Miami's lifeline to Fidel

A group of Cuban-American members of the Florida legislature recently issued an ultimatum to President Bush - either take a tougher line against Fidel Castro or Florida's Cuban-American community might well abandon the Republican party in 2004.

Given the importance of the Florida vote to Mr. Bush's reelection and the unwavering support Florida's Cuban-Americans traditionally give Republicans, the warning received serious attention from the White House as well as from Democratic contenders for the presidency, who are scrambling to curry the favor of disenchanted Cuban-Americans.

In their Aug. 11 letter to the president, the Cuban-Americans demanded measures be taken to ratchet up the pressure on Mr. Castro, but if they really want to turn up the heat on him, they should look closer to home. The Cuban-American community of South Florida has become the single most important source of external economic support for the Cuban government.

Why not take steps to cut off this aid?

Economic sanctions have been the centerpiece of US policy for more than 40 years. Most Americans can't travel to, trade with, or invest in Cuba. The rationale for the embargo is to deny hard currency resources to the government and create pressure for democratic reform and/or regime change on the island.

But the US embargo has holes - the biggest, by far, is the special exemptions granted Cuban-Americans. They can travel and send money to Cuba. Their dollars transferred through these family visits and remittances are now Castro's principal economic lifeline.

While calculating the flow of money transfers to Cuba is difficult, our estimates, which incorporate the main flows of hard currency reaching the Cuban population and its possible uses, put family remittances at more than $1 billion per year since 2000. That's significantly higher than the amount reported by sources relying on Cuban government balance of payments data. Almost 90 percent of remittances come from the US - especially from the Cuban-American community in South Florida (where 60 percent of Cuban-Americans live).

The intended beneficiaries of this money are the family members to whom it is sent, or rather personally delivered by visiting relatives, friends, or paid couriers ("mules"). But the Cuban government also benefits from the remittances of its archenemies in Miami.

Most of the money transferred from the US gets spent in government-owned dollar stores. Taking into consideration total sales ($1.2 billion in 2001) and average markup (240 percent) of the dollar stores plus transactions in exchange houses, we calculate that net hard currency revenues to the government from family remittances are today greater than its profit from tourist activities and sugar and nickel exports combined.

If Cuban-American politicians are genuinely committed to a tougher policy on Cuba, they should encourage the president and Congress to tighten the embargo by cutting Castro's Miami lifeline. Given the precarious condition of the Cuban economy, such a move would be devastating for the Castro government. It would also provide a true test of whether economic sanctions will ever produce political change in Cuba.

But cutting off family visits (around 120,000 per year) and money transfers would also be devastating for those Cubans whose lives are made better by them. If the Cuban-American leaders demanding changes in US Cuba policy are, understandably, unwilling to inflict this sacrifice on their relatives, then they should understand the embargo will not work.

In May, the Bush administration adopted measures that effectively reinforce the contradictions in policy. While eliminating "people-to-people" exchanges that do "little more than line the pockets of the Castro regime," according to a State Department spokesman, the administration actually made it easier for Cuban-Americans to travel to and get money to Cuba.

Small holes in the embargo may have been closed, but Miami's lifeline continues to supply Fidel with desperately needed greenbacks.

• Terry L. McCoy is a professor of Latin American studies and political science at the University of Florida in Gainesville. Paolo Spadoni is a doctoral candidate there.