From Central America, A Nation Divided, 3rd ed. byRalph Lee Woodward, Jr. (Copyright Oxford
University Press, 1998).
Chapter 10 The Failure of Reunification
The tradition of Central American unity was never really strong, even during the three centuries of the Kingdom of Guatemala. The Spanish rulers failed to develop close bonds between the provinces; instead they created local loyalties and jealousies, particularly over the concentration of power in Guatemala City. The passionate and bitter struggle between the states of the United Provinces doomed hopes for unity after independence. Efforts toward unification made since 1847, both of good intention and of ulterior ambition, rarely progressed beyond the stage of initial organization and planning. Salvador Mendieta's efforts early in the twentieth century emphasized the absence of real desire for Central American unity, and the total failure of his Unionist Party corroborated his pessimistic view. The political, social, and economic crises of the 1980s, however, forced Central Americans once again to cooperate with each other to bring peace. The heavy-handed role of the United States also imposed a kind of unity over the isthmus. Although it did not encourage political union, it brought the isthmus together in ways that it had not known since the colonial era. The triumph of neo-liberal interests in all of the states in the 1990s and a desire by those interests to incorporate Central America into the global economy furthered the cause of interstate cooperation. While political union remained unlikely in the immediate future, economic and cultural ties increased and a new Central American Parliament provided a forum for discussing common problems.
Central Americans have often charged that foreign nations--Britain in the nineteenth century, the United States more recently--have sabotaged unity, following a "divide and conquer" policy. Certainly, there is some truth to the charge with regard to the activities of nationals and diplomats of both English-speaking countries. It was, for example, easier for the giant fruit companies to deal with small, unstable republics than with a larger, united nation. Yet had there been no substantial causes of disunity for foreigners to exploit, Central Americans might still have achieved union.
After World War II the development of foreign aid programs, particularly from the United States but also from international organizations, focused on the need for Central American unity and engendered a spirit of cooperation. Working either with the United States Agency for International Development or with United Nations organizations, the Central American nations developed a number of multilateral programs that promoted a spirit of unity, at least among the technicians and politicians associated with them. Internationalism in the labor movement also contributed to uniting working people across the isthmus. Cultural and ideological unity came more gradually with programs to eliminate unnecessary duplication in Central American universities and vocational schools.
The foreign assistance programs imposed a kind of unity over the region from the 1960s forward.
Studies made by private corporations and foundations, by national and international
governmental agencies, and by academicians in several disciplines encouraged the five states to
face up to their common problems. The development of economic integration and its
accompanying interstate organizations promoted cooperation and a sense of unity on the
isthmus, as did the growth of interstate investment and the development of easier transportation
and communication among the states. The civil wars of the 1980s, of course, were a setback to
progress in many areas, but they also brought even more foreign assistance programs and
internationalization of the region. Even though many of the aid programs were curtailed after
1990, as emphasis shifted from public to private sector development, there remained a legacy of
Central American cooperation. Aid programs were often ill-conceived and not applicable to the
peculiar problems of Central America. The failure of the United States to support the
revolutionary programs of Arévalo, the Sandinistas, and other more progressive forces fastened
an aura of reaction on U.S. programs and made them suspect to many Central Americans. At the
same time, military establishments expanded and became, often, the principal beneficiaries of aid
programs. The refusal of most U.S. aid programs to recognize the need for basic restructuring of
the society and economy of the region is at the heart of the failure of the programs to achieve
permanent change. Thus, many Central Americans looked to the aid programs simply as devices
to maintain the peoples of the region in economic subservience to capitalism. Yet the United
States played an important role in resolving the violent crises of the 1980s on the isthmus, which
coincided with the end of the Cold War. In the 1990s, a revitalized Central America, more closely
than ever tied to the North American economy, put the social revolutions of the twentieth
century behind it and turned sharply once more to neo-liberal solutions to the economic and
social underdevelopment of the region.
