Pesos cubanos, Biden, CUP, Cuba, Ordenamiento

Biden and the appreciation of the Cuban peso

LAS TUNAS, Cuba. — Excuse me for this digression before entering the subject of this article, which, as the title already says, will try to delve into the influence of the Joe Biden measures in the appreciation of the Cuban peso. And, by appreciation, understand the financial term used to conceptualize the increase in the value at which a country’s currency is quoted on the market with respect to one or more foreign currencies.

The political parenthesis in the financial text that concerns us is necessary because the measures announced by the Biden administration regarding Cuba have produced a wave of different opinions, from the very sparing of the Havana regime —the one that benefited most from the Washington package— , who described them as “a limited step in the right direction”, to those expressed by US representatives and senators of Cuban origin, who conceptualized them as “a betrayal of Cuba’s freedom.”

But if the statement of the Díaz-Canel regime, more than succinct, is cynical, because knowing as he is that in the depths of a sociopolitical and socioeconomic crisis Joe Biden is opening the doors to billions of dollars, in honor of the truth, the statement from the Cuban-American legislators, at least, is passionate.

Listen to me… except during the 11J protests, I have not heard in years of any massive demonstration to protest the public policies that restrict civil liberties on the Island. The freedom of Cuba is not in the hands of Joe Biden or any president of the United States, yes, have betrayed my fellow citizens, as Kennedy did in the Bay of Pigs; but it is that freedom is in the hands of those who really want to have it and fight for it, and that is not the case of the majority of Cubans.

There are honorable exceptions, of course, and there are the names of those killed in wars, of prisoners and those shot, but Cubans, as a nation that will soon be 120 years old (understood as tribal idiosyncrasy) do have the courage to fight among themselves or to flee Cuba, not to fight for the freedom of their homeland.

Cuba would be free if those who have left had had the determination to fight to achieve independence in their land as they have had the audacity to achieve their personal freedom in the United States or in other parts of the world. In the same irresolute way, at the national level, there are those who stayed and applaud their oppressors while under their breath they curse them. Then, let us not attribute our miseries to the doing or not doing of others.

Having said the inescapable and going into the subject of the Cuban peso, it turns out that Joe Biden will be the one who achieves what Marino Murillo, the czar of the “Ordering Task” of the Communist Party of Cuba, did not achieve: the appreciation of the Cuban peso.

Without goods or services to offer or stocks of foreign currency in the official exchange market and little stock of foreign currency in the informal market, an inflationary spiral was triggered due to a combination of causes, which are not relevant here to detail, among which are the prohibition of the use of the dollar in banks and state institutions, which depreciated the Cuban peso against the US dollar and the euro. Depreciation is understood as the reduction in the value at which a country’s currency is quoted on the market with respect to one or more foreign currencies.

And Cuba finds itself in this situation of depreciation of the national currency —where a dollar costs more than 100 pesos and a mango can cost more than 20 pesos— when the Biden administration announces this package of measures of unquestionable economic benefit for the Cuban family and also, without other options, for the communist regime.

Back to remittances

According to figures from the Inter-American Dialogue and the World Bank published by CNN in July 2021, the total remittances sent to Cuba in 2019 were US$2,055,892,104, which were received by 1,042,451 households, representing 26% of the Cuban families, which, on average, received US$ 2,210 that year, sent by 778, 362 people living in the United States through the so-called “mules” or other means or travelers, which represent 60% or something more of the channels through which remittances reach the Island.

While on that date US$178.2 million were received from Spain for remittances, which represented 8.67%, and US$156.4 million (7.6%) were received from other countries, US$1.721 million arrived in Cuba from the United States, which represent 83.72% of the money remitted from abroad to Cuban families.

Now add to these reference figures the dollars that for airport services, lodging, transportation and other benefits, will enter Cuba once all the measures announced by the Biden administration are implemented and fully executed.

Then, it is not necessary to be an economist to understand that, with respect to today, in the not too distant future, the supply of US dollars in the Cuban exchange market will increase ostensibly, so that, as a result of the law of supply and of demand, the price of the American greenback will drop, with the Cuban peso gaining purchasing power.

And in use of the legal principle of good faith, in the same way that the United States government is eliminating obstacles, reciprocally, the Cuban government must restore legal tender to the United States dollar in banks and in all financial institutions throughout the territory. national, for the purposes of its legitimate exchange for Cuban pesos, according to the exchange rate of the day, eliminating the euphemistically called MLC (freely convertible currency), which is nothing more than a virtual dollar, but which does not stop dollarizing the Cuban economy.

Cubans who want freedom should not ask Biden for it, we must get it ourselves. And the communist regime, which speaks of sovereignty, although assisted by Biden, now has the opportunity to make the national currency out of the depreciated and despised paper that is the Cuban peso. try it.

OPINION ARTICLE
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