How recent changes in remittance policy by the US and Cuba may facilitate small-scale investment to support Cuba’s growing non-state sector
Attached is an interesting MA Thesis by Chaney Wells on remittances and their posible use for microenterprise in Cuba:
Abstract:
This study adds to the existing literature on the potential use of remittances for credit in a financially underdeveloped economy, focusing on Cuba, a country for which little is known about the relationship between remittances and investment. In the past, economic and legal conditions in Cuba, in addition to US and Cuban policies on financial transfers have resulted in a large majority of remittances to Cuba being used for basic consumption. The Cuban government’s changing stance on the non-state sector, as well as recent shifts in both US and Cuban policies on remittances have important implications for remittance use in Cuba. This paper assesses the factors affecting remittance use, and makes the case that as a result of the concurrent shifts in US and Cuban remittance policy along with Cuba’s non-state sector expansion initiative, a more significant portion of remittances will be used for productive investment purposes, filling the void left by the underdeveloped financial sector.