U.S. ECONOMIC AND MILITARY AID TO CENTRAL AMERICA, 1946-96(Loans, Grants, and Other Assistance, in millions of US$)
Economic Military Total
Country Assistance Assistance Aid
Belize 145.1 5.3 150.4
Costa Rica 1,735.1 40.3 1,775.4
Guatemala 1,687.7 75.8 1,763.5
El Salvador 4,210.4 1,175.7 5,386.1
Honduras 1,654.8 563.8 2,218.6
Nicaragua 968.8 30.4 999.2
Panama 1,062.2 77.8 1,140.0
TOTAL 11,464.1 1,969.1 13,433.2
SOURCE: U.S. Agency for International Development, U.S. Overseas Loans and Grants and
Assistance from International Organizations--Obligations and Loan Authorizations--July 1,
1945-September 30, 1996 (Washington, 1997).
Immediately after World War II, with more progressive governments in Guatemala, Costa Rica, and El Salvador--and even some spirit of the need for unity and change beginning to thrive in Honduras and Nicaragua--the movement for unity picked up. The Guatemalan and Salvadoran governments conducted some discussion toward the goal of union between 1945 and 1948, and these formed the background for a general meeting of Central American foreign ministers in October 1951. From those meetings came plans for the Organization of Central American States (ODECA), formally founded in 1955. In 1952 economy ministers of the five states met in Tegucigalpa with the U.N. Economic Commission for Latin America. Subsequent meetings led to a treaty in 1958, which aimed to establish Central American economic integration.
In a move toward the creation of a Central American Common Market (CACM), the states signed a series of trade agreements and planned new industries. This program expanded slowly throughout the 1960s. Costa Rica, already the most prosperous state, was reluctant to cooperate fully, fearing competition from countries with cheap labor and especially distrustful of Nicaragua. Thus, a true common market was never achieved, but substantial advance was made, particularly among the states of Guatemala, El Salvador, and Honduras and new industries did produce many goods formerly imported from outside the region.
Other results of the cooperation were evident. There was an acceleration in the program of road building, including completion of the Inter-American Highway as far as Panama in 1964; also, there was a vast improvement in the condition and number of paved or all-weather roads throughout Central America. These improvements facilitated the increased interstate trade and industry as well as promoting tourism, although continued political violence very much hampered that development. Tourism itself became an instrument for attracting potential investors. Costa Rica promoted immigration of North American retirees as another source of income and land development, although it was not sufficient to offset entirely Costa Rica's serious balance-of-payments deficit. Costa Rica finally ratified the General Treaty of Central American Economic Integration and joined the CACM and ODECA in 1962.
The common market idea did promote much new economic activity, and, combined with foreign investment, it brought some improvement in the standard of living for many Central Americans. This strengthened the larger middle class, and they, in turn, demanded greater participation in government. Yet the overall progress was disappointing. Most of the industries tended to be capital intensive rather than labor intensive and, thus, failed to provide a major source of employment for the rapidly expanding population. Guatemala and El Salvador gained the most from the greater interstate trade. Panama also joined in, but, as with Costa Rica, her participation was minimal. By 1968 Honduras and Nicaragua were importing far more than they were selling to their Central American neighbors.
Interstate central American trade as a percentage of totalcentralAmerican foreign trade
(millions of US dollars)
All Foreign Interstate
Year Trade C. A. Trade % Interstate
1950 518.00 17.30 3.34
1955 833.90 26.20 3.14
1960 954.20 65.40 6.85
1965 1650.50 271.00 16.42
1966 1733.90 349.50 19.70
1967 1886.90 427.90 22.68
1968 1997.50 516.60 25.86
1969 2037.60 498.00 24.44
1970 2331.98 585.43 25.10
1971 2411.30 552.90 22.93
1972 2718.20 611.50 22.50
1973 3534.00 776.90 21.98
1974 5092.00 1065.30 20.92
1975 5244.26 1055.48 20.13
1976 6319.66 1260.50 19.95
1977 8466.45 1505.14 17.78
1978 8598.80 1743.53 20.28
1979 9514.93 1776.63 18.67
1980 10399.37 2228.73 21.43
1981 9642.01 1909.22 19.80 1982 8149.35 1562.41 19.17
1983 8284.69 1577.58 19.04
1984 9303.12 1445.46 15.54
1985 8882.77 1026.57 11.56
1986 8510.76 875.71 10.29
1987 9192.20 1028.45 11.19
1988 9679.34 1109.80 11.47
1989 10354.04 1273.72 12.30
1990a 10399.61 1309.35 12.59
1991a 11049.82 1585.18 14.35
1992a 13185.25 2065.01 15.66
1993a 14646.49 2241.15 15.30
1994a 15742.36 2504.36 15.91
1995b 19068.00 2987.08 15.67
aPreliminary
bEstimate
SOURCE: Secretaría Permanente del Tratado General de Integración Económica Centroamericana (SIECA), Series estadísticas seleccionadas de Centroamérica y Panamá(Guatemala, 1973-1997); SIECA, Compendio estadístico Centroamericano (Guatemala, 1975); SIECA, Estadísticas analíticas del comercio interamericano, No. 1 (Guatemala, 1983); SIECA,Estadísticas Macroeconmicas de Centroamérica 1979-1983 (Guatemala, 1984);Statistical Abstract of Latin America, vols. 22-32 (Los Angeles, 1983-97); and Anuarios estadísticos of the five Central American states. These figures do not include Belize or Panama.
