Cuba: Telecommunications Are a Key Piece for Military Businessmen
Discreetly, although in official form, the businessmen who dress in olive green have taken absolute control of the only telecommunications firm that exists on the island: ETECSA.
In recent days, the Official Gazette published what different national firms would do with their shares of ETECSA. The majority group, with 51%, is Telefónica Antillana S.A. With 27% follows RAFIN, S.A., a Cuban corporation created in 1997, and about which publicly nobody knows where its funds come from and the final destination of its profits.
In Miami, where Juan Juan Almeida García — son of one of the sacred cows of the revolution, Juan Almieda Bosque — lives, the news didn’t take him by surprise. In a statement given to an independent Cuban site, he commented that the acronym of the mysterious company is the initials of ‘Raúl Fidel Inversiones’ and was created one night over shots of vodka and ham canapés in a house in the Siboney district, west of Havana.
Other sources who prefered anonymity confirmed what Almeida Junior said. And they calculate that the capitalization of this corporation is around 10 billion dollars and could be a part of the personal estate of the Castro brothers. RAFIN S.A. has its headquarters on Avenida del Puerto, Old Havana, and its president is Luis Alberto González Ruiz de Zárate.
His complete name gets no hits on Google. By his second last name, he can be related to Serafín Ruiz de Zárate (1923-1991) who, in 1959-1960 was Minister of Health, or to the journalist and investigator Mary Ruiz de Zárate. In Cuba, the Ruiz de Zárates come from a moneyed family from today’s Cienfuegos province.
Some years ago, Forbes magazine put Fidel Castro in its number one ranking among the politicians with the largest quantity of money and properties. Castro perceived it as a media vendetta and furiously responded that he would pay a million dollars to anyone who could prove the supposed riches imputed to him.
It has rained a lot since then. A couple of years ago, the Italians who used to do business with the Cuban telecommunications firm left the country, but they continued maintaining their 27% of the shares; those same that just got bought by the up-to-now unknown company, property of Raúl and Fidel Castro. More about RAFIN and other non-banking entities can be found on this page from the Central Bank of Cuba.
The interests of the military businessmen in ETECSA is logical. It’s a business that moves billions of dollars and in the near future promises to double its growth. According to local directives, mobile telephone lines will outnumber fixed (landline) telephones, with 1,200,000 users. And the trend keeps growing.
A cellular line on the island costs 50 dollars and every two months you have to deposit a minimum credit of 10 dollars to keep it operating; to this you have to add the succulent slice of international calls, with almost 2 million Cuban emigrants alone in the United States.
ETECSA is one of the three Cuban businesses which generate profits in cash, together with civil aviation and tourism. But if millionaires are the beneficiaries of mobile telephony and foreign calls, the immediate future should be promising.
In the first fifteen days of February, Cuba will become linked to Venezuela by an underwater fiber optic cable which will permit the transmission of data and internet connections. At a cost of 70 million dollars, the cable will permit the extension of the Cuban connectivity racket which barely reaches 5%.
The cost will probably also come down. Connections with the information superhighway today are by satellite, more expensive and slower than by fiber optics. In the digital era, the creole Mandarins are interested — and very much so — in maintaining absolute control over the new communications tools, which by its reach and power to launch calls to action could, in a matter of hours, provoke a popular revolt.
The Castro brothers aren’t stupid. And they have taken notice. The latest events in Tunisia and Egypt, and the role played by SMS and social networks like Facebook and Twitter, have demonstrated once again the powerful strength of the Net.
They are also conscious that it is not prudent to keep the populace away from key tools in today’s world. Their plan is to offer internet services … under strict control.
Internet is a double-edged sword for the government. It cannot live behind its back, but it brings an uncontrolled circulation of information. The military regime thinks it can minimize this impact, blocking and censoring the pages that they consider “counterrevolutionary”.
According to ETECSA sources, in 2011 it is forecast to commercialize internet service to Cubans. The initial cost will be 150 dollars for a line, and after that they will sell cards for a fixed quantity of hours.
In the last weeks, after General Medardo Díaz, 48, was designated Minister of Computing and Communications, he has called the attention of the workers to the movement of the military and teams in different dependencies of ETECSA.
To outward appearances, the militarization of this enterprise is a fact. Since 2008, Cuba has changed into a country almost basically controlled by the military. The majority of the ministries are occupied by active duty or retired olive green officers.
But what intrigues the coffee-with-no-milk Cubans, if it’s true what’s said in programs from Miami which are seen with illegal TV antennas, is knowing where the Castros have gotten so much money to start a corporation. And neither did they blush when it was baptised RAFIN.
To Humberto, 43, taxi driver, that “makes me damn mad, because the two have spent 52 years selling us the spiel about sacrifice and humility, and then suddenly — with an economy that’s a shipwreck and thousands of unemployed — they pull a mountain of money out of their sleeves, and they aren’t magicians.”
Note: After editing this piece, the vice Minister of Communications, Jorge Luis Perdomo, told Reuters that Cuba sees “no political obstacle” to opening Internet access to the population.
Iván García y Tania Quintero
Translated by: JT
February 8 2011