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Cuban communism has been consistent in many things. Among the uniformities have been the prioritization of doing anything and everything needed to remain, non-democratically, in power. True to its apocalyptic tyrannical nature, praxis has always been tailored to accommodate survivorship interests. This includes sidestepping the respect of basic natural and human rights, as well as not implementing rational economic courses to move Cuba away from destitution. Two other fundamental factors have characterized the Castro regime’s rule: (1) a dependency on foreign benefaction arrangements, and (2) partaking in morally reprehensible (and illegal) activities searching for hard currency.
A parasitically reliance on Soviet subsidies, complicit foreign investors, Western banks, Venezuelan oil, and remittances have been some of the schemes which have provided Castro-Communism with cash for its extravagant regime-sustenance expenditures. Among the abominable activities that the Marxist dictatorship has engaged in is the pillaging of Cuban national wealth, international neo-slavery work agreements, data and information sales from espionage, and drug trafficking. These disgraceful undertakings provide massive sums of money which needs to be made “legal”. In other words, the sixty-three-year-old Cuban dictatorship has serious money laundering problems.
Since the 1960s, the Castro regime began involving itself in the drug business. First, it was a means to corrupt American youth. By the 1970s, however, its lucrative nature grabbed the attention of the dictatorial leadership. The cooperation and logistical support from the rulers of an island ninety miles from U.S. shores was paramount for drug smuggling from South and Central America. Communist Cuba’s involvement in the illegal drug business is well documented. U.S. intelligence officially acknowledged it by 1975. From the Colombian cartels of the 1980s, to the cartels of Mexico by way of it’s Venezuelan and Bolivian colonies, and the logistical support of other friendly rogue regimes, like Iran’s and North Korea’s, Castro-Communism has been involved in and profited from the drug business for many decades.
The problem of making illegally obtained money appear as legitimate income, is the art of money laundering. Cuban communism, ever so desperate for hard currency revenues, is in a dire need to make the dirty money it has obtained through its drug trafficking role, a “legal” asset it can use in international business. Within the last few years, a disproportionate number of hotels, relative to Cuba’s tourist demand, have been built on the island by the communist dictatorship. This has raised suspicions as to the essence of this real estate frenzy to accommodate non-existent tourists.
The idea of establishing what appears as genuine businesses to whitewash illegally obtained funds is what money laundering is all about. It is no secret that Castro-Communism’s finances has been taking a nosedive for some time. Socialism everywhere is horrific at producing wealth and meeting the needs of its subjects. Despite Castroism’s historically dismal economic scorecard, a product of bad policies that reflect stupid political decisions, the ludicrous project of hotel building when there are scarcely tourists, would be insane even for them. Considering the social unrest that is being fueled by the absence of basic goods and services in Cuba, it becomes clear that the Marxist dictatorship is attempting to utilize its front businesses that spring from GAESA, the military-run state capitalist emporium, to establish collateral and be able to obtain credit and attract capital from foreign investment firms.
The level of occupancy in Cuba’s hotels between 2016 and 2020 has hovered around 50%. This is terrible. In Havana alone, which is not the main tourist destiny, there are eleven high-end hotels within an area of thirteen blocks, a radius of less than a mile. They are all practically deserted. The made in China pandemic cannot be blamed, although it has made things worse.
In 2018 and 2019 (pre-Covid), between 4 and 5 million tourists visited Cuba each year. For purposes of comparison, Florida in 2021, despite still hurting from the Red Chinese virus, received over 122 million tourists. Greater Miami alone, in 2019, attracted over 24 million visitors. The Dominican Republic welcomed over 7 million tourists in 2019. That same year, Cancun, Mexico, alone, had over 6 million tourists. For 2022, the Castro regime is forecasting 2.5 million visitors, but no one should hold their breath on that. The point should be clear. Cuba under communism is not a tourist mecca and does not warrant the volume of investment that the Marxist authorities are allocating to hotel building.
Official data from Cuba’s National Bureau of Statistics and Information states that 35% of the Castro regime’s budget has been dedicated to hotel-building and/or modernizing. This is higher than for public health and education. The figure, however, is probably much higher. GAESA which keeps its own exclusive budget and records, is involved in most of the hotel construction projects.
As Cubans continue to experience long power outages, brutal food shortages, and heightened repressive controls, those in power are, likely, laundering drug money in hotels few people visit. This is communism for you.
Julio M Shiling, political scientist, writer, director of Patria de Martí and The Cuban American Voice, lecturer and media commentator. A native of Cuba, he currently lives in the United States. Twitter: @JulioMShiling // Julio es politólogo, escritor, director de Patria de Martí y The Cuban American Voice. Conferenciante y comentarista en los medios. Natural de Cuba, vive actualmente en EE UU.