The two-week "futbol war" between El Salvador and Honduras in the summer of 1969 brought a halt to the growth of the CACM and pointed up the startling reality that, without stronger political cooperation, economic union was precarious. The Central American states had settled most disputes amicably since World War II, but the outbreak of this "war" brought back memories of the frequent civil wars and the meddling in each other's affairs which had characterized the isthmus in the nineteenth and early twentieth centuries.
Serious problems had been building for some time. To begin with, there was a grave demographic problem. El Salvador, the only Central American state without large amounts of public land, had a population density of nearly 400 persons per square mile, while Honduras had 55 per square mile. The traditional "fourteen families" (by the 1980s counted at 254 families) owned 95 per cent of the land in El Salvador, and for the most part they did not cultivate intensively. Their dominance of agriculture had, inevitably, created a serious land shortage. Because of that shortage, Salvadorans moved to Honduras, where they settled on the land or engaged in commerce or industry. The economic integration treaties signed in 1958 allowed free transit of inhabitants, facilitating the natural flow. In 1950 some 20,000 Salvadorans, 62 percent of all foreigners, already lived in Honduras. By 1961 the number had increased to 38,000, or 74 per cent of all foreigners, and it continued to rise during the 1960s. Although the Salvadorans represented only 2 per cent of the total Honduran population in the 1961 census, their actual number was probably somewhat higher, because the figures do not include those who had become Honduran citizens. In some departments, notably Cortés and Valle, the Salvadoran population was as high as 5 per cent. These industrious and sometimes aggressive immigrants incurred the resentment and jealousy of the local peasants, workers, and shopkeepers, to whom they represented a real or imagined threat of economic displacement. By 1963 the Hondurans' anger had prompted the passage of legislation that limited the number of foreign workers in any enterprise to 10 per cent of the payroll. More directly responsible for the conflict between the two states was a 1968 Honduran agrarian reform law prohibiting Salvadorans from owning land. Under its provisions, the Hondurans evicted thousands of Salvadoran squatters. Honduran large landholders had promoted this law, fearing that without it Honduran peasants would demand land reform
To the demographic problem of Salvadoran immigration into Honduras was added an economic reality--El Salvador had advanced economically much more than Honduras, particularly as a result of the common market. Interstate trade within Central America increased the trade of all of the states, but it did not bring equal benefits in the balance of payments. Honduras was negatively affected, especially during the mid to late 1960s. By contrast, El Salvador had benefited more than any other state by the integration agreements.
Boundary disputes had long embittered relations between the two states, but there had been little violence since the first decade of the twentieth century. Treaties settling the border questions, however, had never been ratified. In 1967 Salvadoran authorities arrested a Honduran in a disputed area, and the Hondurans responded by capturing forty Salvadoran troops in the area of their claim. The two Central American states broke diplomatic relations, which were not resumed until President Lyndon Johnson's visit to El Salvador in July 1968 succeeded in temporarily restoring normal relations.
