Central America today, an evaluation

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Central America today, an evaluation
Series Title:
CTA staff paper
Chinchilla Aguilar, Ernesto
University of Florida -- Center for Tropical Agriculture
University of Florida -- Center for Latin American Studies
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Center for Tropical Agriculture, International Programs, Institute of Food and Agricultural Sciences, University of Florida
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19 p. : ; 28 cm.


Subjects / Keywords:
History -- Central America -- 1951-1979 ( lcsh )
History -- Central America -- 1821-1951 ( lcsh )
bibliography ( marcgt )
non-fiction ( marcgt )


Includes bibliographical references.
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"In cooperation with the Center for Latin American Studies, University of Florida."
Electronic resources created as part of a prototype UF Institutional Repository and Faculty Papers project by the University of Florida.
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by Ernesto Chinchilla Aguilar.

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Full Text
Center for Tropical Agriculture
International Programs
Institute of Food and Agricultural Sciences
University Of Florida
Gainesville, Florida 32611
in cooperation with

Ernesto Chinchilla-Aguilar
CTA Staff Paper 1 January 1981
Center for Tropical Agriculture
International Programs
Institute of Food and Agricultural Sciences University of Florida
Gainesville, Florida 32611
The Center for Latin American Studies
University of Florida
Staff Papers are circulated without formal review by the Center for Tropical Agriculture. Content is the sole responsibility of the author.

Short definitions of Central America are easy to formulate: the Southern barrier of the Caribbean Sea; a bridge between North and South America; a thin wall between the Atlantic and the Pacific Oceans; that bunch of small nations in the middle of nowhere.
The five republics of Central America are Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica. The geographical area includes Southern Mexico and the Yucatan Peninsula; Belize or British Honduras, over which Guatemala maintains a soveriengty claim; Panama, the Panama Canal and the Panama Canal Zone, both becoming Panamanian after the Carter-Torrijos Treaties.
Putting aside its Indian monuments, mountains, volcanoes and beautiful lakes, the main geographical characteristic of the area is its penetrability. Economically, it is agricultural, underdeveloped and dependent. Socially, not completely integrated, with large Indian groups in Guatemala and Black majorities in Belize and Panama. Because of various factors, which are to be analized in this article, instability is corroding the whole Central American system.
Reviewing the characteristics of the area, as they have evolved from the past, is necessary to understand what is happening in Central America today. Some important features of this region have their origins in pre!/Professor of History, State University of New York, Stony Brook, New York. This paper was presented at the University of Florida, Gainesville on April 10, 1980.

Columbian times: consumption crops of maize, beans, potatoes, tomatoes, cocoa, squashes, avocados, chili and pineapplies; Indian costumes and language, particularly in Guatemala, and the role of Central America in the transit of cultures between North and South America, probably also the Caribbean Islands. The possibility that various struggles took place in the area, between peoples of North and South America, is strong. There were enclaves of Nahuatl language in Southern Guatemala, El Salvador, Nicaragua, even Costa Rica. The knowledge of metallurgy from the south probably came through this route. Caribbean Indians told the Spaniards of the existence of continental lands in Central America. During his fourth voyage, Columbus explored the coasts of Honduras, Nicaragua, Costa Rica and Panama. Izabal, in Guatemala, was explored early by Juan Dfaz de Solis and Vicente YMez Pinz6n. And Spanish 'Merodeadores' came to Central America looking to capture Indians even before Balboa's discovery of the Pacific, in Panama, in 1513.
During colonial times, Central America was organized under the Real
Audiencia and General Captaincy of Guatemala, but Panama had its own government until the creation of the viceroyalty of New Granada. The area suffered various attacks from British expeditions following Drake's sudden appearance in Panama after his passage through the Strait of Magellan and after his death navigating near Panama, in Portobelo. Attacks were increased when Jamaica was conquered in 1655.
Not a major mining region, except for Honduras, various Indian crops were intensively exploited in Central America during colonial times; cocoa, indigo, tobacco, cochineal. Also new products were introduced: wheat, sugar-cane, citrus, coffee, rice, various spices, 'guineo' or bananas, pigs, sheep, donkeys, mules, horses and cows.

