Author Archives: Scarpacci Joseph L.

Publication of the Papers from the 2013 Conference of the Association for the Study of the Cuban Economy


The proceedings of the Association for the Study of the Cuban Economy’s 23rd Annual Meeting entitled  “Reforming Cuba?” (August 1–3, 2013) is now available. The presentations have now been published by ASCE  at

The presentations are listed below and linked to their sources in the ASCE Web Site.



Panorama de las reformas económico-sociales y sus efectos en Cuba, Carmelo Mesa-Lago

Crítica a las reformas socioeconómicas raulistas, 2006–2013, Rolando H. Castañeda

Nuevo tratamiento jurídico-penal a empresarios extranjeros: ¿parte de las reformas en Cuba?, René Gómez Manzano

Reformas en Cuba: ¿La última utopía?, Emilio Morales

Potentials and Pitfalls of Cuba’s Move Toward Non-Agricultural Cooperatives, Archibald R. M. Ritter

Possible Political Transformations in Cuba in the Light of Some Theoretical and Empirically Comparative Elements, Vegard Bye

Las reformas en Cuba: qué sigue, qué cambia, qué falta, Armando Chaguaceda and Marie Laure Geoffray

Cuba: ¿Hacia dónde van las “reformas”?, María C. Werlau

Resumen de las recomendaciones del panel sobre las medidas que debe adoptar Cuba para promover el crecimiento económico y nuevas oportunidades, Lorenzo L. Pérez

Immigration and Economics: Lessons for Policy, George J. Borjas

The Problem of Labor and the Construction of Socialism in Cuba: On Contradictions in the Reform of Cuba’s Regulations for Private Labor Cooperatives, Larry Catá Backer

Possible Electoral Systems in a Democratic Cuba, Daniel Buigas

The Legal Relations Between the U.S. and Cuba, Antonio R. Zamora

Cambios en la política migratoria del Gobierno cubano: ¿Nuevas reformas?, Laritza Diversent

The Venezuela Risks for PetroCaribe and Alba Countries, Gabriel Di Bella, Rafael Romeu and Andy Wolfe

Venezuela 2013: Situación y perspectivas socioeconómicas, ajustes insuficientes, Rolando H. Castañeda

Cuba: The Impact of Venezuela, Domingo Amuchástegui

Should the U.S. Lift the Cuban Embargo? Yes; It Already Has; and It Depends!, Roger R. Betancourt

Cuba External Debt and Finance in the Context of Limited Reforms, Luis R. Luis

Cuba, the Soviet Union, and Venezuela: A Tale of Dependence and Shock, Ernesto Hernández-Catá

Competitive Solidarity and the Political Economy of Invento, Roberto I. Armengol

The Fist of Lázaro is the Fist of His Generation: Lázaro Saavedra and New Cuban Art as Dissidence, Emily Snyder

La bipolaridad de la industria de la música cubana: La concepción del bien común y el aprovechamiento del mercado global, Jesse Friedman

Biohydrogen as an Alternative Energy Source for Cuba, Melissa Barona, Margarita Giraldo and Seth Marini

Cuba’s Prospects for a Military Oligarchy, Daniel I. Pedreira

Revolutions and their Aftermaths: Part One — Argentina’s Perón and Venezuela’s Chávez, Gary H. Maybarduk

Cuba’s Economic Policies: Growth, Development or Subsistence?, Jorge A. Sanguinetty

Cuba and Venezuela: Revolution and Reform, Silvia Pedraza and Carlos A. Romero Mercado

Mercado inmobiliario en Cuba: Una apertura a medias, Emilio Morales and Joseph Scarpaci

Estonia’s Post-Soviet Agricultural Reforms: Lessons for Cuba, Mario A. González-Corzo

Cuba Today: Walking New Roads? Roberto Veiga González

From Collision to Covenant: Challenges Faced by Cuba’s Future Leaders, Lenier González Mederos

Proyecto “DLíderes”, José Luis Leyva Cruz

Notes for the Cuban Transition, Antonio Rodiles and Alexis Jardines

Economistas y politólogos, blogueros y sociólogos: ¿Y quién habla de recursos naturales? Yociel Marrero Báez

Cambio cultural y actualización económica en Cuba: internet como espacio contencioso, Soren Triff

From Nada to Nauta: Internet Access and Cyber-Activism in A Changing Cuba, Ted A. Henken and Sjamme van de Voort

Technology Domestication, Cultural Public Sphere, and Popular Music in Contemporary Cuba, Nora Gámez Torres

Internet and Society in Cuba, Emily Parker

Poverty and the Effects on Aversive Social Control, Enrique S. Pumar

Cuba’s Long Tradition of Health Care Policies: Implications for Cuba and Other Nations, Rodolfo J. Stusser

A Century of Cuban Demographic Interactions and What They May Portend for the Future, Sergio Díaz-Briquets

