On May 20, Secretary of State Marco Rubio announced sanctions against GAESA, a conglomerate in Cuba that is not widely known outside of expert circles. Rubio criticized GAESA for contributing to Cuba's economic difficulties, claiming it holds the Cuban population hostage and benefits a small elite. He stated that the lack of electricity and resources in Cuba is not due to U.S. sanctions but rather the actions of those in control of the country.
Rubio emphasized that the U.S. seeks a relationship with the Cuban people rather than with GAESA, suggesting that any future agreements would require dismantling the conglomerate. He expressed skepticism about the Cuban government's ability to reform without significant changes in leadership.
Cuba responded to Rubio's comments, asserting that GAESA is not opaque and has been an effective response to U.S. sanctions. GAESA was established in 1995 by Raul Castro and is believed to control a significant portion of the Cuban economy, with estimates ranging from 40% to 70%.
Christopher Hernandez-Roy from the Center for Strategic and International Studies described GAESA as a large economic entity controlled by the Cuban military, with various arms managing different sectors, including tourism and retail. The tourism arm, Gaviota, is particularly crucial for the Cuban economy, especially following declines in other revenue sources.
Hernandez-Roy noted that while GAESA generates revenue, much of it does not benefit the Cuban state or its citizens, as profits are often diverted to offshore accounts. He remarked on the intertwined nature of military and economic control in Cuba, suggesting that the military elite's hold on the economy exacerbates existing economic challenges.
The sanctions targeting GAESA are expected to further impact the Cuban economy, as foreign investments may decrease due to fears of penalties. The long-term effects of these sanctions on the Cuban government remain uncertain.
