MILITARY INVOLVEMENT IN THE CUBAN ECONOMY

MILITARY INVOLVEMENT IN THE CUBAN ECONOMY

During the past few years, the Cuban military has taken an
unprecedented role in running the economy on the island. The loss of Soviet
subsidies, the need to bring order to a crumbling economy and to provide a
role for a military hitherto involved in international activities has
accelerated this trend.
Significant components of the economy are now directly under military
control or run by present or former military officers. Even the most
dynamic, typically civilian-dominated sectors of the economy are managed by
and directly benefit the armed forces: tourism, agricultural products,
tobacco, import-export services, technology and telecommunications,
construction, free trade zones and manufacturing all have significant
military presence.

- 322 of Cuba's largest enterprises, a group with strong associations with
the military, accounted for 89% of exports, 59% of tourism earnings, 24% of
service revenues, 60% of hard currency wholesale transactions, 66% of hard
currency retail sales, and employed 20% of state workers.(1)
The principal economic entities and sectors under military control include:
- GAESA (Grupo de Administración Empresarial, S.A.) is the main holding
company of the Ministry of the Revolutionary Armed Forces (MINFAR) and
includes:
o Gaviota S.A. (Tourism): Brig. Gen. Luis Pérez Róspide
o Aero Gaviota (Air Carrier/Tourism): Col. José Manuel Borges Vivó
o Cubanacán (Tourism): Manuel Vila
o Tecnotex (Import/Export): Lt. Col. Rene Rojas Rodríguez
o Almacenes Universal (Free Zones in Wajay, Mariel, Cienfuegos, Santiago):
Miguel Angel Hernández Armas
o Almest (Tourism Real Estate): David Pereira Pérez
o Antex (Technical Assistance): Carlos Santiago Martínez Rodríguez
o Agrotex (Agriculture and Cattle)
o Sasa S.A. (Automobile Repair, Auto Parts): Antonio Luis Choong Estupiñan
o División Financiera (Tiendas para la Recuperación de Divisas (TRDs) or
"Dollar Stores"): Alexis Mejías Zamarión
o Sermar (Exploration of Cuban Territorial Waters, Naval Repairs): Capt.
Luis Beltrán Fraga Artileso
o GeoCuba (Cartography, Real Estate, Mining Interests): Col. Eladio
Fernández Cívico
o Complejo Histórico-Militar Morro Cabaña (Military museums, monuments):
Col. Hermán Washington
- Union of Military Industry (UIM): Col. Luis Bernal León
The UIM encompasses 230 factories and companies. It is estimated that 32
percent of its production is for civilian sectors of the economy, while over
75 percent of all repairs and spare parts for civilian use came from
military enterprises. (2)
- Habanos, S.A.: Col. Oscar Basulto Torres
The exclusive distributor of Cuba's famed cigars is run by Col. Oscar
Basulto Torres. Habanos, S.A. controls approximately 30% of the worldwide
premium market with an average growth in sales of 22% from 1995-1999. Sales
in 2004 were reported at approximately $300 million dollars. (3)
- Comercio Interior, Mercado Exterior (CIMEX): Dr. Eduardo Bencomo Zurdo,
President; Enrique Sentmanat, Vice-President (Military affiliated and
staffed)
Holding company dealing originally in import/export, which has expanded to
dollar retail establishments (including supermarkets, fast food, photo
developing, car washes, service stations), credit processing, rental car
service, travel agency, real estate, and cable and satellite television
provision services. Annual revenues have been reported in 2003 at $700
million dollars. (4)
- Citrus Industry: Gen. Rigoberto García Fernández (Chief of Youth Labor
Army)
The largest agricultural crop behind sugar and tobacco and a large source of
revenues. A joint venture between the Cuban government, largely organized by
the Youth Labor Army (EJT), a militarized reserve workforce, and Israeli BM.
- Instituto Nacional de la Reserva Estatal (INRE): Brig. Gen. Moisés Sio
Wong
Oversees the national strategic reserves (material, financial, military) in
case of emergency as stipulated in Article 128 of the Law of National
Defense, 1994.
- Grupo de la Electrónica: Comandante de la Revolución Ramiro Valdés
Menéndez
Supervises numerous enterprises, the most notable being Copextel, S.A., a
technology holding company comprised of over forty commercial ventures
involved in anything from computer software, Internet service, small
appliances, cellular telephones, restaurants, catering, and entertainment
management.
- Ministry of Tourism (MINTUR): Col. Manuel Marrero Cruz
Tourism has become the most important sector of the Cuban economy. 2004
revenues estimated at $2.4 billion dollars. (5)
- Ministry of Civil Aviation: Gen. Rogelio Acevedo González
- Ministry of Sugar (MINAZ): Gen. Ulises Rosales del Toro
- Ministry of Construction (MINCONS): Fidel Fernando Figueroa (FAR-trained
engineer)

Notes
1. Espinosa, Juan Carlos and Harding II, Robert C., "Olive Green Parachutes
and Slow Motion Piñatas: The Cuban Armed Forces in the Economy and in
Transition," unpublished manuscript.
2. Mora, Frank, "A Comparative Study of Civil-Military Relations in China
and Cuba: The Effects of Bingshang," Armed Forces and Society, Winter 2002.
3. Frank, Marc, "A feast for smokers at Cuba's social event of year,"
Financial Times, February 24, 2005.
4. Johns, Melissa, "Foreign Investment in Cuba: Assessing the Legal
Landscape," Boletín Mexicano de Derecho Comparado, no. 106, 2003.
5. Frank, Marc, "Cuba hits target of 2 million tourists," Reuters, December
26, 2004.

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