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Cuba Opens Doors Wider to Capitalist World, Welcomes Foreign Banks

July 16, 1993

CANCUN, Mexico (AP) _ Cuba has opened its doors wider to the capitalist world, saying it will welcome foreign banks to the Communist island and allow Cuban citizens to hold foreign currency.

The decisions, revealed Thursday to a conference of foreign businessmen here, form key parts of a new Cuban policy of economic pragmatism.

Economists say the moves also could tempt Cuban exiles in the United States into sending hundreds of millions of dollars to relatives in Cuba despite U.S. restrictions on such transfers.

″Like it or not, Cuba simply must come to terms with the West,″ Sir Lynden Pindling, former prime minister of the Bahamas, told the conference of mostly U.S. businessmen.

The deputy president of Cuba’s central bank, Raul Amado Blanco, said officials are talking with several foreign banks about entering a joint partnership with the government.

The banks might offer foreign tourists, businesses and diplomats deposit accounts, loans, credit cards and other services, he said. He didn’t identify the banks involved.

Only Cuban-owned banks now operate on the island.

Cubans wouldn’t be able to use the new banks at first, but Amado Blanco didn’t rule it out later.

He and other officials also said the government had already decided to drop a widely flouted ban on possession of foreign currency.

President Fidel Castro suggested last month that the step be studied, but there had been no previous report of its approval.

The Cuban economy has nose-dived since the collapse of the Soviet Union and other Communist regimes, formerly Cuba’s main sources of aid and trade. It also has been hurt by a 30-year U.S. trade embargo, though other industrialized nations recently have invested heavily in Cuba.

Cubans, some undernourished, have little on which to spend their pesos. Store shelves open to locals are nearly bare or stocked with a small array of cheap, flimsy goods.

Tourists and other foreigners, meanwhile, shop in well-stocked foreign currency shops whose entrances are sometimes clogged by Cubans begging foreigners to shop on their behalf.

The black market has boomed.

The currency move is an attempt ″to bring as much of the underground economy (as possible) overground so they can follow it and control it,″ said Smith College economist Andrew Zimbalist.

He said in an interview that Cubans receive about $250 million a year, mostly from relatives overseas. That figure ″could easily double or triple″ if Cuba made it easier for the funds to reach families.

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