Pushing Counterrevolution in Guatemala
Jonas, Sussane
Both to the United States and to revolutionary movements thoughout Latin America, Guatemala's liberation struggle has been an example since the 1940s. In 1944, at the close of World War II,...
...12, 1971, cited in Gail Grynbaum, "Tourism and Underdevelopment," NACLA Newsletter, April 1971, p. 9. 68...
...Guatemala's planners were also counting on the nickel venture to finance a large portion of the public investment projected in the 1971-75 National Development Plan...
...capital, and 20% by Hanna Mining Company...
...by alleviating the serious unemployment problem, since many of these new industries were supposed to be "relatively" labor-intensive...
...At the most obvious level, this has increased the need for repression, in order to preserve (at least on the surface) an atmosphere of calm.6 8 Perhaps the grossest example of the right-wing tourist promotion mentality was a public request by the head of the Tourist Agency, Lionel Sisniega Otero, in January 1971 (during the state of siege) that the government "adopt measures to prevent beggars, cripples, drunks and other social scum from hanging around tourist spots, bothering visitors and presenting a negative image of the country...
...Guatemalan newspapers...
...Some of those involved in the 1962 urban protests joined the ongoing struggle of the Guatemalan peasants...
...El Grafico, Sept...
...23, May 1972, p. 12...
...this contact with the oppression of the people and with their struggle for land transformed military reformism into a socialist consciousness...
...El Grifico, Mar...
...16, 1972...
...March 1974 Published monthly, except May-June and July-August, when it Is published bi-monthly, at 160 Claremont Ave., New York, N.Y...
...MRI),* supposedly to train "students" * MRI Ltd...
...This campaign included the formation of rightist paramilitary groups, the best known being the MANO BLANCA or "White Hand," to carry out those deeds which were too bloody for the army to claim credit for...
...Ibid., Vol...
...This experience revealed clearly what happens when "development" is redefined as bonanza...
...Monthly Review, May 1972...
...As we shall see, reality has brought results far more extreme than could have been imagined by the aid engineers and strategists...
...military advisers in interviews, the Guatemalan armed forces were "weak, disorganized and unprepared to meet the guerrilla threat...
...In addition, the contract with EXMIBAL was seen in U.S...
...newspapers...
...The army worked closely with civilian agencies, but with the military remaining in command...
...cit., pp...
...AID memo, "Export Development," p. 3. 42...
...You have a gun Therefore I am hungry...
...But the concerted counterinsurgency campaign has failed to "pacify" Guatemala...
...11-12...
...Finally, the new strategy and especially the counterinsurgency have demonstrated that the revolution cannot be made simply through armed actions by a small vanguard, but rather requires a protracted people's war at all levels, building upon (but going beyond) the mass struggles of 1973-74...
...ICAITI had no control over this $78,000, for which MRI was directly accountable to ROCAP...
...Eduardo Galeano, Guatemala: Occupied Country, p. 18 The Guatemalan guerrilla movement has deep roots in the daily living conditions of the people and the progressive struggle against those conditions...
...Politically, this community has been characterized by a virulent hatred for Revolutionary Cuba and a fanatic right-wing anti-communism, and has become a willing tool of the CIA and others who promised to help them re-take Cuba...
...In fact only five of them lasted through the whole course (all the others dropped out) -accounting for expenses of $15,000 at the most...
...AID memo, "Export Development," p. 4. 45...
...government agencies such as ROCAP...
...this model, introduced via the pacification program in the late 1960s under M6ndez, was institutionalized during the 1970-74 Arana regime...
...13, 1973...
...The national bourgeoisie organizes centers of rest and relaxation and pleasure resorts to meet the wishes of the Western bourgeoisie...
...4 In the case of the M6ndez government, an "acceptable development program" meant providing Guatemalan "counterpart funds" to complement the funds provided by the aid agencies...
...interests in the region.9s U.S...
...Even U.S...
...The U.S...
...Miami Herald (MH), July 17, 1970...
...In the end (particularly after the uproar in Guatemala about the tax reform) the latter position prevailed, and the whole idea was put aside as "unfeasible...
...2. Thomas and Marjorie Melville, Guatemala: The Politics of Land Ownership (New York: Free Press, 1971), p. 189...
...5, 1978, 77...
...Since the 1950s the Sunbelt groups in the United States had been junior partners in an alliance with the Eastern Establishment - their interests being distinguishable from but not in conflict with those of the latter...
...Inforpress, No...
...Interviews...
...What is clear in Guatemala is that, to the extent that the new interests are not simply the coffee or industrial bourgeoisie in new clothing, those older groups have been forced to share economic and political power with them, especially during the Arana presidency...
...observer reported, the "good works" were far less effective than the brute force: "I was reliably informed in Guatemala City that the real contribution of the United States to deterring Communism in the Motagua Valley was military assistance, not AID proj- ects...
...In effect, the United States has been forced into a second intervention, in the form of a prolonged military occupation and war in Guatemala - and more recently, in the entire region...
...firms investing in Central America...
...53, p.I...
...These activities were stimulated by a body of new incentive legislation, which accentuated * It is not yet clear exactly who comprises this "new" bourgeoisie in Guatemala and what are its links to the older bourgeoisie - for example, to what extent is it the industrial bourgeoisie adapting to new conditions and undertaking new activities, what is the importance of military officers acquiring property, and how serious are the conflicts between these "new" interests and older groups...
...than Cuba...
...officials (including U.S...
...3, Sept.Dec...
...NYT, July 4, 1972...
...strategy in Guatemala would not be so significant...
...In the crucial area of counterinsurgency, for example, Peralta had refused to give the U.S...
...Another high official hoped that ICAITI would never again be in the position of having to accept budget support on terms such as these...
...10 The first issue of the debate was directly linked to the tax reform controversy in Guatemala...
...Thomas Bodenheimer, "Food for Profit," NACLA Newsletter, May-June 1971, p. 11...
...87 The administrator of the program (which is run largely by Texans) since its inception has been Culbertson's old sidekick from Peru, James Boren...
...Needless to say, few Central Americans saw this fine distinction - especially since ICAITI's sub-contract with MRI (using ROCAP funds) was with MRI, Ltd...
...14-15...
...There are several indicators that officials in the aid agencies understood but acquiesced in the deteriorating situation in Guatemala...
...THE LAST ATTEMPT AT REFORMISM The CACM survived the crisis of the late 1960s in the sense that trade among the Central American countries increased considerably, and the leading private investors, foreign and local, continued to benefit from that trade...
...3 Guatemala under President Ydfgoras served as the principal training base for the 1961 Bay of Pigs invasion...
...3 913 companies interested in using Central America as a base, not as a market, and that some firms had already set up operations especially in Costa Rica (which, according to World Bank authorities, had the "most flexible" drawback legislation) .43 (b) Nontraditional Agricultural Export Enterprises: "The Racket of the Century " The export promotion campaign is based on a general recognition that Central America's future lies in developing and diversifying the agricultural sector - for example, exporting such products as fresh fruits (other than bananas), vegetables and flowers to the United States, especially during the winter months...
...The agricultural diversification programs to develop new exports have not helped the rural poor...
...For example, inflation has become a business for some of Guatemala's new bourgeoisie, who have used rising food prices to make a fortune for themselves...
...large-scale extension of Sunbelt economic and political influence there...
...the meeting, "so secret that the State Department won't even confirm it took place," was arranged by an unidentified "mutual friend" of Arana and Agnew.32 Another Agnew friend, Frank Sinatra, has since shown considerable interest in establishing a casino in Guatemala (see below...
...Watergate and Indochina," Monthly Review, June 1973...
...Basically, the new strategy relied on a series of economic activities (e.g., promotion of new exports, cattle ranching, mining, tourism and new tourist "industries" such as gambling) - all of which would bring economic benefits to a tiny group of investors, and none of which required structural (e.g., tax and agrarian) reforms...
...foreign traders will be allowed to store, exhibit, pack, unpack, tune, manufacture, refine, purify, blend, transform and in general, trade, operate and manipulate all types of merchandise, products, raw materials, equipment, containers and other commercial articles, excepting those whose importation is forbidden by law...
...5 9 The irony of the worsening situation in the Guatemalan countryside is that it coincides with Guatemala's AIDinspired and -financed Rural Development Plan, which is supposed to raise productivity and help the small peasants by providing credit, technology, and technical assistance, and by stabilizing farm prices...
...The clearly stated goal was economic expansion - to reach an annual growth rate of 7.8% - in the "most viable" way.' 5 "Planning" to achieve this goal was understood not as an extensive or undue "interference" by the state in the market mechanism...
...Halsaman...
...Rather, the "new" element was the intensification of Sunbelt economic influence and political power in Central America...
...In fact, however, many army officers participated in these groups in their spare time...
...but it amounted to a military occupation of Guatemala through the counterinsurgency campaign...
...correspondents, attacked Time, the London Times, the Washington Post and other big media for their reporting of the political situation, and accused the foreign press of waging an "international campaign" to defame Guatemala...
...p. 13...
...cattle investors - not only in Guatemala, but throughout Central America, especially in Costa Rica...
...20, 1973...
...Naturally, the World Bank thought the problem would be resolved with a new set of Ministers and failed to see this incident as the logical outcome of the capitalist system in Guatemala...
...ROCAP officials felt that although BCIE's legal advisers did not like the operation, they "might be persuaded to accept it...
...Guatemala's tax structure was the worst in Central America and almost the worst on the continent.* Without "* As of 1964 (and still in 1968), total central government revenue was only 7.9% of GNP and tax revenue was 7.1% - the lowest in Central America...
...20, 1972...
...One Guatemalan insider suspected that the free zone might eventually become a haven for casinos and similar types of enterprises...
...there actually was an extended high-level debate in 1967-68 about U.S...
...bases in Panama), "free bombing zones," specialized forms of torture, "civilian" right-wing terrorist groups, and so on.s 0 No less important were the techniques of psychological warfare employed both to terrorize the population into submission to government authority and to build up a "favorable image" of the government...
...To resolve this fiscal crisis, the M6ndez government initially proposed a tax reform which would have moderately increased property taxes and closed other tax loopholes...
...There are indications that the economic boom and rising profits for the few depend directly on the massive poverty of the rest of the population...
...Henceforth, any U.S...
...curfew, which means we have to stop work earlier than usual, the state of siege hasn't affected our work or our programs at all...
...it was rampant under Castillo Armas and Ydfgoras...
...firms as Pan American Airlines in this area...
