"The U.S. Investment Bubble in Central America,"
Tobis, David
Capitalism is like a giant plastic balloon: when you punch in one side it pops out somewhere else. The contradictions of capitalism which originally generated the monopoly stage domestically and...
...firms in the region...
...In the industrial sector, the U.S...
...investment in Guatemala.t' 2 *In the near future the major U.S...
...In an attempt to overcome these contradictions U.S...
...Mooney left AID in the late 1960's to work for ADELA, a giant multinational consortium (see references 19 and 20 at end of article...
...Direct Investment in Guatemala," unclassified U.S...
...TABLE Va OIL EXPLORATION IN GUATEMALA COMPANY SIZE OF CONCESSION LOCATION (acres) Anschutz Overseas Corp.6 982,000 Peten Basic Resources International 936,122 Peten Alta Verapaz Exxon 205,507 Pacific Continental Shelf Mobil/Texaco Pacific Continental Shelf Monsanto * Alta Verapaz Tennaco 376,000 Pacific Continental Shelf Transworld Guatemala Corp...
...I32 LAAD has begun to take temporary control of small local producers, marketers, warehousers and shippers of food and other agricultural products...
...It has already sold its Costa Rican operations and wants to sell its operations in Panama...
...IV, No...
...51) December 18, 1972, p. 23...
...Robert Irquhart, "Guatemala Acts to Boost Investment," Journal of Commerce, July 10, 1970...
...The dollar is no longer the basis of the world monetary system...
...EXMIBAL...
...The value of the shares of the company as a result has fallen from $89 in 1969 to $8 in April 1973...
...1961 1965 39 700,000 batteries Foremost-McKesson (12) Foremost Dairies de (see comment) 1960 1960 70 285,000 565,189 milk, ice cream Formed from 4 firms: Pelsa, El AdministraGuatemala S.A...
...dominance in the 1945-1972 period as one of its permanent characteristics...
...investments are important trends to study in the future...
...dominance), he took a leave of absence to work for U.S...
...pharmaceutical firms which operate in Guatemala-Pfizer and Johnson & Johnson-are not listed in the Directory...
...Paid-in Assets: Type of Company Company Owner Founded Acquired Ownership Capital Book Value Production Comments Beatrice Foods (1) Fabrica de Productos Mishaan Pinto, 1964 300,000 prepared Alimenticios Rene, SA, Rene Menendez cereals, snacks oise Cascade (2) Industria Papelera Arimany 1945 1964 88 4,250,000 bond & kraft Guat...
...After the 10 yr...
...The more important figure is the percent of equity at the time of the original investment, rather than the current percent...
...As Gabriel Kolko correctly points out, the United States is still the only military power that can stop "healthy Third World revolutionary forces...
...firms Percent of these firms in the sector in joint ventures Manufacturing 57 49 Services 10 40 Commerce 26 21 Construction, 13 17 Mining & Finance Agriculture 4 0 TOTAL 110 Source: Phil Church, "Foreign Investment: The Operation of U.S...
...The latter, more competitive sector is newer and encompasses most other processed food...
...2 The growth in European investment and the percentage decline of U.S...
...This practice exists not only in Central America but worldwide...
...4) information from the Bank of Guatemala...
...4) When U.S...
...It has liberated from exploitative relationships the resources and productive forces which are now mobilized to advance the struggles in nations still under capitalist domination...
...It is plausible to expect, though we have not studied this in depth, that these firms from outside the region will begin to make incursions into Central America through trade and investment...
...Company (PEMEX) distribution iip orris (1) products Clark de Zaror 1962 1967 83 1,200,000 1,120,507 chewing gum, Centroamerica S.A...
...Although European investments doubled over the same four years, they are still insignificant, representing only 3.8 percent of all foreign investment...
...Tobis, op...
...The decrease in per capita income for 1970 is probably overstated...
...2 According to the Central Bank of Guatemala, the book value of foreign investment was $137.6 million in 1959 and rose to $286.3 million by 1969.*3 Of the total *Book value represents a corporation's stated value in its account books...
...The arrangements for the first phase are nearly complete...
...All told, the competition in Guatemalan investment from Western Europe and Japan is weak and restricted to very specific projects...
...Banco de Guatemala, Sector Externo, Estadisticas, 1966, p. 36...
...firms are exporting out of Central America however, subsidiaries based in other areas 36 THE RISE AND FALL OF THE BIG BANANA What has happened to the United Fruit Company (UFC) is a slight variation of the contradictions inherent in monopoly capitalism: the need to expand and the decreasing areas in which to do so...
...A Luxembourg-based company, Basic Resources International, S.A., has discovered oil in Guatemala and has recently completed its second well on a 936,000-acre petroleum concession in the Peten region...
...multinational firms have established nominal headquarters in those countries for tax purposes...
...The individuals who participate in joint ventures with U.S...
...multinational corporations found a similar situation...
...Department of Commerce, 1970...
...Originally the two firms were locally owned, ran into difficulties and were bought out by Grace which was no more successful and sold out to Riviana...
...firms...
...Doriol Assistant Manager Boise Cascade (Industria Papelera) Guatemala June 1, 1971 *When Boise Cascade originally acquired Industria Papelera, the company had a monopoly in the production of kraft paper...
...company took control of a firm it could exploit the entire Central American region more efficiently and thereby make the operation profitable...
...The high external tariff meant that goods formerly imported into the region could no longer be sold profitably...
...llsbury (21) Molinos Modernos S.A...
...David Tobis39 REFERENCES Note: Much of the information for this study was gathered in Guatemala between February and July 1971...
...investments or firms which are currently 100 percent U.S.-owned, will initiate nominal (up to 25 percent) joint ownership with Guatemalan capital...
...Grace, canned foods...
...Mills provided Guatemalteca S.A...
...6) Recopilaciones de Leyes de la Republica de Guatemala, on file in the National Archives...
...The nationalization of International Petroleum Corporation (owned by Exxon) in Peru, the cancelling of some petroleum concessions in Ecuador and Panama's insistent demands for control of the Canal Zone are indicative of this trend...
...firms...
...mp v -P 3. Gert Rosenthal, "The Role of Private Foreign Investment in the Development of the Central American Common Market," unpublished thesis (Guatemala, 1971), Ch...
...The extent of monopolization can be determined by considering the number of firms in one industry, each firm's share of the market and the differentiation of product lines...
...6) October 1971, p. 10, for more information on the creation of a dependent domestic bourgeoisie in Central America...
...After these companies have been built up and become dependent on U.S...
...investments in Guatemala and Central America which reveals those contradictions in a time of growing inter-imperialist rivalry, nationalist and socialist upsurge, and increasing resistance to the costs of maintaining the empire by the people of the mother country...
...firms in Guatemala, 30 percent is in companies which were acquired...
...For example, Standard Oil of California (Chevron) is considering a 51-49 joint venture for its asphalt refinery...
