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How Canadian tourism sustains Cuba’s army and one-party state

How Canadian tourism sustains Cuba's army and one-party state
Written by Publishing Team

Reinaldo Rodriguez stands on a street corner in Montreal, carrying a message for Canadians.

“Canadian tourists are feeding the Cuban system,” he told CBC News.

Rodriguez has been part of a wave of protests that has swept Canada’s 30,000 Cuban community since unrest spread across the island on July 11.

“People don’t see (money),” he said. “The same is happening with the money the government makes from its doctors who work abroad. Cuban hospitals are unhealthy, people don’t have medicines.”

Fellow protester Felix Blanco carried a sign that read “All-inclusive resort in Cuba: 51 percent dictatorship, 49 percent foreign company, 0 percent Cuban people.”

Police in civilian clothes arrested an anti-government protester during a demonstration in Havana, Cuba, Sunday, July 11, 2021. Hundreds of demonstrators took to the streets in several cities in Cuba to protest against the ongoing food shortages and rising food prices, amid the novel coronavirus crisis. (Ramon Espinosa/The Associated Press)

Blanco grew up in Varadero, the heart of the country’s sun and sand industry.

“The regime is using this money in repression,” he told CBC News. “We can see how many police cars they have, how willing they are to crack down. But we don’t have ambulances.” (Cuban authorities said they lacked gasoline for ambulances.)

Cuban-Canadian activists say many Canadians don’t know how much the survival of Cuba’s one-party system depends on the foreign currency tourists bring into the country, or how far the Cuban government will go to keep Canadians coming.

And there are fewer who realize how much of their dollars go not to the undemocratic government of Cuba, but to a group of companies controlled by a small group of well-connected generals in the Cuban Revolutionary Armed Forces.

Covid is crushing tourism

While the number of foreign arrivals to Cuba has decreased this year, no other nationalities have been left out like Canadians, according to Cuban government statistics.

Total visits are down about 95 percent compared to 2019, but Canadian visits are down 99.5 percent. (By contrast, Russia already sent more visitors in 2021.)

This greatly hurts the Cuban economy, because (in normal years) far more Canadians enter and leave Cuba than citizens of any other country – including Cuba itself.

On January 1 this year, Cuba – like many countries – introduced new rules requiring all visitors to have a negative PCR test for COVID-19 before travelling.

Cuba is an island and only a few of its poor citizens can leave it. Foreign visitors are the main source of vulnerability when it comes to COVID.

But a few days later, Cuba scrapped the test requirement exclusively for Canadian visitors.

It wasn’t because the risk of coronavirus in Canada was low. In fact, the rules were relaxed at a time when Canada was nearing the peak of the number of cases for the entire pandemic up to that point – about 8,000 new cases a day. (It’s only a few hundred a day.)

Cuba avoided the worst outbreak of the epidemic until 2020. That changed in 2021; Cuba reported only 169 new cases on January 1, 2021, but was recording more than 1,000 new cases per day by February 1.

The Cuban government has also offered PCR tests to returning Canadians at about a tenth of the price one would expect to pay in Canada, the United States or Mexico.

Some Canadians remained very keen on visiting Cuba and sought to expand the Atlantic bubble to the Caribbean island—traveling from Halifax to Cayo Coco to stay in a Canadian-only hotel at a time when Nova Scotia required most Canadians wishing to visit the province to apply for government permission.

Army and resorts

In December 2019, just before the outbreak of the coronavirus, Cuban President Raul Castro appointed Manuel Marrero Cruz as Cuba’s first prime minister in more than 30 years.

The last person to hold this position was Fidel Castro himself, who left him to become president. The appointment of the long-serving Minister of Tourism demonstrated the vital importance of hotels and resorts to the Cuban economy.

Other than tourism, Cuba does not have much to offer to global markets compared to its needs. For every dollar he earns through exports, he spends five on imports. Tourists are looking to make up for that growing gap year by year.

A woman walks past a poster showing pictures of late Cuban President Fidel Castro, First Secretary of the Cuban Communist Party, former President Raul Castro and Cuban President Miguel Diaz-Canel in Havana, Cuba, on April 12, 2021. (Alexander Menegini/Reuters)

Raul Castro is more responsible than anyone else for Cuba’s modern resort industry. Considered by many Cubans to be more pragmatic than his brother Fidel, Raúl was in charge of the Revolutionary Armed Forces when Soviet aid to Cuba dried up.

He used the country’s defense budget to branch out into tourism and other businesses, creating the nucleus of a trading empire that is today the largest player in the Cuban economy. Hotels around Cuba’s western coast rose, although Cubans were banned from visiting them until 2008 (the same year the Cuban government dropped its ban on cell phones, computers, and DVD players).

A hotel empire led by a general

At the head of a military hotel empire sits General Luis Alberto Rodríguez López-Caleja, a father of two great-grandchildren of Raul Castro and a member of Cuba’s Politburo – a man who some Cubans believe truly runs the country alongside his father-in-law. , using President Miguel Diaz-Canel as a replaceable public face.