...8 8 In addition, the ratio of U.S...
...Pan Am, of course, would profit by providing transport for the new export industries...
...Interviews...
...Tobis, op...
...Some of the participants in the November 13 uprising took refuge among the peasants...
...This investment was going to affect profoundly Guatemala's export structure and balance of payments, providing up to 11% of Guatemala's foreign exchange earnings...
...objectives remained what they had always been: containment of the revolutionary movement in Guatemala, and maintenance of Guatemala and Central America as a preserve for U.S...
...According to the definition of the free zone, "Goods of foreign origin may be brought in for re-export without the payment of customs duties...
...strategy for Guatemala and Central America in the late 1960s and early 1970s occurred in response to changing conditions in the region and in the United States: (a) the breakdown of the CACM as a model for "develop- ment" in Central America...
...After 1960, therefore, Empresa Explotaciones Y Exploraciones Mineras de Izabal S.A...
...Second and perhaps even more important, INCO was biding its time in order to await optimal conditions in the world nickel market...
...The Plan was actually written during the last year of the M~ndez government, with very close supervision and substantial "technical assistance" from AID and the international aid agencies...
...As the primary force behind the overthrow of the Guatemalan "Revolution" in 1954, the U.S...
...and in Central America...
...It exemplifies the new economic strategy for Guatemala and Central America, based on enterprises which use the region as a base for exporting and which do not depend on or contribute to the welfare of the local population...
...From ICAITI's point of view the entire contract (which ROCAP officials regarded as a "great advance") turned out to be a disaster, as ICAITI actually got very little of the $215,000...
...meat import quota - a move which, in the Wall Street Journal's words, was "sure to encourage even more [U.S.] -cattlemen to venture to the lush pastures of Central America...
...private investors...
...The need for a new strategy stemmed, first, from the bankruptcy of the "development" schemes of the 1960s...
...For one thing, with his civilian and progressive facade, M6ndez provided the United States with its first pretense of a "model Alliance for Progress" government in Guatemala...
...El Grdfico (Guatemala), Feb, 26, 1973...
...88 Latin America, May 12, 1972, p. 147...
...3. EXM IBAL: Take Another Nickel Out Among the many things the Cuban Revolution signified to the United States, it meant the loss of an easy and U.S.-controlled supply of one of the most strategic metals, especially for military and defense industries: nickel...
...Another complication was MRI's pretense of being a disinterested party with a subcontract to provide technical advice...
...These objectives coincided with those of the economic interest groups described above...
...8 3 Guatemala's militarization was further extended as military officers began to fill civilian posts under the Arana government...
...The other big question facing the M6ndez government was how to finance its ambitious "development" plans...
...spend considerable funds on purely military aid...
...Some of LAAD's projects in Central America include slaughterhouses in Guatemala, Costa Rica and Nicaragua, rubber processing in Guatemala, and flower growing in Costa Rica and Guatemala - - all for export...
...by 1974 "pensionados" had bought up a considerable amount of land and the American colony of more than 60,000 was slowly taking over the streets of the capital city, San Jos...
...Moreover, weakened by its own mistakes, the movement changed its strategy in the 1970s...
...Second, at a time when the Central American market for investment in traditional manufacturing industry had been saturated, export pro- motion opened up a whole new set of opportunities for foreign investors...
...This was the very loan which ROCAP had pressured BC1E to grant on unusually lenient terms and without sufficient guarantees, ROCAP...
...Inforpress, No...
...LAAD's other principal function is as an intermediary institution for financing agricultural ventures - taking over or gaining control over local companies through stock purchases or loans (at 9-12% interest, leaving a large spread for LAAD), building up those companies, and finally selling their stock...
...but, as we shall see, all such "reforms" have been miniscule and in no basic way alter people's lives or present a meaningful reformist alternative for Guatemala...
...The goals of the reformers never went beyond political stability and unlimited opportunities for U.S...
...EXMIBAL), a subsidiary of two U.S...
...in his words, "We concluded that if there was anything illegal," (as they suspected), "Patten has enough friends in AID to protect him...
...but Guatemala's President Arana (through his son) built up a network of business relationships with foreign interests...
...36 and passim...
...tax free) zone in the port of Santo Tomis de Castilla.* Incentives in addition to non-payment of taxes and duties included the absence of exchange or profit controls and the availability of a large supply of cheap labor.4 The zone was to be operated by a Board with substantial representation from the private sector...
...And while realizing the need to increase government revenues and public investment, the aid agencies no longer pushed seriously for a structural tax reform...
...San Francisco Chronicle, Oct...
...The growth of a revolutionary movement was further inspired by the example of the newly won Cuban Revolution...
...workers...
...Stu Bishop, "National Association of the Partners of the Alliance," NACLA Newsletter, Dec...
...8 1 In the end, as one U.S...
...47...
...rather, "the basic idea of the Plan [was] to direct state action toward the support of the directly productive [private] sectors . .. within the framework of a free enterprise economy...
...Particularly since early 1973, the cost of living has risen steadily: during 1973 (breaking a long economic tradition) Guatemala had, according to IMF figures, one of the highest increases in the rate of inflation in Latin America...
...64, p. 5. 66...
...a) New "Industry": Runaway Shops The most important new "industries" are producing not for the Guatemalan or Central American markets, but rather for export to extra-regional markets...
...On November 13, 1960, there was a barracks revolt within the Guatemalan military, designed to overthrow the Ydigoras government...
...2 When publicly criticized for turning over the Costa Rican economy to Vesco, the pragmatic Figueres defended his actions, pointing out that "Money is money," regardless of where or whom it comes from...
...Harper's, Nov...
...Thus, M6ndez was permitted to take office, but not to exercise power...
...Inforpress Centroamericana No...
...By 1973 this was acknowledged even in CIAP and World Bank studies.61 2. Tourism: Moving Miami Beach to Central America A country with the natural beauty of Guatemala has always had a great potential for tourism...
...interference in Guatemalan affairs...
...El Grdfico, Aug...
...Address all mall to Box 57, Cathedral Station, New York, N.Y...
...Interestingly, it was the Wall Street Journal, spokesorgan of Wall Street, which first exposed the Vesco-Figueres relationship...
...Latin America, Mar...
...and on several occasions Costa Rican leaders charged publicly that the MANO Blanca and high Guatemalan officials were involved...
...Few Guatemalan government officials really believed that the Arana government took the Plan seriously...
...training...
...p. 7. 90...
...Several Cuban exiles in Guatemala undertook tourist projects, the most notable being an attempt by Domingo Moreira to gain a whole series of fiscal benefits for a proposed yacht club and sea resort in the area where he already had his fishing operations...
...In Costa Rica, where political debate is much more public, these relationships are less obscure: there is an open struggle for power between the older vested interests and the newer coalition led by Figueres and Vesco...
...What had previously been only a differentiation became an open split in the U.S...
...But with the arrival of the Mendez government, the coffers of the aid agencies were opened, despite some doubts about the government's ability to use the funds effectively...
...19, 1972, p. 330, April 19, 1973, p. 124 Inforpress, No...
...expert put it, "Most of our tourists in Guatemala, around 85%, are businessmen...
...William and Elizabeth Paddock, We Don't Know How...
...Specifically, these groups were: Sunbelt business interests in the United States...
...Los Angeles Times, June 15, 1972...
...One of the enterprises was largely controlled by a Cuban exile businessman, Gerardo Sampedro...
...he's making a good business for himself...
...Many of them became local managers for U.S...
...The courses were universally regarded as a fiasco...
...was a for-profit corporation to handle contracts with private enterprise...
...support of the golpista government...
...2 " A similar partnership existed between Nicaragua's President Somoza and Howard Hughes (and U.S...
...70-14 (Agricultural Export Systems), March 30, 1970...
...Lehman Fletcher et al, Guatemala's Economic Development: The Role of Agriculture (Ames, Iowa: Iowa State University Press, 1970), pp...
...Victor Perlo, The Empire of High Finance (New York: International Publishers, 1957...
...According to AID officials in Guatemala at the time, they recognized the need to "do something" for the area, traditionally a depressed zone, while simultaneously cleaning out the guerrillas...
...s 5 Latifundistas received 96.3% of the coffee diversification funds...
...I, p. 19...
...In practice, regional economic integration and industrialization had not occurred in a way that would control class struggle in the region by incorporating the masses and teaching them middle-class values and consumption patterns...
...AID mission in Guatemala, memorandum on "Export Development," July 16, 1970, p. 2. 35...
...To put it another way, there did not exist in Guatemala the class base (i.e., a "nationalist and progres- sive bourgeoisie") on which to build a solid reformist development strategy...
...3. Ibid., pp...
...16_ er year for non-profit institutions ($30 for two years...
...4 6 In addition to the World Bank loan, the Inter-American Development Bank (BID) also provided a credit line used partly to finance livestock development, in which the average subloan was $84,000 - indicating clearly the use of BID resources to finance the largest ranchers...
...to cite only a few: * Contacts between Guatemalan business and Sunbelt investors were stepped up through private voluntary organizations such as Partners of the Alliance (see below), in which Guatemala's "partner" is Alabama...
...control, and the principal base of support for U.S...
...cit., p. 79...
...63 As in other areas, tourism investment by private enterprise has been greatly stimulated in recent years by special incentive legislation...
...it does not feed Guatemalans...
...military advisers to local armed forces has been the highest in the hemisphere," 9 and the Guatemalan army has the second largest average percentage of total armed forces with U.S...
...Second, some of the tendencies which are beginning to emerge in Guatemala have manifested themselves even more clearly in some of the smaller Central American countries, particularly Costa Rica and Nicaragua...
...Whereas the Liberal era (1871-1944) had bred the coffee export oligarchy and the CACM had bred an industrial bourgeoisie (which functioned as a junior partner of the multinational corporations, producing for the domestic market), the new strategy was linked to a new bourgeoisie whose fortunes were made through new Guatemalan exports to world markets and through increasing power in the government.* While this new alliance of private economic interests was coalescing, at the official level the U.S...
...Scramble for Resources," Business Week, June 30, p. 61...
...Let us take a detailed look at one of these "success stories" which illustrates concretely the nature of the export promotion bonanza - which ROCAP was billing as a great new experiment, but which appeared to one knowledgeable official of SIECA (Secretariat for Central American Integration) more like "the racket of the century...
...The preceding examples reveal the U.S...
...Second, the Mlndez government promised to be much more "cooperative" than the nationalist military govern- ment of Col...
