After 51 years of keeping its people virtual prisoners on their island, Cuba is tearing down the biggest barrier: its exit visa requirement. The next question is where, exactly, will Cubans be welcome when they go?
Beginning Jan. 14, most Cubans will be permitted to travel with only a passport and an entry visa from the countries they intend to visit. Cuban travelers will also be allowed to stay abroad for 24 months (up from 11 months) without losing their Cuban residency or health care coverage.
There are significant exceptions to the new rule. The government will continue to restrict travel to protect national security and “human capital.” The national security exception will probably apply to military personnel, and perhaps to dissidents or to senior government officials and their relatives. The second exception will prevent certain professionals, including doctors and scientists, from taking their skills elsewhere. This is particularly important for Cuba, because it uses its doctors’ services to barter with oil-rich Venezuela. As of last year, around 40,000 Cuban doctors and other professionals were stationed in Venezuela in exchange for around 115,000 barrels of oil a day.
Those who are permitted to leave will face other obstacles. The cost of a Cuban passport is expected to double to $100 - about five times the country’s average monthly salary - as the new policy takes effect. Cuban travelers will also need to find a way to pay for transportation off the island. Currently, round-trip airfare between Havana and Miami on an established charter runs around $400.
But there are good reasons to believe that the Castro regime, now headed by President Raul Castro, brother of Fidel Castro, genuinely wants to make it easier for Cubans to leave. These reasons have little to do with any newfound interest in personal freedom and plenty to do with self-interest.
Remittances - money sent from outside the country, usually by relatives - are an important source of hard currency on the island. Last year remittances totaled an estimated $2.3 billion. To put this figure in perspective, Cuba’s gross domestic product is only about $60 billion. Allowing more Cubans to leave would create more foreign wage-earners who would be likely to send part of their paychecks back to family members left behind. The extended travel period included in the new policy may also allow Cubans who do not wish to leave permanently to spend time abroad earning money that they would then bring back to Cuba.
The regime’s goals are probably not solely economic, however. As pressure for change continues to build, the move may serve as a way for the Castros to quickly get rid of those who are most dissatisfied. As Raul Hernandes-Morales, a Cuban-American lawyer in Miami who left Cuba at the age of 15, told The New York Times, “Every once in a while they open up the pressure cooker and let out some steam.”
The last time the pressure valve opened was in the spring of 1980, during the Mariel boatlift. The effect was, predictably, explosive. The pressure had built to an extreme high; in the midst of economic distress, Cubans had flooded the Peruvian embassy seeking asylum. Ultimately, the Cuban government opened the port of Mariel to those wishing to leave the country, so long as they could arrange their own transportation. Cuban-Americans in Florida responded by heading south in large numbers, in pretty much anything they could find that would float, to help provide that transportation. The U.S. government agreed to accept the refugees, but not to transport them.
The mass exodus led to overcrowding on boats, producing unsafe conditions that killed 27 people. U.S. immigration officials were overwhelmed by the influx. They soon discovered that some of the refugees were criminals and mental patients who had been put on boats directly after being released from prisons and institutions. As officials tried to screen the new arrivals, the approximately 125,000 “Marielitos” were held for processing in refugee camps that were as overcrowded as the boats the refugees had travelled on. At Fort Chaffee Army Reserve base in Arkansas, the conditions were so bad that refugees rioted, and 40 were injured in clashes with federal marshals.
To prevent the problems of the Mariel boatlift from recurring, we will need to reconsider our approach to Cuban immigration. Since 1995, the United States has maintained what is known informally as the “wet foot, dry foot” policy, under which those who are intercepted while trying to reach the States are turned back, but those who successfully reach U.S. soil are permitted to stay and are automatically given the option of embarking on the path to citizenship after one year. Our current policy, combined with Cuba’s new opening, could lead Cubans seeking to settle in the United States to first leave Cuba by obtaining entry visas to other countries, and then later trying to cross the U.S .border illegally. It is easy to see how this would create chaos, not to mention rampant unfairness, along the U.S.-Mexican border, as Cubans who slip across are permitted to stay while Mexicans and others are sent back. The Cubans will accordingly be targets for all sorts of abuse in Mexico as well.
One possible response would be for the U.S. to adopt less permissive policies toward Cuban immigrants once they can, theoretically, emigrate legally to any place willing to admit them. The far better option, however, would be to use this opportunity to allow Cuban immigrants who leave Cuba legally to enter the U.S. in the same way (and to overhaul and liberalize our other immigration policies, as well). The best cure for illegal immigration is legal immigration.
As I have written before, our continued trade restrictions with Cuba serve only to further isolate the country, insulating its leaders from outside pressures. A free flow of people, on the other hand, would create a stronger link between Cuba and the outside world, giving Cubans the opportunity and eventually the means to democratize their own country. Meanwhile, newly arrived Cuban-Americans would do what Cuban-Americans who are already here have done: get jobs, raise families and pay taxes.
When a barrier comes down, or a valve opens, sometimes the only way to forestall disaster in the short term is to temporarily create another stop. But we will be poorly served if we simply replace Cuban immigrants’ struggle for exit visas with an equally onerous struggle for entry permits.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
After 51 years of keeping its people virtual prisoners on their island, Cuba is tearing down the biggest barrier: its exit visa requirement. The next question is where, exactly, will Cubans be welcome when they go?
