|Central American University - UCA
Number 251 | Junio 2002
Central America: The FTAA Guinea Pig?
With the FTAA inexorably heading our way, we need a bold yet realistic strategy for negotiating with the United States. We should be searching for such a strategy together, with less rhetoric and more coordination.
The United States did not choose El Salvador to host President Bush’s March 24 visit to Central America because it was a model of democracy or an economic success story. Nor did the State Department arrange the visit to coincide with the anniversary of Monsignor Romero’s martyrdom to agitate public feeling. Such cultural details do not enter into the calculations of an elephantine superpower that crushes ants without even knowing it. It has other calculations in mind.
Today, following earthquakes, tidal waves and Hurricane Mitch’s devastation, Central America seems destined to suffer another cataclysm, this one of an economic nature. It could end up as the guinea pig in negotiations over the US-promoted Free Trade Area of the Americas (FTAA), given the very limited room for maneuver that the globalized world has granted us when it comes to negotiating protections. In fact, this cataclysm started over 15 years ago when the region opened itself up to "free" trade and imposed structural adjustment programs. It started with the new economic model based on maquiladora export assembly plants, tourism, migration and remittances, with the coffee crisis and the resounding decline of the agroexport model. El Salvador was chosen as President Bush’s Central American host because it was the only country in the region that emerged from its peace process with a moderately viable democracy and had already made the dollar its national currency. Will El Salvador in turn be Central America’s guinea pig in the FTAA negotiations?
Once everything is West, While the English word "globalization" implies a homogenization process that ignores local cultures and potential, as demonstrated by the selection of the anniversary of Romero’s death, the Spanish word mundialización (literally, "world-ization") gives a better sense of the multiple contents of the process we are experiencing on a planetary scale. In the entrance to Guatemala airport I came across a gang of young adolescents selling handicrafts to tourists. They were dressed in the global uniform of Nike trainers, baggy trousers, windbreakers and baseball caps bearing the symbols of the Bulls and the Yankees. Both their clothes and their manner were an expression of globalized ladino youth. The only discordant note was that they were chatting among themselves in a Mayan language.
where will the sun come up?
"Where are you from? El Quiché?" I asked one of them. "From Santiago Atitlán," he replied. "So you speak Mam?" I asked. Reacting rather contemptuously to my not knowing that they speak Tz’utujil in Santiago Atitlán and not Mam, he showed me a key ring with a beautiful green bird on it and challenged me, "What’s this called?" "A quetzal," I replied. He answered me again in his very good Spanish, "No, it’s called x’uen! It’s a quetzal to you, but to me it’s a x’uen."
We live in a world in which almost all cultures are becoming at least bicultural and bilingual, while the dominant culture is striving to impose a monocultural scheme on them all. I believe that over the very long term that dominant culture will find itself at a disadvantage. Until that distant moment comes, however, the dominated cultures—the bicultural ones—will have very limited room for maneuver. I think that the current evolution of globalization represents a strategic advantage for the East over the West in both cultural and economic terms. Although we use the clothes and manners of the northwest axis of the Atlantic, globalization is being inserted into local cultural dynamics that act both as vehicles for the globalization process and filters that will transform the globalizers’ aims over time. As my conversation about the x’uen demonstrates, the mixtures in this mundialización are unpredictable, because the globalization currently being produced is not faithfully following the globalizers’ desires.
El Salvador’s competitive driveThe globalization of our Central American markets is already being nailed down in business pacts with privileged partners seconded by those governing Central America and advised by multilateral agencies. Few surprises are consequently expected with the formalization of the FTAA, which will undoubtedly insert itself into existing local realities. Nonetheless, much of what happens in this Central American globalization space will depend on our negotiating capacity. To understand what might happen, it is essential that we understand the dynamics of the competitiveness among the Central American countries, which will increase with the FTAA. The first step is to compare El Salvador’s situation with that of the three other Central American countries in the CA-4 —Nicaragua, Honduras and Guatemala.
Although Costa Rica promotes itself better, the tiny and densely populated El Salvador has always been more expansionist, both within the region and beyond. El Salvador invaded Honduras first with emigrants and then militarily, and Salvadorans started the Central American wave of undocumented immigrants into the United States, and have also emigrated as close as Belize and as far as Australia. The country exemplifies Central America’s competitive drive and business competitiveness is one of globalization’s key motives. It is the musculature beneath the globalizing attire.
The FTAA will not only increase the competitiveness between business groups from the United States, Mexico, Canada and individual small, medium and big Central American businesses; the Central American business groups will be in there slugging it out as well. In the current pre-FTAA period, Salvadorans are making obvious progress. Salvadoran Simán shopping malls have followed Guatemalan Pollo Campero roast chicken restaurants in giving KFC a run for its money by establishing themselves all over Central America. In the financial sector, El Salvador has the three strongest banks in the CA-4, in which one of them, Banco Cuscatlán is obviously jockeying for regional position, particularly in Honduras. Less obvious but more widespread are the small Salvadoran business concerns, such as those exporting milk and cheese from Matiguás and other rural municipalities of Nicaragua, Honduras and Guatemala.
The Salvadoran advance in Honduras has been aided by the political facilities of Honduras’ new President, Ricardo Maduro, who represents Salvadoran capital. Maduro had to put up an agonizing struggle to become presidential candidate because of resistance from powerful Honduran capitalists such as Facussé and Rosenthal. The problem was not that these leaders wanted to keep Salvadoran business out of Honduras, but that they wanted to include it according to their own rules rather than the rules of the market. In other Central American countries, the Salvadoran advance is due to its own commercial drive rather than political patronage.
The strategies of Central America’s Tom ThumbIt is important to remember that El Salvador is still the Tom Thumb of Central America, not just because of its limited territory but also because of its economic weight compared to Costa Rica and Guatemala. Jorge Nowalski Rowinski’s book Asimetrías Económicas, Laborales y Sociales en Centroamérica ("Economic, Labor and Social Asymmetries in Central America") provides an excellent overview of Central America at the threshold of the FTAA. In 1998, while Costa Rica—with the lowest population in the region—accounted for 45% of total regional exports (both within and outside the region) and Guatemala—with the highest—accounted for 21%, El Salvador and Honduras each only contributed 10%. Panama and Nicaragua are the regional export dwarfs, with 6% and 5% respectively. With the FTAA just around the corner, the hegemony of Costa Rica and Guatemala is patent. So what accounts for El Salvador’s image as a mover and shaker? The answer can be found in the different export strategies of the Central American countries.