...Bomb School Exposed," NACLA 's Latin America and Empire Report...
...1972, p. 97...
...One U.S...
...direct taxes were 10.8% of total revenue, the lowest in Central America.s One study ranked Guatemala as 51st out of 52 countries in "tax effort" during 1963-5...
...These newer interests, located in the "Sunbelt"-primarily in Florida, Texas, and southern California-have a somewhat different economic base...
...9 3 In effect, the proposal laid the basis for legitimating intervention in the affairs of any Central American country in which the situation was getting out of hand - in much the same way that Nicaragua, Honduras and El Salvador had helped intervene in the "Liberation" of Guatemala in 1954.* * The first concrete act was aid from Guatemala and Nicaragua to the Salvadoran military in putting down a revolt by progressive military officers in March 1972...
...and it is "* Moreira was the owner of a vast fish processing empire - a man who, as one U.S...
...banks, to be re-lent to private ventures in tourism...
...If proof is needed of the eventual transformation of certain elements of the ex-native bourgeoisie into the organizers of parties for their Western opposite numbers, it is worth while having a look at what has happened in Latin America...
...Ibid., Vol...
...cit., 1.1...
...in the new political order the poor and the working class were to be kept down rather than won over...
...El Grifico, Dec...
...But these "solutions" are22 temporary and unstable...
...He neglected to mention that this "respectable" program included sending 18 Guatemalan policemen (almost the highest number for any country) to a secret camp in Texas, to be trained in making and using bombs.92 5. Regional Pacification In its campaign to prevent the success of any revolutionary movement in Central America at the national level, the United States has regionalized the counterinsurgency campaign...
...Consejo Nacional de Planificaci6n Econ6mica (CNPE), Secretaria General, Plan de Desarrollo, 1971-75 (Guatemala: CNPE, 1970), Vol...
...But this effort received new impetus in the late 1960s and early 1970s when the military apparatus of CONDECA became a framework for attempts to create a Central American political-military "community," with Guatemala's Arana as the dominant force...
...Peralta, weie reluctant to give the U.S...
...From 1963 to 1966, the movement grew, particularly in the Izabal-Zacapa area...
...counterrevolution in Guatemala...
...But when it became clear that this approach was unworkable without a minimum level of reforms (which neither the foreign nor the regional dominant groups were willing to make), and that the Central American market had reached the limits of its expansion, the multinational corporations began to shift their strategy...
...According to a Peace Corps volunteer and AID officials assigned to work with Partners in Guatemala, the AID Mission under Culbertson placed great importance on the program...
...Even more striking in recent years has been the invasion by U.S...
...napalm on villages harboring guerrillas (dropped by U.S...
...CNPE, Plan, Vol...
...I try to keep the door closed when he comes around...
...A similar situation exists for the urban poor living in the "marginal areas" of the cities...
...Inforpress, No...
...In addition to creating a number of investment opportunities, this partnership had political dimensions: in order to establish closer ties, Guatemala set up an "honorary consulate" in Birmingham, Alabama, and named a Birmingham doctor as "consul...
...This issue was not left at the theoretical level...
...As one such rancher explained it: "Here's what it boils down to - $95 per cow per year in Montana, $25 in Costa Rica...
...Particularly since Culbertson's arrival, a number of private U.S...
...Largely because of developments in Central America (particularly the collapse of the CACM, the saturation of the Central American market), the U.S...
...Politically, this startegy involved the institutionalization of the apparatus of counterinsurgency and repression, and the death or perversion of institutions of bourgeois democracy...
...629, pp...
...The private sector reacted immediately and violently, charging that this tax plan reflected the philosophy of the Communist Manifesto, and launching a direct attack on Finance Minister Alberto Fuentes Mohr.* U.S...
...What was at stake was not really a different kind of society for Guatemala (which even a reformist * A program loan is a large loan, not tied to a particular project, for general commodity imports from the United States, based on a negotiated agreement with the recipient country as to the specific steps it will take in fiscal and other policies, and accompanied by close AID monitoring of the recipient's performance in these areas...
...BLA, Oct...
...AID Project Sheet: Human Resource Development...
...Wall Street Journal (WSJ), July 27, 1972...
...has had to wage an open war against an organized guerrilla force...
...The importance of placing an institution of this kind in the hands of private enterprise was stressed by one ROCAP official, who in an interview claimed credit for having "killed" a United Nations proposal for a Central American regional governmental trading corporation...
...Economically, too, the Cubans acquired considerable power...
...c.t., p. 31...
...7, 1970...
...military supervision through the Central American Defense Council (CONDECA...
...In the spring of 1962, thousands of Guatemalan students and women took to the streets, and workers in the capital declared a general strike, to protest electoral fraud and economic conditions...
...others favored at least a cut in U.S...
...According to the 1971 contract, EXMIBAL was to make a $250 million investment in Guatemala, doubling all previous foreign investment, and causing a major shift in the Guatemalan economy...
...To the extent that it proposed any changes, these were marginal and involved no real challenge to the private interests already in power...
...Complementing the casino crowd, a number of giant U.S...
...counterinsurgency aid to stop the guerrilla movements as soon as he took office...
...Even worse was MRI's performance under its $78,000 contract...
...Interviews...
...Interviews...
...on the contrary, in many respects imperialism has nourished the very fires it is attempting to extinguish...
...Much more important has been the simultaneous development of the revolutionary movement, within the context of a continual and dialectical learning process between the forces of imperialism and the forces of liberation in Guatemala...
...But, given the slow but steady development of the revolutionary forces, time has shown itself to be on the side of the Central American people...
...But in practice the benefits are not so clear: St...
...diplomats (e.g., the ex-Ambassadors to Nicaragua and British Honduras and the former Peace Corps director in Costa Rica) who now have large operations in the countries in which they were stationed...
...Interviews...
...With the rise of the CACM and the Alliance for Progress during the 1960s, the focus shifted again: the CACM promised to provide a Central American market large enough to be worthwhile for the giant multinational corporations, many of which were still dominated by the older Eastern interests...
...In the twenty years of counterrevolution since the direct military intervention, the United States has shown its flexibility in finding new responses and "solutions" to the "Guatemala problem...
...9. U.S...
...This activity, which was a high priority in the 1971-75 Plan, received a great stimulus when the World Bank decided in 1970 to grant a $4 million loan to cover 52% of the costs of a program to increase beef production...
...In short, U.S...
...These works included health and literacy and community development programs, hot school lunches, wells, access roads and other infrastructure, cooperatives, leadership training, technical assistance to the peasants, and the strengthening of local governmental institutions...
...The fact that the hard line prevailed may have been partly a result of Ambassador Mein's relation to Assistant Secretary of State for Latin America, Lincoln Gordon: in 1964, at the time of the coup against Goulart in Brazil, Mein was working directly under Gordon, who was U.S...
...AID functionaries admitted in interviews that in formulating its new program for the Arana government, AID did not even expect any serious reforms to be made, especially any land reform...
...30, 1973...
...Patten claimed that MRI's role had been simply to bring Orbit Sales together with the Guatemalan businessmen and farmers' cooperative...
...10, 1970, p. 291...
...In theory, the new panacea of export promotion was supposed to help the region economically in several ways: by providing new sources of export earnings to ease the chronic balance of payments crisis...
...They demonstrate that if reformism was ever a viable option for Guatemala since the 1954 U.S...
...18 ff...
...after considerable public protest, the government got a law passed regulating beef exports...
...The goal of the Guatemalan "Revolution" from 1944 to 1954 was to permit the development of a modern capitalist economy, based on land reform, and to challenge U.S...
...For full details, see Fred Goff, "Bank of America has a Man-on-the-Spot in Latin American Agribusiness," NACLA Newsletter, Sept...
...And politically, the dominant feature was the militarization of politics and the institutionalization of counterinsurgency as a model of politics: given their unwillingness to attempt serious reforms, the Guatemalan bourgeoisie would have to maintain order through overt repression of all popular movements...
...234-35, 290...
...6, 13...
...And now at the national level, since the advocates of tax reform were not willing to challenge the Guatemalan bourgeoisie and foreign in- vestors, the hard-liners in Washington were right in observing that a thorough change in the tax structure was "not feasible...
...One law, presented in early 1973 and approved in July 1973, provided incentives for "pensioners" who wanted to retire in Guatemala...
...House, Committee on Foreign Affairs, Subcommittee on InterAmerican Affairs, New Directions for the 1970s: Toward a Strategy of Inter-American Development (hearings) (Wash.: GPO, 1969), p. 127...
...and (c) the rise of new economic interest groups in the U.S...
...Equally damaging are the political consequences of having to project an image of stability in the U.S...
...Fuentes Mohr was a perfect Alliance for Progress man: he was an internationally known economist who had spent years working with CACM institutions and had had close contact with all the international financial aid agencies in Washington.7 The entire incident created a serious dilemma for U.S...
...3 0 In 1971 Alabama's Governor Wallace invited Arana for a special visit, supposedly to discuss "their mutual problems of being misunderstood on the question of law and order...
...1964), p. 38...
...see also El Imparcial (Guatemala), Jan...
...and in fiscal year 1973, Guatemala was second only to Bolivia in the amount of military grants received from the United States...
...Business Latin America 4 2 observed that this system offered good opportunities for U.S...
...International Monetary Fund figures obtained in interviews...
...In addition it provided for creation of a "free zone," in which certain industries could locate and would pay no taxes on products being exported...
...CONCLUSION What are the fruits of twenty years of U.S...
...I, p. ii...
...strategy in Vietnam...
...investments...
...policy in Guatemala within official circles in Washington (including representatives of AID [Agency for International Development], the State Department, the Defense D)epartment, USIA, the Treasury Department and other U.S...
...ruling class...
...Lucia" and the tourist industry made the island "a mere conduit pipe for the re-export of the tourist dollar...
...Moreover, although Patten denied in interviews that Orbit Sales had any subcontract with MRI, an ICAITI official showed me a copy of a $20,000 subcontract with Orbit which was fully administered by MRI...
...rather, it emerged gradually8 GLOSSARY AID: Agency for International Development BCIE: Central American Bank for Economic Integration BID: Inter-American Development Bank CACM: Central American Common Market CIAP: Inter-American Committee on the Alliance for Progress CNPE: National Economic Planning Council (of Guatemala) ROCAP: Regional Office (of AID) for Central America and Panama SIECA: Permanent Secretariat for Central Ameri- Scan Economic Integration during the second half of the M6ndez regime and more clearly under the Arana regime after mid-1970...