A Central American canal was a dream from the early days of the sixteenth century. Most of the South American commercial output was sent to Spain through the transisthmian route. From remote places located as far away as Buenos Aires, Potosi in Bolivia and Santiago, the capital of Chile, everything in this rich area of the Spanish imperial system was concentrated in Peru then brought to Guayaquil and Panama, to be transported to Portobelo or Cartagena, in New Granada, and shipped to Spain. Because of this concentration, the Caribbean trade became a target for the buccanneers, privateers, marauders and pirates.
After independence,a Nicaragua Canal project became the first priority of the Central American federal government from the mid 1820's to the mid 1830's. This project increased foreign interest in the area.
Frederick Chatfield expanded the British presence from Belize to the Bay Islands and Mosquitia, to the point that it became a real threat to the existence of the Republic of Central America itself.
On the American side, various entrepreneurs visited Central America,
among them John L. Stephens and Ephraim E. Squier, who made important contributions to the knowledge of Central American archaeology and to the construction of the first Central American railroad in Panama, 1849-1855. But this also invited the adventure of William Walker, a medical doctor from Tenessee, who proclaimed himself president of Nicaragua, permitted the establishment of slavery and made the English language official in that country. Walker seized the ships of the Transit Company of Commodore Cornelius Vanderbilt of New York, who armed Central Americans against the filibuster. When Walker was finally defeated and shot to death by a Honduran squad, the whole matter had to be settled between the British and the Americans who had signed the Clayton-Bulwer Treaty (1850), by which both nations promised to abandon

colonial claims on the area and to guarantee that if a canal was ever built in Central America it had to be neutral and open to the traffic of ships from all nations.
The French were also tempted to try their luck in Central America
after the failure of establishing the Maximilian empire in Mexico and the successful completion of the construction of the Suez Canal. Ferdinand de Lesseps provided his name and reputation to organize the Universal Interoceanic Canal Company (1879), reorganized as the New Panama Canal Company (1894), which in the end sold its rights and stocks to the United States government.
In the last quarter of the nineteenth century some human and material German resources were assembled by individual investors for the development of coffee plantations in the Coban-Polochic-Panzos area of Verapaz, Guatemala, not far away from the region of the attempted British and Belgian colonization of 1841. In the meantime, banana companies began to operate in Costa Rica and Honduras under the entrepreneurship of Minor C. Keith, the Vaccaro brothers, Samuel Zemurray and others.
As a consequence of the Spanish American War, the United States, already interested in the construction of the Panama Canal, forced, and recognized the establishment of the republic of Panama (1903) and celebrated the Hay-Buneau Varilla Treaty that permitted the construction of the interoceanic waterway from 1904 to 1914.
In the meantime, as Central Americans celebrated the first centennial of their Independence, in 1921 the Unionist political party was able to organize a strong popular movement against the dictatorship of Manuel Estrada Cabrera, president of Guatemala (1898-1920); the first labor unions were put together and workers newspapers were published. Even though these

labor movements became organized by the Central American Workers Confederation, COCA (Con federacion Obrera Centro Americana), based in Guatemala, they quickly disintegrated during the euphoric 1920's, or fell under the control of governments which easily understood their use as political instruments, that could be destroyed whenever it was considered pertinent or necessary.
But in Nicaragua, after the election of 1924, supervised by the presence of U.S. marines, a strong guerrilla movement started and was able to survive under the leadership of Augusto Cesar Sandino. This movement has been studied in the excellent book written by professor Neill Macaulay from the University of Florida. During almost six years (1927-1933), Sandino fought against Nicaraguan government forces, U.S. marines which deployed -airplanes and helicopters, and the National Guard organized by General Anastasio Somoza, under U.S. supervision. At the end, the U.S. marines had to abandon the country under heavy criticism abroad and at home; Dr. Juan Bautista Sacasa, who was Sandino's candidate, became president of Nicaragua; the guerrilla leader surrendered his weaponry, disbanded his forces, and after attending an official dinner, was assassinated by members of Somoza's National Guard.
After the crash of 1929, the economic crisis facilitated the implementation of a period of dictatorship in Central America, as happened elsewhere during the 1930's and 1940's. Local headlines of this process were the crushing by General Maximiliano Hernandex Martinez of a workers' and peasants' rebellion in El Salvador (1932); the execution or incarceration of communist leaders by General Jorge Ubico in Guatemala and the recognition by the United States government of General Tiburcio Carias Andino in Honduras and General Anastasio Somoza in Nicaragua.
World War II permitted the successive reelections of the Central American rulers. By mid 1944 a strong popular revolt was able to force the resignation

