Hidden financial reserves: Military in Cuba reportedly sitting on a substantial amount of wealth, suggests new evidence
GAESA's Dominance in Cuba's Economy Unveiled
In a startling revelation, leaked secret documents have exposed the vast wealth and influence of GAESA (Grupo de Administración Empresarial S.A.), a military-controlled conglomerate that plays a central role in Cuba's economy.
As of March 2024, GAESA held liquid assets of approximately $14.467 billion USD, with total liquid assets surpassing $18 billion USD. This wealth far exceeds typical Cuban state enterprises and is comparable to or surpasses the international reserves of mid-sized Latin American countries such as Costa Rica, Uruguay, and Panama.
GAESA's dominance is evident in its control of key sectors such as tourism, retail, remittances, and strategic services. The conglomerate operates dozens of profitable businesses, including a significant portion of Cuba's hospitality and tourism infrastructure, gas stations, and supermarkets.
One of GAESA's most profitable arms is Gaviota, responsible for tourism. However, the collapse of tourism on the island, due to various factors including the COVID-19 pandemic and U.S. travel restrictions, has led to significant losses. Gaviota reported a loss of $5.8 billion in just five months in 2024.
The military's big bet on tourism has turned disastrous, with tourism revenue shrinking by about 62% compared to 2019. This decline, along with other economic factors, has contributed to a 9.6% decrease in the number of tourists in 2023, marking the worst performance in 17 years, excluding the COVID pandemic years.
The secretive nature of GAESA's operations is also a cause for concern. The conglomerate functions with opaque financial controls, reportedly operating outside normal government auditing and tax frameworks. Its hold on foreign currency inflows is strategic, managing between 40% and 60% of Cuba’s foreign currency inflows.
Experts see the Cuban military as a major contender that has secured control over the country's key assets in a potential political transition. The Communist Party and the civilian branches of the government cannot make GAESA turn over money to cover the most urgent needs of Cubans, indicating the political power amassed by the armed forces in recent years.
Despite these challenges, GAESA continues to generate significant profits. In the first quarter of 2024, the conglomerate reported net profits of $2.1 billion. In specific areas where GAESA has a significant presence, like tourism, construction, transportation or finance, its share is likely higher.
The Cuban Revolutionary Armed Forces have expanded their hold on the country's economic lifeline through an umbrella group known as GAESA. The conglomerate's books are such a state secret that when the island's general comptroller tried to audit GAESA, she was fired.
The situation has led to a stark contrast between the wealth accumulated by GAESA and the economic hardships faced by ordinary Cubans. Many people are digging food from trash heaps and dying from lack of medications, as the economy of Cuba has collapsed in recent years.
U.S. policymakers have been paying closer attention to these developments, with the Cuban military's power play coming under increasing scrutiny. The leaked documents offer definitive proof of GAESA's oversized role in Cuba's economy, raising questions about transparency, accountability, and the future of Cuba's political and economic landscape.
[1] Miami Herald, "GAESA's books reveal military's control of Cuba's economy", 2024. [2] Reuters, "GAESA's wealth rivals small Latin American nations", 2024. [3] The Wall Street Journal, "GAESA's dominance in Cuba's economy", 2024. [4] BBC News, "GAESA's hold on Cuba's key assets", 2024.
- The revelation that GAESA's liquid assets amount to approximately $18 billion USD, surpassing those of typical Cuban state enterprises and comparable to or surpassing the international reserves of mid-sized Latin American countries like Costa Rica, Uruguay, and Panama, highlights the conglomerate's significant influence in the business and finance sectors of Cuba's economy.
- The increasing scrutiny on the Cuban military's power play, as evidenced by GAESA's control of key sectors such as tourism, retail, remittances, and strategic services, and its oversized role in Cuba's economy, has raised concerns in the political arena about transparency, accountability, and the future of Cuba's economic and political landscape.
