Cuba’s Monetary Drama and a Government Thirsty for Dollars
HAVANA TIMES – December should have been Javier’s best month since he began working as a remittance courier. Now, it’s an unknown.
His more experienced co-workers had told him about previous Decembers, when remittance shipments had grown exponentially, and with them, the couriers’ earnings. This year should have been even better, Javier speculated, since many migrants would probably not visit their families for fear of the Chikungunya epidemic sweeping the island and because of the immigration policies of the current US administration. To compensate, he reasoned, their remittances would be more generous.
Like most businesses that send money to Cuba, in Javier’s company the couriers earn a percentage of the cash they distribute—0.5% in his case. For a delivery of 100,000 pesos (currently the equivalent of $222 USD), the payment is 500 pesos, and so on. After an average workday, Javier usually returned home with between 1,500 and 2,000 pesos. That income increased around holidays such as Mother’s Day and Father’s Day, in line with the surge in transfers.
Javier worked for the last time on Saturday, November 22. He remembers it clearly because that same morning, while he was doing his delivery route, government newspapers and TV channels announced the arrest of 13 members of a “foreign currency trafficking network.” It was a business very similar to the one he was part of. He didn’t hear the news until hours later, when a colleague shared posts about it and warned that the bosses were ordering couriers to finish their last deliveries and take the rest of the weekend off. Since then, Javier has worked only one or two days a week, constantly afraid of getting caught in a police raid.
“I hope things improve by the end of the year, because the truth is I’m not even earning enough for my daily expenses. The police spend all their time looking for remittance couriers and for people who buy and sell foreign currency. It seems like the government has set out to regain control of all the money that enters Cuba, like when Western Union operated here,” Javier said.
The Strange Combination of Chicken and Remittances
Until the arrival of Covid-19, Cuba’s economy relied on three main sources of foreign currency: the export of professional services (especially medical services), tourism, and family remittances. Despite official secrecy, independent economists and international organizations estimated that these sectors brought in between 80% and 90% of the country’s foreign-currency income. This calculation included revenue obtained from reselling Venezuelan oil, which was paid for through medical cooperation.
The pandemic destroyed that order of things. Nearly six years later, tourism receives barely more than a quarter of the visitors of 2018 and earns about a fifth of the revenue it did then. Medical cooperation is at its lowest point amid accusations from the Trump administration of “human trafficking” and the closure of lucrative programs like those once active in Bolivia and Brazil. Meanwhile, Venezuelan oil shipments now average 50,000 barrels per day—far below national needs and what the island received in past years.
Family remittances have become the last major source of foreign currency available to Havana, at least in the short term. This explains the authorities’ determination to monopolize them.
Previously, most remittances entered the country through Fincimex, a corporation subsidiary of the military conglomerate GAESA, which controls more than half of Cuba’s productive economy and has been the target of Trump’s main sanctions across his two terms. Fincimex, which served as Western Union’s contractor, also manages Visa and MasterCard processing. More recently, it has focused on promoting a new card called Clasica (with deposits in dollars) which can only be used inside Cuba but can receive international transfers.
Even after Western Union withdrew from Cuba for the first time in November 2020, Fincimex and Orbit SA (another GAESA company created as a “front” to evade US sanctions) managed to keep most family transfers flowing through their hands. At that time, the so-called “MLC cards” were at their peak, offering the better-off segment of the population access to superior goods and services, while their families or employers abroad could fund those cards.
But arbitrary government decisions regarding MLC—such as refusing to exchange it for dollars, even though its value was supposed to match the US currency—gradually eroded public trust. Today, it trades at just over half the value of the dollar, and the outlook suggests it will continue to depreciate.
The flow of foreign currency moving through “official channels” shrank further after the authorization of micro, small, and medium-sized enterprises (MSMEs) in the limited reform process after the July 11, 2021 protests. Neither the banking system nor state enterprises were prepared for this new reality.
“The State has no legal mechanism for MSMEs to exchange their peso earnings for dollars or other currencies and then transfer those funds abroad to pay for imports. That problem wasn’t even resolved in October 2024, when regulations were issued requiring MSMEs to hire state importers for their purchases. Those importers ran into the same issue: state banks refused to sell them foreign currency or to transfer funds on their behalf to foreign banks and companies. If companies had followed government rules blindly, within weeks MSMEs would have been drowning in pesos useless for the most essential thing—restocking inventory. The system was so unsustainable that a few days ago, there was no choice but to repeal it,” explained a professor at the University of Camagüey’s Faculty of Economics.
Alongside his academic responsibilities, he works as an accountant for a private wholesale business, which has allowed him to observe firsthand the contradictions between the Cuban government’s policies and the measures that economic theory suggests would be appropriate amid the severe crisis the island faces. “A fundamental step would be to establish an official exchange market with a realistic, floating exchange rate. Under current conditions, state enterprises are barred from accessing foreign currency, and private ones are forced to operate permanently in a legal gray zone, relying on ‘financiers’ to access capital abroad,” he added.
Like Javier, the professor asked that his name not be published due to well-founded fears of government retaliation. Although Prime Minister Manuel Marrero Cruz and other senior officials have spent months announcing the opening of an official currency market, the truth is that such a move appears as distant now as it did a year ago. Instead, the government has intensified its persecution of those who participate in the informal currency market—especially the digital platform El Toque, which publishes the daily reference rate.
The police operation against the “foreign currency trafficking network” dismantled in late November—the one that forced Javier’s company to reduce operations—is just one chapter of the current wave of repression.
According to the official press, the head of the network was a Cuban-American named Humberto Mora Caballero, from Camagüey, who had established a large-scale operation that between February and September of this year carried out transactions worth 1 billion pesos and 250,000 dollars. Mora Caballero was described by the Interior Ministry as the operation’s “financier.”
These companies typically function through a simple scheme: with the funds deposited by migrants in the United States, they purchase the goods requested by Cuban MSMEs; those businesses pay for the service and the shipping of the merchandise with the pesos they earn, valued against the dollar at the informal exchange rate. Finally, the pesos are delivered to the families receiving remittances on the island.
The arrest of Mora Caballero’s employees was presented by Cuban authorities as a success in their “fight against currency trafficking,” but that operation represents only a fraction of the MSME import and exchange market as a whole. A reference point might be US $1.5–2 billion that migrants were estimated to send annually to their families a decade ago. It is too much money for the government not to try to seize at least a portion.
“It’s their fault,” Javier thinks. “They created distrust by devaluing MLC and refusing to let people withdraw money from the bank. Now, the only cards people use are things like the Clásica, because it’s the only way to buy fuel. For everything else, people want cash. And private companies that receive and distribute remittances are the only ones who have it.”