In the 1980s, revolution, civil war and the anticommunist drive of the US in the Western hemisphere turned world attention to Central America. The year 1990 marked a turning point in these bloody Central American conflicts. The civil war in Nicaragua ended. After a fair election the Marxist Sandinista regime stepped down and handed the government peacefully over to the opposition. There are six states wholly in Central America: Costa Rica, Nicaragua, Honduras, El Salvador, Panama and Guatemala. Their combined population was only about 26 million in 1989, though population growth had been very high in the region, as it had been throughout Latin America. Indeed, population growth in the early 1990s threatened to prevent any increase in the standard of living and to condemn the masses to deprivation and poverty. In addition, the resources that were available were not shared fairly. The continuing inequalities were most marked in the unjust distribution of the available land. The wildly fluctuating prices for the agricultural exports of coffee, bananas and cotton, on which these nations were still dependent, created a severe economic crisis, because the prices of manufactured imports did not move in unison, while the cost of oil imports reached dizzying heights before falling back and rising again in 1990. An attempt was made in the 1970s to create more balanced economies that would rely less on manufactured imports and develop importsubstituting industries. Ten years later this only added to the general economic calamities of the majority of Latin American nations. In common with the rest of Latin America the Central American states borrowed heavily from bankers flush with Middle Eastern oil money. The result was that a crushing debt burden, getting ever larger with high interest rates, turned the apparently temporary difficulties of the 1970s into permanent crises. Of course, the difficulties never were just temporary. Political and social reforms, including a redistribution of land, were indispensable preconditions of better economic and social health. The causes of Central America’s problems required radical remedies, regional as well as international. Nothing short of a massive effort could stabilise the region – an effort of will on the part of the developed world to cease protecting its own markets and to pay higher prices for Central America’s agricultural exports, as well as to guarantee these prices against wild fluctuations. International bankers would also need to write down their investments realistically, while wealthy Latin Americans would have to invest in their own economies instead of sending their money abroad. In 1961 hopes and expectations had been raised by President Kennedy when he launched the Alliance for Progress. His aim was to transform Latin America’s economic and social ills by peaceful means. This was to be the free world’s democratic answer to the Marxist revolutionary challenge. But enough aid to meet the enormous economic problems was not forthcoming; much of what was given was diverted to military security against social revolution in the 1960s. Social revolution and a more equitable distribution of wealth and land was condemned by the powerful elites in Latin America, who claimed these measures would open the way for communism. Just as fearful of far-reaching reforms were the Latin American middle classes. Thus there was no will for political and social change among the ruling and influential groups. Yet this lay at the very heart of what the Alliance for Progress was supposed to be about. With the death of Kennedy, and Johnson’s growing preoccupation with Vietnam, the Alliance petered out as more democratic and socially responsible regimes failed to evolve. The Alliance for Progress did not achieve for Latin America what the Marshall Plan had done for Europe. The cycle of violence, deprivation and revolution was not broken; the answer given to Marxist revolution was military suppression. However, in some of the Central American states a certain amount of progress was achieved, especially in Costa Rica and Honduras; but even here it was too little; in the others – Nicaragua, El Salvador and Guatemala – repression and the murder of peasants and of the urban opposition goaded into armed terrorist resistance created a thirty-year cycle of bloodshed and violence. Despite Washington’s good intentions in pushing for democratic and economic improvements and for an end to the abuse of the most fundamental human rights, the image of the US was marred, especially during the two Reagan administrations (1981–9) by the priority given to security and to efforts to halt the spread of Marxism in the Caribbean and South and Central America. The misery and destruction borne by the people through the years of revolution, civil wars and conflict were a terrible price to pay. Even after they were settled in the mid-1990s corruption blighted the region.
Costa RicaCosta Rica is the most fortunate of the Central American states, free from civil war (except for a brief period in 1948), with a GNP per capita in 1987 of $1,610 with the highest income per head of population and one more equitably distributed than elsewhere in Latin America. It is also the only Latin American nation with something approaching an established democratic parliamentary system. Abuses of human rights are not totally absent, as Amnesty International reports reveal, but their scale is small compared to those of the other states. Costa Rica had established a constitutional liberal state in the 1920s with free and fair elections. The collapse of coffee prices, on which it depended, had a devastating effect throughout Central America. The more liberal oligarchic parliamentary governments in the region gave way to the strongmen, the caudillos, who would preserve the interests of landowners and merchants and meet the threat of labour and social unrest. Only in Costa Rica, with its strong constitutional tradition, was the caudillismo somewhat softened in the 1930s and 1940s by regular presidential elections. José Figueres was the outstanding political leader to emerge in the post-1945 period. Reformist Costa Rica enjoys an extensive social-welfare programme, and José Figueres’s revolutionary junta (1948–9) strengthened the parliamentary tradition. Women were enfranchised and after losing the elections Figueres stood down. Perhaps the junta’s most unusual action, given the Latin American context, was to abolish the army. Still, by Western standards, Costa Rican constitutionalism had decided defects. Organised labour was harshly repressed, reforms would be granted from above rather than negotiated with workers and peasant organisations from below. As in most of Latin America, standards of living in the early 1990s remained tied to agricultural prices and the cost of manufactured imports. Despite diversification of the economy, coffee and bananas were still the backbone of exports. The problems of the 1970s and 1980s burdened Costa Rica with a huge foreign debt. Meanwhile internationally, Costa Rica, which aided the Sandinistas in the overthrow of the Somoza dictatorship in neighbouring Nicaragua, was drawn into the struggle between the Nicaraguan Marxist regime and the US. It became the far from enthusiastic host to the Contra bases along its borders. Its president, Oscar Arias Sánchez, was a leading proponent of attempts to mediate peace in the region. The end of the civil war in Nicaragua and the electoral defeat of the Marxist regime in 1990 lessened tension and promised a better future as the presidency changed hands and Arias Sánchez left office.
