Heavily dependent on tourism, the Cuban economy has been hit hard by the pandemic’s restrictions on travel. The loss of Canadian tourists is a particularly heavy blow as in recent years we have been by far the most common visitors to the country’s sunny shores.
And, as pointed out in a recent CBC article, this means Canadians are also major contributors to Cuba’s military. According to the article, former President Raul Castro “used the country’s defence budget to branch out into tourism and other businesses, creating the nucleus of a business empire that today is the biggest player in the Cuban economy.” It appears that a small group of generals in Cuba’s Revolutionary Armed Forces are now capitalist overlords. So much for the revolution.
Top capitalist is Castro’s son-in-law General Luis Alberto Rodriguez Lopez-Calleja, head of GAESA, the armed forces’ holding company. GAESA’s holdings—which include the two largest hotel and tourism groups as well as banks, convenience stores and gas stations, construction companies, and air and ground transport interests—make up over half the Cuban economy.
In Cuba’s friend and neighbour, Venezuela, there too the army manages a large part of the economy. Former president Hugo Chavez brought it into government, now it will be next to impossible to get it out. Senior officers head key sectors, including food distribution services and the state-owned oil company. Furthermore, many generals own companies often with lucrative state contracts. All this aside from involvement in drug and arms trafficking.
We see military domination of economies in a range of countries. In Egypt, for example, an array of goods and services are provided by companies run by or affiliated to the military. Major infrastructure projects have proven to be particularly lucrative for the Armed Forces Engineering Authority. Private companies are disadvantaged by the military-affiliated companies ability to avoid taxes.
In Iran, the Islamic Revolution Guard Corps (IRGC) is the dominant military force. It is also a major economic force. Through a series of subsidiaries and trusts, the IRGC is involved in military industries, housing, highway construction, oil and gas projects, food, transportation, and educational and cultural activities. It controls as much as a third of the nation’s economy. The IRGC was established to guard the revolution; it may now be more concerned with guarding the generals’ pocketbooks.
And then there’s Myanmar. For a long time its military has been amassing wealth by controlling the state bureaucracy and establishing near-monopolies in key economic sectors. In a move that would have done credit to Russian oligarchs, in the years leading up to the return of democracy in 2011 the military-owned conglomerates used privatizations to grab publicly-owned enterprises at fire-sale prices. Military leaders and their cronies also grabbed land and economic concessions.
Myanmar is, in fact, a lesson in the difficulty of establishing democracy when the economy belongs largely to the military. The elected government of the country had been attempting to return control to private enterprise, largely to end the deep corruption of government-business relations that was seriously hindering economic progress. A spokesperson for the governing political party stated that the government bureaucracy, dominated by retired military personnel, would be a major target for reform after the 2020 election. The military had heard enough. Early in 2021 it staged a coup and ended the possibility of further reform.
Myanmar’s military was following the lead of their khaki-clad brothers in Egypt. There, too, democracy had made an appearance but only until the army caught its breath and then ruthlessly stamped it out.
The purpose of a military is to defend the state, but if that state’s military dominates the economy, it will be focussed instead on defending its own financial interests. As a democratic system will invariably attempt to send the military tycoons back to their barracks, democracy will always be their enemy. It could hardly have a more powerful and dangerous foe. The nations discussed above serve as tragic examples. And tragic lessons.