A recent journalistic investigation has unveiled a stark contradiction to the official narrative of ETECSA, Cuba's state-run telecommunications monopoly, which claims financial hardship to justify steep hikes in service charges. As reported by the Miami Herald on Monday, RAFIN S.A., a major shareholder in the state enterprise controlled by Cuba's military, had over $407 million in cash reserves as of August 2024.
This revelation, based on confidential financial documents obtained by the U.S. newspaper, shines a spotlight on the role of Cuba's economic-military apparatus in managing crucial sectors like telecommunications. According to the report, a sum of $407,750,591 was found in consolidated accounts of RAFIN S.A., a financial entity linked to the military conglomerate GAESA, challenging the narrative of scarcity used by authorities to rationalize soaring basic service prices.
ETESCA's president, Tania Velázquez Rodríguez, recently declared on television that the company is facing a "critically severe situation" marked by "frauds," debt, and a lack of foreign currency. Nevertheless, the figures brought to light by the Miami Herald indicate that while consumers are forced to pay over 800% more for extended mobile packages, a company directly tied to ETECSA and controlled by the Armed Forces manages hundreds of millions of dollars without accountability to the public or civil state structures.
Military Control Over ETECSA's Ownership Structure
RAFIN S.A. is not just an entity "linked" to ETECSA; it is one of its principal shareholders. Back in 2011, RAFIN acquired a 27% stake in the company from Telecom Italia, a transaction valued at $706 million. Since then, ETECSA's capital has been entirely Cuban-owned.
Currently, ETECSA's ownership is distributed among several national entities:
- Telefónica Antillana S.A. (TELAN): 51.006% of the capital. A Cuban commercial company based in Havana, created to represent the state's interests in the country's main telecommunications firm.
- RAFIN S.A.: 27.003% of the capital. A non-banking financial entity, established in 1997, authorized by the Central Bank of Cuba, and linked to GAESA.
- Universal Trade & Management Corporation S.A. (UTISA): 11.086% of the capital. A Cuban enterprise registered abroad, associated with other state consortia.
- Banco Financiero Internacional S.A. (BFI): 6.157% of the capital.
- Negocios en Telecomunicaciones S.A.: 3.825% of the capital.
- Banco Internacional de Comercio S.A. (BICSA): 0.923% of the capital.
This ownership structure clearly demonstrates that state and military capital have an absolute grip on ETECSA, with Cuba's telecommunications sector subordinated to political, military, and financial decisions, beyond the reach of accountability mechanisms.
RAFIN, GAESA, and the Regime's Currency Control
RAFIN S.A. is closely tied to GAESA (Grupo de Administración Empresarial S.A.), Cuba's most powerful economic conglomerate, directly subordinated to the Revolutionary Armed Forces (FAR). GAESA oversees everything from banks and currency exchange offices to hotels, real estate, port companies, shipping, and airlines. Within this framework, RAFIN functions as an internal financial fund channeling and managing revenue from strategic sectors like telecommunications and tourism.
According to the Miami Herald, a significant portion of RAFIN's funds comes from ETECSA's earnings through international top-ups and dollar services offered to the population, particularly payments from Cuban emigrants to their relatives on the island. "GAESA uses RAFIN to finance its operations; that's why it holds so much money," an anonymous source explained to the newspaper, fearing reprisals.
Although RAFIN doesn't operate like a conventional bank, its role is to finance strategic military interests, such as building new hotels or maintaining GAESA's business infrastructure. The fact that ETECSA cannot access these funds to settle its debts or upgrade its technology reveals a model where the regime's priorities are geared towards currency acquisition, even at the expense of the deterioration of basic services and public welfare.
Transparency Issues and Growing Social Discontent
Despite the substantial funds these entities have access to, the official narrative persists in portraying an image of operational scarcity, forcing unpopular measures like tariff increases that directly impact a population mired in a deep economic crisis. Meanwhile, the allocation of these substantial revenues remains hidden, with no public audits or clear explanations about the money's destination.
These revelations come amid rising social discontent, evidenced by the thousands of criticisms posted on official sites like Cubadebate following the announcement of the tariff hike. Even sectors traditionally aligned with the government, such as the University Student Federation (FEU), have issued statements questioning ETECSA's decisions.
Exile organizations, such as the Cuban Study Group, have warned that these decisions are part of a broader strategy by the regime to extract foreign currency without implementing structural reforms. Meanwhile, voices like Congresswoman María Elvira Salazar have called for cutting remittance flows to ETECSA as a form of pressure against the opaque use of these resources.
Is the Crisis Real or an Extractive Model?
The existence of over $400 million in RAFIN S.A., while ETECSA allegedly struggles to maintain operations, raises critical questions about the Cuban state's economic structure and its priorities in terms of public welfare versus currency control. Far from being an exception, this pattern repeats across other sectors managed by GAESA. The same Herald investigation revealed that the tourism company Gaviota—also part of the conglomerate—held over $4.3 billion in cash in 2024, while hospitals, electric systems, and agriculture faced operational crises due to lack of funding.
This revelation adds a financial dimension to the debate over connectivity, the right to information, and censorship in Cuba, exposing how the regime's economic apparatus prioritizes corporate and military interests, even as the nation faces a collapse of its essential services system.
Key Questions About Cuba's Telecommunications and Economic Model
What role does RAFIN S.A. play in Cuba's telecommunications sector?
RAFIN S.A. is a major shareholder of ETECSA, Cuba's state-run telecommunications monopoly, and is closely linked to the military conglomerate GAESA. It manages substantial financial resources, influencing the sector's operations.
How does GAESA influence Cuba's economy?
GAESA, Cuba's most powerful economic conglomerate, controls diverse sectors including banking, real estate, and tourism. It uses entities like RAFIN to manage revenues and fund military and strategic projects, impacting the nation's economic priorities.
Why is there public discontent with ETECSA?
Public discontent arises from ETECSA's drastic price increases, justified by claims of financial distress, despite revelations of significant funds managed by its shareholder RAFIN S.A. This has led to criticisms of mismanagement and lack of transparency.