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December 1995, Volume 2, Number 12

Cuban/Haitian Immigration

Between November 15 and 30, over 1,100 Haitians were stopped in boats en route to Florida. By comparison, only about 300 Haitians were picked up between the time 20,000 US troops entered Haiti in October 1994 and November 15, 1995. Haitians are reportedly paying smugglers up to $3,000 each to be taken to the US. The 6,000 UN troops in Haiti are scheduled to leave in February 1996.

The fifth round of bilateral negotiations between the United States and Cuba ended on November 28, 1995. Cuba and the US were unable to agree to a reduction in the $750 fee imposed on Cubans who want to emigrate to the US. Cuban sources said they will seek to maintain the previously agreed upon 20,000 minimum of US visas to be granted annually to Cubans who wish to emigrate to the US.

The countries also failed to agree upon the fate of 1,200 Cubans in US detention centers who arrived during the 1980 Mariel boatlift. The US claims that the detainees have criminal backgrounds; Havana counters that the US government is exaggerating the criminal background of the detainees. At the July talks, Cuba pledged to continue to prevent a mass exodus of Cubans bound for the US.

In the past 10 months, the US government issued more than 24,000 entry visas to Cubans. The US promised to grant at least 20,000 immigration visas per year to Cubans in 1994.

The Cuban economy has shrunk by almost one-third since 1990, including a 15 percent drop in GDP in 1993. Cuba has opened its door to foreign investors to stimulate its economy, and keep migrants at home, but its efforts to attract foreign businesses have been hampered by anti-business regulations and attitudes. Since 1990, about $737 million in foreign investment has been announced--one third is from Mexico, and another third is from Spain and Canada.

At the end of a conference in Havana on "The Nation and Migration," the Cuban government announced that the 1.2 million overseas Cubans will be able to obtain travel documents that would allow then to come and go as they please for up to two years. Cubans abroad send an estimated $400 million to the island.

There are about 11 million Cubans; they represent about one-third of the population of the Caribbean. There are about two million Cubans living off the island; half are in the US.

Cubans can exchange their pesos for dollars, in Cuba's increasingly dollarized economy, at a mid-November rate of 25 to 30 pesos for $1. An average salary in Cuba is 125 pesos per month.

While foreigners are in theory allowed to buy land, the Cuban constitution prohibits the sale of land, so foreigners must lease rather than buy the land on which their facilities sit. Foreign businesses are required to pay their Cuban workers in dollars at the official $1 to 1 peso rate, although the black market rate is $1 to 25 pesos. The Cuban government pays workers employed by foreign businesses in pesos, and pockets the difference.

There is widespread agreement that the US embargo on trade with Cuba will soon be lifted; former Treasury Secretary Lloyd Benston, among others, asserted that if the US can lift the embargo on Vietnam, where American soldiers lost their lives, it can resume trade with Cuba. US businessmen are visiting Cuba, and signing letters of intent to do business there if the embargo is lifted.

Canadian mining and other businesses already operating in Cuba report that the educated Cuban labor force can run high-productivity facilities with few expatriate managers--Cuba's literacy rate is reported to be higher than Canada's. However, it is reportedly difficult to make long-term business plans because the legal and regulatory framework is still evolving--the Cuban peso was made convertible in 1993, a Central Bank was established in 1994, and the foreign investment law was approved in 1995.

Some 200,000 Cubans have taken advantage of the right to be self-employed, but they are so far prohibited from hiring employees, a prohibition that may be dropped in 1996.

The integration of Cuba into the North American economy is expected to have repercussions throughout the Caribbean. Several of the larger Caribbean nations, including the Dominican Republic and Haiti, which together have over 40 percent of the Caribbean's 36 million people, fear that current US interest and investment may move to Cuba. In some Caribbean nations, 10 to 20 percent of the population born on the island lives in the US.

"Cuba rebuff US request to lower emigration fees, Agence France Presse, November 29, 1995. Mike Clary, "Haitians flee as turmoil builds," Los Angeles Times, November 28, 1995. Evelyn Leopold, "No US, Cuba pact on emigrant fees, Mariel detainees," Reuters, November 28, 1995. Larry Rohter, "Havana to ease the way for emigres who live in the US to invest in Cuba," New York Times, November 7, 1995. Jose de Cordoba, "Cuba's Business Law Puts off Foreigners," Wall Street Journal, October 10, 1995. Pascal Fletcher, "Senior US official in Cuba for immigration talks," Reuters, July 16, 1995. "Cuba says dialogue with United States still limited," Reuters, July 13, 1995.