The Latin American Report # 571
Seven days ago, the Miami Herald published sensitive data allegedly drawn from several financial statements of the Cuban Armed Forces’ Business Administration Group—better known as GAESA—, starting another fierce debate about the state of things here. This is a conglomerate that controls a sizeable portion of the Cuban economy, from hotels to gas stations and supermarkets, and for years it has been the subject of intense scrutiny by Cuban-American members of the U.S. Congress, particularly (the corrupt and convicted) Bob Menéndez and the now–Secretary of State Marco Rubio.
The Cuban government has remained silent regarding the revelations, neither confirming nor denying the authenticity of the data. There are some important points to clarify here, assuming, for the sake of argument, that the data is genuine. The first is that the latest financial statements to which the Herald claims to have gained access are dated March and August of last year. In this sense, one number is central to the entire discussion: 18 billion U.S. dollars.
The most widely circulated narrative treats that figure as if it were confirmed to represent GAESA’s current net worth, which cannot be ruled out but which no one can actually prove. For now, and again assuming the leak is accurate, what is known is that this was GAESA’s net worth in March 2024. Therefore, I am certain that a strong analysis of this data can and should be conducted, but it must start by placing it in its retrospective context. In other words: what did it mean for Cuba to apparently have 18 billion dollars in the accounts of a behemoth like GAESA 17 months ago? It’s worth noting that a five months later, the balance had already dropped by 5 billion, although in neither of the two reported months was there any disclosure about CIMEX—a business which runs lucrative ventures such as a chain of hard-currency supermarkets and is allegedly responsible for 40% of the conglomerate’s total revenues.
Critics of the Cuban political system highlight the incongruity of a company holding capital greater than the foreign currency reserves of some central banks in the region, in the midst of a scenario that was already severe at the time. While the country declares it lacks funds to import food and fuel, service its debts, or invest in organic growth, GAESA could have had enough capital to jump-start a recovery process—even taking into account the draining impact of the very comprehensive sanctions regime imposed by Washington since 1960 (I point to the Eisenhower administration as the true starting point of this policy of economic warfare).
Cuba’s debt creditors, such as the Paris Club, must have demanded some explanation from Havana, which appears to still be weighing whether—and how—to respond to the Herald’s publication, which may still have more cards up its sleeve. Because while it is understandable that, given the U.S. Treasury Department’s relentless pursuit of all Cuban international transactions, internal economic management cannot be entirely transparent, the revelations seem to demand—inescapably—some form of public accountability to the Cuban people.
Among the dynamics that have been criticized internally for years is GAESA’s policy of continuing to invest in tourism, particularly in hotel construction, when the spillover effect of this industry has clearly diminished since the peak reached during—or inertially driven by—the thaw in relations promoted under the Obama administration. I estimate that 80% of GAESA-linked entities have been designated since the first Trump administration, which reinforced its hard-line stance against the company in its current edition. I will keep an eye on this development.
