US says embargo on Cuba is working as Castro banishes dollar

Tue Oct 26, 6:02 PM ET Politics - AFP

WASHINGTON (AFP) - Cuba's plans to take the US dollar out of circulation show that the US embargo is a success and has a stranglehold on the government of communist President Fidel Castro (news - web sites), the US State Department said.

"We think that this move is yet another indicator that Castro is refusing to do what's best for his own people. It shows that he's cynically trying to preserve a bankrupt regime at his people's expense," spokesman Adam Ereli said.

"We see it as a confiscatory measure that demonstrates that President (George W.) Bush's policy is working. It's squeezing the regime and causing them to take extreme measures that underscore its own inherent weaknesses," the spokesman added.

Castro, 78, announced late Monday that transactions in US dollars would be banned from November 8 as a response to "mafia-like" US moves on restricting remittances destined for Cuba. Greenbacks would be replaced in transactions with the local "convertible peso," worth one dollar locally though it has no value on international markets, he said in Havana.

In 1993, in the midst of economic free-fall on the heels of the collapse of the communist bloc, Cuba legalized free circulation of the dollar. Havana then in 1995 created the "convertible peso" to fill the gap between supply and demand for greenbacks on the island, a mechanism that until now funneled some -- but not all -- local greenbacks into government hands.

Assistant Treasury Secretary Juan Carlos Zarate called the Cuban move "an act of economic desperation" and a clear signal that President Bush (news - web sites)'s strengthened policies towards Cuba have hurt the Castro regime.

"In typical Castro fashion, his solution to this problem is to implement a measure that will directly benefit and bring profit to his regime, while hurting the Cuban people," Zarate said.

He said Cubans depended on dollar-based remittances from relatives in the United States to survive, and Castro will not only attempt to pool these US dollars for his own profit, but also shake down the Cuban people with a 10-percent penalty for the currency exchange.

In Miami, Cuban-Americans expressed anger at the measure, but vowed to continue to send cash to needy relatives in Cuba.

In a popular restaurant in the city's Cuban sector, Julissa Garcia, a Miami resident since the 1960s, said she was about to send 400 dollars to her brother in Cuba to help care for his cancer-stricken wife, "But I'm afraid of what's going to happen" when the dollar stops circulating.

"Everything there must be bought with foreign currency," she said. "They cannot even buy food. This is just another evil of this Mr. Castro. What am I going to do? My sister-in-law is dying and she needs me."

Francisco Rodriguez, owner of A Little Havana Check Cash, told AFP he had seen no immediate change in business, "although people are walking in and asking for details of the measure."

Quelle:http://news.yahoo.com/news?tmpl=story&u=...ax_041026220228