The Rebirth of the Cuban Paladar: Is the Third Time the Charm? Ted A. Henken

Trabajo por cuenta propia en Cuba hoy: trabas y oportunidades, Karina Gálvez Chiú

Remesas de conocimiento, Juan Antonio Blanco

Diaspora Tourism: Performance and Impact of Nonresident Nationals on Cuba’s Tourism Sector, María Dolores Espino

The Path Taken by the Pharmaceutical Association of Cuba in Exile, Juan Luis Aguiar Muxella and Luis Ernesto Mejer Sarrá

Appendix A: About the Authors


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Remittances Drive the Cuban Economy

By Emilio Morales and Joseph L. Scarpaci, Miami (The Havana Consulting Group).— Fidel Castro’s government reluctantly accepted remittances from abroad in 1993 when it realized it needed access to hard currency to survive.

It was a devastating ideological blow at the beginning of the so-called ‘Special Period in a Time of Peace’ because it revealed that the Cuban exile community had become a lifeline for the island. Suddenly, U.S. dollars started inundating the island and would never leave. Both the Cuban society and the exile community were startled by this bold move.

The former Cuban leader probably never imagined that the forced opening up to dollars was going to become the most efficient driver in the economy over the last 20 years. Not a single Cuban economist foresaw that outcome. Today, remittances reach 62% of Cuban households, sustain about 90% of the retail market, and provide tens of thousands of jobs.

Money sent from overseas far exceeds the value of the once powerful sugar industry which, in 1993, began a huge decline from which it has not recovered. Remittances in 2013 surpass net profits from tourism, nickel, and medical products manufactured by the Cuban biotech industry.

Table 1. Remittances versus Other Sources of Hard Currency in Cuba, 2012 (in millions of US dollars)





Remittances received in cash



In-kind remittances



Total remittances



Tourism revenues



Nickel exports



Pharmaceutical exports



Sugar exports


Data sources: Calculated by The Havana Consulting Group, based on their data and open-source statistics published by the Oficina Nacional de Estadísticas e Información (ONEI), Havana.

The table above shows that remittances ($5.1 billion) outstrip the leading four sectors of the Cuban economy combined ($4.9 billion). Moreover, the figures for items 4 through 7 do not take into account expenses incurred in generating those gross revenues (i.e., costs of processing sugar, manufacturing drugs, food imports, etc.). Sending remittances does not cost the Cuban government money, but it circulates throughout he economy and supports most Cubans in some way.

White House Policies Trigger Growth in Remittances

Barack Obama’s arrival in the White House has directly influenced the increase in money being sent to Cuba. In the past four years, $1 billion USD of remittances have infused the Cuban economy.

Cash remittances in 2012 reached a record $2.61 billion USD; a 13.5% increase over 2011.

In other words, cash remittances outweigh government salaries by 3 to 1. The current monthly mean salary according to ONEI (the official government statistics agency) is 445 Cuban pesos, or the equivalent of just under $19 USD. Today, the economically active work force is 5.01 million workers, of which about 80% (4.08 million) draw state paychecks, whereas the balance is self-employed, agricultural, or cooperative workers.

If we use the official exchange rates that one Cuban convertible peso (CUC) equals 24 pesos (CUP) or one US dollar, the annual payout for state workers is three times less than the volume of money that Cuban émigrés send to family back home. Include in-kind remittance contributions (gifts, appliances, clothing, etc., brought to Cuba during visits), and the ratio leaps to 5.5 to 1.

Behind this growth in sending money to Cuba is the opening up of travel to Cuba as well as eliminating restrictions on sending money there. In 2012, just over a half a million Cubans residing abroad visited Cuba, making them the second largest tourist group in the island’s market; only Canadians (1.1 million visits) surpass them.

Out-migration from Cuba –about 47,000 annually on average over the past decade or nearly a half million émigrés—is also a contributing factor because those who have most recently left the island are the ones most inclined to send money back home. That was not the pattern with the original exile community in the 1960s; sending dollars to the island was forbidden back then.

We also need to acknowledge that several reforms introduced by the Cuban government in the past three years have encouraged remittances. This cash infusion helps to start home restaurants (paladares), B&Bs, car rentals, and more recently the buying and selling of private cars and real-estate. These businesses are aided by the 1.6 million cell phones in use today –available to the general public only since 2007—of which 70% are paid for by Cubans living off the island.

Never at a loss to encourage remittances, the Cuban government announced just last month the opening of 118 Internet stations that charge very high hourly rates. The new cyber cafés will initially cluster in the tourist poles across the island and the provincial-capital cities.

At the present, then, the role the Cuban diaspora plays in developing the island’s economy has never been greater, despite the restrictions on how and where money can be invested. However, the short term is unlikely to witness a greater influx of capital beyond the diaspora’s giving. Witness the failures in recent offshore gas and oil oil drillings that have come up ‘dry’ and the political and economic crisis in post-Chávez Venezuela is mired. This may create a broader space for the exiles to have a more direct hand in rebuilding the country.

