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Central American University - UCA  
  Number 117 | Abril 1991


Central America

The United States: Redefining Central America and the World

Jesuit of Latin America

The United States in 1991 is facing what Secretary of State James Baker has called the "defining moment." What is up for definition is whether the Bush Administration will obtain bipartisan support for its project to maintain the United States as the only remaining superpower after the Cold War. With this in mind, President Bush and his secretary of state are launching a campaign to get approval for a five-year military budget permitting "new power projection forces." The Gulf crisis, the US economic recession and its implications, the overall restructuring of the world, and the US political environment for the next several years are what make the moment a defining one. While this context reaches well beyond Central America, it has serious economic, military and political implications for our region. We will look briefly at each of these four focal points and the interrelations among them before considering those implications.

The Gulf crisis

The US has turned the Gulf crisis into a test of the economic and geopolitical restructuring of the post-Cold War world. At stake is control of oil, military technology, the Arab world and the United Nations, and the conversion of US hegemony into an overt world police force.

Since coming into being in 1775, the United States has had more war experience than any other nation. It has participated in nine major wars in nine generations and, between 1900 and 1975 alone, has militarily intervened in other countries 150 times—an average of once every six months. This does not include the recent invasions of Grenada and Panama, nor does it count the new variant of "low-intensity war," waged indirectly in Nicaragua, El Salvador, Afghanistan, the Philippines, Mozambique, Angola and Ethiopia. The novelty of the Gulf war has been its high technology, turning the deserts of the Middle East into a battlefield of electronic precision.

In the midst of this war, we repeat our comment following the invasion of Panama: The Pentagon wants to demonstrate that US military might is still necessary to engage in imperial wars in its sphere of influence. The difference this year is that the US sphere of influence has passed from its "backyard" to the world's energy sources.

It is appropriate to recall the words of President Abraham Lincoln, in his message to Congress during the worst days of the US Civil War, the last war fought on home territory: "We must first free ourselves, then we will have saved our nation." The Gulf war again reveals the profound contradiction between legality and power that is at the bedrock of US history.

The US recession

For all its problems, the US economy is still the largest in the world—twice that of Japan and a fifth larger than that of the entire European Community. Nonetheless, it is in recession. Making matters worse, the economic growth of both Europe and Japan is slowing down, causing both countries to withdraw funds from the United States to cover the enormous costs of German reunification and Eastern Europe; Japan alone withdrew more than $30 billion in 1990. Without detailing the well-known US economic woes, it is worth noting that its consumer debt, which has grown more than 700% in the past 20 years and is mainly for European and Japanese products, demonstrates a loss of confidence in US competitiveness.

Maintaining a fictitious economy that spends $1 trillion more than it produces domestically is unsustainable. It implies receiving international transfers of over $100 billion a year, which is not easy to guarantee. The US is trying to redefine this structural dilemma through the Gulf war. Bush has gotten the support of three huge sectors: the military-industrial complex, the oil lobby and the pro-Israel lobby. His hope is that the US productive system's comparative advantage will be to control high-tech weapons and world energy, guaranteeing world stability as the foreign-financed world police against threats from the South.

Opinions are divided about whether the Gulf war will have a dynamizing effect or a more recessionary one. The determining factor will be whether the technology used in this war spreads throughout the economy or leaves civilian production even more isolated from the technology used by the military. Japan's and Germany's comparative advantage over the United States is largely because both have kept their military budgets low, dedicating relatively more resources than the United States to productive research, education and infrastructure. With two-thirds of the US Federal budget directly or indirectly dedicated to the military (nearly 70% of which went to defend NATO in the Cold War framework), other economic sectors became less competitive with Japan and the European Community. The trillions of dollars the United States spent on the Cold War—much of it during the Reagan era—has only gotten the US the greatest debt in history, affecting world financial stability and provoking a crisis in the main US banking institutions, such as the Savings and Loan system.

There is increasing international pressure on the United States to put its economic house in order, given the destabilizing effect it is producing in the world. It is significant that, while the United States promotes the adjustment policies of the International Monetary Fund, the World Bank, Inter-American Development Bank and AID for the Third World, it has been unable and unwilling to make the structural adjustments needed for its own domestic reactivation.