of General Jorge Ubico from the presidency of Guatemala, following which a ten year revolutionary process took place in that Country, that deeply affected the economic, social and political life of Central America. Living Conditions before 1944
The majority of the Central American population lived on subsistence crops of maize, beans, tomatoes, chili, rice, potatoes, squashes, fruits, sugar, and scarce meat and milk. This population was concentrated in the highlands of Guatemala and Honduras; on crowded Salvadoran Pacific slopes; the fertile Nicaraguan fringe south of the lakes; central axis of Costa Rica; Panama City and the Canal Zone. These lands, once very rich, were not anymore among the best, as they had been depleted by intensive cultivation by rudimentary means that permitted erosion and deforestation. A few families controlled the best lands of the pacific slopes ahd coastal areas, where large coffee plantations flourished since the second half of the nineteenth century. In smaller scale, there were also sugar-cane plantations since the sixteenth century, pastures' for cattle raising, cocoa and fruit plus some exploitation of forests that provided wood (mahogany cedar, pine, oak) or charcoal. Large banana plantations had been developed in Costa Rica (Puerto Lim6n), northern Honduras, Bananera and Tiquisate in Guatemala, as well as in other areas of Belize, eastern Nicaragua and northwestern Panama.
About oneieighth of the population lived in cities or other minor urban conglomerates, the most important of which were Guatemala City, Quezaltenango, Totonicapan and Puerto Barrios; San Salvador, San Miguel and La Uni6n; Tegucigalpa, Comayagua and San Pedro Sula; Managua, Le6n, Granada and Rivas; San Jose, Cartago, Alajuela, Heredia; Colon and Panama City. This urban population was integrated by economic elites and professionals, or by government employees, commerce clerks, workers in transportation and service, industries

(such as cement, beer, mills, cigarettes, liquor), small shop owners, domes-, tic servants or persons working in hotels and entertainment, particularly in San Salvador, San Jose and Guatemala City, or in the Canal Zone areas.
Electric power supply and transportation by railroad, airplane or ship, were controlled by American companies (Irca, Panam, White Fleet, Grace Line). Communication by cable, telephone, telegraph or teletype were also controlled and operated by foreign firms. But national radio stations had been developed by governments or local entrepreneurs.
Controlled by foreign enclaves and highly dependent on external markets, the economy could decline rapidly, from one year to the other, as traditional exports (coffee, bananas, sugar, even meat) experienced lower external demand or prices. Because of these vicissitudes, salaries were kept atthe lowest possible level. And, in the 1930's, workers were not permitted to organize so strikes were practically unknown.
Bank loans went very often to the commercial sector, to facilitate import-export transactions, but agriculture and cattle raising obtained lower support and the same happened to the incipient industry and even to housing. Personal loans were generally geared to health emergencies or the purchase of sumptuous imported goods, such as cars, boats, home utilities or travel to foreign countries.
State spending and investment, sometimes made with loans from foreign governments orlending institutions, were used in road construction, electrification and urban improvements. These expenses temporarily softened the impact of recessions, unless the countries found themselves in complete incapacity to borrow, because their economies became seriously endangered by the amount of foreign debts, mainly due to high interest rates.