HondurasHonduras, in contrast to Costa Rica, is the poorest of Central American states, and its high birth rate impedes efforts to raise living standards substantially. The income per head of population in 2000 was less than $1,000. Look up Honduras in the index of a Latin American history and the first subheading is ‘bananas’, yet the miserable returns from the foreign-dominated banana plantations kept the country poor and underdeveloped. Honduras is the most apt example of a ‘banana republic’, practically speaking under US economic control because Americans own most of the agricultural sector and much else besides. US administrations wanted to see progress towards constitutional democratic government and rising living standards, especially during the years of the Kennedy Alliance for Progress, but this would have necessitated agrarian reform, the raising of agricultural wages, and the acceptance of some of the demands made by labour organisations which, in turn, would have damaged the interests of American investors. Official Washington had its own set of priorities. Foremost among them was a wish to halt the growth of the left. The authoritarian military rulers were regarded as safer allies, as well as providing a better guarantee of security for investors. The policies adopted by Washington from Kennedy to Reagan varied, but ideological and security concerns in the last resort predominated. In 1954, a successful strike by the banana workers against the United Fruit Company ushered in a period of unexpected change in this most backward of republics. After a period of political turmoil Villeda Morales became president and attempted, like Arbenz in Guatemala and Figueres in Costa Rica, to reform Honduras’s rigid social structure and to transform society from above. But when land reforms threatened to hurt the interests of the United Fruit Company, Washington forced a retreat. In 1963 a vicious and bloody military coup overthrew Morales. Although Honduras gradually returned to civilian rule in 1981, the army with its American-trained officers remains, behind the constitutional façade, the real power in the nation. The economy cannot free itself from foreign domination, and progress has been slow, while corruption is rife. In the conflict with Nicaragua, however, Honduras was the most important ally of the US and was host to the principal Contra bases.
GuatemalaThe problems besetting Guatemala are those of a nation half of whose population, the 4 million Mayan Indians, do not share any sense of identity with the other, white Spanish-American half. The gross income per head of population in 1987 was only $870. Power resided with the army and the coffee-growing elite. For a century, from the mid-nineteenth to the mid-twentieth, four caudillos ruled the country. The first hope for the poor and illiterate majority came in 1944 with a small middle-class revolution supported by sections of the army. Free elections brought to power Juan José Arévalo (1945–51) and Colonel Jacobo Arbenz Guzmán (1951–4). Forced labour was abolished, social reforms were initiated and extended to the Indians, a labour code and land reforms were started. Arévalo had opened government to the left and Arbenz accelerated the process, thereby thoroughly alarming the land-owning aristocracy and Washington, which believed that communism was gaining the upper hand. US-owned companies and land belonging to the United Fruit Company were nationalised, and more nationalisation was threatened. The Communist Party was legalised. With the help of the CIA, Arbenz was overthrown in 1954. The clock was turned back; the old oligarchy and the United Fruit Company regained their influence, with the army now again the real power in the land. There were thousands of killings and the Marxist labour movement was wiped out. Corrupt and inefficient military-run regimes became the despair of the American advisers, who could see no alternative other than the communists. In 1960, Guatemala became the staging post for the invasion of Cuba. After another military coup in 1963, the military remained in control of Guatemala until 1982. The repression of guerrillas and leftist opponents was particularly bloody – the civil war killed 120,000. The sheer extent of the abuse of human rights was unequalled in degree even by the low standards of Central America. Labour leaders, university teachers and political opponents just ‘disappeared’; 40,000 are estimated to have died in this way. By the early 1980s the army chiefs fought each other for the spoils of office – and this was the army that had received substantial US military aid. Amnesty in 1982 accused the Guatemalan government of massacring 2,600 people, and that was an underestimate. Guatemalan politics are subject to a cycle of hope and disillusionment. In 1986 Vinicio Cerezo Arévalo was inaugurated as a popular reforming president. The hope was that he would end the brutal excesses of the generals who had dominated Guatemala for three decades and under whose authority the security forces had murdered an estimated 65,000 civilians. But the reforms did not last. The military soon began to exert their power again. Death squads resumed their murderous missions, killing student leaders, trade unionists and human-rights advocates. Guatemala became a profitable transit point for Colombian cocaine on its way to the cities of the US. Almost half the population was unemployed and inflation was high; civilian government in 1990 was losing control and making little effort to check violence, crime or corruption. In January 1991 Jorge Serrano Ellas became president and assumed the burdens of trying to end violence and restore the economy.
