The Cuban armed
forCes aCCoun T for
a signifiCan T par T
of The Coun Try’s
foreign revenue.
They combine direct, discretionary access to cash with
the secrecy and opacity of the military, enabling corruption. Investigations of administration and allocation
of resources can be stymied by references to national
security. Even if there is no malfeasance, the military
might seek to prioritize aspects of production or profit
that are not necessarily in the collective national interest (e.g., keeping unprofitable and unsustainable weapons production programs).
The Cuban armed forces have arguably been among
the most efficient at exploiting twenty-first century
global markets. Since the collapse of Soviet subsidies
in the early 1990s, businesses managed by the Cuban
armed forces have grown to account for a significant
part of the country’s foreign revenue, not least the
hotels and other establishments serving tourists from
Europe and Canada. Through the holding and tourist service firms Gaesa and Gaviota, the military is
responsible for over three-quarters of export earnings.
To an outside observer, they represent, ironically, the
country’s most successful capitalist institution. In many
cases, what little still works in Cuba is either managed
by a multi-national or by the army.
As with the other new roles described above, one
could argue that having the military run factories or
serve tourists drinks is a useful function in economies
that are still making the shaky transition to democracy. If soldiers can do these jobs competently in the
absence of trained civilians, then what harm is done?
But relying on the military for the provision of critical
services or to make up for shortcomings in domestic
law enforcement and industrial development could
create problems that will not become obvious until
they are too late to correct.
For example, the air traffic system in Brazil, historically operated by the armed forces, is at a critical
juncture as Varig’s monopoly has collapsed and more
private airlines are offering domestic and international
service. The number of air traffic controllers is determined under the broader military budget, which has at
best an indirect connection to the on-the-ground needs
in local airports. The air traffic controllers’ strike that
paralyzed the country in March 2007 could have been
avoided if a more market accountable and transparent institution had been in charge. This, together with
the tragedy of the TAM flight in S�o �aulo in �uly, has
combined to create havoc in Brazil’s air travel that has
affected confidence and economic growth.
Even the apparently innocuous benefit of having the
military pay its own salaries out of its business activities is fraught with danger. The potential for corruption
is obvious—in Argentina’s Fabricaciones, for instance,
illicit sales and under-reporting of invoices were still
going on almost 20 years after the democratic transition. Moreover, the entrenchment of senior commanders in lucrative positions of corporate power may make
it harder for civilian authorities to exert control over
military establishments. In Cuba, military ownership
of hotels, export firms and airlines could complicate the
country’s post-Castro transition. Cuba’s soldiers may be
willing to support a peaceful change to civilian rule that
allowed them to transform themselves from nomenkla-tura to bourgeoisie. But they may also be loath to give up
their access to power and money. As long as Raúl Castro
is in power, the military might feel that its institutional
interests are protected. But even a fairly stable transition
to either technocratic rule under Vice �resident Carlos
Lage or a partycracy under Foreign Minister Felipe �érez
Roque might threaten military privileges.