El Salvador’s strategy is regional. Of total Salvadoran exports, 51% are within the region, while that is true of 31% of Guatemala’s and only 9% of Costa Rica’s. Intra-regional imports and exports together represent 26% of El Salvador’s total imports and exports, a figure higher than the corresponding figure for Costa Rica and on a par with Guatemala, which has twice El Salvador’s population. Thus, the Salvadorans are the most Central American of the Central Americans in trade terms, meaning that El Salvador does not need to alter its regional trade strategy in response to the increased competition that the FTAA will create among Central American businesspeople; it just needs to expand it.
All of these signs of Salvadoran progress are still superficial, however. Bearing in mind that all Central American business groups are now moving within the region and associating with international capital in investments outside the region, it is difficult to predict which countries will evolve better in the FTAA: Guatemala and Costa Rica or El Salvador and Costa Rica. What is clear, however, it that at least among the CA-4 countries El Salvador enjoys two significant advantages.
El Salvador’s two advantages: The Salvadoran banks and the Salvadoran state are more consolidated than those of the rest of the CA-4 countries, thus providing El Salvador with two competitive advantages over Guatemala when it comes to competing for Central American markets and, to a lesser degree, incorporating into the FTAA project.
Healthy banks and a consolidated state
El Salvador has the healthiest financial apparatus in Central America, while commercial banking scandals are commonplace in Nicaragua, Honduras and Guatemala, where banking impunity has swollen those countries’ internal debts. Although El Salvador can by no means cast the first stone, it has jailed members of the country’s oligarchic families, including the Regalado family. Salvadoran interest rates are more influenced by the market than by the banking inefficiency or greed evident in the other three CA-4 countries. Salvadoran traders exploit the lower interest rates to increase their competitiveness in relation to other Central American traders. In El Salvador, the dollarization process was based on banking efficiency and control of the enormous volume of remittances from Salvadorans working abroad.
El Salvador’s other advantage is that it is the only CA-4 country to have emerged from the peace process in relatively good shape. It has a consolidated state and an opposition able to create a model of political competition involving different parties representing the interests of different social forces. The FMLN can be criticized for turning into a traditional opposition party without communication channels to the social movements, but its achievements have been no mean feat. Progressive Guatemalan, Nicaraguan and Honduran businesspeople would give their right arm to have a state and political dynamic like El Salvador’s.
The rest of Central America: In the rest of Central America, political competition is still based on very traditional terms. In Nicaragua, many people are praying for some miracle that would eliminate the two protagonists of the infamous Ortega-Alemán pact from the political game. Honduras is dominated by a two-party structure in which the two main parties practice an extreme form of political patronage, all controlled by oligopolistic groups such as those of the Facussés and Rosenthals. The situation is so serious that in the last twenty years Honduras has always faced an economic recession during the first year of a new government because the state gets restructured each time to "adapt it" to the new tenant in the presidential palace.
More corruption than competition
In Guatemala, a populist government is currently taking on one of the most traditional business oligarchies in Latin America, hoping to use this offensive to cover up the military’s dirty deals while diffusing them in both governmental structures and significant segments of small- and medium-scale national business. Although the big Guatemalan entrepreneurs represented in the umbrella organization CACIF have more drive than their Honduran and Nicaraguan colleagues, they are strongly conditioned by their historic refusal to modernize the state and their historic pact with the military brass now conspiring against them from government. In all three countries, the absence of political contests in which the interests of different forces and social classes are more thoroughly represented has generated abundant and growing corruption.
The CA-4 is currently divided in two, with Honduras and Nicaragua in the southeast and El Salvador and Guatemala in the northwest. Although at this juncture Guatemala appears crippled by its slow transition towards formal democracy and the weakness of its financial sector, the size and diversification of its economy still give it the potential to compete with El Salvador to extend its regional influence following the signing of the FTAA. As of 1998-99, 50% of El Salvador’s population and 60% of Guatemala’s were living below the poverty line, while the corresponding figures for Nicaragua and Honduras were 70% and 80%.
Whichever level is analyzed, Costa Rica is a case apart. This nation greatly benefited from its 1948 revolution, a process that produced even more radical change than Nicaragua’s 1979 revolution. One of many reasons for this is that the Costa Rican revolution coincided with the best juncture of the Cold War, while the Nicaraguan and Guatemalan ones came at the worst possible time. Competing outside the region, along with El Salvador, Costa Rica advanced in terms of productive conversion. The Costa Rican state is even more stable and sophisticated than that of El Salvador, while the country’s advantageous position in the ecotourism industry gives it a head start over the whole region. Guatemala is an excellent destination for ecotourism, but the country suffers from serious public safety problems, and the small, populous and devastated El Salvador has minimal possibilities of competing in this area.
What can the MCCA The Central American Common Market (MCCA), created at the beginning of the sixties, was an exercise in opposed interests. While Guatemala and El Salvador were unwilling to incorporate social policies as a basis of the trade agreements, for example, Costa Rica wanted to evolve toward regionally coordinated social policies, but firmly rejected a free labor market, fearful that immigrants from the other countries would invade its territory.
teach us about the FTAA?
The political and economic backwardness of both Nicaragua and Honduras were so evident even then that it was obvious that neither country was prepared to enter the MCCA. In Honduras, Facussé and a handful of other businesspeople managed to turn negotiations favoring the country into negotiations favoring their own businesses. The same happened in Nicaragua. Right from the beginning, Nicaragua violated the established price scheme in order to favor Somoza’s own companies, particularly those producing caustic soda and insecticides. When the MCCA Council of Ministers wanted to extend preferential treatment to Honduras in the industrial development incentives agreement, Somoza tried to piggyback the same preferential treatment. Following bitter debates in the Council of Ministers, the other countries started to imitate Somoza, armed with justifications prepared by their teams of lawyers. Even before the Soccer War against El Salvador, Honduras was already violating the MCCA treaties and planning to withdraw from the customs union; the war against El Salvador just provided a good excuse for doing so. In 1970, a special development fund was proposed for Nicaragua and Honduras, which El Salvador opposed. As a result, Honduras and Nicaragua had to seek more credits from the Central American Bank for Economic Integration, which increased interest rates for both countries and added another link in the interminable chain of loans that even today has them bound to onerous debts. Because the relative inefficiency of Nicaraguan and Honduran industry worsened rather than improved, it became impossible to hammer out MCCA agreements that contemplated a differential treatment according to development level. Perhaps the main point of the FTAA negotiations will be precisely that: the search for differential treatment in line with a country’s size and level of development.