...The major European capitalist nations are beginning to solidify their common interests in opposition to the United States...
...multinationals, receive tax-exempt status as "New Industries...
...Fortune...
...A recent Harvard Business School study on the operations of 187 U.S...
...and local capital...
...FIASA), a private Guatemalan investment bank established by U.S...
...Hector Melo and Israel Yost, "Funding the Empire: Part II, The Multinational Strategy," NACLA Newsletter (Vol...
...In the manufacturing sector--the largest and most important area of U.S...
...The vise is slowly closing and the worms are being squeezed...
...firms accepted this short-run reduction of profits to preserve their long-run interest...
...When a company is sold, the depreciation of assets for tax purposes starts all over again...
...firms and ADELA Investment Co.2 0 With a $6 million loan from U.S...
...LAAD exerts its financial control in these companies by purchasing stock directly, by providing loans equal to ten times the equity of a company, and by purchasing convertible bonds (i.e., loans which can be exchanged for stocks...
...7. John N. Stopford and Louis T. Wells, Jr., Managing the Multinational Enterprise (New York: Basic Books, Inc...
...GALCASA) sheet metal (15) Industria Quimica Guate- Recalde Larrinaga 1967 100,000' adhesives, b malteca de Adhesivos y synthetic Derivados (INDUCOLL) rubber (16) Pinturas Centroamericanas Prem Rebuli 1958 65 600,000 2,109,187 paints, (PINCASA) varnishes Goodyear (17) Gran Industria de Plihal 1956 1968 77 3,312,070 8,924,972 tires At the time of sale to Goodyear, GINSA was Neumaticos Centro- 67% Guat...
...Interview with Phil Church, U.S...
...The cost to the people of maintaining the empire for the benefit of the private sector becomes even clearer...
...As a recent study by U.S...
...3) May-June 1970, pp...
...According to a company spokesman, Exxon would also establish a refinery if large quantities of oil were to be discovered in Guatemala...
...firms...
...corporations throughout the world, 1,594, or 42 percent, are companies which were acquired.' Many U.S...
...ulf (18) Petroleos Gulf de Mexican Government Oil 1965 100 375,000 4,131,228 gasoline Guatemala S.A...
...AREAS FOR INVESTMENT In Guatemala and Central America the massive penetration of U.S...
...when Phillip Morris tried to branch out from the tobacco industry by producing chewing gum, it was attempting to penetrate WarnerLambert's previous monopoly...
...firms will expand by producing for extra-regional markets which will relieve some of the pressure...
...Bank of America, Report from Bank of America's Man-on-the-Spot in Guatemala, June 1969, p. 1. 26...
...defeat in the Great South Asian War marks the termination of this country's clear hegemony in the imperialist camp...
...General Mills (13) Industria Harinera (see comment) 1958 1969 50 637,437 1,294,677 flour mill Formed from 3 firms...
...Direct ownership occurs later through the purchase of stock, to formalize the control already established...
...and pipes INTUP ERSA eyerhaeuser (31) Caas y mpaques de Dabdou 1961 1964 50 1,500,000 3,316,110 corrugated Guatemala SA boxes30 Table IV, using data from the Bank of Guatemala, shows the extent of national capital involved in ventures with foreign firms...
...firm to exploit a region with minimal capital outlay or risk...
...9. Ibid...
...Gabriel Kolko, "Vietnam and the Future of U.S...
...Again, companies which once had monopolies will face competition...
...2 s 5 Cluett-Peabody's ARROW shirt factory in Guatemala CityMany U.S...
...Of the total paid-in capital (equity) in U.S...
...ployment...
...The creation of CACM in 1960 made this growth possible...
...Department of State, Agency for International Development, Memorandum for the Development Loan Committee, Subject: ROCAP/Latin American Agribusiness Development Corporation (LAAD), AID-DLC/P-972, unclassified...
...AID pointed out, U.S...
...Competition at this stage is beneficial to some corporations, but in the future it will become destructive...
...Steel, Boise Cascade* and Goodyear) acquired local companies they often took over faltering monopolies...
...firms.Food Processing Industry In a competitive industry no one firm controls enough of the market to determine the selling price...
...The growth of national liberation struggles in neo-colonial countries increasingly strains the resources of U.S...
...Ltda...
...capital along the lines described above has led to varying degrees of monopolization in the industries dominated by U.S...
...9) Productos Alimenticios Rios Sanchez 1961 67 250,000 733,061 sweets, Sharp S.A...
...ca-Cola (8) Industrias de Cafe S.A...
...AID) reported a total book value for U.S...
...17, No...
...For these industries within the neo-colony the competition generally preceding the monopoly stage in advanced capitalist countries has not occurred...
...Plant was sold by INFOP, a Guat, industrialization agency...
...8. Interview with Gert Rosenthal, an official of the Secretaria Permanente del Tratado General de Integracion Economica Centroamericana (SIECA), Guatemala, June 15, 1971...
...AID figures represent the high and low estimates of US...
...dor, Lecheros Unidos & Erhbar...
...In some other country where Texaco has no refinery, Gulf returns the favor.* The cooperation exists not only in the distribution of oil but in exploration (Basic Resources, Shenandoah, Saga) and refining (Chevron, Shell...
...The competition for any product within the food processing industry is generally among two or three major U.S...
...firms and (2) other imperialist powers-will permit us to project future developments in the region...
...A definite historical trend has been set...
...dollars and domestic inflation have diminished the value of the dollar to one third that of five years ago: from $35 per ounce of gold in 1968 to nearly $100 per ounce in 1973...
...A parallel process has developed whereby U.S...
...Church, op...
...20, 21...
...ard Brands (27) Dely S.A...
...4. Banco de Guatemala, Sector Externo, Estadisticas, 1966, p. 36...
...1 9 This private corporation is a consortium of eleven U.S...
...For example, the Texaco refinery provides refined Texaco gasoline to all the oil companies in Guatemala...
...firms (Standard Oil of California, Exxon, Gulf and Texaco) and one British/Dutch firm (Royal Dutch Shell) distribute all the gasoline that is consumed in the country In the mid-1960's two small refineries were established, one by Texaco on the Pacific coast and one as a 60-40 joint venture of Standard Oil of California with Shell on the Atlantic coast.* The same monopoly structure for oil refining and distribution exists throughout all of Central America...
...This revolutionalry change has set new limits on the free expansion of capitalism...
...socialism has set sharp limits to the free development of capitalism...
...The information they presented came from their own corporation's market survey...
...Aggravating this contradiction of capitalist production is a contradiction of imperialism: the surplus produced in the neo-colony is appropriated by the mother country, compounding the colony's inability to purchase what is produced...
...See David Tobis, "United Fruit Is Not Chiquita," NACLA Newsletter (Vol...
...Sr...
...The Kissingers of the world are as aware of this trend as we are...
...attachment B. 13...
...Food processing has attracted more foreign investment than any other sector in Guatemala...
