Where is the money going in Cuba. Or where has it gone.

[Ryan]

Some good journalism coming out of this organisation recently, given the restrictions.

An interesting line out of this piece, "In the absence of deep structural reforms, and in the midst of the economic crisis, it is very likely that the sale of the most lucrative assets in the Cuban economy will begin at any moment"

"Any moment" is maybe a little optimistic, but the economy in Cuba probably hasn't been this bad in maybe 30 years. Again, there's a chicken and egg problem. The government will want to sell hotels, but nobody's going to invest anything without an independent legal system in Cuba, which will probably require regime change.

Chrome's "Translate to English" option works well on this site.

https://diariodecuba.com/cuba/1622217681_31502.html

[Nino]

Wow @Ryan - that is some excellent journalism and very good research !

What I like most is that the article is filed under "corruption" - as it should be.

Required reading for many that loudly yell embargo but are silent on slave labour, theft, money laundering and some other crimes...

I will translate some key points and conclusions :

 

The ruling elite has based its strategy on investing the few financial resources available in the construction of new hotels, instead of buying vaccines already proven to contain the pandemic and prepare the country for the tourist season in the second half of the year. At a time when the hotel occupational rate in the last 15 months has been barely 14.7%, 45% of investments have been dedicated to the construction of hotels, a fact that raises strong suspicions of money laundering and it signals an imminent sale of the country to foreign companies in case the economy does not improve.

The other strategy has been to stimulate national tourism by offering packages in dollars to a population that only receives pesos. Undoubtedly, a measure that is aimed at ensuring that the stay of nationals in hotels is financed from abroad by family and friends, giving continuity to the magic formula created by the regime: that the country be maintained by its diaspora and not by the result of the effort and the generation of wealth of its citizens.

However, while the percentage of hotel occupancy in the country is reduced, investments in the industry increase proportionally. Obviously, an equation that does not fit in a transparent and normal economy and that is governed by the precepts and market standards of any modern society in the 21st century; but yes in an economy dominated by a mafia in power with all political and economic control in its hands.

In the last six years (2015-2020), investments in the Cuban tourism sector have gone from 1,575 million pesos to 4,139 million pesos, which represents a huge growth of 162.75%.

In those six years a total of 17,614 million pesos have been invested, a huge figure in a country that does not have the resources to buy medicine or food. In this same period of time, the regime had income of 20,130.75 million dollars for concepts of cash remittances from abroad. By the way, dollars that do not reach the hands of Cubans, but remain in a bank account of GAE S.A. companies in a third country.

How is it possible then that, in 2020, in the midst of a pandemic, the Cuban Government had the year of greatest investment in tourism, with $ 4,139 million pesos? How is it possible that the country has dedicated 45.5% of its investments to a paralyzed industry, while the population was being strongly impacted by the lack of food and medicine? Why build more hotels when the occupancy rate was at zero for several months and at the end of 2020 ended with a very low 14.7%, the lowest figure in the last 30 years?

Two sources that may have been playing a decisive role in these colossal tourism investments quickly come to light: the sale of medical services abroad and remittances to the island, including cell phone recharges.

As has been documented in dozens of studies and complaints made at the United Nations, the sale of medical services abroad is a multimillion dollar business that the Cuban Government has managed to weave in multiple countries and that involves tens of thousands of Cubans who in a way or another have participated in so-called medical missions. This business has been denounced as a slave trade, since the Government appropriates 70-80% of the salary paid by each of these hired professionals.

In 2018, the regime received 6,398.5 million dollars for this concept, according to the ONEI. However, the Cuban health system is in ruins, with structural problems due to lack of maintenance and great physical deterioration in most hospital units, as well as a chronic lack of supplies and medicines.

The other source of financing is remittances from exiles. As is well known, remittances sent through formal channels never reach their recipients in the currency in which they were sent, since the Cuban government delivers them in local currency. The dollars and euros sent remain in a GAE S.A. bank account in a third country. What the Cuban military leadership is doing with that capital of billions of dollars that it receives free of charge year after year and that is not audited by the Comptroller General of the Republic is a big question.

This opens a new chapter in the Cuban regime's participation in money laundering, drug trafficking and organized crime.

