The Real Reason Cuba Is Failing Isn't America

The Narrative That's Being Sold to You

Open most international media coverage of the Cuban crisis and you'll find a familiar storyline: the U.S. embargo is strangling an innocent island nation. American sanctions are causing the blackouts. Washington's hostility is why Cubans are hungry. It's a clean, emotionally compelling narrative — and it's the one the Cuban government has been pushing for sixty years because it is extraordinarily convenient for them.

Here's what that narrative requires you to ignore: Cuba's own government has been looting the country from the inside for decades. Not metaphorically. Literally — through a military-run financial empire called GAESA that controls somewhere between 40% and 70% of the entire Cuban economy, hoards billions in secret offshore reserves, and has systematically locked ordinary Cubans out of their own country's wealth.

The embargo is real. The U.S. has absolutely applied pressure that has made Cuba's situation harder. That's true, and it's worth saying plainly. But it's a far cry from the whole story — and when you do the research, when you look at the actual numbers, a very different and far more uncomfortable picture emerges. The biggest thieves in Cuba are wearing uniforms, not sitting in Washington.

Before You Read Further — This piece isn't an argument for or against U.S. sanctions policy. It's an argument for intellectual honesty: the Cuban people's suffering has a primary author, and it isn't the American government. If you want to help Cubans, you have to be willing to name the right enemy.

Meet GAESA: Cuba's Shadow Government

Most people outside Cuba have never heard of GAESA. That's not an accident — it's a design feature.

Grupo de Administración Empresarial S.A. was founded in the 1990s by Raúl Castro, then defense minister, as the economic arm of Cuba's Revolutionary Armed Forces. The idea, officially, was that military officials with business training would run state companies more efficiently during the catastrophic economic collapse that followed the Soviet Union's dissolution. What actually happened was something far more consequential: the Cuban military built itself a private empire inside a supposedly socialist state, and then spent thirty years making sure nobody could see inside it.

For years, outside analysts could only estimate its scale. Then, in late 2024 and early 2025, something remarkable happened: internal financial documents — more than twenty balance sheets, profit reports, and accounting records — were leaked to the Miami Herald. For the first time, the world got to see inside.

What those documents revealed was staggering.

"The corporate map of GAESA is — or was, until the 2026 crisis — the map of the Cuban economy."

The Numbers That Destroy the Embargo Excuse

Let's talk about money, because the numbers here are almost impossible to square with the idea that Cuba's crisis is primarily America's fault.

The Scale of GAESA's Wealth

To put those numbers in context: GAESA's total revenues are 3.2 times greater than the annual revenues of the entire Cuban State Budget. The conglomerate's gross profits account for approximately 37% of Cuba's entire GDP. Cuban economist Pavel Vidal, writing for Columbia Law School's Horizonte Cubano, noted that GAESA's weight in the Cuban economy exceeds that of state-controlled oil giants like Petrobras in Brazil, Ecopetrol in Colombia, or PDVSA in Venezuela relative to their own economies.

GAESA's cash reserves, as documented in the leaked statements, surpass the total foreign reserves of countries like Costa Rica, Uruguay, and Panama.

Now hold that against this: the average monthly state salary in Cuba reached 6,649 pesos in 2025 — approximately $18 at the informal exchange rate. A basic food basket costs more than 37,000 pesos. A carton of eggs costs over 3,000 pesos. Cuba's consumer price index increased 24-fold between 2015 and 2022 while real wages fell 96 percent.

These two realities coexist on the same island at the same moment. The military is accumulating billions. The people are starving. That's not an embargo. That's a robbery.

A Chokehold on Everything That Matters

Understanding GAESA's power requires understanding just how total its control actually is. This isn't a company that dominates one sector. It's a conglomerate that has systematically captured every meaningful economic artery on the island.

What GAESA Controls

That last point deserves to linger. GAESA built an offshore corporate structure — in Panama, Cyprus, and Liberia — to operate beyond the reach of international scrutiny. Not beyond American scrutiny specifically. Beyond anyone's scrutiny. This is a Cuban military institution deliberately engineering its own financial invisibility, not because of the U.S. embargo, but because opacity is how you keep billions of dollars hidden from your own people.

The cruelest element of GAESA's monopoly is what it does to ordinary Cubans' purchasing power. Between 80 and 90 percent of Cubans earning pesos are completely locked out of TRD Caribe and CIMEX — the only retail chains that carry real goods. Those stores operate exclusively in hard currency that most Cubans simply don't have. So GAESA captures the dollar remittances flowing in from the Cuban diaspora, converts them into revenue through its retail monopoly, and funnels the profit back to the military. The diaspora's love for their families becomes the regime's income stream.

