Havana-Miami-Washington events and arguments and their impact on Cuba
Monday, May 18, 2009
Odds and ends
Marc Frank of Reuters explains Cuba’s tribulations with the U.S. dollar – it accumulates them, can’t use them, and has to pay a premium to dump them.
While we’re on the subject, can anyone explain how the Obama Administration calculates that Cuba skims 30 percent from remittances from the United States?The exchange rate and dollar surcharge amount to 20 percent – could it be that Western Union and other companies charge ten percent?
Las Vegas-based Allegiant Airlines will start operating Miami-Havana charters next month.
Cuba vs. Mexico: Fidel Castro continues the argument with Mexico over H1N1 flu in his latest essay, and Cuba wins one over Mexico in Univision’s beauty pageant.
The 30% is fuzzy math. The charge for changing USD is 10% to cover the expense and risk to Cuba of exchaging it for other currencies. He is including the exchange rate of CUC/USD = 1.08 (but this is an offical exchange rate for everyone and not a charge - Canadians don't blame Americans for charging 1.20 to exchange their money) The other 10% is for te ridiculous Western Union charges to send money to Cuba. Therefore, I don't believe Obama has a valid argument, unless he wants to allow for direct bank transfers and a mechanism to convert the USD held by Cuba to another currency free of charge.
Western Union charges more than 10% to many people, particularly those sending just $1-200 (15%-30%). On the flip side, you can't blame Cuba for the 10% exchange rate loss. In every country you lose money because of the (private market) exchange rate. And the reason for the fee from Cuba's point of view is clear. It seems to me like another area where the US has much more to do to fix things. Change the US law that says dealing with Cuba and its dollars is criminal for starters - Helms-Burton(?). Reading that Frank article I did notice that Obama said "work together" to increase family remittances. Let us hope. But I am not holding my breath. Obama was against Helms-Burton, so why doesn't he say so now that he's President? Or why not put a limit on fees that private US companies can charge, if he wants to dictate Cuba's terms?
Allegian airlines looks great. We need more flights, the price is currently quite $$, given the short distance. Thank you Allegiant!
ReplyDeleteThe 30% is fuzzy math. The charge for changing USD is 10% to cover the expense and risk to Cuba of exchaging it for other currencies. He is including the exchange rate of CUC/USD = 1.08 (but this is an offical exchange rate for everyone and not a charge - Canadians don't blame Americans for charging 1.20 to exchange their money) The other 10% is for te ridiculous Western Union charges to send money to Cuba. Therefore, I don't believe Obama has a valid argument, unless he wants to allow for direct bank transfers and a mechanism to convert the USD held by Cuba to another currency free of charge.
ReplyDeleteWestern Union charges more than 10% to many people, particularly those sending just $1-200 (15%-30%). On the flip side, you can't blame Cuba for the 10% exchange rate loss. In every country you lose money because of the (private market) exchange rate. And the reason for the fee from Cuba's point of view is clear. It seems to me like another area where the US has much more to do to fix things. Change the US law that says dealing with Cuba and its dollars is criminal for starters - Helms-Burton(?). Reading that Frank article I did notice that Obama said "work together" to increase family remittances. Let us hope. But I am not holding my breath. Obama was against Helms-Burton, so why doesn't he say so now that he's President? Or why not put a limit on fees that private US companies can charge, if he wants to dictate Cuba's terms?
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