Central America in 2009: Off the U.S. Radar

January 6, 2009

A generation ago, three successive U.S. presidents—Jimmy Carter, Ronald Reagan and George H.W. Bush—came to office facing high profile issues in the Central American isthmus. Carter’s first national security memorandum dealt with the Panama Canal issue, and his administration soon found itself embroiled in the civil wars of Nicaragua and El Salvador. Ronald Reagan entered office determined to “draw the line” against international communism in Central America, stepped up U.S. involvement in El Salvador and supported a major program to establish a “contra” armed force to attempt the overthrow of Nicaragua’s Sandinista government. And George H.W. Bush focused early on how to extricate the United States from intense intervention in El Salvador and Nicaragua but soon undertook a massive U.S. military intervention to topple the Manuel Noriega government in Panama.

As Barack Obama prepares to take office, Central America is off the U.S. radar. There are so many accumulated problems to address, domestic and international, that it is hard to imagine that senior officials of the new administration will pay any substantial attention to what is happening in the Central American isthmus. Indeed, the recent apparent electoral fraud in Nicaragua’s municipal elections passed almost unnoticed in the U.S. media, in stunning contrast to the obsessive attention devoted to Nicaragua by the U.S. press, administration and Congress twenty years ago.

A quick comparison of four countries in the region I recently visited—Guatemala, El Salvador, Nicaragua and Panama—with their situations twenty years ago is revealing.

All four countries are in many ways better off, in some aspects dramatically so, than they were twenty-five years ago. Nicaragua and El Salvador are at peace, facing political challenges but with no prospect of returning to civil war. Guatemala was still immersed twenty years ago in a brutal cycle of rural insurgency and genocidal repression: it has now managed several consecutive peaceful executive transitions and the inauguration in 2008 of a left-center social democrat, Álvaro Colom, who seeks to strengthen social programs, increase taxes and bolster the state; all this was utterly unimaginable twenty years ago. Panama twenty years ago was still in the grips of the deeply corrupt and repressive regime of Colonel Manuel Noriega; Noriega is now in jail in Florida, Panama’s press is free, and its elections are competitive and widely accepted as fair.

In all four nations, the permissible bounds of opinion and political participation have greatly expanded, and tolerance for diverse perspectives has grown. This profound change should not be taken for granted or underestimated.

Guatemala, El Salvador and Nicaragua, to varying degrees, have importantly diversified their economies, moving away from over-reliance on coffee, sugar, cotton and beef exports to more emphasis on nontraditional products (fruits, vegetables, cut flowers, seafood and poultry); maquila industries such as textiles, automotive parts and computer chips; tourism; and various services, including call centers. Panama, in turn, has very successfully managed the reversion of the Canal, greatly expanded its port and transshipment facilities and developed major banking and legal services centers. Construction is booming, tourism is expanding and the country, buoyed by the major Canal expansion project, has been experiencing enviably high levels of economic growth, with significant reductions in the number of people caught in poverty and extreme poverty.

All four countries have been strengthened by considerably expanded intraregional investment and trade and by improving access to the U.S. market, most recently through the DR-CAFTA arrangement. Massive emigration, mainly to the United States, especially from El Salvador and Guatemala, has relieved employment pressures, provided a vital stream of foreign exchange from remittances (amounting to 18% of GDP in the case of El Salvador), and produced important non-monetary remittances of ideas, techniques and aspirations. Expanded consumption in internal markets, a growing middle class, family connections with the diaspora, modern shopping malls and the omnipresent cell phone mean that urban residents in the interior, not just in the capital cities, are far better connected with each other and with the world. Among the items now being considered for inclusion in the basket of goods used to calculate the cost of living index in El Salvador are cable television, mobile telephones and dog food, a revealing reflection of the growth of middle class consumption.

The many who are still very poor and historically excluded, especially indigenous peoples in Guatemala, remain substantially disadvantaged. But they are no longer brutally silenced, they have and use diverse channels to express their needs and priorities, and their situations are slowly but surely improving. Investment in education has expanded significantly, and statistics on literacy and numbers of school years completed have risen impressively, although quality and performance remain very low. Other social indicators, including life expectancy, infant mortality and access to potable water, have improved throughout the region.

The Catholic Church has moved away from its long time role as a bulwark of the old order in Guatemala and is increasingly oriented there toward the poor, while in El Salvador the left wing of the Church has moderated its pro-revolutionary stance of the late 1970s and early 1980s toward a more apolitical posture. In both cases, the Church has been motivated at least in part by intense competition for market share with fast-growing evangelical Protestant movements, which now claim 35-40% of the population in both countries, when they have built enormous churches and are evident at every turn.

These countries remain sharply divided, however, between highly privileged elites and very large sectors of the population mired in poverty or extreme poverty. These two latter categories together total about half the population in Guatemala and Nicaragua, more than 30% in El Salvador, and more than 28% even in wealthier Panama. Politics and communications have democratized, but access to major economic assets and to high quality education is still extremely restricted. Significant economic growth has occurred since 1990 in Panama, El Salvador and Guatemala and since 2000 even in Nicaragua, but the benefits of growth are still very unequally distributed in all four countries. Guatemala’s elite has more helicopters per capita than any other country (admittedly in a mountainous terrain) but infant malnutrition rates in Guatemala, although improving, are still among the worst in the world. The contrast between the homes and lifestyles of the wealthy and of the poor, both urban and rural, remains stunning.

