All posts tagged Elites

Central America: Evolution of Economic Elites

By Alexander Segovia*

 

El Salvador landscape

El Salvador landscape / Google Images / Creative Commons

The elites of Central America – traditionally organized in national business groups with strong family ties – have lost power and allowed certain reforms to advance over the past 30 years, but the full impact of this historic shift has been blunted by the lack of broad, inclusive national debates and the growing role of regional economic powers. Until the 1980’s, the powerful interests of the traditional agricultural export economy dominated for more than a century, with enormous influence by virtue of their control over property and every facet of the production, processing, and domestic and foreign marketing of their products.

  • For these traditional elites, the state was to be used for their own benefit. Their decisive influence continued even as economies changed and exports diversified somewhat after World War II. It survived the growth of cities, the emergence of new players in industry, the growth of organized labor, and the expansion of government bureaucracies. Elites obstructed changes that threatened their interests and parried others into minor tweaks of the essentially agro-export model that they dominated. They preserved many inequities in social and economic systems, slowed diversification, and protected governments that were weak, corrupt, disorganized, and often authoritarian, repressive, and undemocratic.

Since the late 1980’s, according to my research, the agro-export model that enabled elites to have such power has changed significantly – facilitating the emergence of new economic models (albeit with different manifestations in each country) and eroding the old elites’ grip on society. The change was driven by the armed conflicts, political and social crises, emigration, and the flow of remittances. Neoliberal economic reforms, including liberalization, deregulation, privatization, and opening to foreign investment, had an impact within the context of the broader capitalist globalization gaining momentum during the period.

  • Although not always with alacrity, elites had to accept the advent of new spaces and patterns in which other actors were able to accumulate wealth and power. Tourism, telecommunications, banking, and other service sectors gave rise to new voices, as did the development in some countries of non-traditional exports. New entrepreneurs brought in new foreign actors, including many from neighboring countries and the rest of Latin America. Powerful transnational economic groups (known by the Spanish acronym GETs), with strong family ties, began to operate across borders – creating both new opportunities and new challenges. The GETs have already flexed their enormous influence over public policies. As a result, the traditional elites gradually have found themselves forced to function within a matrix of national and regional power, with new dynamics, over which their grip had been broken or at least significantly weakened.

National elites such as El Salvador’s have broken with the old stereotype of selfish economic interests united around an extreme right wing ideology – being more heterogeneous today in composition and perspectives than ever before – but deeper, lasting change is going to take time and effort. An inclusive national dialogue in each country to build agreement on the broad outlines of a political project to address how to effect national transformation and modernization would be the best way of reassuring all sides that their voices count, but unfortunately no country is holding one. Generational change – characterized in part by younger family members’ constant connectivity with peers outside strictly national circles – could also be a factor.

  • The increased activism of the GETs may explain why breaking the grip of the nation-based traditional elites has not led to deeper and broader change – essentially swapping one elite’s manipulation of government for another’s. The GETs have important, and sometimes decisive, influence over public policies not just in their home countries, but beyond. The future of reform therefore would appear to depend on the willingness of regional elites to pursue them. Several initiatives, including one undertaken by the Instituto Centroamericano de Investigaciones para el Desarrollo y Cambio Social (INCIDE), of which I am President, aim to promote a constructive dialogue between society and the GETs. Progress hasn’t been easy or quick, but we have proven that change is indeed possible.

March 21, 2019

*Alexander Segovia is a Salvadorean economist and President of the Instituto Centroamericano de Investigaciones para el Desarrollo y el Cambio Social.  He was Technical Secretary of the Presidency of El Salvador (2009-2014). This article is adapted from his recent book, Economía y Poder: Recomposición de las Élites Económicas Salvadoreñas.

Leave a comment
by clalsstaff on March 21, 2019  •  Permalink
Posted in Central America
Tagged

Posted by clalsstaff on March 21, 2019

https://aulablog.net/2019/03/21/central-america-evolution-of-economic-elites/

The Panama Papers: Damning Evidence Against Latin American Elites?

By Emma Fawcett* and Fulton Armstrong

Panama Papers

Photo Credit: Pixabay / CC0 Public Domain

The “Panama Papers” have revealed the reputed secret accounts and tax-evasion strategies of a number of Latin American leaders, but preexisting widespread perceptions that political and economic elites are corrupt may reduce the immediate shock value of the revelations.  More than 11 million documents leaked from the Panama-based law firm Mossack Fonseca – given an initial review by the Süddeutsche Zeitung and International Consortium of Investigative Journalists (ICIJ) – provide evidence of 215,000 arrangements by which 14,153 powerful and wealthy clients from around the world hid their money from the prying eyes of the media, tax collectors, and public-accountability experts.  Early reports already indicate Latin Americans – small-time players compared to the Russians and some Europeans – are among those mentioned.