A regional overview: The Central American countries have repeatedly failed to negotiate a more equitable regional integration. The disunity and lack of honesty, cooperation and transparency that have characterized relations among the Central American countries represent the greatest disadvantage that they will take with them into the FTAA negotiations with the United States. And once they are in the FTAA, they will continue to reap these same problems of disunity that they have been sowing for the last forty years. In May at the Latin American and Caribbean Summit with the European Union (EU), Nicaraguan President Enrique Bolaños requested the signing of a Free Trade Agreement with the EU in the name of the Central American governments. In response, Commissioner Chris Patten was obliged to point out that Europe cannot negotiate a free trade agreement with Central America because it is not, in fact, an integrated bloc of nations.
Neither unity nor integration
The MCCA lost its growth dynamic and its regional competitiveness with the 1973 world oil crisis. We are now going into the FTAA negotiations more allied with the United States than with each other. The collapse of the agroexport model, the red carpet being rolled out for export processing plants, tourists and remittances and the massive farewell being bid to our migrants are evidence of the region’s age-old weaknesses. Two national business sectors are revealing more visible weaknesses in trying to keep their heads above water in the new seas of globalization: the Hondurans, who grew up in the only genuine banana republic, and the Nicaraguans, reared by two malevolent nannies—Somocismo and the FSLN.
Are we really all satisfied?The Latin American media serves up a constant contest of pro- and anti-FTAA rhetoric. But with the opinions pouring out marked only by "globaphobia" or "globaphilia" people are inclined to think that the only option is between gringo products and national products. This simplification conceals the fact that the FTAA will represent such a profound transformation of the Central American countries that establishing ourselves in that new context will demand a lot more of us than just rhetoric.
Heinz Moeller, Ecuador’s current foreign minister, is also the president of the FTAA Negotiating Commission and the Latin American and Caribbean representative in the negotiations with the United States programmed to conclude in 2005. By that time, all of the legal and constitutional reforms must be ready for the FTAA agreement to turn the whole continent into a single globalized market. As Moeller puts it: "In the FTAA, either we are all satisfied or nobody is." His rhetoric is distinguished but appears wrong, considering that the FTAA discussions will not be a democratic hemispheric negotiation in which each country has an equal voice and vote. Neither Mexico nor Canada was satisfied at the end of the negotiations over the North American Free Trade Agreement (NAFTA), but both signed.
The cards are stacked The FTAA negotiations will not end in a European-style common market with the free flow of capital, products and labor and with common social policies. If there were to be free movement of labor in the new hemisphere, most Central Americans would be extremely hopeful. But even given the limited information available, they already sense that the factors of capital and labor will not be given equitable consideration at the negotiating table and that no common social and ecological policies will be established.
in favor of the big players
Given the stark reality that the Latin American and Caribbean countries are saddled with a total foreign debt of US$792 billion and together they contribute just 24% of the future FTAA’s GDP, Moeller is nothing if not honest in responding to whether the hemisphere’s weakest and least competitive countries will get anything out of entering the FTAA: "The developed countries are in a more advantageous situation." He does not conclude, however, that this makes the agreement negative. According to Moeller, "The FTAA is a strategy to benefit consumers." The logic is that free markets are more competitive, competition benefits consumers, and poor countries have to follow Chile’s example by making themselves more competitive. Moeller argues that poor countries can find market niches for their primary and agricultural production by increasing their productivity and competitiveness. But that does not take into account the structural drop in the value added of primary products. It does not even consider the obvious fact that the primary product markets are the most competitive and worst in the world precisely because they are saturated with over a billion poor producers from the poorest countries on the planet.
It’s time to swallow the bitter FTAA pillAsked about dollarization in Ecuador, Panama and El Salvador, Moeller replied, "With the creation of the FTAA we must seek a rigid monetary system that avoids issuing unbacked money, which only reduces the competitiveness of our exports. This is a personal opinion, but I foresee Latin America moving, like Europe, toward a common currency that allows the neutralization of inflation, which is the worst tax exacted on peoples." There can be no doubt that this common currency will be the dollar, thus revealing that the pro-FTAA argument is based more on the power of the central economies than on reasons aimed at hemispheric development let alone guarantees of it.
In the Declaration of Quebec in April 2002, the heads of state of the Americas publicly released their plan of action for the lead up to the FTAA. This plan, which contains 16 points representing the hemispheric agenda, is a pretty compilation of all the programmatic reforms that the Latin American political class has been learning from the World Bank. But despite its fashionable phrases, this text is obviously nothing more than a wish list in a hemisphere in which the economic and political crisis is becoming increasingly acute.
US Secretary of State Colin Powell himself announced in the OAS that Latin America is worse off in 2002 than it was in 2001, thus admitting the continent’s downhill slide. Even with their limitations, the 16 points of the Quebec action plan will not be on the agendas of the nine FTAA negotiation commissions, which reveals the hard-line conservative orientation of the FTAA negotiation process. It may be that the time has come to set aside the formalities and diversionary tactics and swallow the bitter pill.
In his task of talking up the "advantages" that the FTAA will represent for our continent, Moeller can be considered a stereotypical representative of the "globaphiles." However, it is of little use to go to the negotiating table guided either by glorifying stereotypes or demonizing ones about globalization. Free trade, free trade agreements and globalization are not intrinsically demonic. A free trade agreement has two components: competition and coordination. An agreement based exclusively on one or the other is a bad agreement. There is currently no free trade, and the free trade of products in the central economies—starting with food, the most basic products of all—is not even being promoted. If genuinely free trade existed without quotas and food subsidies, the poor from the marginal countries would be far better off. So much for Moeller’s argument that the FTAA is a strategy to benefit consumers: which ones might he have in mind?
Free trade agreements can help increase coordination, thus limiting the unbridled competition that characterizes the planet. Even the World Trade Organization seems to be starting to understand this. Every year there is more coordination among transnational corporations, so why shouldn’t there be among blocs of countries? The free trade agreements are the starting point of a long process of negotiations over global-level coordination, which is not necessarily a bad thing in itself. Those who spend their time demonizing globalization and free trade should think what it would mean for their ability to express their "globaphobic" positions to do away with e-mail, cellular phones and international conferences.