El SalvadorEl Salvador’s descent into civil war and bloody conflict was equally tragic. It is the smallest and most densely populated Central American republic. Some forty families owned most of the coffee plantations and dominated banking and the mercantile sector. The distribution of wealth is grossly unequal and the per-capita income was almost as low as that of Honduras. The history of peasant uprisings and protests is a grisly one. A communist-inspired peasant revolt ended in 1932 in wholesale slaughter, a precedent for contemporary times. Here, too, US attitudes after the Second World War were shaped by the fear of communist penetration. Alliances between the wealthy oligarchy and the military were regarded as the only viable alternative and the US has supported them, thereby impeding reform and change. In 1969, El Salvador briefly went to war with Honduras and the resulting victory further enhanced the prestige of the military. But the military and oligarchy began to be challenged by the rise of an urban middle sector. José Napoleon Duarte led a rapidly expanding Christian Democratic Party. By the 1970s there appeared to be a possibility of more representative government. It was a false hope. In 1972, the army frustrated the election that would have brought Duarte to power and he barely escaped with his life. But repression in El Salvador did not bring stability. The economic deterioration following on the oil-price rise in 1973–4 led to increased guerrilla activities as more and more Salvadorans became desperate. It also led to another ‘dirty war’. Brief efforts at reform were superseded by military regimes that paid no regard to human rights. Worldwide attention was directed to the methods of the hated regime when Archbishop Oscar Romero, an outspoken critic of these abuses, was murdered in 1980. Right-wing death squads set about murdering whomever earned their disapproval. In 1980 alone there were close to 10,000 political murders. The civil war rages on and the US has aided and trained the Salvadoran army to crush the guerrillas, who terrorise the countryside. Under pressure from the Reagan administration, internationally supervised elections were held in 1982, but the guerrillas refused to lay down their arms and participate. The extreme right won, but in 1984 the more moderate Christian Democrat José Duarte was finally elected president. Under heavy US pressure, civilian rule and regular elections appeared to change El Salvador’s politics for the better. But the government was hardly in control: guerrillas dominated regions of the countryside, and the army remained a law unto itself. The activities of right-wing death squads lessened – the US could claim an improvement in the human-rights position – but so many thousands had fallen victim that the urban population was cowed. The Reagan administration in the 1980s gave $6 billion in aid and by lobbying for land reform hoped to undercut support for the guerrillas and to promote democracy. But Duarte did not solve the political or economic problems of El Salvador and the Marxist-led guerrillas provided evidence of their ability to strike by knocking out nearly all the electricity supplies on the eve of the congressional elections in 1988. People who bothered to vote turned to the right. The small country was ravaged by civil war, which by the early 1990s had claimed at least 70,000 lives, and by left-wing and right-wing terror. Almost half the population was unemployed. Duarte, on whom Washington’s hopes rested, was terminally ill from cancer and his influence weakened. He was replaced in the election of June 1989 by Alfredo Cristiani, the candidate of the extreme right-wing party. Guerrilla terrorism and right-wing death squads continued to abuse human rights. Despite substantial US economic and military aid, the future for El Salvador remained as uncertain as ever, though the outgoing UN secretary general Javier Pérez de Cuellar brokered a peace plan in December 1991. On 1 February 1992, a peace agreement was concluded that promised reforms and UN-supervised elections in 1994. Peace, trade and democracy have changed El Salvador’s fortunes. The free-market reforms of the conservative Nationalist Republican Alliance (Arena) and the pegging of the local currency to the US dollar have led to steady growth and low inflation, though austerity and readjustment, too, have been painful. Unlike in Argentina, these reform policies have worked and democratic government in the early twenty-first century is more secure, a stabilising influence in Central America.