Tension remained, however, and the dispute suddenly received international attention during World Cup soccer playoffs between teams representing the two states in June of 1969. Violence erupting around the games, which were played in each of their respective capitals, forced the teams to play the third and deciding game in Mexico, where El Salvador won. Meanwhile, Hondurans had savagely attacked Salvadoran residents in Honduras, forcing thousands to flee. In El Salvador the population retaliated by attacking the smaller Honduran population there. In late June El Salvador broke diplomatic relations and demanded reparations on behalf of her dispossessed nationals in Honduras. Honduras then made similar demands, and the two states carried their cases to the Organization of American States, which sent representatives of its Commission on Human Rights to investigate. On July 3, however, El Salvador claimed that a Honduran plane had bombed several points in the state. Sensational news reporting and unrestrained government propaganda inflamed popular opinion on both sides. Violent clashes multiplied along the border until, on July 14, Salvadoran forces invaded Honduras, advancing quickly to within seventy-five miles of Tegucigalpa. Honduras struck back with bombing raids on San Salvador and Acajutla. The war lasted only a few days, but neither country could afford the destruction and dislocation that occurred. They agreed to a cease-fire, arranged by the OAS on July 18, calling for an international observer team and safety guarantees for immigrants in both countries.
Landowners in El Salvador, fearing a return of the émigrés to El Salvador, where they would
demand land, urged Salvadoran President Fidel Sánchez Hernández to fight on and not give up
the territorial advantage already gained. Salvadoran troops remained in Honduras for several
weeks before finally retreating. Peace was restored in August. The damage had been done, not
only to physical facilities in both countries, but also to the common market concept and to the
spirit of friendship among the states, which had seemed to be moving them closer to union.
Bitterness remained between the two states long after the fighting stopped, and solutions to the
real demographic and economic problems are still wanting. Fighting broke out sporadically along
the Salvadoran-Honduran border, requiring the continuance of the OAS force there. After futile
negotiations, Honduras and El Salvador agreed to submit their dispute to arbitration in 1976 and
reached agreement on a treaty formally ending the war in October 1980, although details
regarding the border remained in dispute. Hundreds of thousands of refugees from the
Salvadoran civil war caused relations to deteriorate in 1981, but Honduras resumed trade with El
Salvador after 13 years in 1982. An International Court of Justice decision on September 11,
1992 finally resolved most of the territorial disputes between the two states.
The 1969 war had abruptly interrupted a decade of growth and economic diversification(1), although interstate trade soon reached pre-1969 levels and there was a modest growth in the volume of trade throughout most of the 1970s. In the aftermath of that clash careful analysis revealed not only that economic union could go only so far without closer political confederation, but also that the CACM had not been uniformly beneficial to all five states. Indeed, the technocrats of the Central American Integration Secretariat (SIECA), which included the best minds of Central America, concluded that if it was truly to benefit the entire region there would have to be provision for redistribution of the generated wealth that flowed from one region to another as a result of internal trade patterns. Political disunity hampered efforts to restart the integration movement. Although by 1972 a beginning had been made, the early 1970s will be remembered as a period of disillusion and frustration for the movement. Worsening economic and social conditions, however, stimulated by rampant inflation and the worldwide oil crisis, led to the formation of a High Level Committee which in March 1976 presented a draft treaty proposing sweeping modifications. If adopted, this treaty would have extended the integration movement to total trade liberalization, standardization of foreign investment rules, tax harmonization, free movement of labor and capital, a common agricultural policy, a coordinated system of basic industries, and a unified social policy that promoted health, nutrition, housing, support of labor unions, and harmonization of social security and minimum wages.
Official reaction to these recommendations was unenthusiastic. While admitting their theoretical desirability, no government was willing to relinquish the sovereignty and authority necessary to provide the sort of unified agencies to structure and administer these services. Defeat of the proposed treaty, which would have turned adversity into progress, was a watershed for the integration movement, which continued to decline into the political morass of the 1980s. The failure to seize this opportunity was far more damaging than the "futbol war" for the future of the isthmus.
As we have already seen in reviewing the development of individual states in the last chapter, the economic recession and political turmoil of the late 1970s further fragmented the isthmus and made integration seem remote. The rise of the Sandinistas in Nicaragua and the guerrilla warfare in El Salvador curtailed trade on the Inter-American highway, while the depression reduced exports for all the states. A meeting of economic integration ministers in 1980 in Managua sought to revive the CACM. They agreed to draft a new treaty to replace the 1960 General Treaty but there was little real progress until after 1990, when more peaceful conditions returned to the region.