Subsidies for the North, In the FTAA negotiations, the Central American countries must push for a freer market, particularly for their agricultural products. This central demand would be truly transforming given that the agricultural markets of the United States, European Union and Japan are the least "free"—the most protected and most subsidized—in the world. Every year the governments of the rich countries spend $400 billion subsidizing their farmers to protect their production from the fluctuations of the free market. They thus guarantee their own food security, while leaving the quarter of the world’s population that suffers from malnutrition and hunger unprotected. This year the United States dedicated $171 billion to food subsidies with new legislation subsidizing products such as meat, sugar and other foods that we produce here in Central America.
free market for the South
While the North subsidizes its own, the South is told to cut subsidies and open its markets. This twisted law effectively means that any opportunities for Central American and Paraguayan cotton are crushed by the enormous subsidies that US cotton growers receive from their government and by the notable efficiency of Chinese cotton producers. Central American sugar cane cutters and Haitians who cut cane in the Dominican Republic see any possibilities of fairer wages wiped out by the subsidies received by European sugar beet farmers. Meanwhile, Central American rice prices are plummeting due to the enormous subsidies received by Japanese rice farmers, and Central American maize and bean prices are entering into crisis while US farmers in the Midwest receive juicy subsidies for producing their basic grains.
Were it not for the rich countries’ option of protecting themselves from food dependence, which they call "possible food blackmail," the poor people of the Third World would produce and sell more food, their agricultural productivity would increase and the just pressure for a much-needed agrarian reform would intensify. Eliminating the subsidies to the rich would improve the lives of millions of peasants from poor countries, reactivate those countries’ economies and promote greater world equality, although naturally implying the bankruptcy of many agricultural and agroindustrial companies from the rich countries that are artificially maintained by subsidies. The fact that, with each passing year, the abyss widens between the cost of an hour’s work producing a tractor in the North and that of an hour’s work producing maize in the South cries out to heaven. Eliminating subsidies for food production would reduce this ever-widening gap between US and Central American wages. It’s not just a matter of ethics; it’s also one of efficiency.
A valuable bargaining chipReassigning the $400 billion used to subsidize food production in the North would be a highly effective way of rectifying the biases and imperfections of the world market that cause such misery in poor countries. Alongside restrictions on the free movement of labor, this subsidy is an important obstacle in the fight for a dignified life currently being waged by civil society in Latin America and the Caribbean. It is not easy for the rich man to empty his barns and risk his own food security. Nor is it easy for the millions of misers on the planet to understand the importance of this injustice in their own lives, because it is so well concealed in the structures of the global economy. Movements are emerging in the North, however, that are pointing in the right direction. In the United States, for example, the fact that NBA baseball star Scottie Pippin received $3 million in subsidies as a farmer in addition to the $4 million a year he makes as a basketball player caused a major scandal.
Nicaragua and Honduras would greatly benefit from an FTAA that offered less protection for the US agricultural sector. Oxfam International is starting a creative campaign that is analyzing the issue of the free market for agricultural products and proposing alternatives. Meanwhile, there is already broad consensus among economists that the barriers set up in the North against the products of the South’s poor countries represent the most formidable obstacle to the latter’s development.
Although the United States will not want to give way on such a key issue for international justice and a more genuinely free market, these subsidies could in theory be a valuable FTAA bargaining chip for Central America, if the region were to act as a united bloc. With this chip, it could seek to pry other concessions, such as gaining access for other products to the US market and protecting Central American industries that are still not prepared for the free market. After all, just as the United States is not prepared for the free market of agricultural products, most of our industries are not yet ready for the free market being put to us as the solution to our problem.
It depends on capacity and unityThere have been positive experiences of economically integrating small countries with bigger and more advanced ones. In Europe, the clearest cases have been the integration into the European Union of Portugal and Ireland, two countries that only 20 years ago had massive poverty and economies with very limited development. The keys to their development were favorable market access conditions and abundant aid from the European Union.
Foreign aid was one of the main demands from the Central American Presidents when they met with President Bush in El Salvador on March 24, and it is one of the most difficult issues in negotiations over the Central American FTAA. Central America can expect no great increase in international aid a la Portugal and Ireland, partly because European integration is diametrically opposed to what the United States wants with its Latin American chorus. In addition, the gap between the United States and Central America is far wider than the one between either Portugal or Ireland and France was 20 years ago and our Central American economies are in a worse state than those of Portugal and Ireland were then. Nonetheless, we can still achieve something if we start with the conviction that integrating with the North American market is not a bad thing in itself. It all depends on our capacity to propose serious negotiations and to explain the economists’ technical discussions for public opinion, and above all, it will depend on Central American unity.
Hemispheric Social Alliance: The Hemispheric Social Alliance (HSA) is the most constant and best-organized civil society coordinating body. It has prepared a stock of research material for the FTAA dialogue that isn’t based on rhetoric and isn’t globaphobic.
Important lessons about the FTAA
The alliance began organizing and increasing its analytic capacity during the NAFTA negotiations, though it slipped up by failing to ally with the business sector and emphasizing environmental and social aspects more than purely commercial ones. However, the experience accumulated during those years through coordination among the civil societies of Mexico, Canada and the United States allowed it to expand into a continental network. So far, however, the HSA has not found much resonance in Central America.
Let’s review its main arguments. The first comes from its analysis of the last 20 years as a whole. Like NAFTA before it, the Alliance sees the FTAA as having been germinating for years through the introduction of structural adjustment programs, privatizing state-held companies and deregulating, the aggravation of the debt and the interminable conditions of the International Monetary Fund, World Bank and Inter-American Development Bank. In short, it cannot be naively thought that the FTAA suddenly occurred to Bill Clinton as a good idea during one of his speeches in Miami.
The Washington Consensus and the structural adjustment packages applied in every one of our countries have been paving the way for the FTAA for years. We obviously cannot arrive at the negotiating table dreaming of setting the clock back 20 years and undoing everything that has been done with the adjustment programs. We are obliged to be realistic, to know and accept where we currently stand.
What happened in MexicoThe alliance’s second argument derives from understanding the results of NAFTA and putting this agreement in its historical context. "The initiative to create the FTAA came from the US government, which sees NAFTA as the parameter for negotiating similar or better conditions for its own interests and those of its businesses in the whole continent." The HSA thus views it as fundamental to examine NAFTA’s results in all their lights and shadows, or, to use its own words, "in chiaroscuro."
