In Cuba, the most influential economic force is not the Communist Party but a secretive military-run conglomerate known as GAESA. Established by Raúl Castro in the aftermath of the Soviet Union’s collapse, GAESA initially aimed to sustain the island’s defense sector but has since expanded into a sprawling commercial empire controlling an estimated 40 to 70 percent of Cuba’s economy.

GAESA’s extensive portfolio includes ownership of some of the island’s premier hotels, luxury boutiques, gas stations, supermarkets, currency exchanges, and Cuba’s only internet provider, operated through its subsidiary CIMEX. Additionally, GAESA controls Banco Financiero Internacional, one of Cuba’s largest commercial banks, giving the conglomerate considerable influence over the country’s foreign currency reserves. Despite its vast reach, GAESA operates without government financial oversight, retaining all profits and directing revenues primarily to the military elite rather than the central government.

The conglomerate’s growing dominance has drawn heightened scrutiny from the United States. This year, CIA Director John Ratcliffe visited Cuba seeking significant reforms in economic and security sectors amid reports that the country’s oil reserves have been depleted. Concurrently, U.S. federal prosecutors are pursuing indictments against Raúl Castro related to drug trafficking and the 1996 downing of humanitarian planes. Earlier in the year, President Donald Trump signed an executive order expanding sanctions to target GAESA directly, citing its revenues as potentially triple that of the Cuban state budget. Secretary of State Marco Rubio condemned GAESA as a tool used by Cuba’s political elite to enrich their ranks at the expense of ordinary citizens, promising further punitive measures.

The Cuban government, led by President Miguel Díaz-Canel, condemned the sanctions as coercive. GAESA’s origins date to the early 1990s, when Cuba faced an economic crisis following the Soviet Union’s collapse. At that time, Fidel Castro permitted the military—then under Raúl Castro’s leadership—to assume control over key state economic sectors, such as tourism, in order to stabilize the country. Initially, this strategy yielded positive results, with GAESA reinvesting profits into public services like healthcare and education. However, since Raúl Castro became president in 2008, the conglomerate’s economic grip has tightened, with critics accusing it of consolidating power for the Castro family and profiting while poverty persists.

GAESA’s leadership remained closely tied to the Castro family until the death of General Alberto Rodríguez Lopez-Calleja, Raúl Castro’s son-in-law, in 2022. His successor, Brigadier General Ania Guillermina Lastres Morera, sanctioned by the U.S. this year, maintains connections with Raúl’s grandson, Raúl Guillermo Rodríguez Castro, signaling the family’s continued influence. Notably, recent flights suggest cooperation between GAESA officials and family members in Panama, where companies have been registered to circumvent U.S. sanctions.

Despite its size and resources, GAESA’s focus on tourism investment has not yielded sustained economic benefits. After a brief boom in American visitors following the 2015 thaw in U.S.-Cuba relations, restrictions reimposed by the Trump administration combined with the COVID-19 pandemic severely curtailed tourism inflows. GAESA’s aggressive hotel expansion continued, with 121 hotels built by 2025 compared to 56 a decade earlier, yet occupancy rates remain low, around 30 percent in 2024. Meanwhile, traditional industries like sugar cane production have collapsed, forcing Cuba to import sugar, including from the U.S.

Government spending heavily favors tourism and hospitality, consuming nearly 40 percent of the state budget in 2024—about $1.5 billion—while allocations for education and health care declined. Independent economists highlight the lack of transparency or social accountability surrounding GAESA’s finances, noting that its profits appear hoarded rather than invested in broad-based economic development.

Observers see GAESA as functioning like a “state within a state,” where military control and economic enterprise intersect to maintain the ruling elite’s dominance. Analysts caution that despite its pragmatism, GAESA shows little inclination toward political liberalization, and its substantial financial autonomy may perpetuate the status quo. The lingering question remains whether GAESA’s amassed resources will ever be deployed to address the profound economic challenges facing Cuba today.