[Congressional Record Volume 143, Number 150 (Friday, October 31, 1997)]
[Extensions of Remarks]
[Page E2160]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             UNDERMINING THE UNITED STATES EMBARGO OF CUBA

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                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                        Friday, October 31, 1997

  Mr. HAMILTON. Mr. Speaker, I commend to my colleagues' attention the 
attached article by Ernest Preeg, which was published in the Journal of 
Commerce several days ago. The article points out that, according to a 
new United Nations Study, United States citizens sent relatives and 
friends in Cuba approximately $800 million in cash during 1996--a sum 
nearly twice as large as Cuba's net export earnings from its annual 
sugar harvest. Under current regulations, American citizens may legally 
send cash to Cuba only after first obtaining a very specific license 
from the Treasury Department. Rarely, if ever, has any American applied 
for such a license. The fact that so many private American citizens are 
moved by kinship or generosity to provide cash assistance to 
economically disadvantaged Cubans, in violation of the United States 
embargo and United States law, suggests that many Americans with ties 
to Cuba themselves reject one of the embargo's fundamental rationales: 
that it is both appropriate and necessary to apply economic pressure to 
promote political change in Cuba. This suggests that it is time to 
pursue a new United States policy toward Cuba, a policy in which both 
private United States citizens and the United States Government are 
able legally and openly to aid the Cuban people.

                     [From the Journal of Commerce]

                        Havana and Helms-Burton

                          (By Ernest H. Preeg)

       The U.S. embargo against Cuba, extended to third-country 
     Cuban investors through the 1996 Helms-Burton Act, enjoys 
     strong support among most Cuban-Americans, the three Cuban-
     American members of Congress and the well-organized Cuban 
     American National Foundation.
       However, Cuban-American attitudes are in deep conflict. 
     While most strongly support the embargo, including Helms-
     Burton, increasingly large remittance flows are sent to Cuban 
     friends and relatives, effectively undermining economic 
     restrictions.
       The extent of this contradiction--and its impact on U.S. 
     Cuba policy--is underscored by a startling U.N. Economic 
     Commission on Latin America and the Caribbean report. Eclac 
     found sharply rising remittances to Cuba in 1995 and 1996, 
     even as Congress enacted Helms-Burton, more than reversed the 
     law's limited success at discouraging third-country 
     investors.
       Virtually all Cuban-Americans, and many others, oppose the 
     Castro communist regime and want democracy quickly restored 
     in Havana. Yet Cuban-Americans also understand that economic 
     sanctions' poor track record forcing political change on 
     authoritarian governments--some even step up repression in 
     response--and the tool's disproportionate impact on the poor.
       The dilemma did not exist before 1990 because huge Soviet 
     subsidies--$6 billion annually in the late 1980s--ensured 
     decent Cuban living conditions despite the U.S. embargo. 
     After Russia's abrupt 1990 aid cutoff, however, Cuban 
     shortages of food, medicine and other goods mounted, worsened 
     by Helms-Burton.
       Cuban-Americans responded by stepping up remittances, 
     helped greatly in 1993 when Havana embraced U.S. dollar usage 
     and opened dollar-only stores. The forthcoming Eclac report 
     suggests remittances grew to approximately $800 million in 
     1996 from under $100 million in 1990, despite strict U.S. 
     Treasury limits--before counting direct shipments of 
     clothing and consumer goods.
       The role these remittances play in undermining the U.S. 
     embargo is best seen in a comparison with other dollar 
     sources. Cuba's 1996 tourist receipts were $1.4 billion, 
     sugar exports $1 billion, other exports under $1 billion and 
     much-touted foreign investment inflows about $100 million to 
     $200 million. Exact investment figures are secret.
       But the comparative figures are gross dollar receipts, 
     which don't reflect high offsetting imports. Cuban hotels buy 
     most food and other goods abroad, for instance, while the 
     sugar industry imports fertilizer, oil, machinery and parts 
     to service refineries. Tourism's net inflow, accordingly, is 
     as low as 30% of the gross--an estimated $400 million in 
     1996--while sugar's is about 50%, or $500 million. With 
     remittances, in contrast, virtually all $800 million remains 
     in Cuba.
       In 1996, therefore, the $800 million remittances nearly 
     equaled the net contribution from sugar exports and tourism 
     combined. Applying the same calculations more broadly, about 
     one-third of Cuba's entire net dollar inflow is from 
     remittances.
       The money is sent, of course, to help individual Cuban 
     relatives and friends. Yet in aggregate, it offsets the 
     embargo's financial squeeze and helps Havana keep the economy 
     afloat despite failed central planning policies. While the 
     remittances go directly to Cuban people, their help paying 
     for food and other basic needs leaves the government 
     with $800 million more to spend on other priorities.
       This fundamental difference between what Cuban-Americans 
     say and do regarding the U.S. embargo deserves broader 
     discussion, given the new Eclac figures. Helms-Burton's 
     extra-territorial provisions create tension between 
     Washington and its trading partners, particularly within the 
     World Trade Organization. If Cuban-Americans press for strict 
     adherence to the act's terms while undermining it through 
     large and apparently illegal remittances, the embargo policy 
     is deeply flawed.
       A review is particularly timely given the pope's planned 
     Cuba visit next January. The Catholic Church has consistently 
     opposed economic sanctions throughout the world, given their 
     undue impact on the poor. Pope John Paul may be anti-
     communist, but he is opposed to the U.S. embargo. The 
     church's strategy for social and political change in Cuba, as 
     elsewhere, is longer term.
       During his visit, the pope hopes to obtain enhanced 
     ``working space'' for the church, particularly a church radio 
     station in Cuba--although Castro is unlikely to agree to that 
     request. In the words of one Catholic priest.: ``When Fidel 
     is gone, and the revolution is gone, the church will still 
     be.''
       The Catholic Church has long dedicated itself to helping 
     the poor and disadvantaged. It has opposed the U.S. embargo 
     and extended food and medical shipments to Cubans through 
     Caritas its humanitarian agency. Several million dollars in 
     Cuban Caritas aid, however, pales beside the $800 million in 
     Cuban-American remittances. In this respect, Cuban-Americans 
     are more Catholic than the Pope.

     

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