The political and economic crises of the 1980s made Central America the focus of a dangerous East-West confrontation and brought new manifestations of U.S. hegemony over the region. The pattern of military dictatorship in all of the states except Costa Rica had intensified in reaction to the rise of Fidel Castro after 1959. A military phase of the Central American integration movement was the formation of the Central American Defense Council (CONDECA) with strong U.S. support in 1963 by the governments of Guatemala, Honduras, El Salvador, and Nicaragua. The 1969 "futbol war" deflated this organization when Honduras pulled out, and in the 1970s it faded nearly into obscurity, with greater emphasis being placed on economic and social development. After the Medellín Episcopal Conference of 1968 the Catholic Church began to promote with some success greater attention to the plight of the poor and oppressed, contributing to a new awareness of the problem of human rights violation in Central America. International organizations began to focus on Guatemala, Nicaragua, and El Salvador, and they often scored the U.S. for its support of repressive regimes in those countries. When Secretary of State Henry Kissinger visited Costa Rica and Guatemala in February 1976 he was greeted with riots and outcries against U.S. support of reactionary regimes in Latin America.
United States policy took a dramatic turn under the administration of Jimmy Carter, as he sought to improve the U.S. image abroad and place his country in step with the march of reform and respect for human rights. His pro-human rights policy brought stiff opposition from elites in Guatemala and El Salvador, especially after the overthrow of Somoza in Nicaragua. Carter also pushed through successfully treaties under which the U.S. agreed to turn over the Panama Canal to Panama by the year 2000, easing the severely strained relations between the U.S. and Panama and helping the government of strong-man Omar Torrijos to reverse the ailing economic trends in his country. Although the Carter government worked to prevent a Sandinista victory in Nicaragua, it accepted their accession to power gracefully and, after Sandinista leaders met with Carter at the White House in late September 1979, the U.S. Congress approved a major Nicaraguan aid package.
The election of Ronald Reagan brought a sharp reversal of these policies. Reagan had opposed transfer of the Canal Zone, and his government obstructed implementation of the 1978 treaties, contributing to deteriorating relations with Panama in a period when that state was undergoing political adjustments following the accidental death of Torrijos in 1981. Torrijos' 1968 overthrow of the traditional commercial-bureaucratic elite of Panama represented an anti-Liberal revolution that had brought his military government to power on the strength of support from the less fortunate stratas of Panamanian society. Under Torrijos, the armed forces,, later known as the Panamanian Defense Force (PDF), became a new elite, rivaling the old commercial-bureaucratic oligarchy for power in the country. Through an alliance with working class organizations, the military also challenged the oligarchy's control of economic development and its close relation with the United States that had evolved especially since 1903. In this respect the role of West Indian, darker-skinned working groups imposed a racial factor in the Panamanian political scene that further eroded the old oligarchy's position. Following Torrijos' death, a power struggle concluded with the rise to power of Torrijos's Intelligence Chief, General Manuel Noriega. But although Noriega constructed a powerful political machine, he was less successful than Torrijos in rallying the people to his support. There remained, however, the racial and class division between Noriega's Democratic Revolutionary Party (PRD) and the coalition of parties representing the old elite and middle-class professionals.
The Reagan administration, nevertheless, cultivated better relations with the Central American military forces, and Noriega for a time was on the payroll of the CIA. Soon after taking office Reagan resumed military sales to Guatemala, sent U.S. military advisers to El Salvador, and suspended United States AID programs to Nicaragua. On June 2, 1981, Secretary of State Alexander Haig condemned the "large-scale shipments of Soviet military supplies" to Nicaragua. By November 1981 Reagan had approved $19 million aid for covert operations against the Nicaraguan government. He also increased U.S. support against guerrilla opposition forces in El Salvador. From the outset of his administration, it was clear that Reagan intended to roll back the revolutionary tide in Central America and to make the isthmus a theater in the escalating confrontation with Soviet power.