The basic fact in any evaluation of NAFTA’s results in Mexico is that the economic models implemented in the 18 pre-NAFTA years (neoliberal adjustment) and the first 3 years of the agreement have produced the lowest growth rates in the country’s recent history.
Unlike the Central American agroexport model, the raw materials export model in force in Mexico prior to neoliberalism complemented agricultural exports with minerals, petroleum and textiles. The average growth with that model was five times higher than during the neoliberal model and 66% higher than has been the case with the NAFTA model. The import substitution model installed in Mexico between 1954 and 1969 yielded slightly higher average growth rates per capita than those of Central America, more or less coinciding with the implementation of that model in our region. In Mexico, the average growth rate during import substitution was six times higher than during the neoliberal model and twice the rate that has been achieved since NAFTA. Between 1970 and 1976 this import substitution model went through a relative crisis, as happened in Central America for the same reason: the failure to address productive restructuring within the model to increase the economy’s competitiveness. Despite this, the results were still better than those of the neoliberal and NAFTA models.
Canada, the USA and Mexico: Mexico was lucky to find a way out of that crisis through the discovery of large oil deposits. Patching up its import substitution model and the weakened endogenous growth of its domestic market with oil sales led to the highest growth rates in its history. But its luck turned into the worst of its disasters because even that growth could not withstand the imposition of 18 years of the neoliberal model—the most consistent and prolonged program applied in the continent, which has created more recession and greater poverty.
The winners and the losers
It is much easier to compare Mexico’s neoliberal model with the other models implemented in Mexico or with other neoliberal models in the continent than with its application in Central America. The impact of the wars of the eighties in Central America makes any comparative analysis difficult due to the capital flight, the rupture of intra-regional trade and the diversion of economic development efforts into the Cold War’s political and military requirements. Nicaragua, Honduras and El Salvador also received flows of international aid equivalent to the income generated by Mexico’s oil boom. Then, in the postwar years, during the imposition of the neoliberal package, Central America benefited from the capital repatriation and remittance flows. When analyzing the behavior of the Central American GDP in the nineties, all of these factors must be carefully distinguished from those resulting from neoliberal macroeconomic stabilization.
Although NAFTA has improved Mexico’s per-capita GDP growth rate over that of the neoliberal model, it has still lagged way behind what was achieved by the other models. NAFTA has intensified a dramatic reality: economic growth without generating jobs. While 3.5 million jobs were generated from 1995 to 1997 in Mexico, only 0.4 million were generated from 1998 to 2000, and in 2000 itself, 153,000 jobs were actually lost despite a positive growth rate. Furthermore, the average Mexican wage has lost 16% of its purchasing power since the start of NAFTA. While NAFTA has produced an export boom and the economy is steaming along for 20% of the Mexican population, the working class, not to mention the informal sector, has been left in its wake.
NAFTA has also proved negative for the workers of the United States and Canada. The question asked at the beginning of the negotiations was which country would come out on top and which would lose out in this agreement. It is now clear that this was the wrong question. The real one should have been who would be the winners and losers in each country. The now obvious answer is that the transnational corporations and certain local rich families have won, while working people in all three countries have been the big losers.
The United States is denying If all of this happened to a Mexico that was relatively prosperous when it entered NAFTA, what will happen to the crisis-ridden Central American region? What will become of our small, incomplete and politically manhandled economies when they enter the FTAA? The Hemispheric Social Alliance is not against globalization per se, but it is questioning corporate globalization, coherently and with evidence. "We assume globalization in the sense that isolated and closed economies are not viable at this stage of history. However, this does not mean that its current form—based on free trade and understood as deregulation to leave the economic dynamic to the market alone—is the only one possible, let alone the best. No sane person can object to trying to export, but not in opposition to strengthening the domestic market. Moreover, recent history demonstrates that the domestic market is the only guarantee of growth stability. The United States is the world’s main exporter, but its economy is based on its own domestic market. As the US Federal Reserve recognizes, the dynamism of domestic consumption and the counter-cyclical policies of lowering interest rates and increasing public spending in times of recession are what have prevented the current deceleration from being even greater."
others the opportunities it had
It is worth remembering that the US growth model at the end of the 18th century and during the 19th was an agroexport model, but one that followed George Washington’s policy based on a firm economic pact with the peasant sector, craftspeople and the small industry of the agricultural frontier. Why is Washington’s country systematically denying Meso-America the chance to imitate its historical economic model? Why the denial of counter-cyclical policies? Why the dismantling of Latin American states, rendering them unable to promote and adjust our continent’s domestic market?
There are two possible answers to these pressing questions. The first is that the import substitution model that produced such high growth rates in Central and South America in the sixties and seventies was not accompanied by an equivalent effort aimed at productive restructuring. The region’s business classes rested on the laurels of their high profits. In other words, it was our fault. The other answer complements the first. According to the Hemispheric Social Alliance, the problem was the irresponsible application of a neoliberal adjustment aimed at preparing US expansion through NAFTA first and now the FTAA. Independent of who is to blame, we cannot advance if we do not recognize where we are today. Arguing that NAFTA’s results have been bad in Mexico does not excuse us from preparing ourselves to get the best possible results, in line with our own interests, out of the FTAA negotiations.
Two ways out for MexicoThe Mexican Network on Free Trade (RMALC) was born in 1991 and has been promoting the Hemispheric Social Alliance since 1997. According to the RMALC, "Mexico will not achieve stable and rapid growth much less create enough good jobs without designing a strategy that includes at least two elements. One: integrating or connecting the national productive chains so that the sectors that grow—be they exporting sectors or not—pull along the other productive units, particularly small and medium businesses. NAFTA does not favor this. Two: extending and consolidating the domestic market. For this to happen it is essential to improve the income levels of most of the population. In other words, poverty must be dismantled. This would allow the sectors that produce for the domestic market to grow. It implies that cheap labor no longer be considered our comparative advantage in free trade agreements. It also implies that wage policies no longer be considered part of the anti-inflationary struggle and that real wages become a lever for the growth of the domestic market and thus of the majority of non-exporting businesses."
In theory, the RMALC is right not only for Mexico but also, with certain nuances, for Central America as well. But in practical terms how can this position be brought to the negotiating table after almost twenty years of neoliberal-ism? How can productive chains be linked to export platforms if Central America lacks strong states, like those of Taiwan or South Korea, capable of intervening in the economy on behalf of the domestic market? Central America has also not implemented the same kind of reforms Taiwan did in its countryside and cities to break the oligarchy’s ultra-conservative tendency. We must recognize that the development of the Mexican economy has been shaped not only by NAFTA, but also by much deeper, older and more established economic dynamics.