The Guatemalan Revolution, 1944-1954
The Guatemalan revolution came at an opportune time. As has traditionally happened, it began in San Salvador, with the fall of Maximiliano Hernandez Martinez in May of 1944. By the end of June, university students, teachers, professionals and some workers were able to force the resignation of General Jorge Ubico.
In El Salvador, military and police leaders consolidated their power
after Maximiliano Hernandez Martinez was overthrown, and it was possible that the same could happen in Guatemala, where General Federico Ponce Vaidez had succeeded General Ubico; but on October 20, 1944, two young officers, Major Francisco Javier Arana and Captain Jacobo Arbenz Guzm~n, started the Guatemalan revolution.
Neither they nor Jorge Toriello Garrido, a civilian merchant who was
added to the the revolutionary government 'junta', had a clear idea of what a revolution was about; but their advisors were able to promote basic changes in the new Constitution that was drafted. Among its novelties were democratization of the university, now opened to school teachers; university autonomy or self government; the right of workers to unionize; and a genuine attempt to improve social conditions, through better salaries and better distribution of riches.
Under the new Constitution, Dr. Juan Jose Arevalo, a well known educater, was elected president. He had lived in Per6n's Argentina during the previous years and favored the organization of workers, the draft of a labor code and the establishment of a social security system. Land owners and industrialists protested the employer's social security contribution as well as the minimum wage laws that established 60 cents a day for plantation

workers and 75 cents a day for city workers. There was not imminent pressure for land distribution, since the government controlled the 'fincas' that were expropriated from German citizens during the World War II. Fortunately, coffee prices were high and there was a feeling of economic growth and abundance.
At the end of Arevalo's presidential period, Arana and Arbenz disputed the succession. Arana was backed by the right and Arbenz by the left. The political assassination of Arana paved the road to the presidential ambitions of Arbenz, elected in 1951, with a simple and concrete program to maintain the gains of the revolution: agrarian reform and the opening of a highway to the Atlantic. The former-was clearly directed against the oligarchical landowners and the United Fruit Company, the last one against the monopoly of the railroad company in the transportation to the main seaport in the Atlantic, Puerto Barrios. Labor and peasant organizations, as well as the army, enthusiastically backed Arbenz, but small and large landholders and foreign companies strongly opposed the two projects of his attempted program.
On July 2, 1954, President Arbenz was overthrown by diplomatic pressure and the CIA organized 'Liberation Army', under the command of Carlos Castillo Armas, an army officer of Arana's party. The whole operation has been always considered themost successful carried out by CIA agents in Latin America.
Although the Guatemalan revolution was crushed, a process of social change had been started: in El Salvador by Major Oscar Osorio, in Costa Rica by Jose Figueres and in Honduras by Dr. Ramon Villeda Morales. In Guatemala a new constitution was drafted, which repudiated communism; but basic gains made by workers and peasants during Ar6valo's regime were sustained, including minimum wages, social security and the labor code.

Also during Arevalo's period a central bank system had been developed which abandoned the gold standard and began important changes to increase money circulation and facilitate economic growth. Arbenz had continued these policies and American economists prepared, with Guatemalan counterparts, a general plan to change the infrastructure and promote economic development. Similar studies were made in El Salvador and Costa Rica. The Central American Common Market
The United Nations Economic Commission for Latin America (ECLA or CEPAL) seems to have been the first officially authorized institution to recognize the urgent need of organizing a central American Common Market, in order to promote industrial development in the area. A Central American achievement of this nature would provide to all kinds of investors the incentives of a new and unspoiled market rapidly approaching 25 million potential consumers. Among its recommendations ECLA included a gradual integration to minimize disturbances on the existing national economies and a plan of reciprocal industrialization, based on the consideration of regional resources, so it would not benefit one or various nations, in or outside the area, at the expense of others.
Then came the AID regional office for Central America and Panama (ROCAP), established in Guatemala in July, 1962; SIECA (Secretaria de Integracion Economica Centro Americano); and BCIE (Banco Centroamericano de Integracion Economica). These institutions were able to put together the regional common market after ten years. By 1969, the bank resources reached 250 million dollars, of which 86 percent came from foreign sources (three fourths from the United States and the Interamerican Development Bank 'BID' and one fourth from Western European countries and Mexico). The BCIE had been more success-