NicaraguaIn Nicaragua Washington saw the greatest challenge to US interests in the 1980s and to Latin American progress towards constitutional democratic governments. The Marxist state that emerged after 1979, which was hostile to private enterprise and nationalised foreign-owned interests, also faced severe economic problems. They were in part due to the economic embargoes of the US, which could not be fully compensated for by trade with Europe or loans from sources not under the control of the US; they were also due to the inefficiency of planned socialist economies, as evidenced, for example, in Cuba. Nicaragua is the most thinly populated state in Central America, with the lowest per-capita income after Honduras, at $830 in 1987. Here, too, can be found the link between the dominance of coffee and bananas as Nicaragua’s principal exports, until disease in the 1930s devastated the crop, and the gross disparity of wealth between the few plantation owners and merchants and a landless peasantry, the largest in Central America. Diversification into beef, cotton and sugar in the 1960s could not compensate for the low income from agricultural exports and the declining terms of trade (commodity export prices rising more slowly or falling, as against rising costs of manufactured imports and, in the 1970s, the rising cost of oil). On such a social and economic basis, democracy could not be built up; on the contrary, deprivation and extremes of wealth and poverty provided the soil for revolt and savage repression. Nicaragua has traditionally been an area of US concern. When disorder and foreign financial claims threatened it in 1912, US marines moved in and did not finally leave until January 1933. By then they had had to cope with a nationalist backlash. Augusto César Sandino led a guerrilla campaign against them and against the Nicaraguan government they were supporting. He was tricked into taking part in negotiations by the Nicaraguan leaders whom the marines had left behind in power, and in 1934 he was murdered by the Nicaraguan National Guard. Sandino was a liberal reformist and patriot, and now he became a martyr, a powerful symbol whose name and mantle the Marxist Sandinistas appropriated in their struggles during the 1970s against the rule of the Somoza family. The Somozas had established a dynasty in Nicaragua. In the 1930s power in the country was wielded by the National Guard, which had been organised by the US to maintain internal security. At its head was General Anastaslo Somoza Garcia. The constitutional institutions were a façade behind which the National Guard operated. In 1937 Somoza made himself president and ruled the country for the next nineteen years, until he was assassinated in 1956. His authoritarian rule became notorious for corruption, nepotism and repression. This was not a turn of events Washington had anticipated when creating the supposedly non-political National Guard, but defence of constitutional proprieties was not high on Washington’s list of priorities, as long as US interests were safeguarded. Somoza’s National Guard was preferable to having to send in US marines. Somoza took care not to offend US interests and aligned Nicaragua as a dependent and reliable US ally. He was also adept at manipulating the political and landed interests at home. In the division of spoils, the National Guard were pampered, and plantation owners and merchants were allowed to reap unhindered the profits of their enterprises. This left the vast majority of the population in wretched poverty, illiterate and with no hope for the future. On Somoza’s assassination his eldest son Luis took over the presidency and the younger son, Anastasio Jr, assumed command of the National Guard. The 1950s and 1960s were relatively peaceful in Nicaragua, a period of diversification into cotton and other crops; a small but growing middle class began to emerge with the help of Alliance dollars, and some economic progress was achieved. But for the peasants the expansion of cotton-growing meant displacement from the land. Luis was the ‘weakest’ of the Somozas, and in 1967 Anastasio assumed the presidency. Nicaragua’s most bloody and repressive decade now began. Anastasio made no pretence of ruling as a politician. He used the naked power of the National Guard, employing murder and torture to crush the growing opposition. When a devastating earthquake in 1972 all but destroyed Managua, Nixon sent large-scale aid. It did not reach the victims; only half of it could be accounted for by the Nicaraguan treasury. Corruption was rife, and for a time the National Guard could keep order only with US help. Reconstruction after the earthquake benefited mainly Somoza’s supporters, not the poor. The guerrilla war flared up and National Guard atrocities perpetrated in repressing the guerrillas outraged the Church. Human-rights abuses were now affecting American support. There was growing opposition in the US to providing dollars in support of ruthless dictators, yet even under President Carter military aid continued to be granted to Somoza, since the alternative of a Marxist-led Nicaragua was regarded as totally unacceptable. But the abuses of Somoza and his National Guard, worldwide condemnation and the evident crumbling of Somoza’s power left the Carter administration little alternative but to abandon all support for the regime by the spring of 1979. A few weeks later, in July, Somoza was overthrown by the broad opposition coalition of guerrillas, the Sandinista National Liberation Front (FSLN). The abuses of the Somoza family, their amassing of enormous wealth and the general corruption had made them many enemies, especially among those who had not shared the spoils. These groups ranged from the right, conservatives opposed to any genuine democratic reform, through to the professional and mercantile middle sectors, and to the socialists and Marxists. It was an alliance of the left that formed the first guerrilla groups of the 1960s, recruiting support from peasants and students. The corruption and repression following on the Managuan earthquake of 1972 broadened the opposition. After the assassination in 1978 of the respected editor of the leading newspaper in Nicaragua, La Prensa, the middle class and conservatives were ready to support armed opposition against Somoza. FSLN forces with Cuban help were now well organised and, in a series of attacks, demoralised the National Guard and seized power on 19 July 1979. Somoza fled the country. The