The employment agenda Only the most reactionary sectors of the Central American business world oppose strengthening Central America’s domestic market. The most important question here is exactly who is making practical efforts in the advocacy and negotiation fields to get the employment issue back on the regional agenda. With the adjustment and the social investment programs, the employment agenda shifted from the region’s economic Cabinets to its social ones. Public attention was directed to low-quality jobs to carry out the municipal works promised by the different mayors in the campaigns of their respective political parties. The Poverty Reduction Strategy (PRS) re-launched the adjustment’s social compensation programs, bolstering them with more attention for education and health, but always within the same scheme. After many years, criticisms are beginning to emerge from Central America’s civil society, demanding that employment policy should not just be the responsibility of social Cabinets.
urgently needs rescuing
In Guatemala, the Guatemalan Forum and the Barometer Group are starting to raise certain questions about the Poverty Reduction Strategy: "What factors most contribute to the growth of per-capita income? Per-capita income is related to wage levels, labor competitiveness, the employment rate and the relation between dependency and the number of workers per family. Where should we place our bets? On greater educational performance by the poor, improved dependency rates in the family structure or support for micro and small business, particularly rural business? On greater participation by poor people in the formal labor markets or an improvement in real salaries?
"The analysis of the PRS should allow us to separate the effects of unemployment and low wages on poverty levels, particularly during periods of economic deceleration, to thus illuminate elements of the strategy and national public policies. The limited attention of the PRS to the employment issue does not allow for the strategic definition actions subject to the operation of public policies, such as these and many other more complex issues having to do with the demographic and educational transition of the country’s poor. What percentage of poverty can be reduced through increases in education? Through greater employment? Better wages? Where should the emphasis be placed: on the formal large and medium business sectors or the informal small business sector? We agree with the World Bank that public spending is the best tool for intervening in poverty, but how can we do this if our ministries are no longer able to formulate or answer such questions?"
Exploiting the cracks In the employment issue, as in others, civil society’s analysis and advocacy strategy requires profound diversification and thoroughgoing coordination. There is no "single" critique of the situation suffered by the poor. Discussion forums repeatedly criticize "single thinking" with their own form of single thinking. Single proposals are counterproductive and assume a paradigm that no longer exists.
in the wall of exclusion
There is no single way to breach the wall of exclusion. There are only small cracks in our governments, the multilateral organizations, the bilateral agencies and our own organizations, which we must detect. We must also find allies on the other side of the wall and coordinate to consolidate the emerging consensus and continue building an alternative that we still do not have. A single negotiation agenda is impossible without an alternative paradigm, although multiple agendas and the conquest of partial spaces are possible. These victories will never be black and white; they will always be in shades of gray, although in the best of cases tinged with encouraging color.
Victims of different kinds of dumpingThe third argument offered by the Hemispheric Social Alliance is potentially the most important because it is the most practical and least analytical. It also comes from the Mexican experience, since Mexico is the country that has signed the most free trade agreements in Latin America, and probably the world. In addition to NAFTA, the Mexicans have recently negotiated free trade agreements with Europe and with the Central American countries.
RMALC’s analysis of the mechanisms employed in these agreements can be roughly summed up as three kinds of dumping: commercial, social and environmental. Commercial dumping is when a company floods the rival market with cheap, subsidized products that can undercut the competitors’ production prices and force them to lose their markets. Once the competitors have gone under and the dumping company has "conquered" market after market, it starts selling at the real market prices, or even at inflated ones.
Commercial dumping was categorically forbidden in NAFTA and the United States was prohibited from selling its highly subsidized agricultural production to Mexico. Other varieties of commercial dumping were not excluded, however; "structural dumping on the sellers’ market" and "structural dumping on the consumers’ market" were maintained. Structural dumping on the sellers’ market occurs when an industry with higher productivity within a system of greater systemic competition eliminates its competition, which becomes a crucial point in negotiations over the Central American FTAA. Central America must go the negotiating table asking for protection because the competition is extremely unfair.
We have already suffered structural dumping on the consumers’ market with coffee. When Vietnamese coffee, which is of an inferior quality and benefits from greater labor productivity and state subsidies, is sold in massive quantities to coffee consuming countries, it causes acute crises that have ruined hundreds of thousands of Central American coffee producers. The difference between these two structural forms of dumping in our region is that we have few very efficient small-scale manufacturers of products such as shoes and other mass consumer articles for export to the United States, and an abundance of coffee and basic grain producers whose products have no market there.
A good formula for ridding The "food security donations" that come to Central America in the form of basic grains and cereals from the United States, rice from Japan and dairy products from Europe have the same devastating impact here as unfair competition, even when they are given away. Brazil severely criticized US food subsidies recently as a tactic to go into the FTAA negotiations with greater public support.
the world of rural poverty
Elimination of the $400 billion that the North dedicates to subsidizing its food producers would be the most effective way to eliminate extreme rural poverty on the global level. It would be much more effective than writing off Latin America’s $792 billion foreign debt because it would directly improve the employment situation among rural producers living in extreme poverty. Nonetheless, the World Bank persists in attempting to reduce poverty with its same Social Emergency Fund programs that fail to have an impact on economies asymmetrically affected by structural dumping. The World Bank also persists with the neoliberal practice of delegating the employment problem to the social Cabinets, in the blind faith that opening up the market will let its "invisible hand" adjust all of the asymmetries and generate new jobs in our economies.
Cheap labor is Central America’s "advantage"If commercial dumping was only partially excluded from NAFTA, social and environmental dumping were dealt with in parallel agreements. The aim here was to ensure that the core of NAFTA—liberalization of the movement of merchandise and capital—would not be affected by these two issues. These agreements were reduced to attractive declarations of principles about the environment and work but lacked mechanisms that would ensure they really counted.
Social dumping is expressed in Mexico’s unfair competition with the workers of the North. The Mexican bosses and state took the easiest way out when negotiating NAFTA. They sacrificed Mexican workers so that Mexican businesses could compete a little better in the North’s markets by imposing a policy of capping wage increases to prevent them from rising above inflation. This social dumping is actually a form of unfair competition with the workers of the North, who are now fighting to maintain the wage standards achieved through their historical struggles. The pressure from US and Canadian unions only achieved certain parallel agreements. It is simplistically argued that the workers of the North are now well off and that in any case there is no equality between a worker from the North and a worker from the South. The reality is that this lack of solidarity between workers ensures fewer jobs and less development in the South.