  • The Petrobras scandal that has paralyzed Brazil will find further fuel in these files. Investigators in Operation Car Wash apparently had no knowledge of many accounts held by Petrobras officials.  A secret company linked to House Speaker Eduardo Cunha, who’s leading the charge to impeach President Rousseff, reportedly figures prominently.
  • Argentine President Macri, his father, and brother reportedly had an offshore company for 10 years. They closed it in 2009, two years into Macri’s term as Buenos Aires mayor, but he did not report it.  The government says he was only “circumstantially” the CEO.
  • The president of the Chilean branch of Transparency International, Gonzalo Delaveau, resigned because he was linked to at least five offshore companies.
  • Mexican President Peña Nieto’s association with tycoon-contractor Juan Armando Hinojosa, who reportedly had a massive array of shelters worth US$100 million, is once again a liability. The President was dragged through the mud – and eventually exonerated of personal involvement – over a mansion that Hinojosa allegedly gave to his wife.  The Mexican government is investigating several dozen others named in the documents.
  • Many other cases are in the wings. Pedro Delgado (former governor of Ecuadorian Central Bank and cousin of President Correa); financial backers of Peruvian Presidential candidate Keiko Fujimori; and an array of former central bank and intelligence officials – Peruvians, Venezuelans, Panamanians, and others – are all being looked at.  In El Salvador, the Attorney General, already criticized for his investigative zeal, has raided Mossack Fonseca’s offices, suggesting more revelations to come.

Allegations of tax evasion, hidden income, and other forms of corruption are a mainstay of Latin American political life – and the Panama revelations will only aggravate the oft-held opinion that rich, powerful people play by their own rules to maintain wealth and power.  Ramón Fonseca, one of the founders of the law firm, claims that the publicity is part of “an international campaign against privacy,” which he called “a sacred human right [and] there are people in the world who do not understand that.”  The backlash against someone like Argentine President Macri may not be too great, especially because his family ended the tax haven years ago.  But what makes the allegations potentially disruptive is the number of people implicated – across public and private sectors – in so many countries, in an investigation that has only just begun.  Further revelations are sure to come and, although themselves a sign of transparency, challenge people’s faith that leaders will come clean.  The revelations will fuel popular cynicism and discontent in the short term, but renewed demands for transparency may eventually help rekindle popular confidence in government.

April 11, 2016

*Emma Fawcett is a PhD candidate in International Relations at American University.   Her doctoral thesis focuses on the political economy of tourism and development in four Caribbean case studies: Haiti, Dominican Republic, Cuba, and the Mexican Caribbean.

Leave a comment
by clalsstaff on April 11, 2016  •  Permalink
Posted in Regional Snapshot
Tagged , ,

Posted by clalsstaff on April 11, 2016

https://aulablog.net/2016/04/11/the-panama-papers-damning-evidence-against-latin-american-elites/

Honduras: No Solution in Sight

Photo Credit: OAS / Flickr / Creative Commons

Photo Credit: OAS / Flickr / Creative Commons

CLALS and the Inter-American Dialogue this week hosted a conversation on the crisis in Honduras with experts Hugo Noé Pino, of the Instituto Centroamericano de Estudios Fiscales, and Carlos Ponce, of Freedom House, and about a dozen of some 80 participants spoke up.  The following are key analytical points that were broadly accepted during the 90-minute session.

Honduras is experiencing a multi-faceted crisis – economic, political, judicial, and security– that has grown steadily worse since the 2009 coup and shows no sign of abating.

  • Economic growth (1.5 percent per capita) is too low to alleviate the country’s severe employment problem (affecting half of the working-age population) and poverty (62 percent). Recent polls indicate that some 63 percent of all Hondurans would leave the country if they could.

Violence, corruption scandals, and the steady weakening of institutions dim prospects for a turnaround.

  • The over-concentration of power in the Executive, the remilitarization of law-enforcement and other security services, and the politicization of the judiciary have undermined what democratic foundation Honduras had built since the last military government stepped down in 1980. The economic and political elites, as well as the media they control, have further stifled political discourse.
  • The Sala Constitucional of the Supreme Court and the National Electoral Tribunal have been stacked to tightly control preparations for elections scheduled for November 2017, apparently with the intention of ensuring the reelection of President Juan Orlando Hernández.

