The U.S. Department of State's Bureau of Western Hemisphere Affairs voiced criticism on Friday regarding Cuba's Grupo de Administración Empresarial S.A. (GAESA), a military-controlled conglomerate, for amassing billions while ordinary Cubans struggle with shortages of food, medicine, and electricity. In a statement shared on their X account, they posed a challenging question to the Cuban regime: "If the Cuban military's secret war fund isn't used to meet public needs, what is it for and who truly governs Cuba?"
Washington's response follows an investigative report by journalist Nora Gámez in El Nuevo Herald, unveiling how GAESA functions as a shadow economic entity parallel to the state. This entity is comprised of a multitude of companies, ranging from state-owned enterprises to international economic associations and small businesses, many of which operate outside public oversight and without transparency.
The investigation reveals that GAESA holds over $18 billion in liquid assets, avoids paying taxes on foreign currency earnings, yet still receives state budget allocations. The leak included 22 internal financial documents from GAESA for 2023 and 2024, showing how at least 25 of its companies, including CIMEX, Gaviota, TRD Caribe, and Almacenes Universales, dominate strategic sectors like tourism, remittances, logistics, and trade without any civil oversight or accountability.
By March 2024, GAESA had $14.467 billion deposited in banks, accounting for 76% of its total liquidity—a figure surpassing the international reserves of nations like Panama or Uruguay and far exceeding what the Cuban regime allocates to cover essential needs for its population.
Meanwhile, Cuba is experiencing its most severe economic collapse since the fall of the socialist bloc: daily blackouts, hospitals without supplies, empty pharmacies, and citizens scavenging for food. Despite the presence of funds, they are not being used to address the crisis.
Cuban economist Pavel Vidal, who reviewed the documents for the Herald, noted that GAESA operates like a parallel central bank, safeguarding itself from inflation and currency devaluation with an ultra-conservative strategy of hoarding dollars and transacting in pesos. This allows it to remain stable while other state enterprises flounder.
Official figures indicate that $43 million annually would suffice to supply 63 essential medicines, and around $250 million would stabilize the national electrical grid. GAESA could cover these needs without dipping into its capital, but instead, it chooses to keep profits in internal accounts or entities like RAFIN SA, away from public scrutiny.
Under the leadership of Raúl Castro, who at 94 years old still wields real power from behind the scenes, GAESA has solidified its status as a state within a state. The leaked documents expose not just financial figures, but a silent military power structure while the regime continues to blame the U.S. embargo for an economic disaster that, according to the numbers, could have been averted.
In July, the Department of State's Bureau of Western Hemisphere Affairs criticized the regime for prioritizing spending on tourism over essential sectors like health and education. The report highlighted that in 2024, the Havana government allocated more than 37% of its total investment to the tourism and hotel sector, exceeding the combined investment in health and education by more than eleven times amid severe shortages of medicine, food, electricity, and fuel.
Shortly before this, a piece published by ShareAmerica, the State Department’s official platform, accused Cuba and Venezuela of maintaining authoritarian models designed to benefit elite power structures at the expense of their populations' welfare.
On July 22, Washington issued a public warning to international investors about the risks of doing business in Cuba, labeling the island's economic system as a "rigged environment benefiting the regime and its cronies." The official publication emphasized that the true impediments to the island's economic development are not external sanctions, but rather internal corruption, lack of transparency, and state manipulation of the market.
Frequently Asked Questions about GAESA and Cuba's Economic Crisis
What is GAESA and its role in Cuba?
GAESA is a conglomerate controlled by Cuba's military that operates as a parallel economic system, encompassing multiple companies in strategic sectors like tourism and trade, without public oversight or accountability.
How does GAESA's financial strategy affect the Cuban economy?
GAESA employs an ultra-conservative financial strategy by hoarding dollars and operating in pesos, acting as a parallel central bank, which allows it to remain stable while other state enterprises struggle.
Why is GAESA's accumulation of wealth controversial?
GAESA's wealth is controversial because it amasses billions in assets while essential needs of the Cuban population, such as food and medicine, remain unmet, with funds not being utilized to address the ongoing crisis.