routes in need of increased competition, not least of these being
those to Cuba which are lagging behind the rest of the
region.
This is highlighted by a study undertaken
by nonprofit body the Inter-American Dialogue (IAD), which revealed
that via formal money transfer operators serving Cuba the average
cost is 15 percent of the amount remitted, three times the average
in the rest of Latin America and the Caribbean.
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Unsurprisingly, a survey of Cuban expatriates
by the IAD revealed that the most significant cause of
dissatisfaction among respondents is the high cost of remitting
funds to their families in Cuba. The IAD pointed to lack of
competition as one of the key causes of high costs.
Notably, 65 percent of respondents view
Western Union as being their primary money transfer service
provider while indicative of dissatisfaction, 73 percent want to
use other sending methods than the current one, such as account to
account transfers.
The size of the inbound Cuban remittance
market is not precisely known. According to the IAD’s estimates it
is between $830 million and $985 million while Cuba’s government
reports a figure of almost $1.4 billion.
Absence of an exact figure also reflects the
substantial value of remittances made via informal channels. Most
significant of these are travellers known as mulas (Spanish for
mules) who, according to the IAD, charge on average 13 percent of
the amount carried to Cuba.
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By GlobalDataUS restrictions on money-flows to Cuba imposed
during George W Bush’s term as president have also had a
significant influence on remittances to Cuba.
For example, only 54 percent of remittances
from the US now go via formal channels compared with 71 percent of
remittances from other countries.
Remittances from the US have also fallen
sharply from the IAD’s estimate of 81 percent of the total value in
2005 to 53 percent in 2008.
During the period remittances from Spain to
Cuba have increased from 12 percent to 23 percent of the total
value.