The Honduran political class lacks the will to root out corruption, and is united in resisting developing the capacity and programs to do so.

  • The embezzlement of more than $300 million from the Social Security Institute – funneling part of these funds to the ruling National Party and a variety of fronts – led to the flight of the investigating fiscal (who left the country because of death threats to himself and his family) but little else. Indeed, the most significant law-enforcement actions, such as the indictment of members of the Rosenthal family on money-laundering charges, have come from the United States. Some 80 percent of crimes in Honduras go uninvestigated and unpunished; some reports put the figure as high as 96-98 percent.
  • A Comisión Internacional Contra la Impunidad en Honduras (CICIH), adapted from the successful CICIG model in Guatemala, would be a healthy way of addressing ongoing impunity while building investigative and prosecutorial institutions. The economic and political elites solidly oppose it.  Even if Honduras accepted a CICIH, alone it probably would not be a silver bullet.
  • The OAS’s planned “Mission to Support the Fight Against Corruption and Impunity in Honduras” (MACCIH) – announced in late September jointly with Honduran President Juan Orlando Hernandez – shows little promise of success. Its mandate will be to diagnose problems and write reports, not take action or facilitate a serious, inclusive national dialogue.

Opposition to the current Honduran government is strong and growing, but it has not yet institutionalized.

  • Peaceful marches organized by the Indignados and other organizations have mobilized tens of thousands of citizens outraged by government corruption and its inability to provide even basic citizen security. Among the masses have been an unprecedented number of middle-class and upper-middle-class persons – not seen during previous crises.
  • Opposition groups are still struggling, however, to coalesce into a viable, institutionalized political force. Sustaining effective leadership and overcoming pressure from the government and Honduras’s two traditional parties are difficult challenges for them.

There are no magic or quick solutions to the crisis.

  • Any solution would have many moving parts, including recognition by elites that their own assets are threatened by the deepening chaos. The government will have to be held accountable for corruption.  The judiciary will have to be strengthened and made independent.  The military will have to return to the barracks.  The media will have to be professionalized.  Civil society will have to be empowered.
  • The U.S.-sponsored “Alliance for Prosperity” is unlikely to help Honduras – and could make things worse if it doesn’t challenge the status quo. Honduran observers believe that the $250-plus million dollars from the program should focus on deep change – the product of a broad national dialogue – and should be conditioned on deep reforms, rather than working with just the sitting government, which has shown no willingness to reform.
  • U.S. cooperation in counternarcotics and other security operations might in some cases expose partnered services to U.S. respect for human rights and democratic institutions, but the resources transferred in the process also serve to strengthen them and make them more independent of civilian authority.

October 15, 2015

* Correction: The first sentence of the article originally stated “CLALS and the Inter-American Dialogue this week hosted a conversation on the crisis in Honduras with experts Hugo Noé Pino, of the Instituto Centroamericano de Estudios Fiscales, and Carlos Ponce, of Freedom House, and a dozen speakers from among over 80 participants.” It was edited to clarify that “about a dozen of some 80 participants spoke up.”

Leave a comment
by clalsstaff on October 15, 2015  •  Permalink
Posted in Honduras
Tagged , , , ,

Posted by clalsstaff on October 15, 2015

https://aulablog.net/2015/10/15/honduras-no-solution-in-sight/

Honduras: Charter Cities Lurch Forward

By Fulton Armstrong

Choluteca, Honduras Photo Credit: Jonathan D. / Flickr / Creative Commons

Choluteca, Honduras Photo Credit: Jonathan D. / Flickr / Creative Commons

The Honduran government expects to get the green light this month from a Korean consulting firm for a master plan to hand governance of several small communities over to private investors to develop them, but concerns about the plan run deep and appear unlikely to fade.  Called ZEDEs – the Spanish acronym for “Employment and Economic Development Zones,” the specially designated areas are also called by their proponents charter cities, model cities, and startup cities.  The first tranche of towns facing conversion are in the southern Honduran departments of Valle and Choluteca, with a new port built on the Gulf of Fonseca.  The government says that the affected communities will remain an “inalienable part of the Honduran state,” but amendments to the Constitution, laws, and regulations permit their governing body – which is unelected – to establish “policies and regulations” and their own police and other public services.  Called the “Committee for the Adoption of Best Practices,” the board is dominated by representatives of Honduran millionaires and an even greater number of non-Hondurans of predominantly libertarian ideology.  Among them are American anti-tax crusader Grover Norquist; former President Reagan’s son Michael; and Michael Strong, chief executive of Radical Social Entrepreneurs.  The ZEDEs’ guiding principle is to liberate communities from government taxation, oversight, and corruption in order to attract investment and stimulate prosperity.