...This account is based mainly on interviews with U.S...
...can pay higher prices for [coffee, cotton, sugar and beef] than Latin Americans can pay for basic foods," massive * Perhaps this was no accident: LAAD's man in Central America, Thomas Mooney, had worked in this area at the World Bank from 1958 to 1962, just at the time that the World Bank was advocating a Central American regional private financiema...
...13, 1971...
...3. pp...
...Inforpress, No...
...strategy...
...4 As a result of the way in which livestock development has been promoted - that is, as an export operation - it has had clear effects for Guatemala...
...It became the excuse of aid officials in Washington for continuing to pour millions of dollars into a country where not even the most minimal reforms were being made...
...6, 1973...
...Equally important were the advantages of this new strategy for the United States...
...Since the early 1960s Alliance for Progress agencies had pressured Guatemala to institute some kind of tax reform...
...These negotiations took over ten years, so that the contract was signed between the Guatemalan government and EXMIBAL only in February 1971 - and even then, over strong objections from important sectors of the Guatemalan population...
...564, Sept...
...Los Angeles Times (LAT), Nov...
...564, pp...
...Of course, it was still possible to advocate this or that specific reform (such as extending credit to small farmers, building more schools, etc...
...But even though, in a sense, all "social and civic" programs are part of the military pacification program, the United States has also had to Paddy-wagons donated by U.S...
...military adviser complained that Peralta had even restricted his full access to Guatemalan military intelligence reports...
...Galeano, op...
...The campaign to permit casinos was one sign of the new tourism being promoted in Guatemala...
...This did not mean the decline of the large Eastern monopolistic investors (for most of them maintained existing investments in the region) nor the sudden appearance of Sunbelt investors (indeed, Texans have traditionally had some investment in Central America...
...But these short-cuts to development have had no lasting effect on the lives of the majority of the Guatemalan people, nor have they fooled the Guatemalan people into believing that pacification means development rather than repression...
...military advisors that they proposed cutting off all U.S...
...Jacobo Arbenz: 1951-1954 -Col...
...Interviews...
...10025, or Box 226...
...The social component of the new strategy was "micro-development" - a series of projects and programs involving minor adjustments to maintain social peace, but no real reforms...
...strategy was to integrate regionally the forces of repression at the top, while keeping the people in these countries isolated from each other...
...The aid agencies have also provided credit to Central American Ad in U.S...
...9 0 The public safety program, in effect since 1957 under the watchful eyes of seven U.S...
...officials acknowledged their presence off-the-record, and numerous observers reported seeing them in Guatemalr -- up to 1000 of them...
...Clearly corruption is nothing new...
...5, 1973...
...but Ren6 de Leon, who had been Patten's assistant at MRI, just happened to become manager of EXIMCO at the height of the whole affair...
...The shift in U.S...
...Mostly these contracts had been for giving "courses" and "training" in marketing - courses that were universally regarded by all Central Americans who knew about them as a bad joke...
...36, p. III...
...response showed was the bankruptcy of a reformist or "developmentalist" alternative, given the unwillingness to break with the ruling class in Guatemala and foreign investors...
...imperialism openly...
...27 and Nov...
...Wall Street Journal, Nov...
...should have needed a $6 million AID loan at 3% interest seemed rather absurd to most Central Americans...
...1966...
...Idem...
...Like the "plans" adopted under Castillo Armas and succeeding governments, the new Plan was in fact the creature of the aid agencies themselves...
...Interviews...
...AID, Capital Assistance Paper, Proposal and Recommendations for the Review of the Development Loan Committee, Loan Paper for loan to LAAD (Wash.: AID, 1971...
...You have a gun because I am hungry...
...629, Oct...
...Inforpress No...
...99 ff...
...Presidents (New York: Praeger...
...30, 1969, pp...
...Amid an unprecedented economic boom for a tiny group of producers and exporters, conditions for the vast majority of the population are steadily worsening...
...Nevertheless, the principles of the CACM had ceased to be the main pillars of Central's America's economic development...
...5 0 The cattle boom employs few workers...
...Although the guerrilla movement had existed since 1962-63 and a U.S.-sponsored counter- insurgency campaign had been underway since that time, the situation had become "critical" by the time M6ndez took office in 1966...
...After all, if INCO was willing to take such a risk, lesser investors could rest assured that their investments would be protected in INCO's shadow...
...it was essentially a nationalist, reformist movement, a protest against corruption in the government and against the use of Guatemala as a base for training Cuban exiles for the Bay of Pigs...
...The United States also participated in the discussions between President-elect M6ndez and the Guatemalan armed forces to agree on conditions under which M6ndez could take office: this pact or "deal" (publicly exposed by M6ndez' Vice President) guaranteed the military a free hand in counter- insurgency, excluded leftists from the government, and promised to leave intact the military command...
...According to a BID consultant sent to Central America to evalute them, these programs are...
...In 1973, William Brady, President (and a leading stockholder) of Basic Resources International, which had been exploring in Guatemala since 1970, declared publicly that "Guatemala will soon be the Kuwait of Latin America...
...Inforpress4,No...
...El Grdfico, May 8, 1971, May 28, 1971...
...CIAP report No...
...Thesis, Dept...
...After the overthrow of Arbenz in 1954, the first signs of renewed popular struggle came in the late 1950s and early 1960s, sparked initially by rebellions within the military and the university...
...Equally important, civic action became the model for Guatemala's "development" programs - the "carrot" of the military pacification "stick...
...2 2 Although the Eisenhower Administration in the 1950s was clearly dominated by the Eastern financial oligarchy and more specifically by the Rockefeller group, it also provided the first access to national political power by some of the Sunbelt groups: the personification of this trend was the election as Vice President of Richard M. Nixon, representative of the Los Angeles group and with ties to other Sunbelt interests...
...Such a statement is less surprising if we remember that Sisniega was one of the original "Liberacionistas" in 1954, a close associate of Castillo Armas...
...The United States and the U.S.-controlled international agencies made clear their intention to provide much of the financing - according to one report, more than $100 million in economic aid "if [the Guatemalan government] comes up with an acceptable development program...
...he then moved on to AID (ROCAP), to help develop national private financieras in each of the Central American countries, and he personally set up the one in Costa Rica...
...Marketing Research International Ltd...
...Some of the chief absurdities were: the arrival of "experts" from Orbit who spoke not a word of Spanish: extensive experimentation with pesticides provided by U.S...
...6 2 In 1973 AID granted BCIE a $20 million loan to finance tourism infrastructure, especially in priority tourist attraction areas outside the capital cities, and to promote tourism...
...At least in its conception, the Central American Common Market (CACM) was reformist, insofar as industrialization presupposed a growing middle class and expansion of the domestic market, which in turn required an improvement in the living standard of the majority of the population, and some redistribution of wealth...
...experts, these safety valve colonization programs have been ineffectual.60 The United States and its allies in the aid agencies and in Guatemala seem to have believed that by declaring their intention to focus on the countryside and pouring in millions of dollars to modernize agricultural production, they could create a rural middle class, alleviate the growing class struggle in the countryside, and slow down the potentially explosive migration to the cities...
...192, 196...
...22, 1972, and No...
...Equally important were certain developments in Guatemala, at the national level...
...using other criteria, Guatemala came out 71st out of 72 countries studied by the International Monetary Fund...
...the visit was finally cancelled as a result of strong objections by the State Department...
...Guatemalan officials were more cautious, regarding Brady's statement as a "show" and an attempt to sell stock in the company.7s Nevertheless, it seemed clear by the end of 1973 - particularly in the heat (and cold) of the world oil crisis - that Guatemala was well on the way to becoming, if not a "future Kuwait," at least a playground of the international oil firms...
...and Central American officials and advisers...
...William Allen, "How Eddie, Marcia and I Smuggled Pickled Frogs through Guatemala - and Lived to Tell All...
...This was a situation which forced the revolutionary movements in Central America to regionalize their efforts...
...thus examples from those countries will help clarify the general tendencies...
...Copyright Vc 1974 by the North American Congress on Latin America, Inc...
...indeed, these techniques were woven into the very fabric of Guatemalan politics.19 The most striking example of the Vietnamization of the Guatemalan pacification program was the "Pilot Plan" carried out in Izabal and Zacapa, the principal guerrilla zone, in 1966-67...
...more specifically, LAAD will help create a class of small dependent businessmen "to further stabilize Central America and protect against nationalist movements...
...Inforpress, No...
...The two primary U.S...
...Miguel Ydigoras Fuentes: 1958-1963 - Col...
...1972, p. 57...
...See for example Geyer article in Chicago Daily News, Dec...
...El Grnfico, Dec...
...This intervention (which anti-Communists refer to as the "Liberation") ousted the nationalist reformist government of Jacobo Arbenz and installed a counterrevolutionary government headed by the CIA's protege, Col...
...In 1971 international nickel sales and prices were falling, and INCO's strategy seemed to be to maintain Guatemala as a nickel reserve - a prospect which angered Guatemalan officials...
...He might very well be taking my wallet and I'd be thanking him...
...Since the middle 1960s the U.S...
...As a result, according to U.S...
...The World Bank and the Inter-American Committee on the Alliance for Progress (CIAP) both continued to issue negative evaluations of Guatemala's tax structure, 1 9 understanding that the obvious way to resolve Guatemala's fiscal problems would be to increase direct taxes...
...In Costa Rica this phenomenon could be seen clearly through the economic-political partnership between President Figueres (1970-4) and Robert Vesco...
...this is, as one official diplomatically put it, no direct concern of theirs, and would never be a reason for withholding aid...
...As a result of President Johnson's 1968 visit to Central America, on which he was accompanied by National Security adviser W. W. Rostow, "Central American export and tourism development [was] rated priority attention in a [U.S.] National Security Council directive;'34 soon after the trip, ROCAP (Regional Office of AID for Central America and Panama) and the AID missions in the five countries began to implement this strategy, sending experts, creating new institutions, and promoting specific projects...
...Perlo, op...
...In 1944, at the close of World War II, Guatemala began a profound national capitalist transformation...
...As became clear from interviews with both United States and Guatemalan officials, AID and U.S...
...Moreover, the programs and policies of the Arana government have had no positive impact on the poor...
...0-1 through 0-7 are from the first series of Inforpress publications, preceding the current series, No...
...s3 LAAD is to be, then, "the first regional private investment company in Central America,"s thus in effect fulfilling the World Bank's old dream of a regional private financiera (finance corporation).* LAAD's objectives are long-range...