World restructuring

Confronting the Persian Gulf crisis on August 8, President Bush presented it as a moment to define "who we are and what we believe." His aim is to consolidate the United States as the only world superpower in the new geopolitical and geoeconomic restructuring of the three major blocs after the Cold War. He told Congress that "there is no substitute for American leadership in the world."

Bush cannot maintain the bilateralism of the Reagan era, mainly because of the domestic economy's financial incapacity. Thus the US is entering a new multilateral era, but one with a unilateral character in that the US is playing a leadership role in the Group of Seven. The multilateral financing of US forces in the Gulf, however, has turned them into international mercenaries, allowing the US to play the role of world police more than it could with its own means.

US financial support of the United Nations and political pressure on its allies, in turn, has led the UN Secretary General and the Security Council to submit to the interests of the North instead of representing the institution's genuine world role. The UN's inability to prevent the war, or to achieve an armistice once it began, leaves US foreign policy much more freedom of military action.

US political environment

Political situations become tense and difficult during recessions. Racism and xenophobia are growing against Hispanic and other immigrants in the US, and have generated opposition to foreign aid, canceling the third world debt and European and Japanese protectionism. This could provoke similar protectionism in the United States, particularly after the failure of the GATT meetings; xenophobia finds scapegoats not only in Hispanic, black and Arab immigrants, but also in the Japanese.

The Gulf war has hidden the economic problem behind the spectacle of US international force, allowing Bush to avoid the domestic problems that paralyzed his administration during the budget debate last October. He appears a President without a country; both Democrats and Republicans agree that he has taken no interest in the country during his first two years in office. Bush blames the Democrat-dominated Congress, but the budget crisis demonstrated that he even lost control of his own party on domestic issues.

For all that, he is recreating bipartisan consensus on international issues, receiving support for his stance on the war from both the general populace and the three lobbies mentioned above. Nothing indicates that the "peace dividend" will be used to rebuild and reactivate the US economy, even though major unions, churches, intellectuals and a large part of industry not involved in the military complex, support it. This debate could explode in 1991, breaking the Republican Party's electoral lucky streak for 18 out of the past 22 years.

Impact on Central America

Following the Sandinista electoral defeat, the invasion of Panama and the "democratic homogenizing" of the region's governments, the US has tried to move Central America to the policy sidelines. Crisis management has been delegated to bureaucrats like Under Secretary of State for Inter-American Affairs Bernard Aronson, his two deputies Michael Kozak and Joseph Sullivan, and the respective US Ambassadors to the Organization of American States and the United Nations, Luigi Einaudi and Thomas Pickering. Ambassadors Harry Shlaudemann and Deane Hinton (Nicaragua and Panama, respectively), both with a lot of experience in Central and South America, will be the local coordinators of this effort, neither permitting the crisis to get out of control nor taking the steps to resolve its causes.

The region's countries have all had substantial cuts in US aid for 1991. Costa Rica will get 20% less, Honduras 14% less, El Salvador 8% less (apart from the 50% cut in military aid, which has been reinstated); Guatemala 18% less and Nicaragua 25% less. Only in Panama is the reduction not yet clear. In addition, given the weakness of the governments, the aid is politically manipulated, subsidizing US interests. The funds handled by AID are linked to contracting US technicians and equipment and, in Nicaragua and Panama, high percentages of it go to debt service payment.

The continental framework

The US-Mexico accords in Central America and the Association for Development and Democracy, the Central American arm of Bush’s Initiative for the Americas, are regional expressions of the his administration's new pan-Americanism. This continental project indicates a US shift from geopolitics to geoeconomics in the region. The neoliberal economic project, described in a separate article in this issue, finds support in this continental frame of reference.

Bush's initiative needs Central America as the hemispheric bridge. It offers possibilities for expanding Central American products in the US market, and compensation in a broader Latin American market to initiate US economic adjustments and overcome its recession. The serious fissures that the US crisis has caused in international stability have been particularly strong in Latin America. Its reserves are permanently vulnerable to dollar fluctuations; with a 1% increase in US interest rates meaning $4 billion more in Latin America's debt service. Even getting funding depends mainly on financial decisions made in Washington.