revolutionary junta was dominated by the Marxist–Leninist leadership from the start. Decision-making was collective. FSLN’s most influential figures were the hardline Tomás Borge Martinez and the two brothers Humberto Ortega and Daniel Ortega. The junta was more pragmatic than most communist regimes, permitting some degree of political plurality and private ownership. But it was equally determined on the Leninist Soviet model to retain real power and build a socialist society. The National Assembly reflected the firm control the junta exercised over the country through the revolutionary party, the army and the state security services. Until its closure in 1986, La Prensa remained a lone voice in opposition. Throughout the country there was censorship and control of the domestic media. During the 1980s, splits began to occur among the junta. The more moderate coalition partners of the original Council of State went into exile, leaving the country under the domination of the FSLN. In exile also were remnants of Somoza’s National Guard and dissidents from FSLN’s regime. Together they formed disparate guerrilla bands on Nicaragua’s borders, the so-called Contras, who, with the help of supplies from the US, waged a guerrilla war against the Sandinistas. Within Nicaragua the junta did not honour its commitment in 1979 to establish a democracy, but postponed elections until its power was consolidated in 1984. Daniel Ortega became president. By adopting a programme of reforms from above, and by mobilising nationalist feelings against the US and its support for the Contras, the junta was able to dominate Nicaragua for a decade, backed by the powerful party and security apparatus. The main opposition refused to participate in elections before 1990. In health care, housing and particularly education, the Sandinistas nevertheless achieved progress. State planning and land reforms were instituted more gradually. But the combination of the effects of the civil war, the huge resources devoted to building up a large army to fight the US-backed Contras and US economic embargoes devastated the Nicaraguan economy. Only the limited Soviet and European assistance enabled the Sandinistas to survive. But Moscow’s own economic troubles led to a cut in aid, and the Soviet–US rapprochement forced Daniel Ortega and the Sandinista leadership to modify their policies and invite a more genuine popular mandate through free elections. At the same time, despite Reagan’s strong support, the Contras were being denied essential war supplies by the US Congress’s refusal to supply the funds. These conditions provided an opportunity for the long-drawn-out peace negotiations sponsored by Colombia, Mexico, Panama and Venezuela, whose presidents met on the island of Contadora in the early 1980s, and then by Costa Rica’s president. Arias Sánchez’s peace plan was signed by the presidents of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua in August 1987 and earned Arias Sánchez the Nobel Peace Prize. It called for regional ceasefires in all the guerrilla wars, democratic reforms and the ending of foreign support for the rebels. It marked an attempt by the Central American leaders to solve their own problems without outside interference. In Washington, the Reagan administration greeted the peace plan with scepticism and suspicion. It was difficult to believe that the Sandinista leadership had any other motive but to persuade the US Congress that the US administration’s support for the Contras was an obstacle to peace; then, with Contra pressure removed, the Sandinistas would be able to rule with impunity. As it turned out, Arias Sánchez’s optimism, despite many setbacks, proved at least partially justified. Daniel Ortega had changed: he was no longer the Marxist–Leninist revolutionary leader determined to build a socialist Nicaragua at all costs. The failures in Nicaragua were all too obvious. Daniel Ortega now took the lead in following the perestroika line. In April 1990, free elections were held in Nicaragua and the opposition won, to the surprise of the Sandinistas. Ortega handed over power peacefully to Violeta Chamorro. Violeta Chamorro, in turn, followed a policy of reconciliation acceptable first of all to the Sandinistas, who were allowed to retain command of the army, and acceptable in the end to the Contras as well, who abandoned the armed struggle. At least for war-shattered Nicaragua the future began to look a little more hopeful as the guerrillas gave up the armed struggle. But the economy remained in dire straits, with almost half the population unemployed. Latin America after the early 1960s experienced accelerating economic and social change. Its traditional power structures adapted by increasing reliance on military force and repression, or they shared power with other sectors of society but still placed reliance on the military to check organised peasant and urban labour groups, as happened in Brazil. Socialist alternatives were never able to retain power; the hostility of the US ensured support for anti-socialist opposition forces in Guatemala (1954), the Dominican Republic (1965), Chile (1973), Grenada (1983) and, finally, Nicaragua. The Soviet Union was in no position to challenge the US effectively in the Western hemisphere. During the 1980s, Latin American political developments came to seem more in conformity with Western hopes and American intentions. Military regimes receded in Ecuador, Peru, Bolivia, Uruguay and Brazil. Colombia, Venezuela and Costa Rica were already ruled by civilian governments. Indirectly the US helped to bring about the fall of the military junta in Argentina. By providing intelligence to London, crucial assistance was given to Britain’s recapture of the Falklands in 1982, a blow the junta could not survive. In the Caribbean, the worst of the dictators, Duvalier, had been forced from Haiti into exile (1986); the leftist regime in Grenada, which had lapsed into murderous infighting, was eliminated by a US invasion in 1983, to the evident relief of the local population, but to the embarrassment of Britain, as Grenada was a member of the Commonwealth. What had led the Reagan administration to intervene was its determination to halt the spread of Cuban influence. After a long struggle and despite many setbacks, US policies also succeeded in making authoritarian Marxist rule by the Sandinistas untenable. US policies in Central America and the Caribbean in the 1980s were an update of the Monroe Doctrine.
