When a Cuban taps himself lightly on the shoulder with his index and middle finger, referring to the epaulet of a (military) uniform, he refers to ‘those in power’ on the island – politically and economically. In Cuba it’s all about the powerful Fuerzas Armadas Revolucionarias (FAR), the armed forces that exert great influence on the island through its economic empire.
The Cuban army not only has military power, but through a secretive military conglomerate also controls a large part of the Cuban economy: the luxury hotels that are mainly aimed at foreign tourists, the currency exchange offices that support the parallel dollar economy, the supermarkets, the gas stations, the free trade zone and the largest port in the country. That military conglomerate, called GAESA, has been in the crosshairs of the American government of President Trump for several weeks.
The US has been increasing pressure on Cuba for months, including through an oil blockade. In Havana this is often seen as an attempt to bring about a change of power. Marco Rubio, the US Secretary of State, announced new sanctions in early May, specifically targeting GAESA and its influential executives. A new step came on June 5, when Washington also imposed sanctions on Cuban President Miguel Díaz-Canel, members of the Castro family and the Cuban Ministry of Defense. The Trump administration is thus increasingly focusing its efforts on Cuba’s military and political power core.
‘Kleptocratic communist system’
GAESA, that stands for Grupo de Administración Empresarial SAaccording to various researchers, dominates between 40 and 70 percent of economic activities on the island. Washington sees the group as the financial engine of the Cuban system. According to US officials, profits from tourism, financial services and foreign trade flow not to the Cuban people, but to the military elite. Washington therefore calls Gaesa “the heart of Cuba’s kleptocratic communist system”.
GAESA’s office in Havana.
Photo Yamil Lage/AFP
But the throttling strategy is controversial. Critics of the sanctions policy point out that GAESA is so deeply intertwined with the Cuban economy that additional pressure also affects ordinary Cubans. Foreign companies are already withdrawing for fear of American punitive measures. With power outages caused by the fuel shortage, sometimes lasting up to 22 hours a day, life for the average Cuban is a challenge every day.
GAESA was founded in the 1990s by former President Raúl Castro, brother of the late Fidel Castro, who was Secretary of Defense at the time. With the collapse of the Soviet Union, Cuba lost its most important trading partner and financial backer. Raúl Castro created GAESA during this so-called ‘special period’ as a crisis instrument to provide the army with its own income. Profitable parts of the economy, including tourism, became the property of GAESA, helping to pay for military operations, infrastructure and even soldiers’ salaries.
In this way, GAESA, which developed into an efficient and disciplined conglomerate, found itself outside the government supervision that applied to all other state-managed companies. GAESA gained control over all dollar-related sectors, such as tourism, foreign trade and financial institutions, becoming the military’s central economic instrument of power.
Lack of food and medicine
After Raúl Castro succeeded his brother Fidel as president of Cuba in 2008, GAESA also gained more and more political power. Castro appointed confidantes to run the conglomerate. He first appointed his son-in-law Luis Alberto Rodríguez López-Calleja, who was the most powerful man within GAESA for many years until he died in 2022. Since then, General Ania Guillermina Lastres has been in charge. The US has now also announced personal sanctions against her.
According to the American newspaper the Miami Herald, leaked internal GAESA documents indicate that the conglomerate has approximately $18 billion in liquid assets. This is in stark contrast to the great poverty on the island and the lack of food, medicine and fuel for the Cuban population.
Almost no one knows exactly how much power GAESA has. The group does not publish figures, is not publicly accountable and operates largely out of sight of the Cuban population. American Secretary of State Rubio speaks of “a state within a state”, and the Americans emphatically want to put an end to this.
The Cuban government calls the imposition of the sanctions economic warfare. In a rare reaction on GAESA’s activities, a government official said this week that “the US is trying to discredit Cuba and confuse public opinion.”
Also read
Is the American stranglehold on Cuba really starting to suffocate the island? There is fear in Havana that the US is bent on regime change