Cuban General Luis Alberto Rodríguez López Calleja was married to Raul Castro’s daughter and heads GAESA, the holding company of the Cuban Revolutionary Armed Forces. (Twitter)

Rodriguez Lopez Calleja heads the armed forces holding company GAESA, which operates a consortium of tourism, construction, banking, air and land transportation and retail businesses across the country, including the hotel chain Gaviota, which owns most of the four and five hotels. Star hotel rooms in the countryside.

The Cuban state also owns two other large chains in Cuba, the Gran Caribe Hotel Group and Cubanacan, although both chains have recently lost ground to the military holding company.

The accounts of the chains, like all government institutions in Cuba, were closed.

But the Cuban government has been very public about its intentions to base its economic future on tourism.

Cuba’s current development plan anticipates building over 100,000 new hotel rooms by 2030, along with 24 new golf courses.

At the heart of the growth plan are GAESA and other companies owned by the armed forces. GAESA will spend more than $15 billion on 121 hotel projects, twice what is expected of foreign investors and the Cuban civil government combined.

The Cuban military is on track to have more than 90,000 hotel rooms by 2030 — more than there are currently in the entire Dominican Republic, the most hotel-rich country in the Caribbean.

Spending on new hotel and real estate projects far exceeds Cuba’s shrinking budgets for health, education, agriculture and science sum.

Even as the epidemic spread in Cuba and tourism declined, the Cuban communist government was able to find Canadian partners. Blue Diamond Resorts, a company that already operates about 20 state-owned hotels in Cuba, entered into business with the Cuban state again in August 2020 to open the Mystique Casa Perla boutique hotel in Varadero.

Tourists walk on the beach in Varadero, Cuba, December 7, 2018. (Fernando Medina/Reuters)

Neither Blue Diamond nor its parent company Sunwing have responded to CBC News’ inquiries regarding this article. Nor did the Cuban-Canadian Tourism Board.

Richard Feinberg of the University of California San Diego co-authored a paper on the tourism industry in Cuba for the Brookings Institution. He said foreign hotel chains usually have one of two types of arrangements with the Cuban state or military.

He said that hotels, owned by the Ministry of Tourism, often had foreign companies as small partners (usually with a 49 percent stake in the property, with Cuba holding the controlling stake). He said military-owned hotels are often wholly owned by military real estate company Almest SA, and foreign partners only have management contracts.

Low wages, a ‘captive’ workforce

The workers are provided through an employment agency also controlled by GAESA/Gaviota. If a foreign company pays Gaviota $750 per month for the average base salary, the worker will typically receive less than 10 percent of that amount in salary. The rest goes to the Cuban army.

Cuban hotel workers take home only a fraction of what their counterparts in Cancun or the Dominican Republic earn for similar work. Guest workers from India who work in one hotel are paid ten times more than their Cuban counterparts.

Communist Party organs defended the wage differential by claiming that the productivity of Indian workers was “three or four times better” than the average productivity of Cubans.

A maid wears a mask against the spread of the novel coronavirus, and cleans rooms at the Comodoro Hotel in Havana, Cuba, Thursday, February 11, 2021. (Ramon Espinosa/The Associated Press)

Additionally, GAESA’s construction projects benefit from the forced labor of military recruits, such as those who dug the foundation under the new Prado y Malecon Hotel in Havana.

Felix Blanco points out another difference between Cuba’s tourism industry and other Caribbean destinations: a captive workforce. While Mexican workers who are not satisfied with their salaries can leave and reside on their own, “My family in Cuba is not allowed to do their own business.” A Cuban who leaves a $40 per month job in the tourism sector will be fortunate to earn $30 per month in other sectors of the economy.

Feinberg said tourism jobs are in great demand.

He told CBC News, “Cubans are leaving their jobs as engineers, as medical professionals, as teachers, to work in those hotels, because the salaries are better, the working conditions are better, and you have access to advice from foreign tourists.”

No way about the army

Some tourists choose to avoid Cuba’s large hotels and resorts, preferring private homes and B&Bs. Even then, it is difficult for them to avoid enriching the Cuban army. It operates the banks through which tourists make credit card payments to individuals. It operates stores that sell imported food and goods.

The Cuban military controls the hotel building in Havana and five years ago took control of the Hapaguanx, a federation that runs the shops and restaurants of Old Havana, formerly run by the city’s official historian Eusebio Leal.

As the US hotel company Marriott discovered last year, it is virtually impossible to operate on the island today without enriching what is already the country’s richest institution: the Revolutionary Armed Forces.

Opinions are divided as to whether Canadian tourists, by turning away, can hasten the fall of Cuba’s one-party state. Cuban-Canadians like Felix Blanco say they think it will help.

Meanwhile, Feinberg said he was skeptical of “the idea that if we can only reduce the number of stays in these hotels, we can somehow starve and reduce the Cuban security apparatus.”

He said that the Cuban government will ensure the flow of resources to this apparatus in one way or another.

What is not clear is where they might flow from. Cuba’s growing dependence on tourism was acknowledged by President Miguel Diaz-Canel himself, who called it “the locomotive of the Cuban economy” and once told deputies that “what we have weekly to pay off loans, to buy raw materials and investment comes from tourism.”

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