ful in attracting foreign capital than in mobilizing regional resources, as was the initial proposal of ECLA. Among the incentives provided by BCIE were low interest loans and tax exemptions to industries, including those which assemble, mix or repack imported components. Nevertheless, the Central American Common Market began to operate like an economic miracle that vivified the otherwise dormant economy of this whole area. Incidentally, Panama has never been admitted to the Central American Common Market because of the large scale international financial operations that are based there.
Unfortunately, in the same year of 1969, the Central American Common Market suffered its first backward economic crisis when a war exploded between El Salvador and Honduras following a soccer game. Some 300,000 Salvadorans had emigrated from their overpopulated country and competed for jobs with Hondurans in their own country. Some 11,000 Salvadorans had been expelled from Honduras on the eve of the soccer game. The fighting that followed left approximately 1,200 casulaties and embittered the otherwise traditionally cordial relations between these two sister nations. Since El Salvador and Honduras are located in the middle of Central America, the efficient operation of the common market was severely affected.
Three years later, when the tension between El Salvador and Honduras began to diminish, on December 23, 1972, severe earthquakes destroyed most of the city of Managua, killing an estimated 10,000 of its residents, injuring about 15,000 and leaving half the city's population homeless. On this occasion, General Anastasio Somoza, Jr., was accused of widespread corruption in the administration of the foreign aid provided to Nicaragua by various nations. In February, 1976, severe damage and 22,500 dead was the toll of a series of earthquakes in Central Guatemala. And, after

careful deliberations, but with some opposition in both the United States and Panama, not to mention the Canal Zone itself, on June 16, 1977, president Jimmy Carter and General Omar Torrijos Herrera signed the new Panama Canal Treaties in Washington, providing for the transfer of the canal to Panama, in the year 2,000, and guaranteeing its future nuetrality. At the last moment the United States reserved its right to intervene unilaterally in Panama if the canal operation is ever threatened.
The Fall of Somoza
Nicaraguan economic, social and political conditions seriously began to deteriorate after the earthquakes of 1972. By 1975, President Somoza had to impose martial law following kidnapping of prominent officials of the government by members of the left wing Sandinista Liberation Front (SLF). In 1977, guerrillas made a series of attacks on National Guard barracks at different places. In 1978, widespread civil unrest followed the assassination, in January, of the conservative opposition leader Pedro Joaquin Chamorro, publisher of the newspaper La Prensa. The national palace was seized by leftist guerrillas who held hostage various members of Congress. From that point the insurrectional movement won broad support to oust president Somoza.
On July 19, the revolutionary army of the Sandinista National Liberation Front entered Managua. At its head were Bayardo Arce, Tomas Borge and Eden Pastora (commander "Zero'), members of the SNLF directorate.
A broad based government was then organized, including Violeta de Chamorro, widow of the slain publisher of La Prensa; Moises Hassan, leader of the United People's Movement, a Sandinista mass organization; Sergio Ramirez,

university professor; Alfonso Robelo, an industrialist; and Daniel Ortega, a leader of the Sandinista National Liberation Front.
The 'junta' immediately nationalized all domestically owned banks and prohibited foreign banks from accepting Nicaraguan deposits. Most export trade was nationalized as were the holdings of the Somoza family, including over 75 enterprises, ranging from sugar mills and meat packing plants to transportation companies. Land reform was not considered urgent by the revolutionary government, as the Somozas' holdings seemed to suffice for a better distribution of accumulated capital. The Aftermath in Central America
The first impact of the Sandinista victory was felt in El Salvador, where members of the Popular Revolutionary Block took over six factories in the capital city; another group started a hunger strike in the cathedral of San Salvador; 150 more supporters joined in various other churches; and in early September, Popular Liberation Forces assassinted the brother of President Carlos Romero. Archbishop Oscar Arnulfo Romero (not related to the President) and a number of priests gave support to the outbursts demanding social justice and the war between the two Romeros reached its peak when the President was ousted in October 15, 1979, by a group of young military officers who seized precarious control of the national government, in an apparent effort to avert civil war. They installed a five member 'junta' with two military men: Colonel Adolfo Arnoldo Majano and Colonel Jaime Abdul Gutierrez and three civilians. Shortly after Christmas, the 'junta' came to include Morales Erlich and Hector Dada, Christian Democrats, and