The new U.S. presence in Central America was most obvious in Honduras, where a massive U.S. military and naval buildup supported the militarization of Honduras and covert aid to the Nicaraguan contras, intending to intimidate both the Sandinistas and the Salvadoran guerrillas. In 1983, with the strong backing of the Reagan administration, Honduras. Guatemala, El Salvador, and Panama resurrected CONDECA, with Nicaragua excluded and Costa Rica, emphasizing its neutrality, declining to participate. But the Reagan government played on traditional Costa Rican fear of Nicaragua to encourage a military build-up in that country as well. Major U.S. maneuvers in Honduras highlighted the new organization, although the Ríos Montt government of Guatemala showed little interest and Panama chose not to participate in these maneuvers. Moreover, training of Salvadoran troops in Honduras elicited a strong anti-military and anti-American reaction among Hondurans. The ouster of the Honduran military chieftain Gustavo Alvarez Martínez (see chapter 9) was a blow to this policy, but the U.S. presence remained strong.
As debate over U.S. policy heightened in 1983, Reagan named Henry Kissinger to head a bipartisan commission to study Central America. The Committee's report, although providing considerable evidence that the basic problems on the isthmus were socio-economic, concluded with an endorsement of the military policies of the Reagan government. It also called, however, for a massive economic and social aid program, which the Reagan government implemented. While U.S. congressional and public opinion precluded the use of U.S. combat troops directly in the conflict, the 1983 U.S. Marine invasion of the island of Grenada suggested Reagan's willingness to employ that alternative.
Devastating economic problems in Nicaragua accompanied the rising U.S. support of thecontrasafter 1985. International efforts, notably the Mexican-led Contadora plan, opened a process of seeking a peace agreement for Nicaragua, El Salvador and Guatemala, but stiff U.S. opposition to any plan that would leave the Sandinistas in power blocked successful agreement. Beginning in 1986 a Central American peace initiative by Costa Rican President Oscar Arias with strong support from Guatemala's Vinicio Cerezo led to the signing of the Esquipulas II agreements in August 1987 by the five Central American presidents. Implementation of these peace accords dragged on for months into years, but by 1989 a clear plan had been put into execution. Rebel forces were to lay down their arms and be incorporated into the military or other security forces of their respective states. The U.S. agreed to cooperate in disbanding thecontras, and free elections were to be held in each country. Implementation took several years in some cases, but beginning in 1990 with Nicaragua, a series of closely-observed elections emphasized democratic process and free campaigning. The U.S. also pumped considerable financial support into the electoral process, a factor contributing to the defeat of the Sandinistas in the 1990 Nicaraguan election that brought a coalition strongly linked to the old Conservative Party to office. The George Bush administration (1989-93) that succeeded Reagan continued the anti-communist, military approach. This was especially evident in Panama, where General Manuel Noriega, head of the Panamanian Defense Force (PDF), increasingly was an embarrassment to the U.S. government. Noriega was de facto ruler of Panama, even though various civilians actually served as President. Although Noriega had collaborated with the CIA for many years, assisting in supplying arms to the Nicaraguan contras, his more recent support of the Contadora Peace Plan, which the United States opposed, turned the U.S. against him. The United States formally broke relations with Noriega on 24 September 1987, ending longstanding government support for the Panamanian military. The U.S. Senate unanimously approved a non-binding resolution urging Panama to restore civilian rule with free elections and to investigate the charges against General Noriega or face a cutoff of U.S. assistance. All efforts to negotiate an end to Noriega's rule failed. By 1989 Noriega's involvement in drug trafficking and a feared alliance with Cuba provided George Bush with an excuse to order a sudden military attack on Panama City on December 20 of that year. After much destruction of property and loss of life, particularly among the civilian population of the El Chorillo neighborhood, Noriega surrendered to U.S. authorities. In Miami, a federal court convicted him of violating U.S. drug laws and sentenced him to 40 years in prison. World opinion widely condemned the U.S. invasion. It became clear that invasion had been motivated not merely by a desire to remove Noriega, but to destroy Noriega's Panamanian Defense Force (PDF), paving the way for a return of the traditional Liberal oligarchy and ending the more popular participation in Panamanian politics begun by Torrijos. U.S. forces installed Guillermo Endara, claiming he had been the winner of the cancelled 1988 presidential election there. Endara proved to be a weak puppet for the United States, and widespread corruption and continued drug trafficking thoroughly discredited him and his party. Thus in 1994, in a remarkably free election in which 12 candidates vied for the office, the PRD, behind Ernesto Pérez Balladares, won the presidency with a plurality of only slightly more than a third of the popular vote. With the return of Torrijos' party to power, but without the hated Manuel Noriega, Panama sought to regain its dignity as President Pérez supervised the orderly transferral of the Panama Canal to Panamanian rule at the end of 1999 as provided for in the 1978 treaties. Despite his sympathy toward labor, he was unable to satisfy their demands as strikes and demonstrations increased.