Abusing natural resources is another "advantage"The logic behind environmental dumping is similar to that of social dumping. Not even the minimum standards of the United States were incorporated into NAFTA’s parallel agreement on the environment. In practice, destruction of Mexico’s environment was considered a comparative advantage because it provided an opportunity to reduce production costs. In this sense, Mexican peasants from the agricultural frontier who clear-cut forests and practice slash and burn farming will not only be destroying their future without knowing it, they will also be considered slack for not producing more intensively to generate more employment. Alberto Arroyo, one of HSA’s intellectuals, argues that the lack of legislation on minimal environmental standards in the trade agreements as well as a scheduled plan to bring them more in line with the Río Summit and other international agreements, create pressure to lower the standards won in the North of the hemisphere, cancel the Mexican economy’s ecological viability and sustainability and could be dangerously extended to the rest of Latin America under the FTAA project unless drastic changes are made in the neoliberal policy promoted by NAFTA.
The alliance’s recommendation for all this is to incorporate trade agreements containing real and binding environmental and social legislation into the FTAA. It also recommends avoiding parallel agreements at all costs. In the first rounds of FTAA negotiations, most Latin American governments are refusing to incorporate the labor and environmental dimensions into the free trade agreements precisely because they consider low wages and abuse of their natural resources to be comparative advantages in their competition with the United States.
The obstacle to achieving binding agreements in environmental and social matters is not to be found in the United States—even recognizing Bush’s stubborn refusal to sign the Kyoto protocol—but rather in our own governments, which are always tempted to consider environmental destruction and deficient social and wage policies as advantages that can be offered to foreigners. While Costa Rica has already discovered how to turn its biodiversity, landscapes and ecology into an advantage, one of the biggest challenges facing the CA-4 countries is to find their own valid advantages.
What protections Within the general strategy being pursued by Latin American governments there are variants in the technical capacity and economic power to negotiate different forms of "protection" with the United States. While Brazil has the greatest capacity of all, Central America has the least. In negotiating the Central American agreements with Mexico, the only countries that talked were Costa Rica and El Salvador. And had it not been for Mexico’s compassion, all of the Central American countries would have signed agreements amounting to the chronicle of a death foretold for Central America’s medium business sector. The heads of state and business leaders of the North and South of our hemisphere have had and will continue to have great facilities for making pacts behind the backs of their countries’ working classes that ignore the environment of their territories. Following the pattern of the Alemán-Ortega pact in Nicaragua, the dirty linen both sides have to hide only serves to guarantee such arrangements.
to seek at the negotiating table?
The Hemispheric Social Alliance recommends a clear negotiating strategy to defend the possibility of all of us running the same risks and enjoying the same possibilities in the market. The alliance offers a practical guide to take to the negotiating table with a broad social agenda for hemispheric integration in the areas of human rights, the environment, work, immigration, the role of the state, investment, finances, intellectual property (particularly of indigenous peoples), agriculture, market access, gender, services and conflict resolution and compliance. Civil society can do more advocacy work on the environment, wages and small business, areas to which the Central American governments might be blindest.
We cannot do a U-turn on forty years of historyAccording to Ricardo Zapata, head of the Trade Section of the UN’s Economic Commission on Latin American and the Caribbean in Mexico, "The Central American governments must not arrive at the negotiating table with the idea of negotiating liberalization or a free market. What will be negotiated are protections rather than liberalization." The United States is not going to sacrifice protection of its steel industry to either Europe or Brazil. Central America has no steel industry to protect, but we must think what we should protect in this beautiful strip of land that still has so many natural resources, including water. It also has a unique location that allows both east-west and north-south communications, which is an advantage recognized by the United States that it should not be able to access without granting us something in return.
We should not feed the illusion of believing that our civil societies can simply turn around the economic, environmental and social dynamics that have been installed in our countries for the last forty years. Although the HSA’s proposal is good in theory, we will have to go to the negotiating table not with protests but with concrete proposals hammered out together among the different sectors of Central American society. Our civil society must be able to combine the concrete experiences of previously signed agreements and the information available from the Hemispheric Social Alliance with realistic proposals on trade agreements.
Our interests and US interestsIt is important to go into the FTAA negotiations clear about what a free trade agreement actually is. Integration into the global world has various degrees or levels: political unions; economic unions with a common social policy; MCCA-type common markets in the areas of trade, finances and labor; free trade zone agreements with built-in gradual progression; economic cooperation; and development program associations (Amazon Pact, Río de la Plata Association). The interests of the Central American poor would be most served by any kind of agreement that allowed a free labor market.
The ongoing massive Central American migration toward the United States implies an illegal market with no access to its American social policies. But although it sounds rhetorically good as a demand, we know beforehand that we cannot bring this issue up at the negotiating table. The most we could negotiate is a parallel, non-binding agreement for further phases of the agreement that would allow a free labor market in the long term.
What would suit Central America best in the FTAA is a common social policy, but the United States is unwilling to pay the kind of costs that West Germany paid to incorporate East Germany in the 1990s. Nor does the United States have the lucidity to propose an economic union with Mexico and Central America to extend the scope of its domestic market and thus confront the obvious economic threats posed by China and India.
Dreaming of a common social policy is illusory and therefore not constructive. What Latin America is being offered is the second lowest rung. Following the bitter harvest of neoliberalism and the dismantling of the import substitution model, the small Central American economies and several other Latin American ones are simply unprepared for anything other than free trade zone agreements, and perhaps not even those. By 2005, the United States intends to obtain an agreement that protects its domestic economy at the expense of the Latin American domestic economies, an agreement in which the only things that flow freely will be financial capital and negotiated merchandise. What Latin America needs is a negotiating plan that limits as far as possible the clear advantages enjoyed by the United States through a continental agreement such as the one currently being fashioned.
Central America: The FTAA guinea pig?The United States’ first key negotiations in the FTAA could be with Central America. Would that it were not so. The United States has already launched this idea with the rhetoric that the early harvest is the best, seeking to establish the idea that the first bloc to conclude its FTAA negotiations could reap the most benefits. Will Central America be so naïve as to think that FTAA negotiations will follow the rule that makes baby sweet corn more expensive than corn on the cob? Will it really believe that early FTAA negotiations are the same as the producer who arrives first at market with his maize and beans and makes a killing? What has happened so far demonstrates that it is not in US interests to negotiate a good agreement with the first 35 million Latin Americans—the Central Americans—because the remaining 365 million will inevitably treat the results obtained by Central America as a non-negotiable minimum.