the liberal doctor Ram6n Avalos. Christian Democrat leaders seem to be the only political force behind the 'junta'. But military forces, under conservative defense minister, Colonel Jose Guillermo Garc{a, do not support it enthusiastically, although they gave grudging approval to the nationalization of private banks and seizure of large landholdings to start a general agrarian reform. Popular forces also oppose the 'junta' as too moderate for their taste. The clash between official and insurgent forces in El Salvador has become commonplace both in the city and in the country. The assassination of Archbiship Oscar Arnulfo Romero on March 24 of this year, has dramatized the strained conditions under which Salvadorans have lived since the fall of Somoza,
Although slightly less critical than El Salvador's tragedy, Guatemala and Honduras have suffered the consequences of the generalized unrest in Central America. In Guatemala, conservative Aranista forces came to power in popular elections after 1970. Four years later they had lost political ground, but forced a second degree election in Congress, with General Kjell Eugenio Laugerud Garc{a, as head of the government. The winner of the election, General Efrain Rios Mont, was the candidate of the Christian Democrat party. In 1978, the powerful Aranistas again forced the elections in Congress, with General Romeo Lucas Garcia as President; and Colonel Enrique Peralta Azurdia, a moderate conservative, as the loser.
Conditions in Guatemala were recently dramatized by the seizure over a month ago of the Spanish embassy by a group of terrorists. Policemen tried to force an entrance to the embassy. The terrorists counterattacked with a Molotov cocktail which burned the building and killed 39 persons, including all terrorists and hostages, with the only exception being the Spanish embassador. Among the Guatemalan victims were an ex-vicepresident and a former foreign affairs minister.

In Honduras, President Ramon Villeda Morales was overthrown by a military coup led by Colonel Oswaldo Lopez Arellano, in 1963. Lopez Arellano was then elected President for a six year period, in 1965. The next elected President was Colonel Ramon Ernesto Cruz, but two years later a bloodless coup again brought Lopez Arellano to power. In 1975, L6pez Arellano was overthrown after reports that he had accepted a million and a quarter dollar bribe from United Brands, a banana company. Juan Alberto Melgar became President, as the Commander in Chief of the armed forces. In 1978, Melgar was replaced by a three member military 'junta' headed by General Policarpo Paz Garcfa. The 'junta' has promised free elections in 1980 to have a new Constituent Assembly by May.
In Costa Rica, President Rodrigo Carazo Odio, elected after the second
term of Jose Figueres, in 1978, helped the Sandinistas in their efforts to overthrow Somoza's regime in Nicaragua. Three soviet diplomats were expelled last fall for fomenting local strikes and the communists are strong particularly in the railroad, banana, port, government and teachers' unions. Recriminations for the participation of Costa Rica in precipitating the Nicaraguan crisis are frequent and the government has considered breaking diplomatic relations with Cuba and the Soviet Union if the labor tensions continue.
Other International Factors
Notwithstanding the political, economic and social tensions already existing in the whole Central American area, years ago the governments of Guatemala, Nicaragua and Panama were requested to cooperate in the loosely conceived Bay of Pigs operation against communist Cuba. As a direct consequence, Fidel Castro has provided technical advice, military supplies and training to sustain various guerrilla movements that began to operate consistently in Guatemala and Nicargua and may threaten the safety of the Panama Canal operation.

More recently, after receiving medical attention in the United States, the Shah of Iran was not permitted to return to Mexico but was provided instead with refuge in Panama. Popular protests against his presence in the island Contadora were silenced, and in view of the political tensions and his need for urgent medical treatment, the Shah finally abandoned Panama and went to Egypt. But the prestige of Panamanian leaders was eroded at the time when there was still concern over the various delicate matters and diplomatic negotiations related to the recent Panama Canal Treaties.
Central America, like other regions of the world, has been badly hit by the energy crisis since 1974, with its dramatic price increases in transportation, electricity, housing, imported and local commodities. Even worse, daily consumption foodstuffs such as maize, beans, rice, cheese, wheat, sugar, meat, milk, fruits and vegetables, also showed spiraling prices. The cost of living was moderated, to a certain degree, because coffee and cotton, the two main cash crops of the region, also increased consistently in. price. In the most fortunate cases, salaries have been partially adjusted by the government, coffee and cotton plantations, as well as in some industries; but it was impossible to keep this trend in domestic services or among small farm workers or producers and in various other sectors, negatively affecting the less privileged segments of society. Unemployment reached 30 to 40 percent of the total population. Housing has become almost a dream in cities like Managua or Guatemala, recently destroyed by earthquakes, as has been mentioned. Lately, high interest rates have added to this gloomy picture.
The nature or international character of four of the most important factors affecting this area today (nationalization of the Panama Canal, fall of the Somoza regime, exportation of the Cuban revolution and the energy crisis) have made Central American particularly vulnerable to various nations that have not always mixed in the politics of the area, like Colombia, Ecuador, Peru and Cuba.