PanamaThe US has continued since the Spanish–American War of 1898 to occupy the Guántanamo naval base in Cuba. And ever since Alfred Thayer Mahan highlighted the crucial strategic importance of a transisthmian canal in the 1890s, the US was determined to assure itself of predominant influence in Panama and to exercise sovereign control over any canal that might be constructed. In 1903, ardent Panamanian nationalism against Colombian rule provided the opportunity. The US helped the Panamanian revolution but exacted a price: control of the future canal. Herein lies the crux of Panamanian history in the twentieth century. Ostensibly independent and sovereign, Panama was little more than a US colony for six decades. Panamanian nationalism was inflamed by the country’s lack of sovereignty in the Canal Zone and by the extensive rights the US exercised over its economy and its foreign policy. It was ruled by a wealthy and corrupt oligarchy of the kind common in Latin America but one that was also required to accept a client relationship with the US. If popular riots occurred, US troops intervened to suppress them. In Panama too, the United Fruit Company enjoyed extensive land and rights. Payments made by the US for use of the Canal Zone were an important prop for the economy, at times providing a third of Panama’s national income (bananas and sugar are other important resources). President Roosevelt’s attempts to construct a ‘good neighbour’ policy could not convincingly reconcile Panamanian nationalism, resurgent in the 1930s, and US interests. The 1936 Canal Treaty was wonderfully ambiguous. ‘The Canal zone’, it stated, ‘is territory of the Republic of Panama under the jurisdiction of the US.’ In the 1950s and 1960s popular resentment against the US grew, and 1964 saw widespread riots. After 1968 the political oligarchs lost power to Panama’s National Guard. Any pretence at even a corrupt democratic constitutional process was abandoned and General Omar Torrijos emerged as the undisputed authoritarian leader. He inaugurated harsh labour laws but also a radical programme of land reform with a populist promise that he would help the poor. He also gained support by adopting a stridently nationalist stance on the issue of the US-controlled canal and canal zone. After thirteen years of negotiating with successive US administrations, carefully controlling the pressure of mass nationalism and anti- American feeling, Torrijos in 1977 concluded a new canal treaty with the Carter administration, which was ratified by the US Senate in the following year only with considerable difficulty and the addition of reservations. In stages the canal passed under the control of Panama in 2000. Yet the US is guaranteed passage of the canal in perpetuity for its merchant ships and warships, and it is entitled to use force to protect these rights after the year 2000 if Panamanian troops fail to do so. Panama secured something less than total sovereignty. The 1980s saw the nadir of Panamanian–US relations. Torrijos died in an air crash in 1981, which may have been arranged. General Manuel Noriega, an unscrupulous and brutal soldier, soon took his place. He had been recruited by the CIA, which was anxious to make use of his contacts to uncover the drug trade passing from Colombia to Panama and on to the US. Embarrassingly, Noriega himself drew huge profits from the drug trade; indeed, in corruption and brutality no previous Panamanian dictator compared. He transformed the National Guard into the Panama Defence Forces, with new powers, to act as his tool of repression. Even so, GNP per capita (the population was 2.3 million) rose to $2,240 in 1987. The elections of 1984, which allowed his nominee to become president, were a farce. The US now tried to rid Panama of the general. In 1988, Noriega was indicted for drug trafficking in the US. He countered by beating the anti-American nationalist drum. President Reagan’s pressure and economic sanctions were not enough to topple him, nor two attempted military coups which enjoyed US goodwill. In May 1989 Noriega held elections again, but when the leader of the opposition, Guillermo Endara, gathered most votes despite intimidation from Noriega’s thugs, the results were falsified. On 20 December 1989, President Bush cut the Gordian knot and 24,000 US troops descended on Panama City to arrest and overthrow Noriega. He fled to the Embassy of the Vatican but gave himself up in January 1990. He was tried and sent to prison. Guillermo Endara was installed as president of Panama.