...Some of the surplus which is derived from the region, however, remains with the local producer...
...1. Competition Among U.S...
...To replace the imperialists with local capitalists or in this case, to maintain local capitalists would merely be to promote a less efficient system of exploitation...
...Part of this loss is imaginary because many new imports actually come from U.S...
...The Minnesota Mining and Manufacturing Corporation (3M) is trying to break into the copier business in Guatemala, currently monopolized by Xerox...
...9% Gen...
...Several corporations already export goods to the Caribbean and the rest of Latin America...
...multinationals based in other Central American countries, Europe and Japan.38 imperialism...
...companies began to phase themselves out of agriculture and infrastructure and to invest in a massive way in the industrial sector of Guatemala...
...An examination of the degree of monopolization will allow us to point out the major trends of imperialism in Central America and to make projections about future developments in this area...
...foreign investment in 1969, 86 percent was from the United States...
...Aid to the Central American Common Market," in this issue of the Report, p. 3. 16...
...For additional information see: Bank of America, Report from Bank of America's Man-on-the-Spot in Guatemala, November 1969...
...UFC therefore decided to expand within the United States in the food processing industry--an area in which the company had experience...
...bank in Guatemala, have been able to slip in through the back door by setting up insurance companies...
...Using the above estimate, the book value of U.S...
...Using this system, in 1971, for example, the government deficit is $9.5 billion and the private deficit is $0.2 billion...
...2 Though this dramatic drop primarily represents a cyclical decrease after a period of overinvestment, the cycle is indicative of the large process-the loss of areas in which to expand-which is increasing competition among U.S...
...Finding this unprofitable, it has sold out in Costa Rica, and wants to do the same in Guatemala and Panama...
...But if, as is likely, CACM begins to function smoothly again, what will happen as capitalist industrial growth proceeds...
...had $1.2 mil...
...This represents a rise of 128.8 percent during the decade, compared to an increase during the 1950's of only 37 percent.' As dramatic as this increase in the amount of foreign investment has been its shift from the agricultural to the industrial sector...
...As a result, food processing has presented the greatest number of difficulties for U.S...
...b) Diversification into new product lines within an industry will bring a firm into a competitive situation which it had previously avoided by specializing in a few specific items...
...snacks (23) Fabrica Kugart's Matneu, Matheu, Garin 1960 1969 100 prepared foods, Garin Cia...
...During that time the author interviewed the managers of the Fortune 500 corporations which have facilities in that country...
...2 3 00000000000 *These two refineries have a capacity of 14,000 and 12,000 barrels per day, respectively...
...Two U.S...
...Glidden (14) Galvanisadora Centro- Prem Rebuli 1964 61 600,000 2,634,664 galvanized americana S.A...
...Standard Oil of California is negotiating to establish an asphalt plant as a joint venture with local businessmen...
...hegemony...
...a) Producing goods in other than the firm's original industry has led to competition...
...Gutierrez, Blanco, Bosch Soto 1963 1968 80 500.000 1,373,089 animal feed Cluett, Peabody (7) Arrow de Centro- 1961 100 300,000 men's shirts Owner had a licensing agreement with company america Ltda...
...Because diverse opportunities...
...AID document, CERP D, Guatemala A-107, June 16, 1972, p. 1. 6. Rosenthal, op cit., Ch...
...multinational corporations...
...AID official, June 14, 1971...
...Many U.S...
...It's gone...
...companies invested an average of $25 million per year in Guatemala...
...Though some firms specialize in the production of certain items and emphasize marketing in different countries to decrease the level of competition, no one firm controls more than 5 percent of the over-all regional market...
...Similiano Garcia 1959 1970 78 1,678 400 canned foods Grace which sold the companies to Riviana...
...But its expansion was not rapid or widespread enough...
...firms into competition, and will intensify the competition in nn-monopolized areas...
...and Saga Petroleum A/S of Norway to develop the concession...
...There have been two primary reasons for this: a) The firms feel that the increased competition will expand the entire market and therefore help them in the long run...
...The plants were primarily set up to increase the sales of each firm's other Latin American subsidiaries by serving as outlets behind the tariff wall of the Central American Common Market (CACM).'s The plan has not worked as well as expected...
...By 1970 new U.S...
...Rios Sanchez 1957 67 2,330,000 3,875,721 instant coffee, 51 per cent owned by Coca-Cola and 16 (INCASA) canned foods percent owned by International Mining Co...
...The resulting competition for limited markets has forced companies to maintain their level of production at 60 to 80 percent of capacity...
...Financial institutions which could not enter Guatemala directly because of the Bank of America's strength as the only U.S...
...investment in Guatemala in the mid-1960's, overall U.S...
...Japan, although dependent militarily on the United States, has shown growing independence in its foreign economic policy...
...A second means employed by the oil companies to deal with the problems created by monopolization and the limited size of the market is to diversify...
...Clark, gum), consolidate production (Ducal with Kerns),* or sell part of their operation to a local producer (Kraf~co and Revlon...
...Squibb originally invested in Guatemala to have an advantage over firms which do not produce within Central America...
...TABLE VI MARKET SHARE FOR SELECTED FOREIGN FIRMS IN GUATEMALA AND CENTRAL AMERICA PRODUCT FOREIGN FIRM FIRM'S PERCENT FIRM'S PERCENTOF OF GUATEMALAN CENTRAL AMERICAN MARKET MARKET Animal Feed Cargill 36 Central Soya 30 Ralston Purina 15 Molino Central 9 Other 10 Cake Mixes General Mills 60 Pillsbury 40 Cigarettes British American Tobacco & 99 Phillip Morris Dress Shirts Cluett, Peabody 68 28 Gasoline Texaco 30 Shell, Exxon & 58 Chevron Gulf 12 Margarine United Fruit 41 Unilever 30 Standard Brands 24 Others 5 Milk Foremost- 40 (pasteurized) McKesson Paper (kraft) Boise Cascade 18 (bond) Boise Cascade 88 Steel Tubing U.S...
...Expropriation and restrictions on foreign ownership further diminish new areas for expansion...
...The demand previously filled by imports was quickly met, however, and the saturation of this market, followed by the collapse and subsequent feeble restructuring of CACM, has forced U.S...
...Interview with Agusto Larreta, Manager of Kraftco in Guatemala, March 18, 1971...
...company, after operating under these manufacturers' agreements for several years, eventually acquired the local firm...
...companies in Guatemala have already had difficulties and have been forced to close down (Dart, tupperware...
...In Central America the drug industry is moderately competitive...
...The next phase of competition among the imperialist powers in Central America will be in investment...
...9, May 1973, p. 14.They see a renegade, a revolutionary strong in mind and strong in love They find women comrades refusing seduction and subjagation interrogation They find a union of workers and single out a few who inspire more and with U.S...
...investments in the industrial sector in Guatemala followed three principal forms: (1) acquisitions of local firms, (2) joint ventures with local businessmen and (3) production arrangements with competing firms...