The ZEDEs initiative has been plagued by opposition since its inception, however.  Numerous reports underscore that the affected communities were never consulted, and demands for a referendum have repeatedly been rebuffed.  Honduran implementation of the model has been rejected by the U.S. economist who proposed it, Paul Romer (formerly of Stanford University; currently at New York University).  He withdrew because of the lack of Honduran transparency, including secret deals with interested U.S. parties.  The Honduran Supreme Court initially voted 4-to-1 against a Constitutional amendment allowing creation of ZEDEs in 2012, but the Congress impeached the four dissenters and replaced them with supporters who voted unanimously in favor.  There are numerous reports of intimidation of local civil society leaders, who deem them credible in view of clashes between wealthy businessmen and campesinos in other areas resulting in hundreds of deaths in recent years.

Honduras has a desperate need for economic growth – two-thirds of the population lives below the poverty line – and its model of national governance, riddled with corruption and non-transparency, is indeed in crisis.  But there’s no evidence that fighting one form of corruption with another non-transparent system will help anyone but the big investors.  Indeed, Honduras has ranked among the most violent countries in the world for several years, with the term “failed state” looming darkly over it – making it perhaps the worst place to experiment with provocative new models of governance without popular consultation or support.  Critics seem to have a good case: real reform and economic stimulus would focus on cleaning up the government and holding accountable the elites that have brought the country to ruin and now are trying to impose this model on their fellow citizens, rather than usurping the affected communities’ sovereignty.

March 19, 2015

Leave a comment
by clalsstaff on March 19, 2015  •  Permalink
Posted in Honduras
Tagged , , ,

Posted by clalsstaff on March 19, 2015

https://aulablog.net/2015/03/19/honduras-charter-cities-lurch-forward/

Elite Power and State Strength: A Timely Focus of Academic Studies

By Eric Hershberg

lapidim / Flickr / Creative Commons

lapidim / Flickr / Creative Commons

Insufficient state revenues are one fundamental reason that many Latin American governments fail to provide their citizens with adequate education, health care, public transportation, environmental protection and the physical and technological infrastructure needed to move their countries toward high-income country status.  As a whole, the region’s governments were able to spend only 14.8 and 15.25 percent of GDP in 2013 and 2014, according to the UN Economic Commission for Latin America and the Caribbean (ECLAC).  Rationalization of expenditures is a goal that can only be pursued in practice if there are adequate funds to begin with, and few Latin American states have that luxury.  (To be sure, even where states are well financed, as in Brazil and Argentina, governments typically fail to spend resources efficiently.)  Historically primitive and regressive tax systems have not evolved in a manner consistent with the development needs of the region.  During the second decade of the 21st century this remains a major obstacle for those who strive to build more effective and democratic states across Latin America.

Several ambitious new books in comparative political economy offer insightful and complementary analyses of the political conditions that perpetuate state weakness as well as the dynamics that offer hope of overcoming it.

  • Aaron Schneider’s 2012 Cambridge University Press volume on State-Building and Tax Regimes in Central America was an initial contribution to this emerging literature, linking that sub-region’s changing relationship to the world economy to aggressive efforts by different factions of the elite to fashion tax systems that reflect their narrow interests rather than a broader agenda of societal development.
  • A book that will be launched later this month in Guatemala City builds on this work by underscoring the importance of political contestation regarding the fiscal arena more broadly – encompassing state expenditure as well as revenue. That study, prepared under the auspices of CLALS and the Instituto Centroamericano de Estudios Fiscales (ICEFI), illustrates the ways in which Central American elites have exercised disproportionate influence to render states ineffective and regressive: they contribute little to state coffers and extract much from them, with consequences that diminish the life chances of a majority of that region’s population.
  • Tasha Fairfield’s conceptually ambitious and empirically rich comparative study of South American cases, to be published later this year by Cambridge University Press, is a landmark contribution to literature on elites and Latin American political economy. It consists of a thorough comparative analysis of Argentina, Bolivia and Chile, revealing that strong business associations tied closely to the state augment elite capacity to block progressive tax reforms.  Conversely, she finds that social movement influence over the state can undermine elite capacity to resist the sorts of taxation needed to redistribute wealth.
  • Evelyne Huber and John Stephens demonstrated previously, in their 2012 University of Chicago Press book on democracy and the left, that there is a clear link between the capabilities of the political left in democratic regimes and the prospects for more equitable social policies in Latin America. Such policies, as this recent wave of publications make clear, will only come about if societies develop systems of taxation compatible with the emergence of effective states.