MexicoThe hemispheric role of the US was also deeply resented in Mexico. Yet no country was more dependent on the US economically. Within the Organisation of American States, Marxist Cuba and Nicaragua had in Mexico their only supporter. Mexico had made its own revolution already in 1911. The country had good reason to bear animosity toward her US neighbour having lost half her territory to her in 1848. Mexico then suffered a French occupation (1863–7) and only gained some stability in 1876 when General Porfirio Díaz seized power and ruled the country for thirty-five years until 1911. There was spectacular economic progress during these years; a wealthy small Creole upper class modelled their life-style on Europe. The less fortunate masses of landless native American peasants worked on the Haciendas of large landowners. Díaz could rely for support on the Church and the bayonet. Sweat-shops and textile mills employed labourers at low wages. A split among the ruling oligarchy ushered in the Revolution. Díaz was overthrown in 1911, and a liberal minded president was elected. But the fall of Díaz started renewed conflict and civil war. The hero of the Revolution was Emiliano Zapata, who led a peasant army on his white charger and became the romantic martyr. Civil war raged against the new dictator General Victoriano Huerta in the presidential palace, a flamboyant former cattle rustler, Pancho Villa led a small but well-trained force of mercenaries. Then in 1914 Huerta faced a third foe. Woodrow Wilson sent in the marines and Huerta fled. The outcome of the Mexican Revolution remained in doubt until 1923. By then both Villa and Zapata had been killed by government forces. Despite the socialist rhetoric of the Mexican constitution, reform would be instituted from above – peasants and workers were not to become the arbiters of power. There were to be no revolutionary social upheavals. The secularisation of the state and the expropriation of Church wealth were important outcomes of the revolution. An alliance between the military, the wealthy and the middle class consolidated the powers of the presidents, and their followers were rewarded by the spoils of office. But the difference between Mexico and other Latin American countries is that an effective party organisation, renamed several times and since 1945 called the Partido Revolucionario Institucional (PRI), controls the country and embraces workers and peasants as well as the rising middle-income groups. Lázaro Cárdenas, president from 1934 to 1940, developed a corporate state in which each section of the population, workers, peasants, the military, the middle class, was placed under the party umbrella as groups rather than as individuals. Through large-scale land distribution Cárdenas carried forward one of the principal aims of the revolution, breaking up the haciendas and granting the land as private plots or joint peasant farms; another aim was to take control of Mexico’s major resources, the most important of which was oil. Cárdenas nationalised the largely US-owned oil companies. Dissatisfied with the compensation received, but even more disturbed that other countries might follow Mexico’s example, the international oil companies boycotted her oil and inhibited development of the state oil company until uncertainties in the Middle East after the Second World War made Mexican oil too valuable a Western resource not to be utilised. Westerners regarded Mexico as a truly revolutionary country for a number of reasons: the attack on the Church, the official government espousal of atheism, nationalisation, reforms which hurt the wealthy landowners, the propagation of the myth of a peasants’ and workers’ revolution and admiration for Marx and Lenin, the assertion of a Mexican identity and pride in her native American roots, immortalised by the political–historical murals of Mexico’s most famous artist, Diego Rivera, and the granting of asylum to Leon Trotsky. In fact Mexico conformed far more closely to Latin American patterns than to the Soviet model. In any case the authoritarian state was not exclusive to the Soviet Union but was common among the fascist nations of Europe in the 1930s. Private property in the early 1990s remained the source of great wealth in Mexico for a minority, while poverty was the lot of the peasants and the urban masses, the high birth rate undermining efforts to raise living standards. Mexico too had seen extensive migration from country to city. In ten years, from 1970 to 1980, Mexico City increased its population by 7 million to 15 million, with a huge marginalised population living in shanty slums. The population of the country as a whole grew from 25.8 million in 1950 to 34.9 million in 1960, to 84.6 million in 1989 (by which year the gross per-capita income was US $2,010). The Mexican state is a conglomeration of elements of socialism, state planning and a constitutional electoral process. Mexico enjoys a surfeit of elections for mayors, governors, assemblies and the president; some opposition parties are tolerated and compete. Presidential elections have occurred every six years, and the presidency has always changed hands peacefully, so the spoils are regularly redistributed. But only one party, the PRI, dominates and has decided the outcome of national and presidential elections. Miguel de la Madrid Hurtado, candidate of the PRI, was elected president in 1982 with a vote of over 74 per cent. Distribution of land to the campesinos, the peasant owners of smallholdings, and revolutionary rhetoric kept the majority of peasants quiet as the 1990s began, engaged in trying to make a subsistence living. The seasonal and illegal exodus across the 2000-mile border into the United States provided a safety valve for tens of thousands of the poor. Even so, in urban areas where most Mexicans live, there was massive unemployment. The well-to-do were surrounded by mass poverty. The middle classes enjoyed the high standard of living which the growth and diversification of the Mexican economy had made possible, while the spoils of office were used to ensure a faithful following for the incumbent president and the dominant PRI party. There was more freedom in Mexico than in many Latin American states, but it was carefully controlled. Most sections of the population tended to accept their lack of political influence. In any case the state had a special security police, which, according to Amnesty reports, in the early 1990s continued to employ torture and murder against anyone considered to disturb Mexico’s political order. In Mexico too, hundreds ‘disappeared’, but repression was not on the same vast scale as Argentina or Chile experienced. Mexican stability rested for four decades on a revolutionary myth and authoritarian conservative control. Below the surface, the rapid economic