[Marxism] IMPORTANT: Cuba's military money machine (MH)

["Walter Lippmann" <walterlx@xxxxxxxxxxxxx>]

As much as they hate the Cuban Revolution and the social system
and institutions it has created, the light is starting to go on now.
Perhaps a better subject line might have been "a few lights going
on among the dim lightbulbs in Miami", but oh, well...

These people are being forced to understand that with Fidel now on
the sidelines, the system is NOT collapsing. Indeed, contrary to
what they have told the world for decades, the system here in Cuba
is working and has been working, with difficulties, but it HAS been
working, not for weeks or months, but for DECADES. This is a good
piece to read in combination with two others. Rauls's last major
speech, given six weeks before Fidel's illness and posted a month
before it where it remains still on the front page of the Granma
daily edition, and Marta Rojas's notes on Raul's role in Moncada.


Walter Lippmann
Havana, Cuba

===================================================================
Raul Castro's latest major speech (June 14, 2006)
http://www.granma.cubaweb.cu/secciones/raul-45ejercito/raul03.html

Marta Rojas: When Raul Assumed Responsibility for Moncada:
http://www.granma.cu/ingles/2006/agosto/vier4/33raulmon-i.html 
===================================================================

MIAMI HERALD
Posted on Sun, Aug. 06, 2006    

<http://www.miami.com/mld/miamiherald/news/special_packages/5min/15209490.ht
m>

Cuba's military money machine

Under the leadership of defense minister Raul Castro, the country's
military is a powerful political and economic force.

BY FRANCES ROBLES frobles@xxxxxxxxxxxxxxx

Tourists who sleep in some of Cuba's hotels, drive rental cars, fill
up their gas tanks, and even those riding in taxis have something in
common: They are contributing to the Revolutionary Armed Forces'
bottom line.

The same goes for anyone who has puffed on an exported Cuban cigar,
visited Havana's El Morro castle or hopped a domestic flight in Cuba.

In a post-Soviet Cuba, this military is not a repressive apparatus
out to stifle dissent; it's a money machine that runs not only much
of the tourism sector, but the sugar, naval and retail industries, as
well.

Military enterprises now control an estimated 90 percent of the
nation's exports and 60 percent of its tourism revenue, and employ 20
percent of state workers.

''The military's job is to make money,'' said Frank Mora, a professor
at the National War College in Washington. ``Power in Cuba is not
just a question of who holds the guns, although that helps. More
important is who controls what is profitable.''

In Cuba, that's the men in green.

As nearly 80-year-old Fidel Castro reportedly recuperates from
gastrointestinal surgery and his brother, Defense Minister Raúl
Castro, takes over, the role of the Revolutionary Armed Forces, or
FAR, has never been more critical. The pressure to deliver will be on
the armed forces that Raúl created and transformed.

Cubans who have suffered years of shortages will be looking to Raúl
Castro and his military -- highly respected in Cuba -- to address
crucial deficiencies in housing, transportation, food and medicine.
Experts say the younger class of rising military stars who run Cuba's
commercial enterprises using economic models they learned in European
business schools just might be able to do it.

The government appears to be feeling the pressure. Just three days
after Castro's shocking announcement that he had turned power over to
his brother, the state newspaper Granma featured an article about the
military sprucing up and modernizing its equipment.

The military is also considered more inclined toward reforms and more
qualified to execute them, making them an organization that could
help sustain the socialist government in a post-Fidel scenario,
experts say.

''It's the only institution that has legitimacy in Cuba,'' said
Armando Mastrapa, who runs a website about the Cuban military
(www.cubapolidata.com). ``I don't see how Raúl could continue without
it.''

Fiercely loyal, the military has never in its 47-year history staged
a coup attempt to topple the Castros and has rarely been directly
involved in cracking down on political dissent.

Raúl Castro created the FAR in 1959 with the guerrilla forces that
toppled dictator Fulgencio Batista. Raúl is credited with
transforming the ragtag revolutionaries into a real army. Dubbed
''the historics,'' some of those original revolutionaries still
occupy high-ranking positions in the military.