Beginning Jan. 14, most Cubans will be permitted to travel with only a passport and an entry visa from the countries they intend to visit. Cuban travelers will also be allowed to stay abroad for 24 months (up from 11 months) without losing their Cuban residency or health care coverage.
There are significant exceptions to the new rule. The government will continue to restrict travel to protect national security and “human capital.” The national security exception will probably apply to military personnel, and perhaps to dissidents or to senior government officials and their relatives. The second exception will prevent certain professionals, including doctors and scientists, from taking their skills elsewhere. This is particularly important for Cuba, because it uses its doctors’ services to barter with oil-rich Venezuela. As of last year, around 40,000 Cuban doctors and other professionals were stationed in Venezuela in exchange for around 115,000 barrels of oil a day.
Those who are permitted to leave will face other obstacles. The cost of a Cuban passport is expected to double to $100 - about five times the country’s average monthly salary - as the new policy takes effect. Cuban travelers will also need to find a way to pay for transportation off the island. Currently, round-trip airfare between Havana and Miami on an established charter runs around $400.
But there are good reasons to believe that the Castro regime, now headed by President Raul Castro, brother of Fidel Castro, genuinely wants to make it easier for Cubans to leave. These reasons have little to do with any newfound interest in personal freedom and plenty to do with self-interest.
Remittances - money sent from outside the country, usually by relatives - are an important source of hard currency on the island. Last year remittances totaled an estimated $2.3 billion. To put this figure in perspective, Cuba’s gross domestic product is only about $60 billion. Allowing more Cubans to leave would create more foreign wage-earners who would be likely to send part of their paychecks back to family members left behind. The extended travel period included in the new policy may also allow Cubans who do not wish to leave permanently to spend time abroad earning money that they would then bring back to Cuba.
The regime’s goals are probably not solely economic, however. As pressure for change continues to build, the move may serve as a way for the Castros to quickly get rid of those who are most dissatisfied. As Raul Hernandes-Morales, a Cuban-American lawyer in Miami who left Cuba at the age of 15, told The New York Times, “Every once in a while they open up the pressure cooker and let out some steam.”
The last time the pressure valve opened was in the spring of 1980, during the Mariel boatlift. The effect was, predictably, explosive. The pressure had built to an extreme high; in the midst of economic distress, Cubans had flooded the Peruvian embassy seeking asylum. Ultimately, the Cuban government opened the port of Mariel to those wishing to leave the country, so long as they could arrange their own transportation. Cuban-Americans in Florida responded by heading south in large numbers, in pretty much anything they could find that would float, to help provide that transportation. The U.S. government agreed to accept the refugees, but not to transport them.
The mass exodus led to overcrowding on boats, producing unsafe conditions that killed 27 people. U.S. immigration officials were overwhelmed by the influx. They soon discovered that some of the refugees were criminals and mental patients who had been put on boats directly after being released from prisons and institutions. As officials tried to screen the new arrivals, the approximately 125,000 “Marielitos” were held for processing in refugee camps that were as overcrowded as the boats the refugees had travelled on. At Fort Chaffee Army Reserve base in Arkansas, the conditions were so bad that refugees rioted, and 40 were injured in clashes with federal marshals.
To prevent the problems of the Mariel boatlift from recurring, we will need to reconsider our approach to Cuban immigration. Since 1995, the United States has maintained what is known informally as the “wet foot, dry foot” policy, under which those who are intercepted while trying to reach the States are turned back, but those who successfully reach U.S. soil are permitted to stay and are automatically given the option of embarking on the path to citizenship after one year. Our current policy, combined with Cuba’s new opening, could lead Cubans seeking to settle in the United States to first leave Cuba by obtaining entry visas to other countries, and then later trying to cross the U.S .border illegally. It is easy to see how this would create chaos, not to mention rampant unfairness, along the U.S.-Mexican border, as Cubans who slip across are permitted to stay while Mexicans and others are sent back. The Cubans will accordingly be targets for all sorts of abuse in Mexico as well.
One possible response would be for the U.S. to adopt less permissive policies toward Cuban immigrants once they can, theoretically, emigrate legally to any place willing to admit them. The far better option, however, would be to use this opportunity to allow Cuban immigrants who leave Cuba legally to enter the U.S. in the same way (and to overhaul and liberalize our other immigration policies, as well). The best cure for illegal immigration is legal immigration.
As I have written before, our continued trade restrictions with Cuba serve only to further isolate the country, insulating its leaders from outside pressures. A free flow of people, on the other hand, would create a stronger link between Cuba and the outside world, giving Cubans the opportunity and eventually the means to democratize their own country. Meanwhile, newly arrived Cuban-Americans would do what Cuban-Americans who are already here have done: get jobs, raise families and pay taxes.
When a barrier comes down, or a valve opens, sometimes the only way to forestall disaster in the short term is to temporarily create another stop. But we will be poorly served if we simply replace Cuban immigrants’ struggle for exit visas with an equally onerous struggle for entry permits.
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