What has Cuba done with currencies?

During the past decade, the Cuban State used the currency from foreign trade and the remittances collected to finance the construction of hotels and, apparently, to pay debts, according to the data available in the Balance of Payments.

The Balance of Payments (BP), according to the economic encyclopedia Economipedia, is "an accounting document in which commercial operations, services and capital movements of a country abroad are recorded."

It is essentially made up of two subaccounts: the Current Account (CC) and the Capital and Financial Account (CKF). The first shows what the determining relationship is with the external sector, and the second, whether the destination of said flows is for debt issues or foreign investments, in the case of a surplus, or the nature of the financing, in the case of a deficit. .

For its part, the CC collects the balances of the trade balance, namely exports and imports, which is the main source of foreign currency for any non-issuing country. It also includes the balance of primary income transfers, that is, the sending of profits and salary payments made by foreign companies that operate in the country being analyzed, as well as the collections of national companies that operate in the country. foreign. Finally, there are current transfers, which are basically remittances.

The use of BP by specialists, analysts and officials allows diagnosing the flows of economies abroad, as a basis for analysis to draw up economic policies and make decisions.

In the case of Cuba, a country whose institutions lack transparency, so that government policies and uses of public money are not reported in a timely, systematic and clear manner, the BP also serves to know what the government hides or manipulates.

Thus, by making an informed reading of the BP, clear images of the Cuban economy are obtained. Their data reveals that between 2010 and 2019 Cuba had positive net exports, or in other words, its exports were enough to pay for everything it imported and, in addition, there was money left over. The country had, through exports, profits ranging from 1,700 to 3,900 million USD annually.

On the other hand, the balance of remittances was positive in almost every year, reaching 1,800 million USD; even José Luis Rodríguez, former Castro economy minister, speaks of 2,000 billion.

Both figures, net exports and remittances, represent the foreign currency income that Cuba received, and that the State had available to, like any nation, pay debts, invest and pay foreign companies that operate in the country.

Between 2010 and 2019, the State allocated figures ranging from 900 to 1.9 billion dollars each year to pay foreign companies operating in Cuba, according to official data collected in the BP for that period. In those years, the French emporium Bouygues was carrying out hotel construction projects in Cuba,such as the remodeling of the Packard, inaugurated in 2018; del Manzana, inaugurated in 2017, and the construction of Laguna del Este V, according to the French company's website. Therefore, the latter was one of the foreign companies that received payments from Cuba.

Another part of the currency, according to official data, was used to finance investments. Regarding their structure, what stands out most is that most of them were concentrated in hotels, with their maximum growth between 2015 and 2019. Among them, the K23 hotel stands out, which has been under construction since 2018 and has been raised with 100% Cuban capital, as reported by the Cuban magazine Juventud Técnica in May 2023.

After paying foreign companies that operated on the island and financing investments, the Balance of Payments figures indicate, the State was left with between 1,200 and 3,100 million dollars per year destined to pay debts or invest abroad, which that the first option is more likely, since there are no indications that Cuba is making significant investments abroad, in addition to the fact that the National Office of Statistics and Information (ONEI), the official body in charge of preparing and disseminating the BP, It does not publish the part that shows that information for the observed years.