The interest of Mexico and Venezuela, as oil producing countries has become obvious. The Central American Common Market is now threatened by the growth of these two local economic giants. The Andean republics have also made inroads in Central America, forte first time since the Congress of Panama in 1826. And communist Cuba has made Central America one of its prime targets.
If the various factors involved in the current Central American situation
are considered, is there any hope to restore order in this area without sacrificing democracy and the basic principles of human rights? Is it possible that Central Americans can ever recover from the extremes of political violence and the accumulation of all kind of abuses and economic frustrations? Is it possible to save the economic miracle of the Central American Common Market? It is the opinion of the author that there are remedies for the maladies of Central America today. There is also a sense of urgency.
First, nobody knows what the policies of the United States are toward Central America. Up to now, they seem to have been misleading, hesitant and very often contradictory. The enunciation of clear U.S. policies in the area is a first priority.
Among short run economic measures that can be taken are subsidies on consumption articles such as maize, beans, rice, sugar, meat and milk. In a similar category, subsidies to transportation, electricity and housing ought to be available; and probably the establishment of price controls on some carefully selected consumption articles will be necessary. An increase in government programs to fight unemployment is required. It is also imperative to stop the abuses of large planters, mainly in the spraying of pesticides to control cotton crops. Above all, stop corruption.
Long range economic cures would have to include the stabilization of

domestic grain markets through an increase in the production of consumption crops, mainly maize and beans. A review of the taxation system is also recommended, it has to be adequate to the needs., but also appropriate to local tradition, and not just a copy of unrealistic foreign patterns improper to the needs and limits of local economic conditions. The development of light industry has to be encouraged through incentives. But industries that only Assemble, mix or repackage imported components cannot be considered at the same level of exoneration as real processing industry, that generates economic change and develops new jobs and skills. Finally, it is imperative to continue the orderly redistribution of land. But agrarian reform by itself is not to be considered a panacea.
On the political side, the most urgent Peed of Central America to reestablish confidence in public institutions is to restore the practice of democratic elections, with civilian candidates. Permitting the free organization of political parties and the discussion of political issues, will help settle the general academic unrest, and restore to the universities their priority role in higher education--not in politics.
The alternative is what Central American history demonstrates: the frequent use of dictatorship to solve all kinds of problems. If Central Americans do not find other means to overcome the crisis of survival with which they are faced, it is not impossible that they will feel inclined to try the only alternative being skillfully presented to them, the proletariat's dictatorship.
At this point, Central America, as other regions where agriculture is the main source of income, seems to have been caught in the trap of a kind of anarchism--which only offers destruction and death--as is demonstrated by the typical example of El1 Salvador today: a nation of solid democratic traditions, which just a few months ago enjoyed the strongest and most prosperous conditions of the entire area here studied.

Franklin D. Parker, The Central American Republics (London, 1964). Mario Rodriguez, Central America (Englewood Cliffs, N.J., 1965). Ralph L. Woodward, Jr., Central America, A Nation Divided (New York, 1976). John Tate Lanning, The Eighteenth Century Enlightenment in the University
of San Carlos de Guatemala (Ithaca, N.Y., 1956).
Murdo MacLeod, Spanish Central America, A Socioeconomic History (Berkeley,
California, 1973).
Neil Macaulay, The Sandino Affair (Chicago, 1967). Thomas P. Anderson, Matanza, El Salvador's Communist Revolt of 1932 (Lincoln,
Nebraska, 1971).
Susanne Jonas, "Guatemala, Land of Eternal Struggle", in Latin America edited
by Ronald H. Chilcote and Joel C. Edelstein (Cambridge, Mass., 1974). Donald McClelland, The Central American Common Market (London, 1972). North American Congress on Latin America, Guatemala (New York, 1974). See also NACLA Report on the Americas, Vol. X, No. 2, on Nicaragua; and Vol.
XII, No. 5, on Panama

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