off-limits, although most Cuban emigrants are likely concentrated in just a few countries: the United States, Spain, and probably Mexico.3

But without a doubt, emigration and remittances go hand in hand, worldwide and in Cuba. Global remittance flows are increasing and their role in the economies of some countries is decisive, not only because of their absolute amount, but also because of their proportion of foreign income and their dynamic role in domestic demand and investment.4

The role of remittances is also significant in Cuba. If it’s assumed that remittances reach somewhere between two and three billion dollars, let’s say 2.5 billion, then remittances are comparable to profit in relation to total exports in 2018, which equaled nearly 2.4 billion dollars. If that amount is converted to Cuban pesos at the official exchange rate (24 Cuban pesos per 1 dollar at the CADECA), then it equates to 60 billion Cuban pesos.

If compared with the actual total household consumption for the year 2018 (77.8 billion Cuban pesos), then remittances would account for 77% of that consumption. If we compare the total salaries earned by the workforce5—around 41 billion Cuban pesos—then remittances would be 143% of salaries earned in 2018.

If we assume that between 25% and 30% of these flows is dedicated to investment in private businesses, let’s say 25%, then we can assume that about 625 million dollars per year are invested from remittances year after year, compared to the amounts of committed foreign investment, about 1.6 billion annually6 of remittances are 40% of that total7. This phenomenon is not exclusive to Cuba; in many other countries remittances are also decisive in the dynamics of their economies.


In short, whether due to their impact on consumption and wages, or because of their impact on investment, remittances are of great importance to the national economy, which, without a doubt, has been the main reason that the Rubio-Trump duo is doing everything possible to limit and hinder their flow to Cuba.

That’s also why it’s very important for Cuba to maintain and increase remittance flows from all over the world. This will depend on the incentives proposed by the Cuban government in relation to that objective.

The restrictions imposed by the United States government, which sanctions all operations made in dollars by Cuba or related to any Cuban entity, including the capping of remittance amounts undertaken by the Trump administration, are perhaps the biggest disincentives for the entry of dollars into the country. Little can be done about that.

This is also why we are forced to consider how much can be done from within Cuba. The opening of the small private business sector has undoubtedly been one of the biggest incentives to send remittances to the country. Similarly, the opening of a “dollar market” for the purchase of consumer goods is another incentive. But there’s still a lot to be done.

In my opinion, lowering the prices of the Cuban passport—over $800 for a passport valid for six years in the case of Cubans residing in the United States, making it the most expensive passport in the world—would stimulate travel to the island and would be very well received by the vast majority of Cubans living abroad and their families. Another important measure would be to create mechanisms, instruments, and entities that allow for a better use of remittances and, above all, that amplify their impact to benefit all Cubans.

The creation of investment funds with specific allocations8 (housing, for example); the securitization of remittances9; and the creation of micro-credit institutions to stimulate investments in small industries. Undoubtedly, any of these constitutes a great challenge in both the financial and political spheres.

But emigration, at least in the case of Cuba, means much more than remittances. An important portion of Cuban emigration in the last 30 years—I would even say a decisive part—is economically motivated. Some of those emigrants have managed to position themselves in their respective countries of residence and have become successful entrepreneurs and well-connected executives in their corresponding business fields. Many of them recognize that the training they received in Cuba was an essential component of their success. Many have publicly expressed to the Cuban authorities their interest in investing or establishing some kind of trade relationship with Cuba; however, I don’t believe that many have succeeded. In general, it’s much easier for a foreign entrepreneur to do business in Cuba, whether through trade or investment, than for an emigrated Cuban.

When considering Cuba’s future, we must think of emigration as one of our country’s strengths, and look for ways to better harness that human potential.

  1. “When referring to the phenomenon of migrants, we refer to a population with specific qualifications that enable them to decide to make a change in either their geographic, economic, social, familiar or personal, or even political situations. There is another sort of migration, which is displaced by environmental factors, wars, and ideologies, among other factors.” Antonio Aja Díaz and collaborators: “La migración internacional de cubanos. Escenarios actuales,” in Novedades en población, N. 26, Vol. 13, Havana, Jul.-Dec. 2017.
  2. Practically all emigration after 2013 was of a “temporary” nature, such that emigrants would not lose their rights as citizens in Cuba and that they could return whenever they wanted to, provided they meet the established norms, which are in line with international migrants’ rights. Ibid.
  3. Cubans are reported in approximately 129 countries; 98% are concentrated in 20 nations: USA, Spain, Venezuela, Mexico, Dominican Republic, Costa Rica, Ecuador, Germany, Italy, Canada, Colombia, Nicaragua, France, Chile, Argentina, Sweden, Switzerland, Russia, Panama, and Brazil. Ibid.
  4. In Latin America, the cases of El Salvador and Mexico are illustrative.
  5. Estimated based on the average monthly salary as reported in the Anuario estadístico de Cuba 2018, which was 777 Cuban pesos, with 4.48 million employed people.
  6. José Luis Rodríguez estimates that between 2014 and 2019, foreign investment agreements were signed in the amount of 8 billion, which is about 1.6 billion in annual foreign direct investment.
  7. Macro comparisons are limited. In reality, the final impact of remittances on economic growth is far from its actual potential given that the atomization of these amounts and the benefits to their recipients limits their real effect on the country’s overall economy.
  8. An example is Mexico’s experience with the project Facilitación del acceso de receptores de remesas al financiamiento para la vivienda.
  9. This is the issuance of securities backed by remittance collection.