NO MORE SUBSIDIES

The military gained experience in combat during its involvement in
African wars in the 1970s. Thousands of Cubans fought and died in
Angola, and many survivors now make up another circle of respected
officers.

That was back when the FAR enjoyed massive subsidies from the Soviet
Union. From 1960 until 1990, it received up to $19 billion in Soviet
subsidies, and defense expenses made up 13 percent of the national
budget, according to Mora's research.

With about 150 Soviet-supplied fighters, including MiG Floggers and
Fulcrums, the Cuban armed forces were considered the best-equipped
military in Latin America.

The collapse of the Soviet Union dealt a blow to the FAR. Suddenly,
it had more than 220,000 troops and no money to pay for them.

>From 1988 to 1991, its budget was cut nearly in half, Mora said. By
1998, a U.S. Defense Intelligence Agency report described Cuba's
armed forces as one with mothballed equipment, a navy with no
functioning submarines and an air force with fewer than two dozen
operational warplanes. Its troop strength dropped to about 55,000
soldiers.

The Cuban military meanwhile needed to find a way to pay for itself,
so the FAR started experimenting with Western-styled business
management techniques and began running parts of the economy.

Raúl Castro formed GAESA, or Business Administration Group, the FAR's
holding company for the Defense Ministry's economic interests. At the
helm: Col. Luis Alberto Rodríguez, Raúl's son-in-law, known as a Raúl
loyalist and sharp businessman.

Based on the fourth floor of the Armed Forces Ministry, GAESA did $1
billion in business in 2000 alone through a long string of
GAESA-owned companies, experts say.

MILITARY TO POLITICS

The FAR's powers extend well beyond GAESA, however.

Half of the now 20 members of the politburo are active military
officers, and generals are in charge of several ministries, including
sugar and fisheries.

By 1996, Mora said, the FAR was generating enough revenue to pay half
of its own budget.

The military ''enjoyed the best of both worlds,'' Mora said, because
it was able to profit from its businesses while leaving the political
repression to the Ministry of Interior, which runs the police and the
state security agency.

But even within the armed forces, there are potentially problematic
divisions, he added.

'They went to wars abroad. They worked in the fields. These were the
`heroic FAR.' These are the good guys. They have garnered a lot of
respect,'' said Mora. ``But that has begun to change, because now
there are generals who live a little bit better.''

Former military officer Eugenio Yáñez, author of Secretos de
Generales (Generals' Secrets) said the perks obtained through the
officers' connections are not luxurious -- maybe a computer or a trip
abroad -- but they are valuable enough to spark jealousies.

''They live a life of privilege,'' he said of the officers. ``I'm not
talking things that would be considered privileges in Hialeah, but
they are in Cuba. Of course there are jealousies.''

Experts say that fissure could cause problems for Raúl in the long
run. On the other hand, they add, those who have benefited have a
vested interest in keeping the status quo.

''These are political animals,'' said Domingo Amuchástegui, a former
Cuban intelligence officer who defected in 1994 and now lives in
South Florida. ``They are not guerrillas. They are professional
politicians. They're just like American generals who retire and
become CEOs -- but these are going to work at state-owned joint
ventures.''

He said Raúl Castro and his team -- military and civilian -- are
likely to push reforms forward. Each time Cuba experimented with
farmers' markets where uncontrolled prices drove up production, it
was defense minister Raúl who pushed them -- and Fidel who shut down
all but the current ones.

If Raúl and the military focus on housing, food and jobs, Cubans are
likely to support them, experts say.

''They have been in a situation for 12 to 15 years where their hands
were tied,'' Amuchástegui said. ``Now they are going to feel they'll
have their big chance to put in practice the knowledge they acquired
in the world's best capitalist institutions.''


________________________________________________
YOU MUST clip all extraneous text before replying to a message.
Send list submissions to: Marxism@xxxxxxxxxxxxxxxxxxx
Set your options at: http://lists.econ.utah.edu/mailman/listinfo/marxism