Dangers confronting the region

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The Dependency School of Thought

The Dependency School of thought had some influence and bearing upon the rise of liberation movements in Central America during the 1960s and 1970s, although the sheer brutality of the dictatorships and militaries which ruled was also a major factor in their emergence. In the context of the global cold war between capitalism and communism, the liberation movements represented a threat to US hegemony in the western hemisphere and had to be put down. Along came US President Ronald Reagan who gave free rein to his dogs of war to do just that, but it would be wrong to credit Reagan with only the butchery that went on in Central America. The Reagan-Thatcher axis was a prime mover in the extraordinary influence of the Washington Consensus in the globalising spread of capitalist relations of production and consumption under what is known as neoliberal economic development. This spread increased in speed through the 1980s and 1990s, and after the fall of communism and the end of the cold war at the beginning of the 1990s, neoliberalism had a honeymoon period in which to dominate Third World nations such as those in Central America without fear of the influence of a competing ideology.

The last decade of the twentieth century witnessed an industrialisation of production that had always failed to happen under the efforts of Central Americans, possibly because the capitalist metropolitan core (Europe and North America) had sufficient control over the capitalist relations of production to keep Central America as a source of primary products, raw materials and cheap labour. The industrialisation that did occur, however, was the result of the globalisation of the production of processed and fabricated goods and still, therefore, deprived Central American people and governments of any degree of control over the production of these goods. This globalised production involved the installation of maquilas, often referred to as sweatshops where pay is worse than poor and work conditions are often appalling. It was not the kind of industrialisation process envisaged by the dependentistas, and it failed to stimulate local production of the raw materials required by the processing. Instead, the raw material for the process was imported (without import tariffs), the material was processed and then exported to some other maquila, probably in another part of the world, for further processing. .

The maquilas needed a plentiful supply of cheap and largely unskilled labour. At the same time the plantations of primary agricultural goods needed more land for expansion and new crops such as the biofuels. The latter displaced many rural inhabitants from their land and means of survival, but supplied the former with their cheap labour after they had been moved from the rural areas.

The maquila industrialisation of production was accompanied by the supermarketisation of consumption, another facet of globalisation.

Selected quotes

Juan Almendares:

“I came to the understanding that the essence of capitalism is anti-human and racist, … and that we can’t be indifferent nor neutral but have to take a position against injustice, war and the violation of human rights.”[1]

Juan Almendares:

“but I can’t keep silent before the crimes and lies of the military geopolitics of international financial capitalism, articulated with the oligarchic power and the ideology of neoliberalism. In essence, I am anti-imperialist.”[2]

Rodrigo Carazo (1989) Tiempo y Marcha, San José, Universidad Estatal a Distancia.
His observations about TNCs after 2 years as Executive Director of Recope, the Costa Rican Petrol Company (1963 – 1965) whose parent company was the US based Texas Petroleum (and later during this time bought by Allied Chemical), and the way they operate. He described himself as a “high status errand boy”.

“De la experiencia con Recope derivé enseñanzas de gran importancia para mí. Lo mismo sucedió con mis tareas de asesor internacional de Allied Chemical. A pesar de las buenas relaciones que mantenía con los representantes de sus socios mayoritarios, no podía menos que concluir que las empresas transnacionales no prestan importancia alguna a la suerte de los pueblos en cuyos países hacen sus negocios: tratan de cumplir estrictamente sus compromisos contractuales y legales, pero hasta allí llegan. La frialdad es total. Lo que manda es el ‘balance de situación’, la rentabilidad, la productividad, en fin, los negocios de la empresa. Si para que éstos sean mejores se requiere endurecer sus posiciones con sus funcionarios o trabajadores, esto no importa … los negocios privan y sus requerimientos son vinculantes. No hay consideración social, política o de relaciones humanas que pueda privar por sobre los intereses de la empresa.

Nada de esto es moralmente aceptable para el nacional de un país sede de inversión extranjera, salvo que asuma la actitud – tan generalizada y común – de ser “más papista que el Papa”, de olvidarse del país y de su pueblo y entregarse en cuerpo y alma a la empresa extranjera.”[3]

Rodrigo Carazo (p.121-2), from his experience as Executive Director of Recope at the time when the parent company Texas Petroleum was taken over by Allied Chemicals (1963 – 1965), suggests that “the transnational companies take their decisions by comparing the benefits which various countries offer them and they choose those which can give them the most” (p. 121). From this it’s easy to conclude that “the investments are motivated exclusively by what the businessmen of short-term vision call ‘productivity’ and ‘successful enterprise’ and, in one word, ‘development’.” (p.121)

“Las empresas buscan, por lo general, beneficios especiales a cambio de la inversión. A la postre, si tienen éxito llevan estos beneficios a los socios extranjeros y tratan de poner a los países pobres en competencia entre ellos para que les dan más. Hemos vivido lo anterior, entre 1982 y 1988 con características de tragedia, en el caso de los inversiones bananeras, que han logrado disminuir casi a cero los impuestos de exportación a base de decir, en cada país, que esos impuestos nacionales ponen a la respectiva nación que los establece “fuera de competencia en el mercado mundial”. [4] Cuando Figueres. El 11 de octubre de 1973, decide nacionalizar Recope, sentí una gran satisfacción como costarricense.”

Dennis Rodgers:

talks of “a new growth model led by narco-trafficking and Free Trade Zones.”[5]

Stephen Corry:

“No open-minded student of history could possibly conclude that the passing of time leads inevitably to an improvement over what has gone before, yet that is the belief which underpins, at least in part, the assertion that industrial society is more advanced than others.”[6]

 “Why, for example, should a mineral resource under tribal land not be exploited to help the majority? In reality, those who benefit most are not the needy and the poor, but the directors and shareholders of multinational corporations, development banks and senior government officials. Such arguments are little different from those used to support colonialism, communism or fascism: one group takes what belongs to another, with the excuse that they need, or deserve, it more.”[7]


[1]   Juan Almendares (2010) ‘Letter to Mother Earth and Humanity of the Planet’, Tegucigalpa, Honduras, April.
[2]   Ibid.
[3]   Rodrigo Carazo (1989) Tiempo y Marcha, San José, Universidad Estatal a Distancia, p. 121.
[4]   Ibid.
[5]   Dennis Rodgers (January-February 2008) ‘A Symptom Called Managua’, New Left Review, 49, London.
[6]   Stephen Corry (2011) Tribal Peoples: for tomorrow’s world, Alcester, UK: Freeman Press, p. 33.
[7]   Ibid. p.295

Chapter 11: Whither Development?

That the current level of violence (illustrated particularly in Chapter 9) is so high even twenty years after the end of the region’s wars reflects the same prevailing power structure which reigned during the wars of the 1970s, 1980s and early 1990s. That same power structure still reigns largely thanks to the influence of the US, the international financial institutions and the traditional Central American oligarchies which all combine to promote neoliberal economic development rules that favour western TNCs and national elites over local communities and environments.

The violence may range from a bureaucratic refusal to recognise a valid claim to land ownership, the denial of the results of a consultation exercise by indigenous groups, denial of the right to form a union, the use of tear gas by security forces against a peaceful demonstration, unlawful imprisonment of non-violent protestors, threats against personal and family well-being, death threats, assassinations, massacres and the use of terror against whole communities. As the preceding chapters have shown, the inclusion of those last items in the list is not an exaggeration of the levels of violence. Death threats, assassinations and terror are precisely the tactics used to ensure the ‘success’ of development projects.