...corporations (e.g., U.S...
...Goodyear estimates the total regional sales as 450,000, a discrepancy from the Firestone market estimate of 400,000 tires...
...By 1969 the company had $80 million in idle cash which it could not productively invest...
...3) Bolsas de Papel S.A...
...anti-trust suits and banana market limitations, the company had difficulty expanding in Latin America...
...patent props and with U.S...
...The proportion of Guatemalan imports from the United States has dropped from 67 percent in 1951 to 42 percent in 1965 and 34 percent in 1970.*3o One of the reasons the United States began to invest massively in the Guatemalan industrial sector was to regain the advantage which it previously held in trade but was losing to Western Europe and Japan...
...firms consequently face a slower growth rate of the internal market relative to production...
...firms of $135 million...
...V, No...
...But the same problems of expansion continued to exist...
...The role that EXMIBAL will play in the Guatemalan economy and as part of the over-all U.S...
...In addition, Gulf Oil, which only has distribution facilities, bought out the state-owned Mexican Company Pemex to begin its operations...
...The entire project will cost $1.5 billion!2 2 Several international oil companies are currently exploring for oil in Guatemala...
...tThe distribution of the remaining U.S...
...But, shaken by the Arbenz government's attempt to nationalize United Fruit Company land in 1953, the victory of the Cuban Revolution in 1959, and faced with the need to export surplus capital in this period, U.S...
...If one looks only at those firms which began their operations between 1960 and 1970, 15 out of 34, or 44 percent, began by acquiring local firms...
...Now Goodyear has 80 percent of the Guatemalan market and Firestone has 65 percent of the Costa Rican market...
...Under these circumstances, increased capital investment simply heightens the contradictions...
...The two phase project will have a $40 million investment to cut hardwood and to make kraft paper...
...A U.S...
...Lurking in the wings of the food processing industry is the Latin American Agribusiness Development Corporation (LAAD...
...Alimenticios Kerns S.A...
...investment can be gotten from Table I which breaks down all foreign investment by sector...
...These monopolies existed because the limited size of the local market could not support more than one large firm...
...Virtually all of the Fortune 500 companies which are involved in the local food processing industry began their operations by buying out Guatemalan producers...
...p. 129...
...To rationalize and preserve their collective interests the companies cooperate with each other and enter joint ventures in order to eliminate destructive competition whenever possible...
...empire is growing...
...The pattern of monopolization in oil distribution has remained essentially the same since its inception in the 1920's, though Texaco and Gulf are newer to the market...
...These processes will bring previously monopolistic U.S...
...As a result, perhaps four or five firms control 80 to 90 percent of production.33 The oil industry in Guatemala consists of three parts: (1) the old, monopolized area of distribution, (2) a newer, monopolized area of refining and (3) exploration...
...corporations...
...Thus they did not have to compete in Central America...
...the rest, by foreigners.' " The vast majority of these foreign companies are from the United States...
...Ducal and Kerns have had a rough time of it...
...Similarly, Exxon buys its oil from "competitors" in Guatemala and not from its own refineries in Nicaragua or El Salvador.34 and a part of food processing...
...There is no point in kidding ourselves about it, that it is just shaky, that we will reconstruct it...
...9 b) All but three of these acquisitions are now joint ventures.t The process promotes a dependent, impotent bourgeoisie.' 0 c) Government tax revenues decrease...
...Interview with Agusto Larreta, Manager of Kraftco in Guatemala, March 18, 1971...
...The United States Balance of Payments: From Crisis to Controversy...
...Firms There are signs of growing antagonistic competition among U.S...
...HOTELS FROM BOARDWALK TO PARK PLACE Central American industries have reached varying degrees of monopolization...
...1, October 1972, p. 3. 2. Banco de Guatemala, Departamento de Estudios Economicos y Relaciones Publicas, Balanza de Pagos Internacionales de Guatemala en 1965, pp...
...contract ended, bought 1 of the stock...
...35 TABLE VII U.S...
...3) World Trade Directory Reports compiled by the Commercial Attache of the U.S...
...John B. Connally April 29, 1973 Throughout the entire period from 1960 to 1971, the United States has suffered from a negative balance of payments caused by its imperialist military and economic policies...
...The company's subsidiary in Guatemala, Recursos del Norte Ltda., has recently gone into a joint venture with Shenandoah Oil Corp...
...Domestic resistance to bearing the cost of the empire further limits the strategic options of imperialism...
...These five processes-(l) the growing competition among U.S...
...The monetary and trading system that provided the basis for the postwar era has collapsed...
...A syndicate of investors from Europe, India and Guatemala has signed an agreement to form another paper mill, Papelera del Istmo...
...Fred Goff, "Bank of America Has a Man on the Spot in Latin American Agribusiness,"NACLA Newsletter (Vol...
...Each firm has given a different reason for its problems...
...plant 51 Alia(5) Zarco Alfasa 1964 92.5 800,000 2.073.118 animal feed enral Soya (6) Amentos Mariscal S.A...
...In the long run, however, this strategy is contradictory...
...There are however, areas of production which are already monopolized: oil distribution and refining, paper, steel tubing, tires and chemicals, *When EXMIBAL begins its operations it will dramatically help the oil industry by consuming between 13,000 and 27,000 barrels of heavy duty oil per day...
...nationalism in neo-colonial countries is at a new height...
...4. Nationalism is at a New Height In an increasing number of countries the "free flow" of U.S...
...Table I breaks down foreign investment in Guatemala by sector from 1963 to 1970...
...Colt Industries is planning to export motors to the Caribbean...
...Sharks serving sharks...
...The tendency for the next few years will be that new U.S...
...United Fruit, the other giant in Guatemala,' having disposed of a large part of its holdings in the late 1950's and early 1960's, was forced by a U.S...
...AID...
...Gulf Oil Co., traditionally in petroleum extraction, tried to compete in the distribution market in Central America...
...5) formal annoucements of corporate activity which are printed as "Avisos" in El Grafico...
...FIRMS IN JOINT VENTURES IN GUATEMALA: 1971 SECTOR Total number of U.S...
...cit., p. 8. 17...
...investments...
...The U.S...
...Lettuce production and ice "ream and soda chains were the principal areas that United Fruit was able to break into and in turn help monopolize (UFC acquired Inter-Harvest Lettuce, A&W Root Beer and Baskin Robbins ice cream in the mid-1960's...
...It should be added that we are not arguing for the maintenance of an inefficient local bourgeoisie or lower rates of production...
...In Guatemala, as in most capitalist countries, U.S...
...1, 1966, p. 3; an interview with George Bilbao, Manager of Squibb in Guatemala, April 28, 1971...
...The food processing industry comprises both monopolistic and more competitive sectors...
...companies, once they have established their own factories, sign production agreements with competing Guatemalan or U.S...
...These two firms currently have 60 and 40 percent of the Central American market respectively...