Scholarship on Latin American economic development has until recently devoted little attention to political power imbalances as drivers of state weakness and the consequent failure of societies across the region to forge pathways toward developed-country levels of income and opportunity.  These studies highlight the centrality of elite collective organization and behavior, as well as the political strength of countervailing forces in society, for determining levels of taxation across the region.  Taken as a whole, this welcome wave of social science research restores Latin American political economy to its rightful place as a domain of scholarship that speaks to the concrete challenges facing the region today and in the future.  Policymakers throughout the hemisphere who speak of democracy and economic growth need the clear analysis to progress that scholarly works such as these provide.

February 5, 2015

1 Comment
by clalsstaff on February 5, 2015  •  Permalink
Posted in Regional Snapshot
Tagged ,

Posted by clalsstaff on February 5, 2015

https://aulablog.net/2015/02/05/elite-power-and-state-strength-a-timely-focus-of-academic-studies/

Haiti: Plus ça change …

By Fulton Armstrong

Photo credit: a-birdie and Free Grunge Textures / Flickr / CC BY

Photo credit: a-birdie and Free Grunge Textures / Flickr / CC BY

Haiti buried Jean-Claude “Baby Doc” Duvalier last week, but his and his father’s ghosts continue to haunt Haitian politics and keep institutions so weak that, after two decades of operations, the United Nations decided to renew its mandate there yet again this week.  Duvalier didn’t get the state funeral his family and closest supporters wanted, but his sendoff was dignified enough to demonstrate that political elites have forgiven his excesses – including thousands of extrajudicial killings and unbridled corruption – or were at least nostalgic for his version of “law and order.”  President Martelly tweeted that Duvalier was “an authentic son of Haiti” and sent his personal friend and counternarcotics chief, Gregory Mayard-Paul, to the service.  While a small group of protestors outside the church demanded justice for the dictator’s abuses, several hundred of Haiti’s economic and political elite applauded the eulogies for Baby Doc, who was forced into exile in 1986 and returned in 2011.  Duvalier outlived by three months the first president to be elected after his removal, Leslie Manigat, who himself was overthrown in a bloodless coup after serving less than six months in office (1988).  The next democratically elected successor, Jean-Bertrand Aristide, was ousted in two coups (1991 and 2004) and last month was put under house arrest for alleged corruption.

Institutional weaknesses dating back to the Duvaliers’ rule and before continue to stymie progress in Haiti.  Because the government is unable to provide even basic police services for  the people, this week the United Nations Security Council again – for 20 years in a row – authorized an extension of a mission to provide either peacekeeping or “stabilization” support.  The vote was unanimous and, according to the UN’s own press report, the MINUSTAH mission would continue “for another year, until 15 October 2015, with the intention of further renewal.”  Like past resolutions, this week’s called on Haitian political leaders “to work cooperatively and without further delays to ensure the urgent holding of free, fair, inclusive, and transparent [elections]” at the legislative, partial senatorial, municipal, and local levels.  Senate elections are three years overdue, perpetuating the sort of political crises that have long plagued the country.  Officials’ reassurances to U.S. Secretary of State Kerry and others last week that elections will be held this month lack credibility in the absence of an electoral law and the complex preparations necessary for voting.

It would be inaccurate and unfair to say that Haiti has made no progress since Jean-Claude’s ouster almost 30 years ago.  The vicious and corrupt Haitian military has been disbanded, and – although the Tonton Macoutes that the Duvaliers deployed to force the population into submission were never brought to justice – vigilantes no longer roam the streets terrorizing entire neighborhoods.  Haitian elections have been messy but, in many observers’ estimation, clean enough to give Presidents and legislators a good bit of legitimacy.  But the tragedy of Haiti that keeps repeating itself is one of unfulfilled aspiration.  Individual Haitians are deeply committed to education – sacrificing huge portions of family income to keep children in school – and, when jobs are available, work as hard as anyone in the hemisphere.  Despite billions in aid, the country’s institutions are too weak, and the elites’ interest in keeping them that way is too strong, to move the country faster.  The politically and economically powerful who prospered under Duvalier surely hope that any responsibility they had for his excesses was buried with him, and if Haitian history is any guide, they’ll get away with it – while the UN and international community keep internal Haitian tensions in check and help provide basic services.