This continental neoliberal policy offers AID an even greater structural role in implementing US policies in the region, given the weakness of Central America's regional financial and marketing institutions, such as the Central American Bank for Economic Integration.

Esquipulas loses autonomy

Esquipulas, originally a summit platform for regional peace talks, has shifted to economic negotiation, abdicating its pacification, democratization, verification and mediation role to the United Nations, complemented by the Organization of American States. But the current UN crisis and the permanent crisis of the OAS are reducing the autonomous space Esquipulas once had. At the beginning, the countries in the Contadora group, the UN and the OAS only complemented Esquipulas; their margins of autonomy in turn strengthened by Central America's decision to affirm its own autonomy. With the new US role as the only world superpower, that relative autonomy has given way to submission in all cases.

Other outside interference

While the United States always has been and continues to be the biggest outside influence in the region, other international aspects mentioned below will have an effect, for better or worse, in resolving the causes of the Central American crisis.

The Demise of Two Regional Counterweights. Mexico's historic counterbalance in the Central America-US-Mexico triangulation is now in question, given the special relationship that Mexico's President Salinas de Gortari has established with the United States. With the additional loss of Eastern Europe as another counterbalance, Central America has a more direct and lopsided relationship with the United States than ever before. The loss of these two counterweights forces us to analyze not only the obvious threats of the global crisis, but also new opportunities for pushing a Central American popular alternative.

While the situation erodes the possibilities of autonomy for Central America, it offers certain new spaces, product of the current contradictions within US society, its economic crisis and the contradictions in US relations with other world mega-markets. For example, a more direct link to the United States permits closer ties with the US people. The presence of nearly 20 million Hispanics in US society, particularly Chicanos and Central Americans, offers the possibility of creating a "Latin lobby" for Latin causes.

The death of the anti-communist myth, so dominant in US culture, could make room for more constructive and fraternal communication between neighboring peoples. Freed of this myth, North Americans who reject their country's interventionism and new hegemonic designs as the only superpower will have more possibility of finding shared values with the region's peoples. If they could learn about the Central American peoples' alternative proposals in their genuine form, they would not be likely to oppose them.

Ambiguity of the European Community and Japan. In recent years, the geoeconomic interest of both blocs in Central America has increased, given its strategic position as a bridge between North and South America and between the Pacific and the Atlantic. This relationship has remained ambiguous largely because their Central American interlocutors have been battered governments and precarious states. Furthermore, neither bloc is independent of the United States, evidenced by their lack of a more autonomous policy regarding the low-intensity war against Nicaragua, the invasion of Panama and, more recently, their lack of a more autonomous policy regarding the Gulf war's threat to the world. Nonetheless, the relationship between civil societies in Central America, Europe and Japan offers paths never before explored by our peoples. The role of churches, nongovernmental organizations and environmental, women's and peace movements offer opportunities for mutual solidarity. This again suggests that Central America's popular alternative must have an international projection not only toward counterparts in the South, but also toward those groups in the North that reject a civilization that divides the world between the Northern minority and the South’s wretched of the earth.

An international crossroads

Central America held center stage of international interest in the 1980s, for both the importance and intensity with which various international actors played their roles and the amount of resources transferred to the region. Central America became the only Latin American region with a net resource inflow. Although this did not prevent military intervention in Panama, it may have done so in Nicaragua and El Salvador. In no case did it resolve the original causes of the regional crisis, which still remain.

The Gulf war, the restructuring of Eastern Europe, the danger of disintegration and/or a military coup in the USSR, the US recession and the prolongation of Central America's economic crisis have all cut into international interest in our region. The inability of Central America's governments and regional institutions to present consistent programs has fed this general boredom and marginalized the region from international resources.