...obrto Sanchez 199 90 100.000 silver mine .S...
...Information for this chart came from six sources: (1) interviews conducted in 1971 with managers of these corporations...
...2. Joint Ventures Prior to the time when U.S...
...999,000 Peten Sources: El Grafico: February 7,1972 and April 14, 1972...
...Today one-third of the world's population is socialist...
...corporate control...
...Banco de Guatemala, Departamento de Cambios, Inversiones extranjeras directas en Guatemala por pals de origen, 1970...
...bank...
...By 1969 this figure had fallen to 86 percent...
...The analysis of emerging changes in the first two conditions-absence of competition from (1) other U.S...
...companies in the country, Empresa Electrica and International Railroads of Central America, sold their holdings in the late 1960's to the Guatemalan government on terms very favorable to the companies...
...Only Nestle's and Maggi (both Swiss) and British American Tobacco provide any comparable investment...
...There are 20 major pharmaceutical firms in Guatemala...
...capital to Guatemala...
...Their investment will eventually reach $80 million in equity and $250 million in assets...
...500 companies and at least two are European...
...This has been the reasoning behind Coca-Cola's subsidiary (INCASA) producing ketchup for Del Monte even though INCASA produces its own ketchup...
...Interviews with Enrique Billareal, Assistant Manager of Standard Oil of California in Guatemala, June 1, 1971...
...paper The bank passed the debt & control to Boise...
...Arimany 1960 1963 67 50,000 857,545 cement bags (4) Empress Comercial e Sanchez Garcia 1931 1967 87 788,000 1,300,733 printing Industrial Hispania S.A...
...It represents total investment minus a large depreciation write-off for tax purposes...
...Its partners will be either the Novella family, owners of the largest cement factory and one of Guatemala's wealthiest families, or some of the families behind local construction firms...
...100-101, *The foregoing figures, presented by the International Economic Polioy Association, include governmentfinanced exports as receipts under the government sector account...
...firms did establish themselves in Central America, the variety of investment opportunities available for growth enabled them to keep competition to a minimum...
...It would be incorrect to overstate the decline of U.S...
...See Suzanne Jonas (Bodenheimer), "Masterminding the Mini-Market...
...5 The Central Bank and the U.S...
...corporations ranked by sales...
...anti-trust suit to sell its remaining holdings to Del Monte for $20 million in 1973.' Despite the sale to the Guatemalan government of these two subsidiaries which together had accounted for 36 percent of U.S...
...holdings have in- creased...
...Many U.S...
...know-how" & a loan...
...debt to U.S...
...Incuded with the figures for Commerce.28 The massive increase of U.S...
...Monsanto, through its subsidiary Asufres de Guatemala, is in a joint venture with Basic Resources International and operates on 1/3 of that company's concession...
...Kraft perhaps came closest to describing the real situation: the market is not sufficiently large and cannot expand fast enough, given that Guatemala's per capita income is $266 per year and will fall to $246 by 1980.26 During the 1960's, U.S...
...CACM provided a large market primarily for import-substitution industries, the main attraction for U.S...
...Steel 90 Toothpaste Colgate 90 Source: This table is based on interviews with the managers of some of these firms in Guatemala...
...firms have begun to diversify in two ways: (a) by expanding into new industries, and (b) by branching out into new product lines in the same industry...
...b) Joint ventures decrease the risk of nationalizations by superficially tying the interests of the rich Guatemalans to the interests of the colonizers...
...In those industrial fields where several potentially competitive U.S...
...But the New Left has held a myopic view of imperialism, persistently equating it with U.S...
...TABLE IX U.S BASIC BALANCE OF PAYMENTS: 1960-71* (billions of dollars) YEAR BY SECTOR TOTAL Private Government 1960 +2.5 -3.7 -1.2 1961 +3.3 -4.0 - .7 1962 +2.1 -3.8 -1.7 1963 +1.6 -3.2 -1.6 1964 +2.9 -3.0 - .1 1965 +1.3 -3.3 -2.0 1966 +2.2 -4.2 -2.0 1967 +1.4 -4.6 -3.2 1968 +3.1 -4.8 -1.7 1969 +1.5 -4.4 -2.9 1970 +1.9 -5.3 -3.4 1971 -3.5 -6.2' -9.7 Source: International Economic Policy Association...
...Embassy in Guatemala...
...Ribbons of their blood kiss the shore and streaks of sadness take flight with the sun...
...capital is being restricted by bourgeois nationalist military and civilian regimes...
...companies initially enter the Guatemalan market via a production contract with a local firm in the same industry...
...The company of course attributes these problems, as they always have, to hurricanes.37 of Latin America will begin to find that they too must expand...
...imperialism and viewing U.S...
...firms initially enter the Guatemalan market by working with or helping a local firm, by means of a loan, technical assistance, or a licensing or manufacturing agreement...
...Zoe Best In the summer of 1972 eight labor leaders of the Partido Guatemalteco de Trabajo, the Guatemalan Communist Party, disappeared...
...firms in these three areas account for one third of all U.S...
...2I LAAD's strategy is to make specific companies more efficient in order to promote the expansion and integration of the entire sector under the domination of a few U.S.-owned and U.S.-controlled firms-a process which might be described as planned monopolization...
...The competition in advertising and marketing increases the sales for the entire industry by expanding the over-all demand--convincing people to buy products they never before thought they needed...
...Ibid...
...The monopolistic nature of the oil industry in Guatemala and the limited size of the market make it difficult for the companies to expand and to find new ways to improve their investments.* For example, Gulf, a newcomer to the market, was unable to break the control held by the old monopolies and is divesting itself of operations because they are only marginally profitable...
...The previous owners were primarily new, small capitalists who were willing to sell out on favorable terms...
...corporations are wealthy businessmen who own other companies which then become affiliated with the U.S...
...c ) Although a small portion of the surplus produced by the foreign-owned subsidiary stays in Guatemala in the form of shareholders' dividends, that surplus is appropriated by the local elite and therefore only accentuates the distortions in income distribution...
...THE CONTRADICTIONS COME HOME TO ROOST These four factors not only explain why U.S...
...In 1971 the market could not support the two canned food firms and pucal was absorbed by Kern& Diversification These problems of underconsumption coupled with the need of capitalist corporations to expand constantly, make it necessary for firms to diversify and find new markets...
...That market has leveled off...
...50 (Guatemala April 12, 1971...
...In Guatemala and other neo-colonial areas, many major firms established themselves from the outset as full-blown monopolies...
...Interviews with the managers of Coca-Cola (Rios, April 20, 1971) and Standard Brands (Gonzales, May 27, 1971) in Guatemala...
...The 1960's marked a major shift in the flow of U.S...
...Instituto Centroamericano de Investigacion y Tecnologia Industrial (ICAITI), "La industria farmaceutica centroamericana," MonograjfasIndustriales Centroamericanas, No...
...The figures presented in the text list book value investments and are therefore higher...