changes caused dissatisfaction with the authoritarian style of government to grow. During the Olympic Games in 1968, widespread student protest led to the killings of hundreds in Mexico City and attracted worldwide attention. In the early 1970s guerrilla bands appeared but were suppressed by the security services. With the enormous increases in oil prices engineered by OPEC (of which Mexico was not a member) and new oil discoveries, export earnings after 1975 increased ten times to US$20 billion. But lavish expenditure and ambitious development resulted in high inflation. The end of the oil boom in the 1980s and worldwide economic stagnation burst the Mexican bubble. Heavy foreign borrowing and austerity programmes drastically reduced standards of living, while the birth rate, if it continued unabated, would double the population every twenty years; and half the population was under sixteen years of age. Mexico was saddled with one of the largest foreign debts in the world, whose payment had to be periodically rescheduled; the bankers demanded austerity and Mexico found itself caught between trying to satisfy international financiers by making economies, while trying to prevent internal unrest as a result of policies imposed externally. The inability of the regime to cope effectively with the catastrophic earthquake that hit Mexico City in September 1985 added to a loss of credibility, which was compounded by Mexico’s economic crises. The stability maintained by the political system began to look increasingly fragile. The right-wing opposition Partido de Acción Nacional (PAN) claimed massive electoral fraud, but the ruling PRI made few concessions. Despite misgivings about the undemocratic nature of Mexican politics, Washington saw a greater danger in further destabilising Mexico and provided financial support. In the 1988 presidential elections the PRI candidate, Carlos Salinas de Gortari, claimed to have won. There was fraud on a colossal scale, but the PRI monopoly of power had been broken in the Mexican Congress. Nevertheless, the PRI President remained firmly in power and an economic austerity programme was instituted. But for the first time in many decades there were indications of future political changes. In 1961, Kennedy’s Alliance for Progress was to have been the starting point for the transformation of Latin America. The cycle of deprivation, economic and social injustice was to have been broken and Latin American societies were to have started on the road to political democratic reform. Over thirty years later the problems of the continent were still daunting. Population growth outstripped development. The danger of Marxist revolution had been contained, but terrorism and repression continued. The root causes of instability had not been removed. The immigration from the countryside had swollen the shanty towns that surrounded the fashionable streets of the wealthy. Everywhere there were thousands of children begging, stealing or offering themselves for prostitution. Mexico City served as but one example of their plight. The pependores, or rubbish pickers (10,000 of them), made the City’s three huge rubbish dumps their home. Even here they were exploited by ‘bosses’ who made their money out of the refuse that could be recycled. By turning to a market economy, privatising and liberalising trade with the expected coming into operation of a free-trade region comprising herself, the United States and Canada, Mexico hoped in the 1990s to create her own economic miracle. Many companies were privatised and in 1990/1 a good growth rate was achieved, while inflation, which in 1987 ran at 160 per cent, was slashed in 1992 to 12 per cent. Foreign debts were reduced and foreign investment began to return. Salinas toured the country and won support among the peasantry. He used proceeds from the sale of state-owned companies to build schools, to link rural communities with the electricity network and to ensure that clean drinking water was available. More than 1200 health clinics were opened in 1991 to serve the people. Huge problems remained. Carlos Salinas de Gortari declared that his aim during his six-year term of office as president from 1988 to 1994 was to take Mexico from Third World to First World status. During the first years of his presidency he made a dynamic start. There were at last some hopeful indications of change in Latin America in the 1990s. A number of countries were determinedly trying to turn the economic corner and make a start on raising the standard of living of the most deprived. The enormous level of Latin American debt, which had risen from $68 billion in 1975 to $410 billion in 1987, threatened to cripple efforts towards further investment and development. But, unable to recover all of it, the West agreed to write a portion of it off. Western institutions such as the International Monetary Fund insisted on the medicine of austerity and better economic management, which Mexico had to accept in order to attract new funds. Among left-wing guerrilla movements there was a collapse of morale following the demise of the Soviet Union. All but Marxist fanatics were ready to end the fighting and to exchange the rifle for the ballot box. Civilianelected governments and multi-party parliaments became the norm. It was not democracy, but it was progress, a move away from tyrannical and authoritarian regimes. Even so, there was no guarantee that democratic representative institutions could long survive economic mismanagement, as the example of Peru showed in 1992. Democracy cannot be divorced from social and economic progress. It can not take firm root unless the needs of the poor are also met. When elected officials accept that their power derives from the people and not just from the nation’s elite, true democracy can be established. Widespread corruption still plagued Latin America in the last decade of the twentieth century. Birth rates still tended to be too high, though they were dropping in Argentina, Chile, Brazil and Mexico. High birth rates meant that even countries on the path of economic reform would be faced with increasing poverty. The distribution of wealth, or rather lack of it, to the poor majority scarcely diminished the gap between rich and the poor. The statistics for income per head of population obscure this because they are averages: the poor were much worse off than the average. Simply absorbing the young and providing some employment for them when nearly half the population was aged under twenty was a formidable problem. Urbanisation and the growth of mega-million cities magnified the problem. The power base of the energetic political leaders of Latin America was fragile and their austerity policies to cure inflation were deeply unpopular. The leaders themselves were all too often tempted by the fruits of office.