Like it or not, Cuban exiles carry economic clout on the island. They have a lot of skin in the game; some of it is economic, and a lot of it is love of family. Their role in shaping the lives of many will be transformative in years to come, and on both shorelines that straddle the Florida Straits.

Last Updated (Tuesday, 11 June 2013 04:20)

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Emilio Morales and Joseph L. Scarpaci, “Bring on the [Cuban] college graduates!”

Original Essay from the Morales Scarpaci  Havana Consulting Group web site here: “Bring on the [Cuban] college graduates!”

The Cuban government slammed on the brakes when it recently scrapped plans to allow private wholesaling and let skilled workers strike out on their own.

 Vice-Minister of Work and Social Security, José Barreiro’s announcement last week signals a strong reversal of reforms that began in 2010. He also stated that jobs that had been previously off limits to private workers –auto-body repairers, floor polishers, aluminum product vendors, rust removers, welders, and confectioners—are now legal trades.

But what about software engineers, tutors and teachers, and other skilled workers?

The new announcement shows resistance to change and the lack of a strategic plan. Both moves are intolerant of free-market competition among the island’s emerging private sector.

President Raúl Castro’s recent trips to China and Vietnam show concern about adapting the magic formula from these two key allies. The Asian answer was simple but it is only part of a recipe for success: open up to foreign capital, liberalize all economic sectors, and let skilled, professional workers earn a living either on their own or in small enterprises.

Vice Minister Barreiro described the ‘new’ changes this way: “[they] are designed for urban cooperatives, a different kind of organization compared to self-employment, [but the cooperatives] will have greater flexibility and work like the state-run beauty shops did where the shops were passed on to its workers.”

We argue that this move is bound to fail. The track record speaks for itself: the classic failures of both the sugar-cane and non-sugar cane UBPCs (a type of cooperative) should not be forgotten by the Cuban government.

Unexplainable contradictions.

A priority two years ago was the plan to shed 2 million workers from public payrolls over the course of five years.  One hundred eighty-three private trades were approved by the Cuban Communist Party to absorb downsized workers. However, the limitations of private-sector work, inflexible laws, high taxes, the continuation of a dual currency system (pesos and CUCs), and poor conditions to acquire inputs have thwarted these efforts.  So how can the government send layoff notices to 2 million workers if it cannot nurture a private sector to employ them? The Nanny State is unwilling to cede economic space that it has dominated for more than 50 years.

A work break in a private sector barber shop, Havana, March 2011, photo by Arch Ritter

How can you build a private sector without private wholesalers?

This is a major weakness of the Cuban model. No country can develop a sustained private sector without wholesalers. Failure to do so will further the pattern of stealing from public institutions and stimulate the black market.

While the mindset of Cuban workers needs to change to adapt to these new measures, both the laws and thinking of the Cuban governments must also adjust if real reform is to take root.

We suspect these observations are not lost on the Cuban leadership because in recent years, hundreds of high-level Cuban scholars have been traveling around the United States, Asia and Europe to gather first-hand observations about what constitutes successful development. They file reports to myriad agencies when they return. Are the polítcos and decision makers reading these reports?

Economic reforms without professionals and technology: Mission Impossible The National Statistics Office (ONE) in Havana claims there are 6.8 million working-age Cubans, of which, about one-fifth are college graduates. So why doesn’t the state allow them (about 1.5 million workers) to work in trades that maximize their skills and training? White-collar and skilled workers drive economic development, and failure to engage them will doom the Cuban economic model.

Remember the fiber-optic cable laid between Cuba and Venezuela? Well, it has been idle for over a year even though it –along with other infrastructure and reforms—could play a key role in creating high-tech work and jump-starting the economy.

Cuban college graduates are needed in housing construction, agriculture, selling automobiles, supply-chain management and distribution channels, tourism development, the food industry, and a plethora of service-sector jobs.

Tapping into college-trained workers will require a change in the mindset of the Cuban leadership. Triggering this new thinking is the main dilemma in changing the economic model. Failure to do so will only produce a “light” version of the economic reforms spelled out in last year’s VI Cuban Communist Party meetings and attendant laws that have been approved in recent years.

Let the college grads work!


The authors are principals at The Havana Consulting Group LLC and authored Marketing without Advertising: Brand Preference and Consumer Choice in Cuba. Scarpaci chairs the Marketing and Management Department in the West College of Business at West Liberty University, West Liberty, WV.


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Association for the Study of the Cuban Economy, 2011 Conference Proceedings

ASCE, the Association for the Study of the Cuban Economy has just published the Proceedings of its 2011 Conference. The Proceeding include a wealth of information and analyses. All articles for 2011 and indeed all the Conference proceedings for the last 21 years are freely available on the ASCE Web Site

Below is the Table of Contents for the 2011 Proceedings with all articles hyper-linked to the original ASCE source.


Conference Program

Table of Contents

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