October 16, 2014

1 Comment
by clalsstaff on October 16, 2014  •  Permalink
Posted in Haiti
Tagged , ,

Posted by clalsstaff on October 16, 2014

https://aulablog.net/2014/10/16/haiti-plus-ca-change/

Guatemala: The War of Paz y Paz

By Steven Dudley*

CLALS Paz y Paz

Law professor and human rights attorney Claudia Paz y Paz’s selection as Guatemala’s first woman attorney general was a surprise, but strident opposition to her reappointment from the dark interstices of the political spectrum is not.  More hippy professor than government bureaucrat, she’s a woman who defied the odds when she took office in 2010.  Paz y Paz speaks with a soft, gentle tone to the point where she almost needs a microphone to run a staff meeting.  Yet, from nearly the moment she walked into the attorney general’s office, she made a difference.  She and her team arrested previously untouchable figures such Juan López Ortiz, alias Chamale, and dozens of members of the feared Mexican criminal group, the Zetas.  The country’s murder and impunity rates fell.  Paz y Paz also prosecuted former military officers, including former military dictator Ríos Montt and others allegedly involved in atrocities in the 1980s, and helped set up special offices to deal with violence against women.

Paz y Paz also demonstrated how, employing best practices, Guatemalan judicial institutions can excel.  Her office’s reliance on forensic evidence, telephone intercepts and video analysis made for stronger cases.  This took the onus off of eyewitness testimony, a notoriously unreliable means of fighting powerful criminal groups, especially those who have deeply penetrated the state.  Paz y Paz also widened the investigative net, looking at entire criminal structures, rather than focusing on single criminal acts.  She won praise from a broad array of international partners and pro-democracy forces inside Guatemala.  She was a 2013 Nobel Peace Prize nominee.

In spite of – or because of – these accomplishments, Paz y Paz is struggling to keep her job for another four-year term.  She has to be approved by a “postulation commission” made up of 14 lawyers who select the final six candidates, from which the president picks one.  Special interest groups, using shady brokers (some with ties to organized crime), are maneuvering to make sure that her attempt to reform Guatemala’s Attorney General’s Office ends sooner rather than later.  She has opened up many wounds and frightened Guatemala’s traditional elite, some of whose members worked with the Army during the civil war and believe they could be next on Paz y Paz’s list.  Efforts to block Paz y Paz’s second term underscore that Guatemala is a country that is still struggling to deal with its past civil war and its forever lopsided power structure.  Despite ending a nearly four-decade-old conflict in 1996, Guatemala is still at war –though the battles now take place in the courts – and the elites don’t want a formidable player like Paz y Paz to be in the game.

*Steven Dudley is co-Director of InSightCrime, which is co-sponsored by CLALS.  Click here for the full investigation of “The War of Paz y Paz.”

Leave a comment
by clalsstaff on April 25, 2014  •  Permalink
Posted in Guatemala
Tagged , , ,

Posted by clalsstaff on April 25, 2014

https://aulablog.net/2014/04/25/guatemala-the-war-of-paz-y-paz/

Central American Governments Face Tough Challenges

by Benedicte Bull*

CLALS last week convened a panel in San Salvador to discuss the findings of its multi-year project on “Elites, States and Reconfigurations of Power in Central America.”  Attended by over 120 people, the event analyzed how the evolving role of elites will affect the new administrations in El Salvador, Costa Rica, and Honduras.  The following day featured a daylong event to launch the Instituto Centroamericano de Investigación sobre el Desarrollo e Inclusión Social (INCIDE), a new think tank that aims to foster fresh thinking about the difficult challenges facing the region.  Here are some key conclusions:

The leftist FMLN in El Salvador and the centrist Partido Acción Ciudadana (PAC) in Costa Rica have won crucial elections, but their ideological labels don’t fully capture how they will relate to three decisive actors: legal capital (the private sector), illicit capital (organized crime) and the United States.  The elections of Salvador Sánchez Cerén and Luis Guillermo Solís do not signal a strong turn to the left in Central America, but rather show that the population in both countries increasingly questions the political elites and institutions.  Solís capitalized on the corrupt image of Costa Rica’s two traditional parties, and what tipped the elections in El Salvador were all those who feared the return of a corrupt and elitist right, whose dirty laundry was made public in feuding between ARENA and the breakaway party GANA.