Elsewhere, implementation of the Central American Peace Accords finally brought a settlement to the long civil wars in Guatemala and El Salvador, as well as in Nicaragua. With peace, however, came new problems resulting at least in part from the demobilization of both rebel and state military forces. There was a sharp rise in ordinary crime--robbery, murder, kidnapping, and other assaults--in all of the countries. The triumph of neo-liberal political parties in all of the states witnessed a decline in emphasis on social welfare programs and an increase in privatization of state resources with more emphasis on both agroexport production and new industrial growth, especially assembly plants (maquiladoras) for textiles and other goods destined for export to the developed countries. These governments place a high premium on attracting foreign investment and tourism (especially in Guatemala and Costa Rica) in an effort to overcome the serious balance of payments deficits that Central American entry into the global marketplace had caused. The neo-liberal development model could certainly claim some success in increasing economic activity and trade, but it did not remove the serious poverty that still plagued the isthmus. Indeed, there was ample evidence that the gulf was widening between rich and poor and that for most Central Americans, standards of living remained abominably low. The deepening poverty, in turn, contributed to the spread of epidemic disease and in the 1990s cholera, AIDS, dengue fever, and malaria were all on the rise in many parts of the isthmus. The gap between Central American expectations and achievements was wider than ever, and the affluence of the few stood in sharp contrast to the rapid population growth that has expanded the depressing poverty of the majority to alarming proportions. Despite much modernization, the people of these states still carry a heavy colonial burden, both materially and psychologically. The creole mentality of small elites who remain dominant and willingly collaborate with foreign interests is disappearing only slowly. Widespread corruption, the heritage of an underpaid and poorly trained bureaucracy, resistance to structural change, and protection of position and wealth characterized the elites everywhere.
Independence brought the creole elites to power. The Liberal revolutions challenged their absolute hold and enlarged the middle sectors, so that in the late twentieth century the small elites no longer controlled everything. Middle- and working-class interests challenged the oligarchies that the Liberal revolutions had created and demanded a more equitable distribution of wealth and power. In the 1990s, however, the challenge to the Liberal states and the families who dominate them has been greatly checked and Central America appeared to be entering a new phase of liberalism with a widely diversified economic version of the earlier monocultural agro-export model. Great emphasis on "non-traditional" exports, and the opening of new trading channels with the United States, Mexico, Europe, and the Far East has increased the productive capacity of the land and its people. The increased revenues from this activity, however, has yet to reach the vast majority of its population.
A myriad of parties, factions, fronts, and organizations has characterized the political spectrum of each Central American state in the late twentieth century. By the mid 'nineties, however, these have tended to coalesce into broad coalitions representing four sectors of ideological, social, and economic interests. Clearly dominant is the traditional Right, defending the Liberal-Positivist development models of the last century in an effort to save the privileged position of the old order in active collaboration with United States economic and diplomatic representatives. Moderate reformist parties remain important in every country, but their inability to collaborate with more leftist social democratic groups have limited the effectiveness of both the center right and center left. The more militant, Marxist left, has been badly shaken by the collapse of the Soviet Union and by the general victory of the Right since 1989, yet they have shown more resilience than center groups in organizing effective opposition to the neo-liberal parties. While details vary from country to country, as described in Chapter 9, the leftist coalitions remain likely to challenge Central American establishments in all of the states.
Perhaps the most promising element of contemporary Central American development is the
revival of the Common Market and development of a Central American Parliament (despite
Costa Rica's continued aloofness from these institutions). The growth and importance of these
and other interstate organizations is once more on the rise bringing about cooperation at many
levels. For the immediate future, however, its is likely that Central America will remain divided
into seven sovereign states with strong nationalistic elements that emphasize their unique
differences rather than their common problems.
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