...These countries have been falling apart for the last three centuries so one loses a sense of urgency...
...Shortly thereafter, GINSA sold out to Goodyear...
...This shift has had the most drastic effect on the Guatemalan economy...
...TABLE VIfI TIRE MARKET IN CENTRAL AMERICAN COUNTRIES: 1970 (percent of sales) Manufactured in Region Imported GOODYEAR FIRESTONE JAPANESE OTHER Guatemala 80 18 1 1 El Salvador 65 25 5 5 Honduras 36 12 33 19 Nicaragua 39 28 25 8 Costa Rica 29 65 3 3 Source: Figures are based on a market survey by Goodyear Tire and Rubber Co...
...In virtually all joint ventures the U.S...
...The ready demand for these products could now be filled by U.S...
...The other shares are usually held by one, or not more than a half a dozen, Guatemalan businessmen...
...Shortly, they will begin to eat each other to create more room...
...4, 5, 10...
...Of 2,748 subsidiaries of U.S...
...Mooney's contacts at FIASA and other investment banks throughout Central America will be a boon to LAAD in the next and most profitable phase of its strategy: the sale of shares in the companies over which U.S...
...Search for New Markets As investment opportunities get tighter in Central America, U.S...
...Bank of America, Report from Bank of America's Man-on-the-Spot in Guatemala: April, 1969 and May 1972...
...the three acquisitions which are not joint ventures are: Pemex, Arrow de Centroamerica and Kugarts, acquired by Gulf, Cluett-Peabody and Pillsbury respectively...
...The tire manufacturing industry is one good example...
...Originally employed by the World Bank (firmly under U.S...
...Revlon claimed the loss of Honduras from CACM had drastically hurt its sales...
...Boise Cascade will sell hardwood to the syndicate...
...Ducal (in processed foods) gave the same reason but also said its sales were cut back in Nicaragua because of increased domestic taxes...
...empire, (4) the rise of nationalism and (5) the growth of socialism-have contributed to the decline of U.S...
...GINSA) wants to buy all of the remaining shares...
...The era of American supremacy in international finance that began in World War II is finished...
...The drug industry and one area of food processing are in the competitive stage which precedes monopoly...
...corporations which might have provided competition had sufficient, non-competitive investment opportunities in other regions...
...The following is an analysis of U.S...
...1. Guatemala Report, No...
...de Monterrey S.A...
...AID, a government agency which underdevelops countries...
...a) They absorb local wealth and place an increasing share of the local economy under direct and indirect U.S...
...ADELA holds stock in LAAD and finances FIASA...
...share of foreign investment rose from 74 to 80 percent in the same period...
...Exxon owned a fertilizer plant, Fertica, but found it to be unprofitable and sold it to a Mexican company in 1970...
...The U.S...
...corporations, a few major and several small local producers...
...capital employs 58 people for every $100,000 of total assets, whereas the national average is 658 people.* The contradiction, however, is that if companies minimize employment via capital-intensive production they are faced with a slower growth rate of the internal market relative to the growth rate of production...
...firm maintains majority ownership...
...CACM created a regional market which necessitated financing, management, tech- nology, production and distribution on a scale that made it impossible for them to compete...
...It couldn't compete, however, and eventually sold its gum operation...
...In 1962, only 19 percent of Central America's $38 million in pharmaceutical sales was produced within the region...
...This process has furthered the underdevelopment of the economy of Guatemala in the following ways: a) The capital generated from the sale of these firms generally stays in the United States as stocks held in the parent (purchasing) company...
...Pharmaceutical Industry 31 MU$ICAL CHAIR$ One man played a key role in the implementation of LAAD's Central American takeover strategy: Thomas W. Mooney...
...This arrangement allows the U.S...
...IV, No...
...Over half (28) of the Fortune 500 firms in the country have their investments in three areas: (1) pharmaceuticals, (2) food processing and (3) the petroleum industry (refining, distribution and exploration).* The combined assets of U.S...
...The manager of Squibb attributed the growth in this market to frustrated rising expectations of lower and middle income groups...
...The larger figures were presented in the body of this article because they are the only estimates available which span the time period from 1959 to 1969...
...companies to curtail further expansion...
...Apparently the market for some products is new enough and expanding rapidly enough (at a rate of 10 to 15 percent a year) that competition is seen as a benefit to each of the firms involved...
...companies, (2) the growing competition among other imperialist powers and the United States, (3) the increasing cost of maintaining the U.S...
...Squibb, for example, was considering the production of pharmaceuticals for a firm which did not have facilities in Central America...
...imported guides to public safety to counter-insurgency electrodes, water, cigarettes slashing and beating raping and watching waiting Then when the power of Their silence (because They've said it all in Their work) frustrates besieged insanity cannibal fantasy circling vulture glares arouses the putrid order to fly them above the Pacific to drop Them scarred, living and dead o limp and rigid sisters and brothers with their sex tortured away to be made final fare for the sharks...
...for rapid corporate expansion were available internationally during the 1960's, investments could be undertaken which did not yield the maximum possible return...
...Many of these products are non-nutritional, such as plastic food snacks, instant coffee, corn flakes and soda...
...The Guatemalan Association of Life Insurance Agents has made a formal petition to the Superintendent of Banks requesting that no further licenses be issued to foreign insurance companies to operate in the country...
...Hector Brolo Division Manager American Cyanamid, Guatemala April 26, 1971 *In Central America only 5 million of the 15.5 million people consume pharmaceutical products...
...cit., pp...
...concerns...
...Hired to "develop" local investment banks throughout Central America, Mooney, personally directed the establishment of the one in Costa Rica, later used as the model for FIASA in Guatemala...
...III, pp...
...mConcession request submitted in 1972...
...Oil Industry In an industry which has become monopolized, companies which have competed with each other for yeats have eliminated competition by absorbing other firms, expanding production and increasing their control of the market...
...firms...
...The monopoly structure of the processed food industry as a whole made it extremely difficult for UFC to diversify and expand rapidly enough in the United States...
...11-15...
...In February 1971 Mooney moved again, this time to become LAAD's representative in Central America...
...Of those firms which began operations between 1960 and 1970, 42.7 percent of the equity is in acquired firms...
...investment in this project by International Nickel and Hanna Mining will equal more than half the current total of foreign investment in the country...
...The majority of the acquired firms were of moderate size in the context of Guatemala...
...Twenty-seven years, however, was only a brief historical period...
...firms were able to establish full-blown monopolies in Cental America but also help to explain why investment conditions in the region throughout the 1960's were generally favorable for them...
...4 Chevron-Shell hopes to convert its refinery to a heavy duty oil producer exclusively for EXMIBAL...
...An average refinery in the United States produces around 200,000 barrels per day...
...Many foreign firms set up plants within the region because of the low investment required to establish a conversion operation...
...The competition between these two firms occurs within the larger Central American region, not in the country where each is based...
...Each U.S...