...These concrete conditions coincided with the realignment of economic interests and the crystallization of a new alliance of economic and political forces both in the United States and in Guatemala and Central America...
...Carlos Castillo Armas...
...2 4 These were indicators of the more general problem of market saturation in Central America...
...ROCAP got the cooperative to form a joint venture, EXIMCO, in conjunction with several Guatemalan businessmen and a Florida-based marketing firm, Orbit Sales: presumably Orbit would distribute the produce in the United States...
...M6ndez, by contrast, according to some sources, had previously "conferred with Ambassador John Gordon Mein and had promised to seek more U.S...
...The more prag- matic U.S...
...S. Menshikov, Millionaires and Managers (Moscow: Progress Publishers, 1969...
...To cite one example: In 1972 AID made a $6 million loan to LAAD (Latin American Agribusiness Development Corporation), a consortium of 13 U.S...
...For the United States this has meant the promotion of "development" schemes designed to avoid comprehensive reforms...
...These and other indicators of a generally worsening situation in Guatemala are logical consequences of the new U.S...
...see also NYT, April 18, 1971...
...cit., Webb, op cit...
...In addition they established California, Florida and the Southwest as the bases for gambling and sun-and-surf tourist industries...
...Following the November 1960 military uprising, Guatemala received the first U.S.-sponsored civic action program in the hemisphere...
...It became a national joke among Guatemalans that in order to receive massive U.S...
...advisers would also respond to the "guerrilla threat" by initiating real social and economic reforms...
...Latin American Radicalism (New York: Vintage Books...
...Latin America, June 25, 1971, p. 202...
...of Economics, Univ...
...see also BLA, Jan...
...The model for the program was taken directly from Vietnam - as were many of the principal U.S...
...More significantly, after that time, the Mindez government never again dared take reformist initiatives (such as land reform) which might in any way threaten the privileges of the bourgeoisie...
...But as usual with a project of this nature, it did not remain dormant for long: by December 1973 a new bill for the creation of tourist zones, granting all the fiscal incentives to investors, was approved...
...In terms of the ongoing debate within U.S...
...They made their money largely in electronics, aerospace, and defense-related industries, and also represent the "independent oil producers" (as opposed to the multinational oil trusts...
...Small wonder, then, that ICAITI officials felt they were being used as a conduit - or as one official put it, "the post office" - for ROCAP relations with MRI...
...El Grnflco, Dec...
...By 1973 even relatively progressive military officers, in opposition to the Arana government, took the position that "in the present conditions of chaos and violence the Army is the only force which is capable, morally and materially," of governing Guatemala...
...Defenders of the bill, including the Vice President and President of the Congress, argued that Guatemalans would have to get over their "small-town attitude" about casinos...
...By 1970 three different groups in Guatemala had formulated projects for the creation of an Export Promotion Center: the Bank of Guatemala, the Ministry of Economy and the private sector...
...Kirkpatrick Sale, op...
...BCIE alone was planning to provide $88 million for tourism projects for 1973-80...
...El Grifico, Aug...
...22, 1973...
...agribusiness giants,* to develop existing and new enterprises in Central America to produce, process, transport, distribute or market agricultural products.s' (That a multi-billion dollar consortium of the largest agribusiness enterprises in the U.S...
...Although strictly speaking the counterinsurgency campaign dates back to the early 1960s, it was not massively applied until after M~ndez took office in 1966...
...The very brutality of the repression is a measure of the continuing "threat" of class struggle in Guatemala...
...Once the private sector attack was mounted, the Mendez government quickly backed down, leaving Fuentes Mohr alone to defend the tax plan...
...Perhaps the most blatant examples were the Cuban exiles (ex-Batista officials) who served as press secretary and close political adviser to President Figueres in Costa Rica - not unlike Bebe Rebozo's close relation to President Nixon in the United States...
...Arms Control Project, Feb., 1970...
...this was to be part of a much larger program, involving a subsequent World Bank loan of $15 million...
...For full details, see "Integrating the Big Guns: The Central American Defense Council," NACLA's Latin America and Empire Report, May-June 1973...
...First, despite the demise of the CACM as a model, the region remains a unit and, as the U.S...
...These extractive ventures, along with other huge mining projects in Central America (e.g., Alcoa's bauxite venture in Costa Rica and a Howard Hughes seabed mining operation off the Nicaraguan coast, yielding "thousands of tons a week of copper, nickel, manganese and cobalt" 7 6 ), greatly increased the strategic importance of Central America to the United States - especially as the world shortage of some of these minerals began to develop in the 1970s...
...the benefits of those programs have been diverted to those who already own property...
...When the tourist zone law was debated in Congress in August 1973, attention focused on one feature, authorizing luxury hotels to operate casinos...
...owned, or at least joint ventures with U.S...
...6 4 The objections were so strong that the bill was withdrawn...
...For them, the only political consideration is, to quote one World Bank official, "law and order," which is a prerequisite for the political stability that will encourage and create a "favorable climate" for foreign private investment...
...PLANNED CYNICISM Illustrating certain aspects of the new economic approach was the Plan Nacional de Desarrollo (National Development Plan) of 1971-5...
...First, given the U.S...
...2 The United States had good reasons to support the election of a man such as M6ndez (although the Pentagon is said by knowledgeable sources to have opposed it...
...In addition to securing the creation of new institutions, AID pushed for the adoption of new incentive legislation designed to attract foreign investors...
...aid to Guatemala unless the official blood-bath was stopped...
...From both perspectives, the new economic strategy would have to promote agribusiness and non-traditional exports, tourism, and extractive mining...
...In contrast to the older groups which have invested heavily overseas and claim to be "multinational," these secondary groups have tended to rely more heavily on domestic production and real estate operations, and have only more recently entered the international investment field...
...This approach complemented the economic strategy of the 1970s, which almost deliberately assumed that no real economic or social reforms were going to be made...
...12, 1972...
...a free hand in counterinsurgency...
...Interviews...
...Andrew St...
...One American technical adviser who came into contact with the MRI operation said that he and others who were suspicious about it asked people in AID/Washington if there was anything illegal...
...Interview...
...4 If this is AID's general approach to the export promotion campaign, let us see what it has meant and whom it has benefited in practice...
...Moreover, it would be misleading and unrealistic to see the debate as one between two equal alternatives...
...7 9 A number of them were Puerto Ricans and Cuban exiles with experience in Vietnam -- an attempt, no doubt, to disguise their gringo loyalties...
...advisers (most of them former policemen), included such items as establishment of a "crime lab" and communications center, provision of equipment and training, and construction of a $400,000 police academy...
...3s Given the commitment to expanding and diversifying Central American exports, U.S...
...and knowledgeable government officials admitted that it was just a matter of time until a new bill authorizing casinos would be slipped through, as had already happened in other Central American countries...
...In 1971, according to one account, local EXIMCO officials were hauled into court for misuse of funds...
...77, p. 3; La Hora (Guatemala), Nov...
...immigration officials...
...Subcommittee on Inter...
...0-7, p. 9. 89...
...see also Haissman, op...
...WSJ, Jan...
...Like the border industries program on the U.S.-Mexico border, it is in essence a means of "exporting" cheap, Latin American labor to the United States without having to deal with U.S...
...Nevertheless, there was no question that it did survive these setbacks: "The initial guerrilla failures, far from asphyxiating the movement, catapulted it forward...
...Richard Gott, Guerrilla Movements in Latin America (Garden City, NY: Doubleday, 1971), pp...
...By 1973, the Eastern Establishment, feeling the need to reassert its own control of the situation, decided to turn the Watergate affair into a major scandal in order to cripple Nixon and his Sunbelt allies...
...capital, technology and markets, LAAD will then sell its stock in the firms to local businessmen...
...Interviews...
...Like its predecessors since 1954, the 1971-5 Plan was designed to fulfill two basic purposes: to improve the international image of the Guatemalan government and to attract foreign aid funds...
...13, p. 7. 39...
...the ripening of the cucumber crop with no means of transporting it to the United States...
...aid appears somewhat unreal...
...To cite a couple of examples: *A Houston-based "philanthropic" organization, Amigos de las Americas ("Friends of the Americas") has sent several groups of volunteers from Texas, Florida and Southern California to Guatemala since the late 1960s to perform "good works," especially in health...
...imperialism...
...cit., pp...
...21, 1972...
...But the development of the liberation forces in Guatemala was not stopped by the events of 1954...
...These private sector "productive" activities were not tied to the growth of a domestic consumer market in Central America, but rather used the region as a base for operations oriented toward world markets...
...33-34...
...BLA, March 25, 1971, p. 96: interviews...
...The regulation was lifted in March 1973...
...6 Politically and socially, the effects of tourism in a dependent capitalist economy are even worse...
...These and innumerable other programs, including cooperatives and programs to "integrate" the Indians, are part of the new implementation of Title IX of the Alliance for Progress programs, supposedly designed to spur popular participation and spread "democratic values...
...Even though the guerrillas had been severely weakened by the brutal U.S...
...Latin America, Sept...
...Moreover, the international agencies have chosen to ignore the massive right-wing semi-official and official terror campaigns tolerated or even initiated by the M6ndez and Arana governments...
...Edward Glick, Peaceful Conflict (Harrisburg, Pa.: Stackpole Bks., 1967), pp...
...6 Nor was this situation improving: taxes actually decreased as a percent of GNP from 1955 to 1966 and again between 1965 and 1967.7 some change, the government would be in permanent fiscal crisis, unable to finance its grandiose "development" plans...
...Ambassador Turner Shelton...
...market to sell the finished products...
...29, p. 2. 74...
...and, as the 1974 "election campaign" has made absolutely clear, reformism has no meaning in the political process...
...strategy for Central America stemmed not only from the ever-deepening crisis in the CACM...
...Spurred on by world oil shortages and by the generous petroleum code in Guatemala, nearly 30 companies rushed in by 1974 - many of them "paper" companies or "fronts" formed solely to stake out claims and to sell these rights to the big international oil companies if anything worthwhile was discovered...
...The new strategy was designed to prevent the outright collapse of the Guatemalan economy, but without making any fundamental socio-economic reforms...
...according to one ex-AID functionary, its contracts amounted to around $1 million...
...Inforpress No...
...counterinsurgency campaign and had not managed to generalize their struggle to the entire Guatemalan society, there was no doubt in the minds of anyone in Washington - reformers or hard-liners - that the guerrillas constituted a class threat which had to be liquidated...