Nonetheless, the changes in the world not only "interfere" as international factors, but condition each country and the region as a whole. Many of the new phenomena have even become "internalized" and form part of domestic and regional reality. For example, the end of the East-West confrontation has created a new culture of international dialogue and détente, at least among the countries of the North. Most of Central America's own social and political actors have embraced the search for some form of negotiated consensus to overcome the greatest crisis in the region's history. Only recalcitrant minorities have entrenched themselves in their privileges and their anti-communism, following the US example. This vengeful and unrealistic attitude, which undercuts negotiated solutions, can be found in ARENA in El Salvador; CACIF in Guatemala; the armies of both of those countries and Honduras; and, in Nicaragua, in COSEP, the rightwing mayors' movement and the Vice President himself. As for the US, the invasion of Panama, aggressiveness toward Cuba and belligerence toward Sandinismo, the FMLN and the URNG indicate that the Bush Administration is not interested in détente and dialogue with the South; President Bush has changed only the style of Reaganism, not its objectives.

The Bush Administration notwithstanding, there has been a multilateral effort to help our regional and national dialogue. The European Community, Scandinavian countries, UN and OAS all contributed to the creation of Esquipulas, the Central American Parliament and other arenas for negotiation. Despite their limitations, these processes have laid foundations for peace, democracy and development. The so-called Sanford Commission (International Commission for Recovery and Development) in the United States was a symbol of and contributor to this spirit of dialogue. The United Nations played a particularly major role in consolidating this dialogue, verifying the Esquipulas accords for disarmament and demobilization, observing Nicaragua's elections and mediating the Salvadoran conflict. With much less professionalism and efficiency, the OAS also collaborated in this effort. But both came under strong pressure from the United States, limiting their autonomy and resources.

Now largely spent, these initiatives were always ambivalent. On the positive side, they strengthened the desire for peace and the search for national and regional negotiated solutions, fortified international law and multilateral mechanisms, isolated the most recalcitrant sectors and buttressed regional institutions promoting dialogue and peace. On the negative side, US financial and political pressures have limited their effectiveness and even served to legitimize "interference." Neither the UN nor the OAS denounced US financial interference in Nicaragua's electoral campaign or its international effort to distort the campaign's obvious limitations, due to the war and dramatic economic crisis. (After the Sandinista defeat, the US touted those same elections as exemplary.) Pressures are now being applied on UN mediation of the negotiations in El Salvador. In short, the positive aspects of the "world negotiating culture" and of multilateral mechanisms are being bogged down and distorted by US efforts to impose its own stamp on them.

The Gulf war has fully exposed this imposition already experienced by Central America. The UN and its Secretary General are faced with a crisis of legitimacy for conniving with the US and the Group of Seven. It will be a hard crisis to resolve without transforming and democratizing the UN, particularly its Security Council and the anachronistic veto power in the hands of the creators of the Cold War.

The peoples of the South need a genuine and democratic United Nations, but since the UN no longer has the power balance of the Eastern European countries, its crisis in the Gulf could have serious repercussions not only on the Salvadoran negotiations, but also on other conflicts in the South. The UN risks repeating the OAS's loss of prestige in the continent, which became undeniable in Panama.

New forms of interference

"Low-intensity democracy" could be the new low-profile form of US intervention, using democratic processes as instruments of penetration within the framework of sovereignty and self-determination of nations. Democracy, drugs and ecology could be the legitimizing excuses for such intervention in the continent in a world without counterbalances.

In Central America, however, the most sophisticated mechanism of low-profile interference could be more structural—the indiscriminate and asymmetric opening of the world market. The crisis is neither of capital nor of the world market per se; it is of the circuits that reproduce human life and nature, especially in the South. Destroying humanity and nature brings high earnings in the short run; only over time does it also destroy the market's own potential. In Central America, this destructiveness is already visible in the countries' increasing ungovernability.

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Introduction and Dedication

The United States: Redefining Central America and the World

The Neoliberal Model in Central America: Gospel of the New Right

The Nation-State Crisis: Ungovernability

Demilitarization: The Other Face of Democratization

Central America’s Grassroots Movement: A Partial Alternative

Guatemala: The Civilian Facade Collapses

Honduras: A Grassroots Party Emerging from Grassroots Organization

El Salvador: UN Mediation and Civil Negotiations

Nicaragua: Political Maturity and Economic Immaturity

Panama: Eternally Condemned

The Popular Alternative: The Agenda and Challenge for the 90s
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