...b) Companies can utilize excess capacity and increase their profit by producing for competitors...
...firms began investing in the industrial sector there were virtually no joint ventures between U.S...
...This was possible for four primary reasons which vary in importance depending on the specific industry: 1) There was only minimal competition from other U.S...
...companies among the Fortune 500 account for the vast majority of U.S...
...1 ' But the market has failed to expand as rapidly as necessary to utilize the productive capacity of the competing firms...
...Three pharmaceutical companies, for instance, sell products to Panama, the Dominican Republic and Ecuador...
...It was later revealed by a policeman that the government was responsible for their disappearance and arrest...
...Table VII presents the percentage of foreign investment from the United States in "Looks like there's some truth to the rumor we're being taken over by Boise Cascade...
...Foreign Policy," Liberation, Vol...
...All foreign investments and not only those firms which are acquired perpetuate these distortions...
...imperial system will be discussed in a separate article...
...any other solution is anachronistic...
...Direccion General de Estadisticas, Anuarlo de Comercio Exterior, (Guatemala 1951, i965) and Informador Estadistico, No...
...Steel (30) Industria de Tubos y Fundidora de Fierro y Acero 1961 1968 94 579,000 2,475,680 steel profiles Perfiles, S.A...
...2) Investment competition from other imperialist powers remained minimal...
...In 1971, roughly 50 percent of a $50 million market was nominally produced locally.*' 4 The pharmaceutical industry in Guatemala is a "conversion" industry...
...MULTINATIONAL CORPORATIONS: 1960-19692a Fctune 500 Guatemalan Previous Year Year Percent U.S...
...canned foods olgate almoive (10) Inustria Quimica S.A...
...producing items of varying quality and aiming their sales at distinct income groups...
...Three other major processes serve to intensify the contradictions among U.S...
...investment in Guatemala will be in a nickel mine called Exploraciones y Explotaciones Mineras Izahal, S.A...
...As we mentioned earlier, most U.S...
...In the 1960's when the joint venture policy began to blossom, the U.S...
...TABLE I DIRECT FOREIGN INVESTMENT IN GUATEMALA BY SECTOR& (millions of dollars) SECTOR 1963 1968 1970 Value Percent Value Percent Value Percent Agriculture 29.2 27.2 27.9 25.7 27.1 23.2 Mining 8.0 7.4 2.6 2.4 2.9 2.5 Manufacturing 11.2 10.4 33.9 31.3 42.6 36.3 Construction 2.6 2.4 1.8 1.7 1.8 1.5 Electricity, Gas & 13.5 12.6 14.3 13.3 14.6 12.4 Watert Commerce 15.0 13.9 20.8 19.1 19.9 16.9 Banking * * 6.1 5.6 6.1 5.2 Transportation & 26.2 24.4 .3 .3 .4 .4 Communications Services .3 .3 .7 .6 1.7 1.5 Other 1.5 1.4 .1 .1 TOTAL 107.3 100.0 108.4 100.0 117.1 100.0 Source: Departamento de Cambios, Banco de Guatemala 6 These are equity figures...
...This classification *Fortune magazine annually compiles a list of the 500 largest U.S...
...company stated that 30 percent of the food processing industry is owned by Guatemalans...
...Gonzales, Sigui & Sobenes 1959 1965 87 150,000 241,25 edible oil happen (28) Industria ietalurgica Shlomo Hag 1961 1966 71 150,000 stoves Centroamerica S.A...
...The sale of Empresa Electrica to the Guatemalan government occurred in 1972 and therefore this company is included in these figures...
...investment in Guatemala is roughly $246 million...
...American Cyanamid, currently producing Formica in Nicaragua, was planning to establish a pharmaceutical firm if CACM were to become more stable...
...Wall Street Journal, March 27, 1973...
...candy (20) Tabacalera Centro- Galvez 1931 1964 91 5,000,000 cigarettes americana S.A...
...4 For all of Central America the book value of foreign investments rose from $388.2 million in 1959 to $888.0 million in 1969...
...2) corporate balance sheets which are printed in El Guatemalteco, the official paper of the Guatemalan government...
...8 In some cases pressure was applied by the Fortune 500 company in the form of a threat to establish a competitive operation elsewhere in the region, which would have driven the local firm out of the market...
...capital, technology and markets, LAAD will then sell its stock in the firms to local businessmen through the Financiera Industrial Y Agropecuaria S.A...
...When a U.S...
...Until that time Guatemala served the United States as a cheap source of agricultural products, principally bananas and coffee...
...corporations in Guatemala and Central America...
...When the drug companies first established their plants in Guatemala, there was rapid growth in the demand for antibiotics...
...The contradictions of capitalism which originally generated the monopoly stage domestically and imperialism internationally, eventually reappear in an acute form within imperialism...
...INCASA has also considered producing instant coffee for Standard Brands...
...TABLE V OIL REFINERIES IN CENTRAL AMERICA COUNTRY OWNER OF REFINERY Guatemala Texaco Chevron/Shell El Savador Exxon/Shell Honduras Texaco Nicaragua* Exxon Costa Rica Allied Chemical/ Costa Rican Government Source: Trade Lists of American Firms and Subsidiaries for each of the Central American countries, prepared by the U.S...
...investments...
...The GINSA tire plant in Guatemala, once the only such manufacturer in Central America, ran into competition from Firestone when the latter invested in Costa Rica in the mid-1960's...
...When Gulf buys the refined oil from Texaco, no money is exchanged...
...The eight leaders were tortured and then thrown from a plane into shark-infested waters...
...Twelve of these are U.S...
...each Central American country in 1969.* 3) The existing and potential local producers were weak in comparison to the U.S...
...Concession request submitted in 1971...
...With little pressure from external competition, they could keep their local competition to a minimum by: manufacturing different goods in the same field...
...It would be important to see the comparable figures for the industrial sector alone...
...III, p.8, based on figures from the central banks of each of the five countries...
...A 1971 study of 110 firms in which U.S...
...THE BIG BANANA SPLITS Two of the major U.S...
...investments had shrunk to $2 million annually...
...Standard Brands is planning to produce cake mixes once its competitors, General Mills and Pillsbury, have developed a market...
...companies account for 11 percent of the total direct investment but employ only one percent of the labor force.'" Figures from this study show that U.S...
...A study by the United States Agency for International Development (U.S...
...If balance-of-payment figures are broken down by private and governmental sectors, they show how government expenditures-our taxes-have gone to prop up the sagging private sector...
...Camara de Industria de Guatemala, Directorio Industrial 1971-72 (Guatemala, April 1971), pp...
...Gutierrez, Bosch Soto 1963 1966 50 400,000 1,786,501 flour mill (22) Productos Alimenticios Turnovsky 1941 1967 80 280,000 1,077,952 cake mixes, Imperial S.A...
...tax dollars have helped to seize control...