...In addition, after deciding to make this a model for future non-traditional export projects, ROCAP signed a $215,000 contract with ICA1TI (Central American Research Institute for Industry - a prestigious scientific institution) to provide technical assistance...
...It is also a channel to those who are concerned about the dangers of Communism in the hemisphere...
...10027...
...4, 1973...
...4, 24 ft...
...The revolutionary movement was unequivocally fighting for socialism, not for a reformed capitalism...
...After being ap- proached by Guatemalan Finance Minister Fuentes Mohr, AID and the State Department were considering the possibility of granting a program loan.* The "reformers" in State and AID felt that this loan should be tied to a tax reform by the Guatemalan government...
...Sources for the following story include: primarily interviews with a number of prominent U.S...
...thus in effect it pits Central American workers against U.S...
...Galeano, op...
...Before describing this strategy in detail, let us see briefly what we mean by calling it a "strategy...
...Jon Frappier...
...Another notable U.S...
...Costa Rican Tourist Agency ad: "A tourist is a friend who comes here to invest...
...George, "The Cold War Comes Home...
...Paddock and Paddock, op...
...Susanne Jonas, "Cuban Exiles and Watergate," NACLA's Latin America and Empire Report, Nov...
...A second law also introduced in Guatemala in early 1973 provided for the creation of "tourist zones" and granted a series of incentives for hotel construction...
...Ambassador, who also became involved in resolving EXIMCO's problem...
...A number of congressmen and labor representatives, citing the negative precedent of Cuba under Batista, protested that this kind of tourism could only have bad effects for Guatemala...
...Prensa Libre (Guatemala), Jan...
...corporations holding exploration concessions in Guatemala, began negotiating with the Guatemalan government to fix the terms of a large-scale nickel mining venture there...
...policy-making circles...
...AID to Guatemalan police...
...Miami Herald, Nov...
...This had been demonstrated through the CACM experience: the most privileged U.S...
...None of these groups was "new" in the sense of not having existed previously, but by the end of the 1960s their fortunes were rising, due to a combination of structural factors and circumstances...
...balance of payments crisis and international monetary crisis (which were partly caused by the war in Vietnam) put further strains on the U.S.-dominated capitalist order...
...Replacing the Alliance for Progress model was a model of politics run by the military, of politics as special warfare...
...For one thing, it often has such side-effects as destruction of the local culture and relocation of Indians...
...A similar law had been adopted in Costa Rica, permitting foreign retirees a whole series of special benefits and opportunities to invest...
...10, 1973...
...2 9 Guatemala did not have any one Sunbelt "angel" of this kind...
...2-3, 36 and passim...
...Title IX is an attempt to remove the pressures for real change through small programs -- "micro-development," as one participant called them...
...For the previous 5-6 years it had had a contract as "marketing adviser" to ROCAP...
...dollar forced U.S...
...Notas sobre el Sistema Imperialists de Dominacibn y Explotaci6n en Centro-am~rica," OCLAE (Cuba) No...
...Whereas9 Guatemala had received $40 million in loans from 1954 until mid-1966 (not counting the nearly $80 million in U.S...
...Investment Bubble in Central America," NACLA's Latin America and Empire Report, May-June 1973 ("U.S...
...The failure of reformism has made clear that they cannot achieve their goals through elections, and that there can be no "intermediate" stage in the Guatemalan revolution: the very process of defeating police-state repression and imperialism in Guatemala must simultaneously be a process of building socialism...
...But these economic problems have also had another effect: during 1973 and 1974 they gave rise to widespread strikes and popular struggles which brought large numbers of the Guatemalan people to the streets for the first time since the early 1960s (see "After Twenty Years," above...
...At the same time, the U.S...
...Other prospective foreign investors were watching the EXMIBAL investment, projected to be the largest industrial enterprise in Central America, as a "weathervane" of the "investment climate" in the country...
...and those which were not planned were logical outcomes...
...Specifically, AID hoped for adoption of a law similar to the "model" passed in El Salvador in early 1971: it exempted export industries from income and other taxes and import duties, permitting unlimited profit remittances and granting other special privileges...
...By 1968 reformism was no longer a serious possibility for Guatemala...
...El Grtflco, Feb...
...Enrique Peralta Azurdia: 1963-1966 - Julio Cesar M6ndez Montenegro: 1966-1970 - Col...
...objective in Guatemala...
...Business Latin America (BLA...
...Smaller ranchers in other parts of the country protested this discriminatory aspect of the loan, as well as the high interest rates on subloans...
...From the very beginning, AID officials believed that one way to generate interest in new exports would be to create immediate "success stories"" - i.e., pilot projects which succeeded in exporting new products to new markets and which brought in high profits overnight...
...MONEY IS MONEY" Given this fundamental acceptance of the status quo, the aid agencies have had to formulate a new economic strategy for Guatemala (and all Central America) * - a strategy based on the impossibility of making structural reforms...
...EXMIBAL is 80% owned by International Nickel Company (INCO), which is legally based in Canada but financially controlled by U.S...
...This was not surprising, since the loan was specifically designated for the South (Pacific) Coast - precisely where the biggest ranchers, and those least needing additional resources, were located...
...The counterinsurgency model was also generalized through the aid programs: the BID representative in Guatemala after 1971 was Julio Sanjinez Goytia, formerly a colonel in the Bolivian Army in charge of his country's civic action program, whose book on civic action (in English) was discussed extensively by leading experts on counterinsurgency...
...military training, for example, produced several of Guatemala's finest and most capable guerrilla leaders, such as Luis Turcios Lima and Marco Antonio Yon Sosa...
...Meanwhile, the project itself at Teculutin was turning into a disaster...
...66, June 1972, p. 4. Christian Science Monitor, Oct...
...Beyond the immediate question of raising taxes was the larger issue of whether it would be possible in Guatemala to forestall revolutionary change by making smaller reforms - and whether the United States was prepared to exert any meaningful pressure for a reformist policy...
...Moreover, even if the revolutionary forces in any one country did take power, this apparatus would facilitate intervention by the others...
...Agency for International Development (AID), Capital Assistance Paper, Proposal and Recommendations for the Review of the Development Loan Committee, Loan Paper for Loan L-014 to Guatemala (Property Tax Development) (Washington: AID, 1967), p. 2. 10...
...The preceding examples illustrate the illusory nature of that belief, given the basic unwillingness to make the one change that really could alter the social structure of the countryside and create a "stable" rural middle class: agrarian reform...
...BLA, Mar...
...companies find it cheaper to transport goods to Central America to be elaborated than to pay higher salaries in the United States...
...strategy would have to achieve the basic U.S...
...12, 1973...
...subsequently had to become the guarantor of the Counterrevolution...
...almost all aid during that period had been channeled through CACM institutions...
...Complicating MRI's involvement in the EXIMCO venture was the existence of a second MRI (Marketing Resources International Inc...
...and international aid agencies responded to the collapse of the CACM and other changing conditions in Central America and internationally by promoting a new set of productive activities in the private sector...
...Inforpress, Nos...
...Congress and State Department) to defeat the proposal...
...Richard Webb (consultant), "The Incidence of Government Policy on Poverty in Guatemala" draft report for World Bank, April 6, 1973, pp...
...One U.S...
...investor reportedly was Lyndon Johnson...
...hence, they required no serious domestic reforms...
...19, 1972, p. 333...
...attempt to camouflage counterinsurgency by blending it into the political countryside...
...Washington Post, April 5, 1971...
...First, INCO insisted that it had difficulty obtaining long-range financing in the international capital markets for its $250 million investment...
...and since there are no limits on size, these ranches are often as large as 4000 acres...
...Inforpress, No...
...In 1967 - when urban guerrillas were becoming active - AID launched a "model precinct" program in Zone Five, one of the poorest areas of Guatemala City, to test new techniques and establish a "police presence" in this "highcrime" area, and eventually to be extended to the rest of the city...
...Next ROCAP pressured BCIE to grant a $370,000 loan to EXIMCO under very irregular conditions...
...37...
...Put simply, it is used in cases where U.S...
...Levinson and de Onis, op...
...CIAP report, No...
...NACLA Newsletter, Oct...
...In fact, what the 1966-68 experience of the attempted tax reform and the U.S...
...tourists to switch their vacations from Europe to the nearer, cheaper, and tied-to-the-dollar resorts in the hemisphere...
...The U.S...
...EXMIBAL was granted the right to mine, refine, and export 60 million pounds of nickel annually for the next 40 years...
...NACLA'S LATIN AMERICA & EMPIRE REPORT (Formerly NACLA NEWSLETTER) Vol...
...aid grants to Castillo Armas), by mid-1970 the total was $152.5 million: 74% of all foreign loans between 1960 and 1970 were signed during the M6ndez government 0 After Arana took over in 1970, the aid flow continued: from 1970 to 1973 the Arana government signed $92 million in foreign aid loans.21 Thus, in general, the response of the international aid agencies has been to note, politely and in carefully chosen words, that the situation in Guatemala, especially with regard to income distribution and unemployment, is becoming dramatically worse...
...Eg., BLA, Jan...
...19, 1972...
...Quite aside from the question of casinos and their "moral" effects, the broader push for tourism and Guatemala's increasing dependence on it has important effects and implications...
...attempts to contain the class struggle and to maintain Guatemala as a preserve for U.S...
...adviser has suggested, for example, that Guatemala should develop artisan industries, since "Guate- malan women are very good with their hands...
...WSJ, July 27, 1972...
...Against their better judgment and feeling that the project was not really viable, BCIE gave in to ROCAP pressure - with the resulting default in 1973...
...interviews...
...for the Guatemalan people, the new "boom" only accentuates their own misery...
...The United States took immediate advantage of this change in attitude to set up a massive counterinsurgency program...
...This profitable activity is part of a larger strategy: "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...
...Integrating the Big Guns...
...The furor over beef exports coincided with, or was partly sparked by, the Nixon Administration's liberalization and eventual suspension of the U.S...
...26, For detailed analysis, see NACLA's Latin America and Empire Report, Oct...
...5. ROCAP memorandum, "Comparative Revenue Performance of the Central American Countries," Feb...
...Industrialization" as imposed by the United States and by the multinational corporations had failed to touch Central America's unemployment and fiscal problems...
...First, they recognized implicitly if not explicitly that no Guatemalan government since 1954 has had serious plans for making structural reforms...
...Susanne Jonas "a References 1. See Susanne Jonas, "Masterminding the Mini-Market," NACLA's Latin America and Empire Report, May-June, 1973...
