The most powerful entity in Cuba is not the Communist Party. It is a secretive conglomerate run by the military, known as GAESA, which is estimated to control between 40% and 70% of the Cuban economy.
Originally created by Raúl Castro to strengthen Cuba’s defense sector, GAESA evolved into a commercial empire and became one of the main targets of Washington’s pressure campaign against Cuba.
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Its reach ranges from the island’s best hotels and high-end boutiques to recreational diving centers.
It controls hundreds of gas stations, money transfer companies, the island’s only internet operator, currency exchange offices and supermarkets — all through a vast corporate structure called CIMEX.
GAESA also controls one of the country’s largest commercial banks, Banco Financiero Internacional, which likely gives the conglomerate dominance over Cuba’s foreign currency reserves.
GAESA functions as a State within the State. It does not allow the Cuban government to audit its accounts. All profit generated remains with GAESA itself, accumulating resources outside the Cuban central bank and redirecting the money to the military elite that governs the country.
CIA Director John Ratcliffe visited Cuba this month to demand major economic and security changes from the government. The visit occurred just as the Cuban government admitted that its oil reserves were exhausted and coincides with efforts by federal prosecutors to obtain a formal indictment against Raúl Castro for drug trafficking and .
This month, President Donald Trump signed an executive order to expand sanctions against Cuba and target GAESA. The order states that the conglomerate’s revenues “probably exceed the State Budget by more than three times”.
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Secretary of State Marco Rubio increased the pressure, calling GAESA an instrument of the Cuban political elite to repress the population while getting rich.
GAESA “is this private company that has more money than the government itself,” Rubio said during a trip to the Vatican last week. “None of this money is used to build a single road, a single bridge, to provide a single grain of rice to a single Cuban who is not part of GAESA.”
“It is a sanction against this company that is stealing from the Cuban people for the benefit of a few,” he said, before adding: “we will do more.”
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Cuban President Miguel Díaz-Canel classified the executive order as “coercive”.
GAESA was born out of desperation after the collapse of the Soviet Union in 1991, but its roots date back to the 1980s. Raúl Castro, then defense minister, convinced his older brother, President Fidel Castro, to allow changes in the military’s business interests, according to Frank Mora, who served as deputy assistant secretary of defense in the Obama administration.
When the USSR fell, Cuba lost its biggest trading partner and financier. The Armed Forces were in ruins and had difficulty paying their troops. Fidel allowed the military to take over state sectors of the economy, such as tourism, in an attempt to save the country.
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At first, the experiment worked, analysts say, and the military proved to be more efficient managers than other areas of the state. The economy recovered in the late 1990s, with the military reinvesting profits back into the country to support hospitals, education and government food distribution programs.
GAESA’s control became even more dominant when Raúl Castro assumed the presidency from his brother Fidel in 2008. Today it oversees many sectors of the economy, large and small. GAESA also owns companies in Angola, generating hundreds of millions of dollars in annual profits from education, healthcare, construction and other areas.
Critics say GAESA is now just another tool for the Castro family to consolidate their power.
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Today he is more powerful than ever, but poverty on the island has also reached unprecedented levels.
“The military has always been the most pragmatic arm of the revolution, but that does not mean that it defends political liberalization,” said Mora. “It is as much an economic enterprise as it is a military institution,” he added. “So they have less incentive to change the status quo unless it benefits them.”
GAESA’s finances are secret and do not appear anywhere in the government budget, which makes it uncertain whether the State receives part of its profits. When the government’s comptroller general admitted in a 2024 interview that she did not have access to GAESA’s finances, she was fired after 14 years of service.
The Castro family leveraged its authority over GAESA to maintain firm control over the Cuban economy as a whole. In 2011, shortly after assuming the presidency, Raúl placed his son-in-law, General Alberto Rodríguez Lopez-Calleja, in charge of GAESA.
After Rodríguez’s death in 2022, a person with no connection to the Castro family was appointed to lead GAESA: Brigadier General Ania Guillermina Lastres Morera, sanctioned by Washington this month. But the son of the former head of GAESA and grandson of Raúl, Raúl Guillermo Rodríguez Castro, appears to maintain ties with Lastres, likely preserving Castro influence.
Flight records show that in 2024, they traveled together on a private jet to Panama, where GAESA registered several companies to evade US sanctions, according to an investigation by a group of local media outlets.
The younger Rodríguez Castro, known as el Cangrejo — “the Crab” in Spanish — has emerged as a key figure in negotiations with Washington, meeting with Rubio’s team this year.
Another member of the Castro family who acts as a coordinator in these negotiations is Óscar Pérez-Oliva Fraga, grandnephew of the Castro brothers. He is currently Vice Prime Minister of Cuba and Minister of Foreign Trade and Foreign Investment — an important pillar of the economy.
The presence of two members of the Castro family at the negotiating table casts a strong shadow of doubt on whether the regime is really willing to give up its economic monopoly, as the Trump administration demands.
While the Cuban government often blames its financial difficulties on Washington’s sanctions and trade embargo, analysts say GAESA’s investment strategies have also contributed to the island’s economic decline.
“The government complains about the embargo when it’s convenient, but then it builds these hotels as if the embargo didn’t exist,” said Ricardo Torres, an economist at American University in Washington who specializes in Cuba.
After the 2015 agreement between Cuba and the Obama administration, which reestablished diplomatic relations and relaxed travel restrictions, GAESA invested heavily in tourism, expecting a mass arrival of Americans.
At first, the gamble paid off and the Americans rushed to the island. GAESA began an accelerated spending pace: by 2025, it had built 121 hotels, compared to 56 a decade earlier, adding 22 thousand new rooms.
But the tourism boom was short-lived.
In 2017, Trump reinstated sanctions and banned American tourists from visiting the island. The Cuban economy suffered another blow in 2020, when the pandemic practically paralyzed tourism.
Still, GAESA continued building hotels, while neglecting other sectors of the economy.
Cuba’s once-famous sugar industry — which financed the early years of the communist revolution — collapsed as public spending in the sector plummeted.
Cuba has had to import sugar in recent years for domestic consumption, including from the United States.
According to the most recent government data, in 2024 Cuba allocated almost 40% of its budget to tourism and hospitality, which amounts to around US$1.5 billion. Even so, hotel occupancy that year was a disappointing 30%.
The tourism budget was about 11 times larger than that allocated jointly to education and health in 2024. Education spending fell 26% compared to 2023. Observers say the fact that the government is spending more on tourism while Cubans are left without basic items shows how much the communist revolution has degraded.
“The Cuban Constitution says that we, the people, own all the means of production,” said Torres, the Cuban economist. “But there is no supervision over GAESA’s finances or business decisions, there is no social control.”
Last year, GAESA opened the Iberostar luxury hotel in the tallest building in Cuba. The five-star hotel rises above the Havana skyline, marked by dilapidated houses. Still, some tourists say the hotel is practically empty during their visits.
“These military men have profits that were built up for hard times,” said Ricardo Zúniga, a former U.S. government official who helped negotiate the Obama-era deal. “Well, in Cuba hard times have come to a head. So where is GAESA?”
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