"The U.S. Investment Bubble in Central America,"

Tobis, David

Capitalism is like a giant plastic balloon: when you punch in one side it pops out somewhere else. The contradictions of capitalism which originally generated the monopoly stage domestically and...

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

Vol. 7 • May 1973 • No. 5


 
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