They apparently broke the $2 billion level last year.
Opening up on both shorelines helps increase remittances sent to Cuba in 2011 by about 20%
By Emilio Morales & Joseph L. Scarpaci (THCG).― While Cubans debate the future of their economic model, measures taken by Raúl Castro since the Sixth Cuban Communist Party Congress held last April, are correlated with nearly exponential growth in remittances reaching the island. Nearly $2.3 billion USD entered the island through this venue last year, up about 19.5% over 2010.
Table 1. Remittances sent to Cuba, 2000-2011 (millions USD).
Source: Calculated by The Havana Consulting Group LLC.
Remittances increased ten fold over the past six years compared to the 2000-2005 period.
A variety of measures confirm that remittances are the main source of hard currency reaching peoples’ pockets.
What factors have unleashed this growth in the past six years?
This time, both the Obama administration’s policy towards Cuba and the measured implemented by the government of Raúl Castro have made this growth possible.
Allowing Cuban Americans to go from visiting the island once every three years, to as often as they want, has been a major driver of these remittance increases. At the same time, the Obama regulations removed the $300 wiring maximum each three months, to sending $10,000 daily.
Factors carrying the greatest weight on the Cuban side include allowing cell phones for a mass market and the sale of private homes and cars.
The six most important factors behind these changes are:
1. Increase in trips to Cuba.
2. Opening the Cuban real-estate market.
3. More space for private enterprises.
4. Growth of cell phone usage.
5. Decreasing wire-transfer and package shipping costs.
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