Socio-economic costs of global integration: Remittances, the informal economy, and rising inequality in contemporary Cuba

With the demise of Soviet trade and aid, socialist Cuba suddenly was forced to reintegrate into the global capitalist economy. The subsequent restructuring of its economy has compromised one of the Cuban government's fundamental goals---that of socio-economic equality. This research examines how remittances and the informal economy have influenced rising socio-economic inequality in the post-1993 restructured Cuban economy. I specifically explore how the socialist project of class and, in particular, racial equality has been influenced by dollarization---a central mechanism of Cuba's reinsertion into the capitalist world economy. To what degree are remittances a source of racial inequality, given that eighty-four percent of Cuban emigrants are white? Second, has the informal economy served as a potential means through which historically disadvantaged groups, particularly Afro-Cubans, are able to unofficially access the new economy? Drawing on my extensive field experience in Cuba, I conducted a large household survey (334 households), formal interviews, and field observations to analyze the impact of remittances and the informal economy on growing socio-economic polarization in Cuban society. Based on this household-level data, I found that white Cubans consistently had more access to the market-based (dollar) economy---not only through remittances, but also through state employment bonuses and self-employment. While many black households did access the market economy through informal means, they did so at even rates with white households. The study concludes that uneven access to the dollar economy, in the context of a racially-biased emigration and enduring racial prejudices, has unevenly benefited whites to the disadvantage of blacks and mulattos. The significant social mobility achieved by Afro-Cubans in the first three decades of state socialism are eroding due to a lack of access to the dollar economy.