Conclusions

With an economy totally bankrupt, with an extreme liquidity crisis, without international credit lines, with a galloping foreign debt and an irreformable, destroyed and inefficient economy, also impacted by the effects of the pandemic, the Cuban regime has dedicated itself to build dozens of hotels in the country. This situation, to which is added a tourism industry in decline and closed by Covid-19, raises a great suspicion of money laundering.

Faced with this dystopian reality experienced by the Cuban population, it is extremely disgusting that the Government has invested more than 17,000 million pesos in the tourism industry in the last six years.

What is the real objective of these voluminous investments? Launder the capital obtained illegally from remittances and the salaries of medical personnel hired abroad, as well as from other illicit and non-transparent sources of financing, to convert it into financial assets?

In a country where political, executive and legislative power are managed and administered by the same elite, it is very easy for these financial anomalies to occur without any scrutiny and outside the law.

The false cliché that Cuba is a communist country, where it is proclaimed from the rooftops that the means of production are owned by the people, hides a true reality: the country is controlled by a military mafia that disposes and administers the financial resources at its own expense. total convenience, showing once again that organized crime has no ideologies.

Most of these hotel investments have been carried out by the company of the military elite GAVIOTA S.A, of which it is unknown who its shareholders and real owners are. This company has the largest hotel network in Latin America, with 105 facilities located in the country, which cover the range of sun and beach, cities and nature tourism. In total, it is more than 40,000 rooms.

In the absence of deep structural reforms, and in the midst of the economic crisis, the sale of the most lucrative assets of the Cuban economy will very likely begin at any moment. Among them, the tourism sector will be one of the highest value.

Perhaps this is the real reason why these colossal investments have been made in such adverse circumstances. Apparently the sale of the piñata is around the corner. Who will benefit from these potential sales? Undoubtedly, it will not be the Cuban people, "owners of the means of production", but the unknown shareholders of these companies of the mafia-military elite that controls the country.

 

[Kevin48438]

Capitalist Propaganda from the devils to the north!   Everyone loves to buy hotels.  It’s why they are included with the Monopoly board game.

 

[Kevin48438]

Also, wasn’t hotel ownership one of the chief complaints by the “revolutionaries” of the Batista regime?

[Ginseng]

Information like this is stunning in its clarity, if not its reality.

But I have to ask, what exactly is the endgame? Who's playing it? Can Cuba persist as it is? Or will another revolution bring an end to this one.

It just seems like unending suffering.

[Kevin48438]

It’ll take a revolution of some sort.  Can’t see the mafia-military regime willingly giving up power/money.  Hard to see the Cuban people being able to do it without outside support.  But in the 2020s (2000s even) people have little desire to fight evil and suffering if it doesn’t directly affect them.  They would rather contain it away from them and turn a blind eye.  So Cuba may be as close to the beginning as they are to the end.  Look at North Korea.  The UN stopped and said keep it over there on the other side of this minefield.  Cuba is about 15 years behind on that cycle.

I mean, there are assholes in the US who wear Che Guevara t-shirts.

[Nino]

1 hour ago, Ginseng said:

Information like this is stunning in its clarity, if not its reality.

But I have to ask, what exactly is the endgame? Who's playing it? Can Cuba persist as it is? Or will another revolution bring an end to this one.

It just seems like unending suffering.

It is Wilkey - as for the endgame, if I you read between the lines it will be just like in the old Soviet Union or the East Bloc where a small Nomenklatura and some Oligarchs took over the economy and the financial wealth of their countries cheaply and left their countrymen bareassed while they bought football clubs, megayachts and private islands ...

[Nino]

20 minutes ago, Count of Montecristo said:

Do you think it’s fair for anyone in Cuba to be making $30 a month when we smoke one of those cigars every day that cost $30 like it’s nothing? I learned about this in the mid 90s when I met Cuban citizens that migrated to America to work at cigar factory is here in San Diego. We pay over $20 for a cigar and the people who rolled it get nothing not even a new shirt to wear. Please don’t kick me out of your group for saying this it’s just the truth. 

