GAESA: The Military's Secret Financial Empire in Cuba's Struggling Economy

Amidst the most severe economic collapse Cuba has faced since the fall of the socialist bloc, characterized by prolonged power outages, resource-strapped hospitals, barren pharmacies, and citizens scavenging for food, one state entity has quietly amassed a vast fortune: GAESA, the business conglomerate of the Revolutionary Armed Forces.

A detailed investigation by the Miami Herald, drawing from 22 leaked internal financial documents from 2023 and 2024, reveals that the Cuban military controls over $18 billion in liquid assets—surpassing the international reserves of countries like Panama or Uruguay. These documents, which include balance sheets, income statements, and sales reports, disclose the internal operations of at least 25 companies under the GAESA umbrella, such as CIMEX, Gaviota, TRD Caribe, and Almacenes Universales. These entities dominate strategic sectors of the economy: tourism, retail, logistics, finance, and remittances.

A Corporate Network Beyond State Oversight

While GAESA's existence and influence are not new, the extent of the financial details revealed by the documents obtained by the Herald is unprecedented, directly implicating it in the nation's structural poverty.

Under the leadership of Raúl Castro, who at 94 still holds actual control of the country, GAESA has functioned as a state within a state. Economist Pavel Vidal, who reviewed the documents for the Herald, notes that the conglomerate has effectively assumed the role of a parallel central bank, hoarding foreign currency reserves without institutional oversight or accountability.

For years, the regime has solely blamed the U.S. embargo for shortages on the island, yet the financial records indicate that funds to alleviate the crisis exist but are not allocated to resolve it.

Financial Figures: Revenue, Profit, and Reserves

In the first quarter of 2024, GAESA reported net profits of over $2.1 billion. That same year, its tourist division, Gaviota, held deposits of $8.5 billion, while other subsidiaries like TRD Caribe and Almacenes Universales amassed an additional $5 billion.

Despite a more than 60% drop in tourism since 2019 and nearly empty new hotels, GAESA continues to invest millions in hotel construction. Meanwhile, the average monthly salary on the island stands at a mere 5,839 Cuban pesos (about $16), with pensions at just 1,999 pesos ($5).

This stark contradiction is evident: while the nation suffers, a military elite hoards dollars without any redistribution.

The Hidden Subsidy: State Funding for GAESA

One of the most startling revelations from the documents shared by the Herald and reviewed by CiberCuba is that GAESA not only centralizes resources but also receives state budget allocations.

According to its August 2024 balance sheet, the conglomerate received 9,260 million Cuban pesos from the state while paying only 920 million in national currency taxes. In dollars, its fiscal contribution was zero.

This indicates that the Cuban state subsidizes a military structure that operates as independent and efficient, functioning like a private enterprise yet fueled by public funds without social responsibility or institutional transparency.

Currency Hoarding: Over 75% in Dollars

The documents analyzed by CiberCuba reveal that by March 2024, GAESA held $14.467 billion in bank deposits, constituting 76% of its total liquidity. Only a minor fraction was in Cuban pesos.

This ultra-conservative financial policy—storing dollars and operating in pesos—enables GAESA to withstand inflation, monetary chaos, and recession affecting non-military state enterprises. It also reinforces its power outside the official economic system.

Opaque Accounting and Number Manipulation

The financial documents shared by the Miami Herald reveal accounting practices that violate basic international principles.

For instance, figures in pesos and dollars are combined directly, without an explicit exchange rate, as if both currencies held equal value. This obscures the true weight of foreign currency and distorts balances and results.

Moreover, there are significant discrepancies between reported net worth and actual calculations. In August 2024, GAESA reported a net worth of $2.057 billion, but the real value—assets minus liabilities—was $12.863 billion. In March, the gap was even greater.

This practice allows GAESA to feign less economic power than it truly holds, complicating analysis by external auditors or analysts.

Regime's Priorities: Military Spending vs. Basic Needs

Military and hotel spending starkly contrasts with the neglected basic needs of the population. Official figures suggest that $43 million annually is sufficient to supply 63 essential medicines, and $250 million to stabilize the national electric grid.

GAESA, theoretically a state business conglomerate, could cover these expenses without affecting its operational capital but chooses not to. Instead, it retains profits in foreign accounts or within its financial entities like RAFIN SA, without civilian oversight mechanisms.

U.S. Sanctions and GAESA

In response to this concealed financial power, the U.S. government—under the leadership of Secretary of State Marco Rubio—has intensified sanctions against entities linked to GAESA.

Rubio has warned that "GAESA is the financial backbone of the Cuban regime," advocating for more of its subsidiaries to be included on restricted company lists.

However, the most compelling evidence comes not from Washington but from the regime's own leaked internal documents. Cuba's plight is not solely due to sanctions; it is largely self-inflicted by its military and political elite.

A Future Mortgaged by Secrecy

Economists consulted by the Herald and CiberCuba agree: GAESA acts as a parallel state, absorbing the country's most valuable resources without redistribution. It does so through tax evasion, hidden subsidies, and opaque accounting.

In any potential future political transition, the military's control over these reserves will be a significant obstacle. As economist Mauricio de Miranda Parrondo cautioned to the Miami Herald: "These resources belong to the Cuban people and should be under their control."