It is about alleged proximity to the military, the secret service or the security forces of Cuba: Since November 2017, the US State Department has maintained a list of companies and other institutions with which no one who is subject to US jurisdiction is allowed to do business. Initially, this list had 180 entries. It has been updated several times since the start, including at the turn of the year.
In a statement by US Secretary of State Mike Pompeo, it said that Banco Financiero International SA (BFI) would also be added to the list with immediate effect. The Cuban military controls the financial institution and uses it to enrich itself through transactions, it said to justify.
Under the incumbent President Donald Trump, the United States stopped the hesitant rapprochement with Cuba from the tenure of his predecessor Barack Obama and withdrew most of the easing of the economic embargo against the Caribbean state.
Currency reform in response to an embargo
Washington justifies the economic pressure on Cuba with the oppression of the Cubans by its own government: Cuba is curtailing the human rights of its citizens. In addition, the country – where the Communist Party is the only authorized party – supports the “illegitimate” government of Nicolás Maduro in Venezuela.
The US embargo and the corona pandemic have ensured that the economic situation in Cuba has recently deteriorated significantly. The government in Havana is counting on currency reform in the fight against the crisis. In the opinion of observers, this is likely to increase inequality in the country, at least temporarily, while at the same time enabling stronger market economy reforms.
The measure is considered to be the greatest upheaval in the socialist economy since the 1959 revolution. Specifically, with the turn of the year, the national currency, the Cuban peso (CUP), and the foreign currency CUC, which is issued at an artificial exchange rate of 1: 1 to the dollar and only in Cuba can be exchanged, merged. The CUC was abolished. In fact, this means a massive devaluation.
In Havana, people are excited about the future Biden government’s future Cuba course. The question is whether it will keep up the pressure or resume the opening policy of the Obama years.