{"id":240402,"date":"2021-06-15T15:47:25","date_gmt":"2021-06-15T19:47:25","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=240402"},"modified":"2021-06-15T15:47:25","modified_gmt":"2021-06-15T19:47:25","slug":"welcome-to-the-plastic-dollar","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/opinion\/columns\/counterbalance\/welcome-to-the-plastic-dollar\/","title":{"rendered":"Welcome to the plastic dollar!"},"content":{"rendered":"

A few weeks ago, the CADECA exchange houses <\/span>announced<\/span><\/a> that the exchange of USD for Cuban pesos in the country\u2019s airport terminals was temporarily suspended due to the limited availability of existing currencies to comply with the said provision, something understandable by almost everyone if one considers the fact of the drastic reduction in the inflow of foreign currency to the country motivated by the decrease in tourism, remittances and other income from external sources.<\/span><\/p>\n

On Thursday night, June 10, the Central Bank of Cuba <\/span>announced <\/span><\/a>that as of the 21st of this month the commercial offices of the banking system and also the exchange houses, would not accept deposits in physical USDs, due to the difficulty of Cuban banks to be able to use those dollars in cash in international operations, something caused by the persecution that the United States Department of the Treasury has maintained over any commercial or financial operation that involves Cuba and that has increased exponentially since the Trump administration.<\/span><\/p>\n

A contradictory situation<\/b><\/p>\n

The truth is that a country that faces a strong balance of payments restriction, which has a negative impact on growth, the supply of goods, and the dynamics and magnitude of exports, which has a source of legitimate income in remittances and any other dollar from any other legal source, is deprived of being able to get more out of them due to extraterritorial impositions.<\/span><\/p>\n

Those who have had to deal with the odyssey of carrying out a commercial transaction with Cuba are fully aware of the difficulties and the financial costs this entails.<\/span><\/p>\n

Having foreign currency is a growing need for the national economy, among other things because the weakness of its productive system has made it increasingly dependent on imports, now increased by the pandemic and by the short-term consequences of an erroneous implementation of the <\/span>task of reorganization<\/span><\/a>, especially in the agricultural sector.<\/span><\/p>\n

Remittances, together with foreign investment and income generated by exports, are one of the main sources of \u201cliquidity\u201d for the national economy and surely the first of all sources of \u201cforeign exchange\u201d for the country\u2019s population. There are different estimates of the number of remittances, from $2 billion to $3.5 billion. In recent years these flows have decreased, but even so, remittances outperform practically all sectors of the national economy in terms of net income. There are no public figures on their weight as a proportion of GDP or investments, some estimates placed them close to 15% for the year 2017, other studies have affirmed that between 300 million and 600 million dollars annually of remittances go to investment in the private sector, something practically impossible to confirm. Most of the currency in which they are received are USD, and through informal channels.<\/span><\/p>\n

Being one of the most important revenues in the country since the initial years of the 1990s, it is paradoxical that Cuba does not have a policy for the collection and use of remittances. Recommendations in this regard have existed for a long time. It is also true that in all these years in which we have been subjected to persecution by the Trump administration \u2014 and everything seems to indicate that it will continue with Biden \u2014 it has not been possible to innovate sufficiently in financial terms in order to find possible alternatives to that systematic attack when there is no guarantee that it will stop in the near future. For example, I will always wonder why there are no more electronic means of payment (debit cards, gift cards) issued by institutions outside the control of the U.S. government. Is it not possible? Companies with possibilities and decisions to make it safe exist.<\/span><\/p>\n

Notwithstanding the foregoing, a group of actions with this purpose can also be identified in recent years. I list some of them:<\/span><\/p>\n