You are saying the truth - no worries. I will support you with simple maths :

A roller at El Laguito, the Cohiba factory, has a daily "norm" to roll a certain amount of cigars depending of the vitola.

Let's say he rolls BHK 54 - his norm would be say 100 sticks a day plus whatever he rolls outside the daily norm.

100 BHK 54 a day by 20 days a month ( he will work Saturdays too and some Sundays but let's keep it simple ) = 2000 BHK 54

Price of a BHK 54 in Germany : 61€ a stick.

So he is making  122000 Euros a month for HSA while he is earning 40 Euros a month.

Next question ?

[griller]

8 minutes ago, Nino said:

You are saying the truth - no worries. I will support you with simple maths :

A roller at El Laguito, the Cohiba factory, has a daily "norm" to roll a certain amount of cigars depending of the vitola.

Let's say he rolls BHK 54 - his norm would be say 100 sticks a day plus whatever he rolls outside the daily norm.

100 BHK 54 a day by 20 days a month ( he will work Saturdays too and some Sundays but let's keep it simple ) = 2000 BHK 54

Price of a BHK 54 in Germany : 61€ a stick.

So he is making  122000 Euros a month for HSA while he is earning 40 Euros a month.

Next question ?

The math is just sobering, but it doesn't lie. Then again, if nobody smoked cigars and there was no such thing as a roller at El Laguito, then the situation for this individual in Cuba would likely be no different under this regime. He/she would be fulfilling some other job or role, and still be a subject of the state and it's grand plan for the island.

[Kevin48438]

59 minutes ago, Count of Montecristo said:

On YouTube you’ll see one of the CEOs of Habanos putting his face in most of those Habanos festival videos, The look on his face is pure evil and hatred. Good cigars though. Thanks a lot Obama for supporting this guy. Do you think it’s fair for anyone in Cuba to be making $30 a month when we smoke one of those cigars every day that cost $30 like it’s nothing? I learned about this in the mid 90s when I met Cuban citizens that migrated to America to work at cigar factory is here in San Diego. We pay over $20 for a cigar and the people who rolled it get nothing not even a new shirt to wear. Please don’t kick me out of your group for saying this it’s just the truth. 

No worries, bro.  We are here because we love the cigars, culture, and people of Cuba.  Our criticism and contempt for the Cuban leadership is for the betterment of all Cubans.

That place should be like Hawaii x8.  Ideal location on earth, plenty of resources, very rich culture.  So what if the young peoples’ club music sucks.  That’s true of everywhere.  🙄

And if they haven’t banned me...

[Kevin48438]

12 minutes ago, Count of Montecristo said:

Was things worse than this with Batista?

It was for the Castros.  And yet they were treated much better than the Castros’ political opponents.

I think that is where the mark gets missed.  The money that is earned by much of the economy doesn’t go into a national account.  It goes into to leaders’ personal accounts offshore.   That’s what the OP is about.   This isn’t really about a failure of socialism as an economic model.   Never really has been.   It’s just that corruption is much, much easier than in a free market.

“Power tends to corrupt, and absolute power corrupts absolutely“ - Sir Acton

[JohnnyO]

Properties being sold in Cuba find suckers every day. In the 90's Argentinians, early 2000's the Spanish and now the Chinese. They sell a wonderful story: "Lets have a couple of Bucaneros under this palm tree, I want you to meet some girls." The business starts out well, but then the owner realizes that they have to turn to the black market for supplies. Now they have bags of Cuban pesos that the government is not willing to exchange for USD. Back to the black market to get dollars. The government catches you in these shameful activities, they seize the property and your worthless pesos, kick you out of the country. They threaten you with 20 years in prison if you ever come back. Many have abandoned their business before it gets to this point because of the Cuban Peso. The bank has a 24:1 exchange rate, the streets 60:1 and I'm sure it will get to 100:1 this year. John

[frenchkiwi]

On 5/30/2021 at 9:39 AM, Count of Montecristo said:

I think the 80s TV show Fantasy Island was derived from Cuba

 

Was things worse than this with Batista?

There is a game called Tropico - you get to be the dictator and choose how to rip the people off, take the bribes from overseas multinationals, and imprison activists etc...