The new governments’ ability to restore confidence will depend firstly on how they relate to business and private capital.  All the countries of Central America are included in the free trade agreement with the United States (CAFTA-DR) and have been generally pursuing market-oriented development strategies since the late 1980s, but economic elites are still dependent on the state for survival.  Many build their business primarily on contracts with the state; all depend on the state involvement in infrastructure and services; but few are willing to pay sufficient taxes to allow their governments to face important challenges.  Honduras, which has accommodated elites the most, may establish a free zone fully exempt not only from taxes but all government regulations.  Nicaragua’s approach, under Daniel Ortega, is to build an alliance between the presidency and business, facilitated by Venezuelan assistance and growing integration into ALBA trade networks.

Institutional weaknesses throughout the region make it difficult to bring organized criminal groups under control.  In Guatemala, where congressmen frequently jump between political parties, organized crime easily buys political control and influence.  Weak parties, weakened ideologies, and leaders’ unwillingness and inability to build a state capable of implementing policies for the common good also allow organized crime a strong grip over politics.  In both Honduras and Guatemala, criminalization of politics has blurred distinctions between legal and illegal elites.

Central America’s relations with the United States also tend to hold it back.  While South America has come a long way towards independence from the United States, many Central Americans believe the old hegemon does not intend to let go of their region.  U.S. policy has in many ways become more sophisticated, but former members of governments speak freely of various methods the U.S. uses – often with the support of Washington lobbyists representing Central American rightwing elites – to restrict Central America’s room for maneuver.  This overshadows debate in Central America over China’s influence and Brazil’s growing leadership.

Taken together, these factors contribute to the conclusion that, even with winds blowing slightly to the left in Central America, the new presidents will have little space to make new policies.  For former guerrilla Sánchez Cerén and former history professor Solís, their experience and wisdom may be their best assets to move forward their agendas.

*Dr. Bull is Associate Professor at the Center for Development and the Environment (SUM) at the University of Oslo.

Leave a comment
by clalsstaff on April 15, 2014  •  Permalink
Posted in Central America
Tagged , , ,

Posted by clalsstaff on April 15, 2014

https://aulablog.net/2014/04/15/central-american-governments-face-tough-challenges/

Will Bolivia’s Half Moon Rise Again?

By Robert Albro

Embed from Getty Images

In early 2014 Bolivian President Evo Morales’s main nemesis, the Media Luna (or Half Moon), composing the eastern departments of Tarija, Pando, and Beni, and led by the economically powerful department of Santa Cruz, has all but vanished politically. Morales is a prohibitive favorite to win a third term, while the opposition Social Democratic Movement built on the vestiges of the Media Luna is not a serious electoral contender. In 2008 this seemed highly improbable. Evo Morales was in a battle for control of Bolivia’s future. The Media Luna was in open revolt. The conflict had begun with Morales’s election in 2005 and was exacerbated by the acrimonious constituent assembly of 2006-2007. It came to a head over the MAS government’s intention to nationalize the country’s natural gas industry and use royalties from Tarija’s vast reserves to fund a new national pension plan. The Media Luna wanted greater regional autonomy and control over revenues. Its August 2008 revolt, which raged for several months, included a region-wide strike, widespread road blocks, takeover of natural gas facilities, government offices, and airports, and violent skirmishes between youth brigades and the police and army, culminating in the killing or wounding of dozens of pro-MAS indigenous marchers in Pando.

Then what happened? The Media Luna, led by elites who had dominated Bolivia’s economic and political fortunes at least up through the second Banzer regime (1997-2001), discovered the limits of its diminishing influence. Throughout the conflict in 2008, Morales maintained control of the machinery of state, including the police and the military, while opposition leaders lacked a political party, critical presence in government, or the international leverage to oust the MAS government. Nor did they have a clear agenda beyond opposition to Morales. Their at times racist attacks fueled national outrage, mobilized defenders of the government, and elicited international condemnation. Accused of conspiring with the Media Luna, the U.S. ambassador was expelled. Media Luna overtures to the OAS were rejected. Most tellingly, UNASUR issued an unequivocal statement supporting Morales’s “constitutional government” and comparing Media Luna tactics to the ousting of Chilean President Salvador Allende in 1973.