We have already heard Meoller’s answer to the question about what will happen to the Americas’ weakest economies, and there is no doubt which ones they are. The United States has to use certain countries to try out its answer to the need for an agreement that responds in some way to the differences in size and level of development. Negotiating with Mexico, one of the Organization for Economic Cooperation and Development’s 24 members, is not the same as negotiating with the Central American countries, which are among the 110 at the bottom of the Human Development Index and whose regional GDP is well below that of even Mexico City.
Arriving hat in hand, At this moment, with our current preparation level, Central America will go to the FTAA begging charity to consolidate its access to its main trade partner and pleading for more space within the Caribbean Basin Initiative (particularly in textiles), more foreign aid and better treatment for its illegal emigrants.
seeking the visa for a dream
To build the FTAA, the United States needs faster progress in a sub-regional framework, particularly regarding the treatment of different country sizes and development levels. In a world in which the focal point of accumulation has passed from production to services, the United States is enormously attracted by the ideal platform for transnational services that Central America offers. In recent years, the United States has demonstrated its full capacity to manipulate Central America’s Presidents. It knows their weaknesses, their dirty linen. They are the leaders of countries in which most of the population is seeking the "visa for a dream": to migrate to the great country that has invaded us 17 times in the last century. There are many reasons for the United States to be confident of negotiating a low ceiling with Central America, one that will not damage its possibilities with the Andean countries and those of the MERCOSUR. The Central American economy is so weak and dependent that it encourages the United States to trade on past experiences. Central America will end up as the FTAA guinea pig if we do not develop a serious, dignified and consensual negotiation position.
Informal sector and emigrants: Central America’s small and medium businesses will suffer greatly from the wave caused by the FTAA, while its micro-businesses and informal sector are already in too bad a state to feel much difference between today’s pre-FTAA phase and tomorrow’s FTAA. The informal sector, which accounts for 60% of the businesses in the Central American economy—will continue absorbing the regional indigence. The number of informal sector micro-businesses is growing at the same rate as the population, but as the sector expands, it is becoming increasingly excluded and finds itself at a greater disadvantage. Hundreds of thousands of businesses fail every year in Central America, yet new ones continue to start up due to demographic pressure. This informal sector does not disappear because it is the only platform accessible to most Central Americans. In effect, the informal sector and emigration are the region’s only safety valves.
The region’s only safety valves
The worst thing for micro businesses and the informal sector is being unable to find anyone to sell their services to. The micro business sector is no longer patriotic and has been internationalized. It matters very little to those involved who buys their services: a Nicaraguan or a Salvadoran, a Central American or a US export assembly plant. The informal sector and the transport services are migrating toward the maquilas, and the micro-financing industry is following suit. The only thing that would transform the sector in the long haul is an endogenous growth program or linking foreign and national investments with the national and regional economy, restructuring small and medium businesses to increase wage levels and thus make them more viable in an expanded domestic market. The job generation promised by export processing plants and the tourist industry is minimal compared to what could be produced by adequately and appropriately promoting the most viable levels of our small and micro businesses.
Reduce the rhetoric and coordinateWill Central America enter the FTAA? Undoubtedly yes, because there is no alternative. Does Central American civil society have enough strength in the area of advocacy for the negotiation to be a dignified exercise rather than an experiment with guinea pigs? No. Will the FTAA turn out to be a package negotiated without popular consultation? It will. But if our political parties and grassroots social organizations are honest and frank, we will have to recognize that a great part of civil society’s legal, institutional and social efforts are as well.
Could the Presidents of our countries and the Central American business groups negotiate an FTAA that benefits the majority of the population without pressure from civil society? Certainly not. Could the regional elite negotiate an economy-stimulating FTAA for Central America that uses a decent negotiation strategy with advice from different areas rather than just from ECLAC and other multilateral organizations? Yes, but one cannot expect miracles or solutions that favor the Central American majorities after so many centuries of backwardness. Achieving this is a process that will go on for several decades and will depend on restructuring our states, parties, NGOs and grassroots organizations. The FTAA negotiations offer us the opportunity to restructure our negotiating skills with the outside world. That is a tough task but the most important restructuring, the one that has to be inward and from the bottom up, will be very hard to do before the FTAA is signed.
All of us who feel the incredible loss of the potential of the overwhelming majority of Central American businesses—of the Central American people—are wracked by doubt over the viability of a reasonable alternative within the North’s current plan. But although it may be a good councilor, we cannot be guided by doubt. It does not exempt us from the responsibility of informing and seriously preparing ourselves for the FTAA negotiations. Nor does it exempt us from trying to develop the coordination needed to be able to influence the negotiations or establishing links with the Hemispheric Social Alliance, links that up to now have been minimal or non-existent. If our civil society goes into the negotiating stage with nothing more than rhetoric, it will be fighting another losing battle. The only alternative is a realistic strategy and a broad consensus built around that strategy.
What happens in Central America will have consequences for the rest of Latin America. Bad negotiations will weaken those of other countries. Can we again offer a small ray of hope beyond our borders and even beyond our own capabilities, despite the weight of this globalized world? Probably not, but failing that, we could at least seek a minimum strategy, lower the tone of the rhetoric and get coordinated.
Realistic, audacious, astute Our region’s crisis is not going to disappear with a badly negotiated FTAA, or even get better. It will get worse.
and united into a single bloc
In fact, the crisis is so profound that it would not even disappear following good negotiations. This is the time to debate the FTAA and our inspiration should be the faces of our people in municipal markets, the profiles of our peasants selling firewood on rural highways, the desperate gleaning of children at our traffic junctions and the dawn cries of street vendors in our neighborhoods. They must convince us that a realistic, audacious and well-prepared negotiating strategy would be more valuable for all of them than the rhetorical campaigns of inflamed denunciations that will only put us on the losing side again. In the post-colonial Nicaraguan play of the same name, the wily Güegüense used his humor as a weapon against the new colonial rulers. Let us hope that, like him, we can find a way to make the best of our misfortunes.
Peter Marchetti is the research director of Guatemala’s Rafael Lanívar University and an envío contributor.