...New York Times, Feb...
...commitment to defeating the guerrilla movement, which no one questioned, and given the clear inability of the Guatemalan army to defeat that movement by itself, the United States could not have seriously considered cutting off military aid at this crucial moment...
...The principal differences among the three had to do with the funding of the Center and the composition of its Board of Directors...
...Fred Block, "Watergate: An Editorial," Socialist Revolution, May-June 1973...
...55, p. 1...
...Roque Dalton...
...investors, put it in 1970, It seems to be a pattern that whenever the problems of operating in the...CACM mount to a point where companies begin to think the game is not worth the candle, something happens to provide a new lure to investors...
...Underneath the glowing reports about high prices for coffee and Guatemala's other traditional exports, and the growing potential for new exports (which has compensated for the negative effects of the CACM collapse) lies the stark reality of increasing concentration of income in the hands of the few...
...2, no...
...76 S.Guatemalan Guerrilla Movement...
...9 But when the 1967-68 controversy became heated, they did not exert any strong pressures...
...The official rationale for these programs is to "professionalize" and "humanize" the Guatemalan police...
...Another AID-inspired project was a private ("for profit") trading corporation to promote the sale of Guatemalan exports in foreign (non-Central American) markets...
...By and large they maintained the investments they had made...
...Public Safety, Table VI for 1974...
...it had made significant inroads by 1966, when the U.S.-directed counter-attack began in serious...
...The armed forces already had full control of the countryside through a shadow government made up of commanders of each Military Zone and Comisionados Militares in each town...
...VIII, No...
...Its concrete projections for the Guatemalan economy were based on the expectation of receiving vast amounts of foreign aid - $272.3 million or 60% of total investment for 1971-5.'14 Starting on page i, the two-volume, 650-plus page Plan exuded an attitude of pragmatism (not to say cynicism...
...13, 1973, Prensa Latina, Dec...
...54, p. 10...
...Determinants of Tax Performance in Developing Countries: The Case of Guatemala" (Eugene, Ore.: Ph.D...
...CASINOS, CUCUMBERS, CUBANS, COWS, AND COLONELS 1. The New Panacea: Non-Traditional Exports By 1968, it was clear to U.S...
...To resolve the transport problem, Guatemalan EXIMCO officials, one of whom was a personal friend of President Arana, attempted to get a government subsidy...
...Parallel to this discussion was a second debate...
...15 port for/ Guatemalans for Guatemalans But this same law granted special privileges to two exporters of processed beef, thus guaranteeing their monopolistic control...
...At the most obvious level, the U.S...
...Indeed, Vesco invested in almost every area of the economy and bought more than $10 million in Costa Rican bonds, giving him powerful leverage over the nation's economy...
...6 9 * But politically Guatemala's dependence on tourism cuts two ways...
...a free hand...
...chemical companies - only to discover that the pests in question were absent from the soil in this part of Guatemala...
...3 6 This decision can be seen clearly in regard to the process of establishing a new export promotion institute or center in Guatemala...
...business circles as a model - a "precedent setter for future mining accords" of this kind, both in Guatemala and in other countries...
...Since the early 1960s, the Pentagon attempted to coordinate and centralize military command of Central America under U.S...
...For one thing, though cattle raising has increased, beef consumption in Guatemala has actually declined during the last decade...
...News from Guatemala (published by Guatemalan Consulate in New York), April 1973...
...Clearly, then, AID's actions lived up to its principle that "it is the private sector which exports, the government which provides the umbrella of incentives and facilitation...
...This established civic action approach was given a new twist with the 1970 arrival of Vietnam-experienced Robert Culbertson as head of the AID mission in Guatemala.* Culbertson's idea was to combine "social development," especially in the countryside, with private sector "aid" programs: As he told a Congressional committee, "I am of the view, personally, that [in order to lower the U.S...
...Foreign Policies upon Farmers...
...the United States and the Guatemalan bourgeoisie have been unable to establish legitimacy or consolidate power on a stable, lasting basis...
...All the rhetoric about giving priority to the rural sector is contradicted by the refusal to alter the land-holding system, with the result that the living standard of the poor is deteriorating (or at least not improving...
...Cuban exiles who (with a good deal of U.S...
...internal study prepared for InterAmerican Development Bank, but not published), April 1971, 2.1...
...David Tobis, "The U.S...
...Their experience was a crucial lesson not only for themselves but also for revolutionaries throughout Latin America...
...WSJ, Feb...
...Military Training and Weapon Acquisition Patterns, 1959-69," M.I.T...
...Here again, the pragmatists, including Ambassador Mein, argued that the main political priority should be to keep M6ndez in office, and that therefore no pressure should be exerted at all...
...6, 1971, El Grafico, Aug...
...6 s* In a similar vein were the Dude Ranch developments in Costa Rica, which combined cattle operations with the "new tourism...
...In many respects the Presidency of Richard Nixon in 1968 represented the marriage of these two sets of interests...
...Although constant in its intent, the U.S...
...throughout the 1960s Central America has served as one of the exiles' principal bases for launching raids against Cuba...
...1, 1972, p. 278...
...They claimed to have extracted more than 50,000 teeth in Guatemala...
...Moreover, the revolutionary forces in Guatemala have learned much from their own mistakes during the 1960s and from the social process triggered by the new strategy of imperialism...
...Guatemalan police have also been sent to the United States for training in riot control, firearms, fingerprinting, etc...
...see also Partners literature...
...aid" has often set into motion forces which it could not subsequently control - forces which contributed to the liberation struggle...
...By 1973 the threat of an intervention by the three openly fascist governments (Guatemala, El Salvador and Nicaragua) caused some alarm to Central America's less reactionary governments (Costa Rica, Honduras and Panama...
...Fortunately for the United States, large nickel deposits had also been discovered in Guatemala, a much more "secure" country for the U.S...
...In this sense Ambassador Mein and the other hard-liners were objectively correct in arguing that it was impossible to impose reformist pressures on the M6ndez government, given its situation at the time...
...11, 1973...
...Inforpress, No...
...Guatemala's very need to create a favorable image to attract tourists makes it very vulnerable to the international press...
...Ambassador Mein and attempted to exert pressure (through the U.S...
...Ambassador Mein) argued that to press too hard on such sensitive issues as tax reform could bring down the weak Mendez government...
...By mid-1967 a group of liberals in State and AID were so horrified by the magnitude and brutality of the counter- insurgency campaign initiated by the "progressive" civilian M6ndez government and its U.S...
...Thus, to speak of the "rejection of reformism" after the late 1960s means that historically reformism was no longer a viable option for Guatemala, and that ill specific policies would have to be adopted within this general context...
...Eastern industrial interests were not eager to expand their investments in the region and were willing to permit the * The Nixon Presidency coincided with the development of a profound crisis in the American system and its overseas extensions, i.e., in American imperialism...
...Guatemalans refer to them as "perreras" or "dogcatchers' wagons...
...On the contrary, the very conditions imposed by the Counterrevolution spurred on the development of those forces and impelled the transformation of a reformist resistance movement into a revolutionary movement fighting for socialism...
...defeat in Vietnam presented a basic challenge to U.S...
...Foreword...
...NYT Sunday Travel section, Jan...
...but by the end of the 1960s, there were few new investments of this type, and a few subsidiaries of U.S.-based multinationals (e.g., Ducal in the food industry and Clark's in chewing gum) closed down their operations, citing as the reasons the loss of the Honduran market and control of the market by other firms...
...EXMIBAL promised to become as central to the Guatemalan economy as the United Fruit Co...
...The Central Americanization of the counterinsurgency campaign requires a corresponding Central Americanization of the liberation struggle...
...9 6 * Unemployment and underemployment in both the rural areas and the cities remain serious, especially in view of the 3.1% and rising annual population growth rate...
...19, 1972, Nov...
...A Central American technical adviser commented, "He knows exactly what he's doing...
...Put simply, it is a debate over the most effective way to combat the threat of revolution - whether through reforms coupled with repression or through a hard-line strategy designed only to maintain control, without any pretense of reforms...
...3, 1973...
...For example, Nixon was still attempting to win the Vietnam war, long after most Wall Street leaders recognized the need to end the war in order to alleviate the balance of payments crisis, etc...
...Ambassador to Brazil and who recommended U.S...
...That's why Americans are in the cattle business here...
...One AID functionary said, "Patten is always trying to put something over on the AID Mission...
...MRI was supposed to provide "training courses" for about 25 "students...
...Here, too, shaking the operations profitable to giant foreign enterprises, with minimal benefits to the local population, is not a random consequence but an integral aspect of the new strategy...
...Finally, AID worked closely with such U.S...
...advisers, and many of their subordinates.'" Also active in Guatemala after 1966 (although their presence in Guatemala was officially denied) were U.S...
...ruling class as a result of Nixon's response to the crisis in U.S...
...In general these industries are supposed to capitalize on Guatemala's abundant resources - cheap labor and agricultural produce...
...by building up industries using primarily inputs (natural resources) from Guatemala...
...The Guatemalan Congress has become, according to one official, an arena "for selling laws...
...In the words of a U.S...
...goals...
...Offsetting the supposed employment benefits - al- though these industries do not necessarily employ many Guatemalans - - are the fiscal loss, the problems of administrative control and the tremendous opportunities for contraband...
...MRI Inc...
...and Guatemalan officials...
...minutes of Ad-Hoe ROCAP-ICAITI Committee for Project Agreement 70-14...
...However, the reality of the CACM as imposed by the United States permitted no significant changes or reforms.* In fact, it is only in the light of what followed that the CACM strategy appears relatively reformist...
...26, 1973...
...2 5 s Meanwhile, Central America began to appear interesting to a different set of business groups both in the United States and in Central America - groups whose fortunes were not tied to the growth of a domestic consumer market in Central America, groups for whom, rather, Central America was to serve as a base of operations oriented toward markets elsewhere...
...The producers were small farmers in Teculutin, Zacapa, who had formed a cooperative...
...Lester Schmid, "Some Effects of U.S...
...Second-class postage paid at New York...
...In addition MRI had helped prepare an "exhibition" of Central American products in Washington and New York, which one knowledgeable Central American official described as an absurd "show" and an embarrassment...
...To cite a few indicators: * Particularly in the countryside, poverty is worsening...
...1, p. 8 (Inforpress Centroamericana, hereafter referred to as Inforpress, is a weekly news summary published in Guatemala since 1972...
