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Rebuilding Central America takes rethinking 50 years of policy

By GARY MacEoin

The following is the first of an occasional series on the ongoing problems and the emerging hopes of Central America by Gary MacEoin, a longtime observer of the region.

The destruction wrought by Hurricane Mitch, enormous by any standard, came quickly and as a result of a natural cause that was out of anyone’s control — a downpour of biblical proportions.

But the problems of rebuilding the region have everything to do with elements within human control — the use of wealth and governmental attitudes toward those who have been marginalized. The reasons why so many have been displaced by Mitch and have so little hope of re-entering the mainstream anytime soon can be understood only in the light of the economic history of Central America since World War II.

In the first 30 years after World War II, an economic miracle occurred. In a favorable international context, exports of bananas, coffee, sugar and meat increased. The number of wealthy people grew, as did the middle class, the teachers, professionals, nurses, small businesses and skilled workers. Peasants flocked to the cities. Annual economic growth hovered around 6 percent. Central American governments began to feel some muscle.

The U.S. government watched developments with a more than paternal interest. In 1950 the State Department updated the Monroe Doctrine with what is known as the Miller Amendment. Edward Miller was then undersecretary of state for inter-American affairs. The amendment provided that no government would be allowed to come to power anywhere in Central America and the Caribbean unless approved by Washington; and if a government became unacceptable to Washington, it had to be ousted.

Historian Walter LaFeber has likened this doctrine to the later (1968) Brezhnev Doctrine that justified Soviet intervention in its satellites. President Eisenhower used it to overthrow the constitutional government of Guatemala in 1954, Johnson in 1965 to invade the Dominican Republic and oust its elected president, and Bush in 1989 to invade Panama.

Big role for armies

The most concrete result of the new U.S. concern about Latin America was the reformulation of the role of Latin American armies, which were linked in a new organization headed by the Pentagon. Gen. William Westmoreland, chief of staff of the U.S. Armed Forces and former commander in chief in Vietnam, explained the new role at the Eighth Conference of the American Armies in Rio de Janeiro, Brazil, in 1968.

"The communists have used insurgent warfare throughout the world," he said. "The propaganda describing each insurgency will picture what they describe as an ‘oppressed’ people rising to overthrow the alleged oppressor. The objective — a communist dictatorship — will persist. ... The insurgency environment is dynamic. The world has many dissatisfied people whom the communists can exploit in their quest for destruction of free society."

Starting from this premise, armed forces were given a new assignment, namely to destroy all movements seeking social change. The School of the Americas, originally in Panama and now in Georgia, trained the generals and colonels in interrogation and torture methods, and they in turn taught their subordinates that the civilian was their enemy and that all techniques to root out the disease were legitimate.

The wealth created in these years in Central America was badly distributed. The ranks of the very poor swelled faster than those of the wealthy or the middle class. Such was the frustration of those left behind that by 1975 protests were widespread against fraudulent elections, military repression and the intervention of the U.S. embassies. About the same time, international prices for the export crops began to fall, revealing the weakness of the export strategy promoted by the United States.

El Salvador followed Guatemala into open civil war. Nicaragua in 1979 ousted Anastasio Somoza and began to share the benefits of the new wealth with the peasants. Washington was not amused. Applying the Miller Amendment, it spent a total of $15 billion successfully counteracting the efforts of Guatemalans and Salvadorans to get rid of their oligarchic regimes and reversing the popular success in Nicaragua.

Part of the grand strategy was to occupy Honduras militarily, thus intercepting supplies for the Salvadoran popular forces and providing a base for the contra attacks on Nicaragua. By the early 1990s, all of Central America had been "pacified," at least in the sense that no serious threat to Washington’s perceived interests remained and international capital could operate freely.

Export production up

Meanwhile, beginning in the early 1980s, the so-called neoliberal economic system began to penetrate the region, starting in Costa Rica and Guatemala. Agriculture shifted its emphasis from traditional food crops to production for export. South Korea and Taiwan established maquilas to produce clothing for the U.S. market, taking advantage of more favorable import conditions granted by the United States to these countries in return for political support. Migration to the United States, mostly undocumented, expanded exponentially, as young men fled war and persecution.

A decline in production caused in part by falling demand for export products and in part by war conditions produced a new kind of economy, the so-called informal or parallel market. With unemployment reaching more than 50 percent in several countries, people struggled to survive by scavenging, begging and collecting scrap.

In Costa Rica, Guatemala and El Salvador, remittances from migrants in the United States helped to cover the commercial deficit, as did a slow increase in export of nontraditional products, such as flowers and strawberries. Honduras and Nicaragua covered the deficit by borrowing. In addition, direct and indirect financial benefits flowing from U.S. contributions to counterrevolutionary forces helped.

U.S. aid ended with the pacification of the region about 1990. Less than a decade earlier, Jeane Kirkpatrick, then U.S. ambassador to the United Nations, had described Central America as the most important place in the world for the United States. Now it drifted below the horizon. With popular resistance crushed, the oligarchic regimes set out to punish the poor for their attempts to emerge from powerlessness and voicelessness. This was particularly blatant in Nicaragua, where the Somocistas returned from Miami and proceeded to reverse the gains of the previous decade.

The extreme poverty of the poor spilled over onto the middle class. Governments cut back on social services, such as education and health, hurting many professionals who found themselves out of work or miserably paid.

World Bank worries

Even the World Bank became worried as social unrest revived. It tried, though without success, to persuade the governments to improve education and health facilities. Finally, it decided to ignore its own theories and create what it called Social Investment Funds in all Central American countries while stressing that this departure from its financial orthodoxy was temporary, a stopgap measure until neoliberalism could function normally.

The Social Investment Funds are supposedly designed to benefit the very poor. In the short term, however, the middle classes and the oligarchy are the principal beneficiaries — teachers, nurses and builders of schools, clean water systems, bridges and highways. Little or nothing trickles down to the poor majority.

There is a historic reason why this is so. Class conflict is an abiding reality in Central America. Ever since the European invasion 500 years ago, society has been split into conquerors and conquered, settlers and natives. Interracial mixing has occurred at a level quite unlike the United States. But the social divide remains. On the one side, those who have rights without obligations. On the other, obligations without rights.

It is true, I believe, that significant change has occurred as a result of the struggles of the 1980s. The people (el pueblo) did not attain their objectives. But they now have some power, albeit a minor share. They are no longer voiceless or powerless, as they were previously. At least they have a greater sense of the value of organization. They will not give up, even if at this time all the weapons are in the hands of the oligarchy.

The sense of a new identity is stronger in Nicaragua, El Salvador and Guatemala — the three countries that were "pacified" through massive U.S. aid to their oligarchies — than it is in Honduras. The United States occupied Honduras militarily before popular resistance had mobilized. In consequence, efforts at grassroots mobilization never developed.

This recent history helps to explain how Hurricane Mitch affected the various layers of society. The hardest hit were the poorest, those whose adobe shacks melted under water, those whose land was on steep slopes or in flood plains close to rivers, those with least protection against cold or torrential rains.

They also are the ones who will have the greatest difficulty in recovering because they lack collateral to obtain the loans they need, loans on which they would have to pay up to 42 percent interest. All they have left is an incredible resilience, a sense of community, an ability to survive. They have not given up.

Gary MacEoin’s E-mail address is gmaceoin@compuserve.com

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National Catholic Reporter, February 26, 1999