Morales’s 67% victory total in the 2008 recall vote, convened as a concession to the opposition, hastened its fragmentation. Moreover, the MAS has made steady electoral inroads in the East, in part capitalizing upon a demographic shift. Santa Cruz is now far from “wealthy and white,” and the MAS enjoys sizable support among indigenous groups, highland in-migrants, urban and rural poor, and small business owners. Support for the MAS led to popular rejection of autonomy initiatives in these departments. The MAS has also successfully recruited candidates among former elite enemies, a strategy of cooptation that has enabled it to gain six of nine governorships (including in Pando). Even in the once reactionary bastion of Santa Cruz, the MAS won nine of fifteen provinces in the most recent elections. At the same time, the MAS has promoted its model of state capitalism with the private sector, promising to respect private property, and pledging economic development, even as it has begun to expropriate the agricultural holdings of many lowland opposition leaders.

What seemed an existential threat to Morales and the MAS in 2008 has been reduced to a disjointed cadre of right-wing ideologues in 2014. The fate of the Media Luna is a lesson about the sometimes rapidly changing political and economic circumstances around elites in Bolivia and Latin America. The MAS firmly controls the Bolivian state and enjoys broadly distributed electoral support. Despite occasional tensions, neighboring states have also backed the Morales administration. With major agribusiness and hydrocarbons investments in Bolivia, Brazil energetically pressured Media Luna leaders to negotiate with the MAS government. Internationally isolated, lacking a credible electoral instrument, with less economic clout than in the past, Media Luna elites also have lost their historical monopoly brokering access to the global economy. Perhaps hardest to recapture: they no longer appear able to offer a compelling national project or vision for the future.

Leave a comment
by clalsstaff on April 1, 2014  •  Permalink
Posted in Bolivia
Tagged ,

Posted by clalsstaff on April 1, 2014

https://aulablog.net/2014/04/01/will-bolivias-half-moon-rise-again/

Central American Elites Are Evolving But Cling to Power

From left to right: Manuel Torres, Ricardo Barrientos, Hugo Noé Pino, Aaron Schneider and Elizabeth Oglesby participating in the project seminar in Costa Rica

From left to right: Manuel Torres, Ricardo Barrientos, Hugo Noé Pino, Aaron Schneider and Elizabeth Oglesby participating in the project seminar in Costa Rica

The sources of Central American elites’ wealth are evolving, as are their fundamental interests and the ways they wield political power.  Land‑intensive production – the focus of decades of insightful scholarship – continues to prevail in Guatemala and Honduras, but the economically powerful now maintain their position through a growing array of service-sector activities and by capturing rents from public coffers.  Changes in their economic foundations are but one of several transformative processes that swept the region beginning during the 1980s, making the past three decades a period of fundamental rupture with the past.

  • Civil wars in El Salvador, Guatemala and Nicaragua during the 1980s transformed the economies in all three countries and had spillover effects in Costa Rica and Honduras.  Most striking is the case of El Salvador, where elites abandoned the countryside upon which they had depended from time immemorial, never to return.
  • Structural adjustment programs, implemented throughout the region during the 1990s, changed the role of the state in Central American economies and thus the ways in which the public sector intersected with the elites’ wealth-accumulation strategies.  Hasty and corruption-ridden privatizations, in particular of energy and telecommunications and of an array of public services, created a reformist façade but gave private-sector groups a piñata that helped to ensure uninterrupted enrichment.
  • During that same decade, transitions to electoral democracy contributed to elite reliance – albeit with some important exceptions – on political parties, campaign strategies and legislative lobbying to protect their interests.  Ties to military and death squad enforcers are no longer the principal vehicles for the enforcement of elite imperatives, though Honduras today is increasingly reminiscent of the worst times in Guatemala and El Salvador.

Central America’s elites have yet to offer the region a vision of reform that will enable the isthmus to overcome misery, exploitation and predatory rule.  While dominant groups have embarked on aggressive state-building strategies, experts question whether these are producing the virtuous dynamics that advance the general welfare of the population and ensure effective governance. 

Scholars from across Central America have reached these conclusions through research and seminars under a multi-year AU program on Central American elites and power.  To foster better understanding of the shifting landscape in the region, and thus to illuminate plausible paths toward more equitable distribution of power and resources, the Ford Foundation is supporting this effort, undertaken in partnership with more than two dozen researchers from institutions throughout the isthmus and the United States.  The project was the focus of a recent workshop at FLACSO Costa Rica, and several publications will result over the course of 2013 and 2014.  Click here for more information.

Leave a comment
by clalsstaff on January 18, 2013  •  Permalink
Posted in Central America
Tagged , , ,

Posted by clalsstaff on January 18, 2013

https://aulablog.net/2013/01/18/central-american-elites-are-evolving-but-cling-to-power/

« Older Posts