...snacks ttburg Des (24) Transformadora de Aceros Colombian 1960 79 425,000 2,119,995 structural & oines Steel Tissot S.A (TIPIC) sheet steel n Purina (25 Autocafe in Ltda...
...Only bottling and minor chemical additions (principally air and water) occur in the Guatemalan plants...
...The fastest growing market currently is for tranquilizers...
...and Antonio Urrutia of Exxon in Guatemala, May 11, 1971...
...Similiano Garcia 1963 99 1,171.000 canned foods Ducal and Kerns were first acquired by W.R...
...Direct Investment in Guatemala," unclassified U.S...
...If these sales are instead listed under the private sector heading, as they should be, the negative balance for the government is further increased...
...firms setting up plants in the region...
...Rios Sanchez 1958 1963 88 200,000 1,569,851 toothpaste, Local firm bought with $25,000 from United soap & shampoo States and $600,000 local loan...
...Now Goodyear americana S.A...
...Moreover, many Guatemalan firms, shortly after being acquired by U.S...
...The former (and older) sector consists primarily of cigarettes* (Phillip Morris and British American Tobacco), chewing gum (Adams, now owned by Warner-Lambert) and margarine (United Fruit, Standard Brands and Unilever/de Sola) 1 6 These companies have had operations in Guatemala for many years and are essentially the only producers in their respective fields...
...tSB (11) Duralux S.A...
...At the same time that U.S...
...Gulf was seriously considering drive-in grocery stores on the premises of its gas stations...
...2. Cmnetition From the Other Imnerialiat Powers Though the United States has remained the dominant foreign investor in Guatemala, its position has slipped slightly In 1965, 92 percent of all foreign investment was from the United States...
...Through a clever financial deal (backed with Morgan money) Eli Black, Chairman of AMK, took control of the company, hoping to utilize the $80 million in further expansion...
...The difference would be less extreme but would be in the same direction.TABLE H GUATEMALAN FIRMS ACQUIRED BY U.S...
...He used his contacts to procure the $6 million AID loan, which the agribusiness combine now uses to take over local food processors...
...Because of the problems of nationalizations, U.S...
...The countries of Western Europe and Japan which were devastated by World War II have been rebuilt and are in a new phase of imperialist expansion...
...That data is unavailable...
...Centroamericana S.A...
...AID at 3 percent interest, *Tobacco is considered part of the food processing industry in Central America...
...The Banco de Guatemala, the country's central bank, considers all investments from Panama and Venezuela as coming from the United States...
...By and large, this breakdown corresponds to the investment by sector of U.S...
...This constant outflow of U.S...
...and concentrating the marketing of their goods in diverse geographic areas...
...4, 5. 12...
...3. Production Arrangements with Competing Firms Many U.S...
...If the project is carried out, it will include a trans-shipping terminal, the refinery on the Caribbean coast and a 250 mile pipeline from the Pacific coast to handle crude oil from Alaska, the Middle East, western South America, and Southeast Asia...
...But now, the foreign insurance companies have reached a saturation point...
...1. Investment by Acquisition Acquisition as a form of investment was virtually unknown prior to the 1960's...
...Kraftco, cheese...
...Three firms sold part or all of their operations at the end of the decade: Phillip Morris, gum...
...29 de te S.A...
...Of the 43 Fortune 500* companies which have production, service or extraction operations in Guatemala, 17, or 40 percent, began by acquiring local firms...
...101, 103...
...Again, UFC was unable to invest its cash and currently has $75 million in the bank...
...5. Socialism Sets a Trend Slightly more than fifty years ago there was no socialist country in the world...
...The effects of joint ventures on Guatemala are the following: TABLE IV GUATEMALAN CAPITAL INVOLVED IN OPERATIONS WITH FOREIGN FIRMS: 1970 (millions of dollars) SECTOR PAID-IN CAPITAL Total Foreign* National Agriculture 28.3 27.1 1.2 Mining 2.9 2.9 Manufacturing 54.2 42.5 11.7 Construction 2.3 1.7 .6 Electricity, Gas 17.1 14.5 2.6 & Water Commerce 29.4 26.0 3.4 Transportation & .7 .4 .3 Communications Services 2.9 1.7 1.2 Other .1 .1 TOTAL 138.0 117.1 20.9 Source: Departamento de Cambios, Banco de Guatemala *These figures include data on joint ventures and firms which are 100 percent foreign owned...
...The cost of maintaining the U.S...
...Four U.S...
...If people buy medicines, they will eventually buy televisions...
...Assistance to the local firm is provided in such a way as to promote dependency...
...hegemony...
...investment--local capital accounts for 21 percent of the total capital in ventures in which foreign corporations are involved...
...investment in Guatemala is capital-intensive, thus minimizing em...
...When he died local firm was sold to them...
...Melr, ener 1961 61 250,000 restaurants viana Foods (26) Alimenticios Duca S.A...
...These two contradictions reinforce each other and generate underconsumption...
...5) September 1970, p. 1. 20...
...A manager of one U.S...
...The resolution to the contradictions of imperialism is socialism...
...Table II lists Guatemalan firms which have been acquired by U.S...
...Petroleum Intelligence Weekly (VoL XI, No...
...d.) These firms expand and promote efficiency by turning to capital-intensive forms of production...
...But the field had already become monopolized except for a few sectors...
...A new period is beginning of intense imperialist rivalry...
...From the table one can see that a total of 31 Guatemalan firms have been acquired by multinational corporations...
...Ibid...
...A 250,000 barrel per day refinery is under consideration for Nicaragua...
...capital was invested in Guatemala, found the following percentages of firms to be in joint ventures: TABLE III U.S...
...company thereby gains experience, understanding of the local market and a high rate of return on a small, low-risk investment...
...Washington, D.C.: IEPA, 1972...
...PERCENT OF DIRECT FOREIGN INVESTMENT IN CENTRAL AMERICA: 1969 COUNTRY PERCENT OF DIRECT FOREIGN INVESTMENT FROM UNITED STATES Guatemala 86 El Salvador 60 Honduras 95 Nicaragua 80 Costa Rica 75 Source: Gert Rosenthal, "The Role of Private Foreign Investment in the Development of the Central American Common Market" (Guatemala: draft, 1971), Ch...
...INCREASING PRESSURES 3. The Cast of Emnire iV ,rowin It has become an increasing strain on the United States to provide financial assistance and military and political protection for its corporations throughout the world...
...These countries, however, present a significant challenge in trade...
...AID document, CERP D, Guatemala A-107, June 16, 1972, pp...
...5. Phil Church, "Foreign Investment: The Operation of U.S...
...investments were primarily in agriculture and in the infrastructure necessary to make agricultural extraction feasible...
...firms on the one hand and among imperialist powers on the other...
...The percentages should therefore be read with caution...
...Tire's...
...allows them to pay no corporate tax for five years and to import all their machinery and raw materials duty-free...
...Thousands of squatters live in La Limonada in Guatemala City...
Vol. 7 • May 1973 • No. 5