Why Reform Is Impossible When the Military Won't Allow It

Here's the question that should be at the center of every serious conversation about Cuba: if the situation is this bad, why hasn't the government reformed?

It's a fair question, and the Cuban government's own economists have been asking it loudly. In December 2025, Cuban economist Pavel Vidal published a striking analysis pointing out that Cuba's own government stabilization program — released that same month to address the deepening crisis — didn't even mention GAESA. Not once. A plan to fix Cuba's macroeconomic disaster deliberately ignored the entity that controls more than a third of the country's economic output.

That omission is not an oversight. It's a confession.

What Reform Would Require

What Reform Would Cost GAESA

This is why blaming America is so strategically valuable for Cuban leadership. As long as the conversation stays focused on the embargo, nobody is asking why a military conglomerate in a socialist country has $14.5 billion sitting in undisclosed offshore bank accounts while its own citizens can't afford eggs. The U.S. isn't just a geopolitical adversary for Cuba's ruling class — it's a perfectly positioned scapegoat.

Cuba Was Failing Before America Tightened the Screws

One of the most revealing data points in this entire conversation is the timeline. Cuba's economic collapse didn't begin when Trump reimposed sanctions. It didn't begin with Biden's SSOT designation. It predates all of it by years — and it tracks precisely with decisions made inside Cuba, not in Washington.

Cuba's GDP fell 10.1% between 2018 and 2023 — years that include significant periods of relative U.S.-Cuba diplomatic engagement. Agricultural production of corn and rice plunged between 38% and 58% from 2016 to 2024. Exports halved since 2013. Inflation hit 77% in 2021, 39% in 2022, 31% in 2023. The public deficit reached nearly 20% of GDP by 2025.

These numbers reflect structural failures in the Cuban economic model that have nothing to do with American foreign policy: a Soviet-style planned economy that cannot produce efficiently, a private sector deliberately stunted to protect state monopolies, agricultural policy that has driven food production into the ground, and decades of underinvestment in critical infrastructure like the power grid.

The Blackouts Tell the Story — Cuba's nationwide power grid collapsed in October 2024 when the Antonio Guiteras Power Plant failed — a plant that had been deteriorating for years due to lack of maintenance and spare parts. GAESA, meanwhile, was completing the 42-story Torre K luxury hotel in Havana in 2025, a construction project linked to GAESA businesses, at a time when tourism was already collapsing. The military found money to build a five-star hotel. It didn't find money to maintain the power grid that 11 million Cubans depend on.

The Cato Institute's analysis put it bluntly: had Castro's revolutionary government not taken power in 1959 and followed Cuba's pre-revolutionary economic trajectory, the Cuban economy would have been expected to be roughly double its actual size by 1989 — before the Soviet collapse triggered the next round of crisis. Sixty-five years of economic mismanagement don't disappear because there's also an embargo in the picture.

None of this means American policy toward Cuba has always been wise, proportionate, or well-targeted. Reasonable people can and do disagree on that. But here's the critical distinction: sanctions restrict what flows into Cuba from outside. GAESA controls what happens to the wealth already inside Cuba. Even if every sanction were lifted tomorrow, there is no evidence — none — that the Cuban military would redirect its billions toward the Cuban people rather than its own accounts in Panama and Cyprus.

What the World Owes Cuba's People — And Who Actually Owes It

The Cuban people deserve better than the situation they're in. That much is completely beyond debate. The images coming out of Havana right now — the ghost-town streets, the people on bicycles because there's no fuel, the elderly digging through trash — are a genuine humanitarian crisis and they demand a genuine response.

But here's what getting serious about helping Cuba actually requires: being honest about who is primarily responsible for their suffering. And when you look at the leaked financial documents, the Columbia Law School analysis, the Miami Herald investigation, and the Cuban economists who have spent years screaming into the void about GAESA — the answer is not ambiguous. A military conglomerate is sitting on billions in secret offshore reserves while running a total monopoly on the hard-currency economy, blocking every meaningful reform that could benefit ordinary Cubans, and pointing at the United States every time someone asks why things are so bad.

The embargo is a legitimate policy debate. GAESA is not. GAESA is a documented, institutionalized theft operation running on the backs of 11 million people — and it will not reform itself, because reform means dismantling the system that makes the Cuban military fabulously wealthy.

Propaganda works by giving you a simple explanation for a complex problem. The embargo narrative is simple. It's emotionally satisfying. It has a clear villain in a geographically distant capital. But if you actually do the research — if you sit with the numbers, the leaked documents, the testimony of Cuban economists, the structural reality of how GAESA operates — a much harder truth comes into focus.

Cuba's people are not failing because of America. They are failing because their own military decided, decades ago, that it was more profitable to loot the country than to run it. And until that truth becomes the center of the conversation, the real architects of Cuba's collapse will keep getting away with it.

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