...Enrique Peralta Azurdia had been...
...Embassy * GOVERNMENTS SINCE 1944 -Juan Jose Ar6valo: 1945-1951 -Col...
...And, as could be expected when "development" is entrusted to such private sector organizations as the Partners or the Rotary Club, underneath the "grassroots" rhetoric grow the weeds of profits for the few...
...At the end of 1973 there were persistent reports of a triple-coup attempt, directed against Costa Rica, Honduras and Panama, spearheaded by Cuban exiles, and based partly in Guatemala.921 Seen from a more general perspective, the existence of a unified, modern, well-trained and -equipped Central American armed force, loyal and subordinate to the U.S...
...they indicated that LAAD would invest in producing ventures only in those situations where marketing was the principal aspect...
...objective of pacifying Guatemala without requiring any basic reforms...
...Inforpress, No...
...Particularly since World War II, however, this East Coast financial oligarchy has gradually been forced to share power with newer but / 0 Izabal-Zacapa Guerrilla Zone Although much of the pre-"Liberation" maneuvering had been managed by the Eastern interests, particularly United Fruit Company, during the early years of the Counterrevolution the initiative was picked up by Sunbelt political and economic interests, led by Vice President Richard Nixon...
...The primary objective was to "establish a government presence," both in order to facilitate the pacification process and to win over the population through "social works" - small, non-structural changes...
...Strategies for Central America, NACLA's Latin America and Empire Report, May-June, 1973.5 America, from reformism to a hard-line policy...
...hotel chains (e.g., Hilton, Sheraton, Western International) have made sizeable tourist investments in Guatemala...
...11-12...
...but since there were no indications of such a reform, they accepted the strategy of improving administration of the existing tax laws...
...29, 1972...
...Victor Perera, "Guatemala: Always La Violencia," NYT Magazine, June 13, 1971...
...taking place almost exclusively on the large estates for increasing the economic benefits and political power of the privileged class, while the living standard of the general population deteriorates and the disparities between rich and poor are increasing daily...
...The Amigos worked closely with the army's civic action program and, in fact, according to some ex-participants, * Following a long career with the Ford Foundation, Culbertson (together with his Deputy, James Boren) developed his ideas as Director of AID in Peru in the early 1960s...
...investors within a framework of dependent capitalism...
...businessmen in Guatemala met with U.S...
...d) The "Green Revolution" in Guatemala Although cattle raising is an extreme example, some of the same patterns are evident in the other areas of agribusiness...
...Edwin Lieuwen, Generals Vs...
...Green Berets, flown into the country, according to one scholar, after the 1966 election...
...Through these personnel, the techniques of counterinsurgency developed in Vietnam were transferred to Guatemala...
...Washington Post, Dee...
...in order to achieve this goal, the government had to rely on a firm alliance with the Guatemalan bourgeoisie and foreign capital - forces which would never tolerate a meaningful "planning" process regulating their operations...
...6. Harley Hinrichs, "Tax Reform Constrained by Fiscal Harmonization within Common Markets: Guatemala: Growth without Development" (mimeo.: 1971), pp...
...1970...
...These Eastern groups form what we may call the "financial oligarchy...
...Tobia, op...
...78,000 of the ROCAP-ICAITI contract was earmarked for an ICAITI subcontract with a firm called Marketing Research International Ltd...
...Reformism proved unable to contain the class struggle in Guatemala or to resolve Guatemala's profound social problems, and the civilian "middle class" could not control the situation...
...As Business Latin America, voice of U.S...
...AID pushed the Guatemalan government to establish an export promotion center...
...5 2 * Bank of America, ADELA, Caterpillar, CPC, Monsanto, Dow Chemical, Borden, Cargill, John Deere, Gerber, Standard Fruit, Ralston Purina -- and most recently, Chase Manhattan Bank...
...but it is a deliberate response to changing conditions in Central America and in the United States...
...Inforpress, No...
...2 3 In the 1950s Nixon was crucial in cementing the cold-war alliance between Wall Street and the Sunbelt groups.10 During the 1960s, Central America experienced an unprecedented influx of foreign investment in manufacturing by these multinationals...
...b) the failure to "pacify" Guatemala...
...As seen above, Guatemala's "partnership" with Alabama has provided opportunities for fruitful contacts between Arana and Governor Wallace...
...Miami Herald, Feb...
...investors have produced a very contradictory situation by 1974, even judged in terms of U.S...
...interviews...
...smaller "secondary" financial groups which have emerged first in the Midwest and then in the South and Southwest...
...8 4 The 1974 Presidential election, giving the population a "choice" from among three military candidates, demonstrated the extent to which politics had become the domain of the military...
...Under the regime of the Counterrevolution since 1954, social and economic conditions for the Guatemalan people have been among the worst in Latin America...
...a non-profit corporation established to do contract work with the U.S...
...Thus, INCO stalled its investment partly as a tactic to apply pressure on the Guatemalan government to grant the guarantee...
...Journal of Commerce, Feb...
...But Nixon's assumption of the Presidency brought a shift in the power balance, as Southern-based interests acquired a new prominence politically and put forward new priorities.* In Central America, this shift played into a unique set of circumstances...
...The only means of obtaining such revenues was a tax reform...
...The 1966 Presidential election was held amid extreme uncertainty: when civilian "reformer" Julio Cesar Mendez Montenegro won, defeating two military candidates, no one was sure whether he would be permitted to take office...
...officials...
...established a counterinsurgency base in Izabal, staffed by U.S...
...105-08...
...Carlos Castillo Armas: 1954-1957 - Gen...
...His specialty in preparing the "Liberation" had been as an announcer over the clandestine radio station, as part of the anti-communist intelligence organization and of the psychological campaign prepared by the CIA...
...Laws with some of the same features were proposed in Guatemala and Costa Rica in late 1972 and subsequently adopted.A 8 Another "accomplishment" in Guatemala in 1973 was the creation of a free (i.e...
...The only movement strong enough to defeat repression and imperialism is a generalized class struggle...
...7. Gert Rosenthal, "La Asistencia Financiera Externa como Instrumento de Programaci6n: Experiencia Reciente de Guatemala," (Santiago: Instituto Latinoamericano de Planificaci6n Econ6mica y Social - ILPES, 1967) (INST/S.1/L.2), p. 6; Michael Best...
...of Oregon, 1969), p. 45...
...House, Committee on Foreign Affairs...
...If any further proof were needed of the government's total capitulation to right-wing business and military pressure, in March 1968, M6ndez dismissed Fuentes Mohr from the Cabinet...
...imports was to promote Central American exports...
...LAAD and Bank of America officials expressed particular interest in such areas as developing new markets, refrigerated warehousing, and leasing agricultural equipment...
...Partners (published by National Association of the Partners of the Alliance), Vol...
...In addition, aid officials aimed to resolve the serious balance of payments crisis in Central America, to keep the regional economy going and to permit an economic expansion or even "boom...
...Behind the rhetoric about reforms, it was not clear whether the Guatemalan bourgeoisie and military and their foreign allies, on whom the M6ndez government depended, would permit such reforms...
...The experience of this defeat produced the armed movement which a socialist oriented revolution demands today...
...government's profile] we should very seriously consider turning over a good share of the work, and especially the sensitive work in these areas of political, social development, and also in the highly technical areas, to nongovernmental agencies...
...their mistakes were part of a collective learning experience for the entire continent...
...The very repression which Guatemalan officials claim is necessary for tourism also discourages tourists...
...strategy is spelled out in memo on "Export Development...
...Beginning in the late 1960s, the United States had to shift its strategy for Guatemala, and in fact for all Central * See "U.S...
...had been 50 years earlier...
...1973...
...What remained to be seen was whether the M6ndez government and its U.S...
...El Grnfico, Aug...
...As for Patten himself, the reports were even worse...
...No less important, tourism is a way of attracting foreign investors...
...Also in the early 1970s, Guatemala became the scene of a new oil rush...
...cit., 1.1...
...In Central America, and especially in Guatemala, CIAtrained Cuban exiles have been used as police reinforcements and goon squads to do the governments' dirty work.11 A few Cubans have managed to become important political figures and advisers in the region...
...1972 ("Special Issue") and Nov...
...Thus, the dividing line between military civic action and civilian "civic development" was totally blurred, and even the civilian AID officials had previous experience in Vietnam...
...BLA, Oct...
...ICAITI was supposed to produce a manual based on the Teculutin experience, which would become a "Bible" for future projects of this kind...
...4. Washington Post, July 13, 1966...
...And a few became important entrepreneurs, moving into many different areas of finance and investment (see below), and forming partnerships with local business interests...
...According to its Central American representative, LAAD hopes to show Central Americans that "capitalism can really work...
...In the end the hard-liners won out and the reformists had to be satisfied with a very weak letter to the M6ndez govern- ment...
...In 1962, the U.S...
...these areas were also ideally located to service the drug traffic and other profitable activities undertaken by organized crime...
...18, 1972...
...Meanwhile, the region's balance of payments was deteriorating...
...These investors naturally wanted to keep the CACM going in some form - at least as a commercial unit...
...79 ft...
...Sept...
...It was related to the arrival of new foreign investors in Central America, the rise of new groups in the Central American bourgeoisie, and their accession to political power...
...1973 ("From Wall Street to Watergate: The Money Behind Nixon...
...Thus, particularly after the CACM * This delay was caused by several factors...
...In short, the new strategy of imperialism has both forced and enabled the revolutionary movement to develop new forms of struggle and to broaden its political base...
...By itself, however, the worsening situation resulting from U.S...
...Guatemala: Military Camp under Liberal Command," Viet-Report, April-May, 1968, p. 11...
...World Bank, Reports of the Industrial Finance Mission to CentralAmerica, Annex, (Washington: World Bank, 1971), p.9...
...In proportion to its population, Guatemala has been among the five highest recipients of military aid in Latin America...
...the farmers in the cooperative, of course, were left holding the cucumber bag...
...He later (1966-68) served as Associate Director of AID in Saigon, South Vietnam and subsequently as Deputy Assistant Secretary of State for Social and Civic Development in Washington, before becoming AID Director in Guatemala in January 1970.20 were under the direct command of the army in potential guerrilla areas...
...And in August 1973 EXIMCO defaulted on its BCIE loan (one of very few BCIE defaults...
...6, 16...
...see also MH, Dec...
...During the 1960s the U.S...
...In addition, it meant that by the end of the 1960s - largely as a result of extensive U.S...
...thus, the drive for tourism has revea