Political institutions in all these countries remain lamentably feeble. Presidents and national legislatures are elected, usually in votes that are widely accepted as credible, but they soon lose public approval because of corruption and ineffectiveness. Public confidence in most presidents is low, and in the legislatures is even lower. The judicial systems are widely regarded as corrupt, compromised and unable to provide accountability or tackle impunity. Political parties are mostly weak, with the exception of El Salvador, where the conflict between ARENA and the FMLN may soon polarize the nation once again. Political parties come and go with startling rapidity in Guatemala, and parties are mere personal vehicles in Nicaragua. In each of these countries, there is some danger of reversion toward authoritarian rule, with the signs most evident in Nicaragua, especially in the evident government manipulation of the November 2008 municipal elections.

There is now less fear or possibility of military intervention in politics, but by the same token, police institutions are mostly ineffective, unable to provide the basic elements of citizen security, especially in Guatemala and El Salvador. Emigration provides the benefit of remittances, but deportation back to the region of criminal youth has also contributed to the growth of gangs, known as maras, in both El Salvador and Guatemala as well as in neighboring Honduras.

Violent crime, including homicide, is also high in both countries and has moved beyond youth gangs and narcotics cartels to present a more pervasive threat, linked to the increasing power of organized crime. “You used to be at risk here if you said the wrong thing politically or joined the wrong group,” one Guatemalan observed, “but today you may die simply because you are on the wrong road at the wrong time.” Public opinion polls throughout the region, even in Panama, show that citizens are worried most about crime and impunity. Private security guards substantially outnumber the police in El Salvador and Guatemala. Nicaragua appears to be the least beset by these fears, in part because the country, helped by the former Sandinista military leadership, developed professional and apolitical military and police forces that still function relatively well. In Panama, while public opinion is concerned about crime and the drug trade, there is also fear in some circles that recent security reforms, ostensibly adopted to combat these dangers, could be abused, and could even lead to renewed militarism.

The immediate political challenges facing the countries are very different.

In Guatemala, President Colom is the first political leader to win office on the basis of rural electoral support, without carrying Guatemala City, but his leverage and authority are consequently limited. His finance minister recently presented a budget calling for significantly increased social investment requiring a modest increase in Guatemala’s remarkably low tax rates, but the conservative Guatemalan business sector staunchly opposes even these limited proposals.

In Panama, a third party candidate from the private sector is credibly challenging the two established parties, each derivative of caudillos from the 1960s, but has no party machinery of his own. In any case, some Panamanians say that elections merely serve to distribute opportunities for theft, and the judicial system remains a major question mark, despite the efforts of courageous individuals to make reforms.

In Nicaragua, President Daniel Ortega and his wife seem determined to manipulate the rules and procedures in order to perpetuate their own power, through maneuvers that have been facilitated by the general tendency toward short-term and tactical alliances in a polity with weak institutions and little enduring loyalty.

El Salvador faces the prospect for the first time of a highly competitive candidate put forward by the FMLN, TV personality Mauricio Funes, a moderate who is credibly challenging the 20-year long reign of the center-right private sector based ARENA party. Funes appears to be a modern social democrat in the model of Chile’s Michelle Bachelet and Brazil’s Lula, but the FMLN itself still remains in the control of orthodox communist apparatchiks who have hung on since the 1960s and 70s. This raises doubts about how Funes would govern if he were elected. Business and professional elements, in turn, are split between those who believe that a Funes victory could be good for democracy in El Salvador and that its risks can be mitigated by cooperating on economic policy and those who seem bent on warning (and perhaps creating a self-fulfilling prophecy) of reckless radicalism.

Throughout these four countries, but especially in El Salvador, concerns are fast rising about the impact of the U.S.-triggered international financial and economic crisis. This crisis has already caused a drop in remittances to El Salvador and to a lesser extent elsewhere. It has also reduced markets for exports and therefore jobs, cut back tourism receipts and potential, slowed construction and investment because of credit constraints, and provoked a return of migrants who add to the pressures on the employment market and on public services. These worries are more immediate in El Salvador and Guatemala than in Nicaragua and Panama, but even in Panama economists and government officials are quietly but urgently assessing the new risks, while Nicaraguan officials must also contemplate the likely reduction in Venezuelan largesse, as international oil prices decline, and of European and other international budgetary assistance, both because of political reservations and worsening resource constraints.

Finally, the role of the United States in these countries has also changed remarkably since the time of intense interventionism in the 1980s. The United States embassy is still important in each country, but it is no longer the pinnacle of the local power structure. By the same token, these countries are ever more closely connected with U.S. society: demographically, economically and culturally. Hardly a Salvadoran family lacks a relative in the United States, and nearly the same could be said for Guatemala. Migrants from every country of the region move to the United States while U.S. tourists, retired persons and investors move down to the region. The dollar circulates as official currency in El Salvador and Panama and is widely used in Guatemala and Nicaragua. Transnational citizens and networks are expanding throughout the region, dealing with such issues as international health insurance, extraterritorial application of medicare benefits, portable social security payments, driver’s licenses and bilingual education.

The era when President Ronald Reagan could declare, however implausibly, that the United States had a vital national security interest in the internal political arrangements of Central America is long gone. None of these four nations is now considered vital for U.S. national security, nor does any present problems or solutions for the most pressing issues of U.S. foreign policy, as currently conceived.

But the bonds of interdependence, reinforced by proximity and legacy, make Central America and Panama relevant to the United States. It would not take much for the new Obama administration to have a very positive impact in this border region. It could do so by further extending Temporary Protective Status (TPS) for Salvadoran migrants, pushing through a comprehensive immigration reform, getting Panama’s long-neglected Free Trade Agreement through Congress, working closely with international agencies to improve economic development and disaster relief assistance in the region, addressing extreme poverty as part of a consistent worldwide program and supporting regional efforts to improve energy and transportation infrastructure. These would all be modest but good investments in a region that time and again has pushed itself back onto the agenda of U.S. foreign policy.