With neoliberalism patently destructive, floundering or failing there have been various responses around the word. Neoliberal globalization wreaks havoc on the working class and the poor, particularly in Central America, leaving them ill-equipped to survive a global economic downturn and local stagnation. In the process it has hollowed out economies and eroded social structures. The tenuous social order globalization brought about could only be sustained so long as the economy expanded. Now we see an increase move to migrate North. In the US, following restructuring economies under the guise of ‘adjustments’ there has emerged anger over the increasing economic inequality. Populist nationalists have tapped into this anger. Nationalism arose as an expression of impotent fury of a disorganized array of losers under a failed neoliberal project. Illegal migrants from south of the border became a target. Trump won the 2016 election through the promise to build a wall and the rhetoric of racist nationalism.
The mass revolutionary movements of Central America of the 1970s and the 1980s did mange to dislodge entrenched military-civilian dictatorships and open up political systems to electoral competition. At the same time capitalist globalization appeared in the Isthmus undermining attempts of implementing any substantial social justice or democratization of the socioeconomic order. This new economic investment ushered in economic elite and a small high-consumption middle class creating the ‘illusion’ of peace and democracy. In fact, extreme concentration of wealth and political power in the hands of elite minorities remains. The very conditions that gave rise to the conflicts in the 1970s in the first place are aggravated by neoliberal globalization. Central American regimes now face mounting crises of legitimacy, economic stagnation, and the collapse of the social fabric.
Neoliberal globalization also brought with it a major expansion of transnational agribusiness that are controlled and run out of the US. In Honduras, local and transnational capitalist interests have snatched up vast tracks of rural farmland from peasant, Afro-descendant, and Indigenous communities and converted them into palm oil plantations. In Guatemala, too, palm oil planted by local suppliers of global agro-industrial giants ADM and Cargill is uprooting a growing number of peasant communities and driving them to migrate abroad. In Nicaragua, peasants displaced by transnational agribusiness have pushed into and colonized what remained of the agricultural frontier, disrupting Indigenous land. Costa Rica is now a major exporter of exotic new products such as figs, dates, and winter fruits and vegetables produced by transnational agribusiness that has displaced peasant producers and pushed them further into the agricultural frontier.
But above all, the $20 billion in remittances Central American migrants have sent back home has provided an economic lifeline to the regional economy, while outmigration has acted an escape valve containing political crises. Eighteen and 19 percent of El Salvador and Honduras’ GDP, respectively, comes from remittances, and 10% of Guatemala and Nicaragua’s. In fact, remittances accounted for half of all growth in the GDP in these four countries in 2017, and 78 percent for El Salvador. In other words, the region’s economy would collapse without the money Central Americans send home. Now, however, as the global economy sputters toward recession and investment flows decline, there are diminishing opportunities for capitalist expansion in the Isthmus. The social crisis is now leading to escalating political conflict and an unprecedented spiral of corruption. Corrupt state elites backed by national private sector associations, the transnational capitalist class, and international financial institutions have imposed the globalization model.1
During 20th century multinational companies, particularly the United Fruit Company, played a determinant role in Guatemala’s national economic and political sectors. Today, Guatemala is the most populous country in Central America, Mexico’s southern doorstep and one of the region’s most important export economies, yet it still struggles with a government that is plagued by graft, corruption and impunity. The larger backdrop to political instability in Guatemala is an upsurge of mass mobilization among the country’s poor and largely Indigenous majority and the return of widespread repression and human rights violations, including the reappearance of death squads that terrorized the population for decades prior to the 1996 peace accord. The CODECA (Campesino Development Committee), the Campesino Committee of the Highlands (CCDA), and other Indigenous, peasant, student, and worker organizations have organized mass resistance around the country, and are calling for a Constituent National Assembly to re-found the republic and develop “an alternative to capitalism.”
In Honduras, several members of the ruling National Party and family members of former president Porfirio Lobo, brought to power by the 2009 coup d’état, and current president, Juan Orlando Hernández, elected for a second term in 2017 in a contest widely believed to be fraudulent, have been implicated in drug trafficking, embezzlement, and other crimes. In March 2016, Berta Cáceres, human rights defender and indigenous leader opposed to the Agua Zarca dam, was assassinated. She had been actively leading her community’s resistance against Agua Zarca, a dam project which has previously been linked to the killing of Tomás Garcia, another human rights defender, in 2013. Both defenders were leaders of the indigenous Lenca community which alleges that the Agua Zarca dam would significantly impact their livelihoods and that they had not been adequately consulted according to the international standard of free, prior and informed consent.
In El Salvador remittances account for nearly one-fifth of GDP, and one-third of the population lives below the poverty line. Anti-mining activists have faced death threats and assassinations in El Salvador, where 90 percent of surface water is estimated to be polluted by toxic chemicals, heavy metals, and waste matter as a result of mining. These activists won a historic victory in 2017 when the government passed legislation imposing a blanket ban on metal mining. In 2017 lawmakers in El Salvador voted overwhelmingly to prohibit all mining for gold and other metals, making the country the first in the world to impose a nationwide ban on metal mining. Supporters said the law was needed to protect the country’s dwindling supply of clean water. “Why do Salvadorans migrate?” Nayib Bukele, asked during the recent Salvadoran presidential elections. “They migrate because of lack of hope. We see it in the caravans. It’s hope that moves the Salvadorans.”1
The Northern Triangle, El Salvador, Guatemala, and Honduras consistently rank among the most violent countries in the world. Extortion is also rampant – fees paid to organized crime groups. Extortionists primarily target public transportation operators, small businesses, and residents of poor neighborhoods, according to the report, and attacks on people who do not pay contribute to the violence. Violence is distinct in each country, but the proliferation of gangs, narcotics trafficking, weak rule of law, and official corruption are common threads. Drug trafficking adds to the violence. U.S.-led interdiction efforts in Colombia, Mexico, and the Caribbean have pushed trafficking routes into Central America, and U.S. officials report that 90 percent of documented cocaine flows into the United States now pass through the region. Weak, underfunded institutions, combined with corruption, have undermined efforts to address gang violence.
Since Theodore Roosevelt in 1904 declared the U.S.’s right to exercise an “international police power” in Latin America, the U.S. has cut deep wounds throughout the region, leaving scars that will last for generations to come. For much of the 20th century, the American banana company, United Fruit dominated much of Central American economies – introducing the concept and reality of the banana republic. The last three decades neoliberal elites and international financial institutions continue this power exploitation. Tax revenues as a percentage of gross domestic product (GDP) in the Northern Triangle are among the lowest in Latin America, exacerbating inequality and straining public services. The Central American population has increased from 25 million in 1990 to over 40 million in 2017 but the labor market has been unable to absorb the majority of new entrants, which helps explain the surge in migration abroad.
The most disastrous feature of the neoliberal period has been the huge growth in inequality. President Donald Trump’s response is huge tax breaks for the rich and doubling down on immigration. Trump has declared a ‘national security crisis‘ on the southern border of the US – even when there is no evidence of any kind – to secure funds for the wall. This rhetoric has created the highest levels of migrants arriving at the southern border in over a decade. Right-wing nationalists have no real economic solutions to appease the anger that brought them to power. The trouble with Trumpian nationalism on the right is that the “enemies” it preys on are the weak, including migrants. The “wall” is, in fact, a metaphor for shielding America from outside threats and uncertainty. But metaphors are merely symbols. They do not constitute sound policy. The failures of neoliberalism are fueling the rise of nationalism around the world, including America.
1William I Robinson (28 Jan 2019) The Second Implosion of Central America https://nacla.org/news/2019/01/28/second-implosion-central-america