How remittances to Cuba help fund the Castro military machine

Over $100 billion in cash and goods have gone to Cuba over the past 30 years with no effect whatsoever on development on the island or in ending the communist tyranny. That’s because a good part of it goes to Cuba’s military machine. Over the past three decades, Cuban exiles have sent more cash and goods to Cuba than the Castro regime has imported over the same period.

Cuban economists reveal how a good portion of those remittances end up in the hands of the Castro dictatorship via Martí Noticias:

Experts reveal the final destination of remittances to Cuba and how it eventually flows to GAESA

Remittances to Cuba constitute the most significant asset in the island’s economy, the result of the sweat and sacrifice of hundreds of thousands of Cubans living abroad.

The meager economy and its poor productive performance, however, reveal the necessary dependence on the diaspora.

“Remittances have never been used for the country’s development; they have always been used to maintain power,” said Emilio Morales, an economist from the analysis center Cuba Siglo 21 based in Miami, in an interview with Martí Noticias.

Morales led a study on remittances to Cuba as a financial support for the subsistence of the island’s population. Among other conclusions, it highlights that the military framework established by the Business Administration Group S.A., GAESA, to appropriate remittances has shored up a regime in decline and bankruptcy.

“In thirty years, Cuba has received 52.25 billion dollars in cash as remittances, and another 50 billion in medicines, clothing, food, and other consumer goods,” stated the economist, who mentioned having used nine different methodologies in the research, without going into detail.

The former specialist from CIMEX Corporation asserted that the sum of cash and in-kind remittances exceeds what the Cuban government obtained from imports over three decades.

“We’re talking about an exile population that doesn’t work in Cuba, doesn’t live in Cuba, and yet can produce more than a country with 11 million enslaved and underutilized inhabitants,” Morales emphasized.

When Fidel Castro gave the green light to remittances in 1993, they were always controlled by companies under the control of the government’s military apparatus (MININT – MINFAR). First, it was the CIMEX Corporation, and later GAESA consolidated the business.

“Fidel Castro created CIMEX in 1978; he considered it his own company, his property, to circumvent the embargo, launder money, traffic goods and people, among other wrongdoings, while at the same time channeling commercial transactions,” explained Morales.

Later on, CIMEX Cuba was established.

“The real owner of all the regime’s businesses is CIMEX Cuba. And this is stated in an affidavit from the legal director of CIMEX, Mali Suris Valmaña, filed in the documents of a lawsuit by the Exxon Mobil oil company against CIMEX in the United States,” said the economist.

According to Morales, this remained a secret, even at the highest levels of the corporation.

“Not even I, who worked at CIMEX in the presidency on the 9th floor for six years, knew that,” confessed the expert, who was in charge of the Market Planning Department of CIMEX’s Market Division.

GAESA, a company attached to the Ministry of Revolutionary Armed Forces (MINFAR), is described by Angel Rodríguez Pita, a private entrepreneurship consultant in Havana, as a network of companies with guaranteed clients, as they all depend on each other.

“While it is true that this allows them to develop improvements to achieve specific objectives, on the other hand, it subordinates one to the other and increases dependence on foreign capital for the market they are oriented towards,” Rodríguez Pita said.

Its executive president, until his death in 2022, was Brigadier General Luis Alberto Rodríguez López-Calleja, a member of the Central Committee of the Communist Party of Cuba.

“GAESA encompasses payment service companies like Red, the well-known Redsa, which issues the magnetic cards used in the banking system, as well as other joint-stock companies that provide working capital, accounting and financial advice for investments in businesses, and international economic association contracts with the participation of national companies,” commented Pita Rodríguez.

Likewise, it represents between 80% and 90% percent of the economy on the island with 100% participation in the retail market in foreign currency, such as hotels, travel agencies, car rentals, and imports.

“As a company, GAESA constitutes a matter of national security,” Rodríguez Pita asserted, pointing out that the military conglomerate has not managed to balance the current reform process and the sectarianism of the power groups, which is why its dissolution is already being considered.

The immediate future foresees an integration of GAESA’s business groups into the Council of Ministers, under the command of Manuel Marrero.

“Marrero will exercise all power over these groups, but GAESA will always really respond to the same people who hold the power,” Rodríguez Pita assured.

SMEs and US banking

In recent days, unofficial reports have been circulating about the possibility the White House will allow small and medium-sized businesses in Cuba to open dollar-denominated bank accounts in the US to assist the Cuban business sector.

In Emilio Morales’ opinion, there is no private sector in Cuba because it lacks total independence from the State.

“For there to be a private sector in Cuba, there have to be laws to support it. To have SMEs, you have to go through a series of filters and steps that don’t exist anywhere else in the world… The Municipal and Provincial People’s Power, the Communist Party, Counterintelligence, the Ministry of Economy and Planning, and a list of permitted jobs in which you could invest,” he explained.

He also mentioned the case of state-owned companies that have become SMEs like CUBAPACK.

“CUBAPACK, belonging to CIMEX and which has been under GAESA since 2010, is the one that controls all shipments to Cuba from the US, a company of GAESA. Are you going to give credit to that company here in the US? How many more are there like Cubapack?” the economist wondered.

Rodríguez Pita did not agree with Morales’ version regarding the creation of SMEs.

“The request for the creation of SMEs is made to the Ministry of Economy and Planning through a virtual platform where the interested party must present the data of the activity they propose to carry out, as well as the social statutes. After being approved, the same procedures are followed as in the rest of the world,” said the entrepreneurship advisor who has assisted many entrepreneurs in creating their own businesses.

1 thought on “How remittances to Cuba help fund the Castro military machine”

  1. I regret to inform you that everyone knows this and that it makes no difference, meaning it will not change. The amount being pumped into Cuba will only increase as more and more people leave the island to join the “diaspora” and become new sources of remittances in cash and goods. It is a practically perfect racket.

Leave a Comment