NACLA - Pushing Counterrevolution in Guatemala

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,...

...Prensa Libre (Guatemala), Jan...

...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...

...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...

...Ambassador, who also became involved in resolving EXIMCO's problem...

...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...

...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...

...0-5, p. 9: Anthony Liversidge, "The Beguiling New Economics of Nickel," Fortune, March 1970, p. 136...

...in his words, "We concluded that if there was anything illegal," (as they suspected), "Patten has enough friends in AID to protect him...

...Cuban exiles who (with a good deal of U.S...

...And in August 1973 EXIMCO defaulted on its BCIE loan (one of very few BCIE defaults...

...it was rampant under Castillo Armas and Ydfgoras...

...9 0 The public safety program, in effect since 1957 under the watchful eyes of seven U.S...

...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...

...49, p. 3; MH, Dec...

...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...

...The growth of the guerrilla movement during the 1960s forced the United States to intervene a second time in Guatemala...

...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...

...economic assistance, residents of an area had to demonstrate the presence of a "guerrilla threat" to be smashed...

...Finally, AID worked closely with such U.S...

...Guatemala: Military Camp under Liberal Command," Viet-Report, April-May, 1968, p. 11...

...Although constant in its intent, the U.S...

...Inforpress, Nos...

...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...

...officials realized by the end of the 1950s, any strategy for Guatemala is necessarily part of a strategy for Central America as a whole...

...By and large, however, as acknowledged even by U.S...

...cit., Webb, op cit...

...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...

...6. Harley Hinrichs, "Tax Reform Constrained by Fiscal Harmonization within Common Markets: Guatemala: Growth without Development" (mimeo.: 1971), pp...

...Before describing this strategy in detail, let us see briefly what we mean by calling it a "strategy...

...in the new political order the poor and the working class were to be kept down rather than won over...

...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...

...Saxe Fernandez, "The Militarization of Costa Rica...

...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...

...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...

...The regulation was lifted in March 1973...

...In addition, it meant that by the end of the 1960s - largely as a result of extensive U.S...

...Enrique Peralta Azurdia had been...

...But these "solutions" are22 temporary and unstable...

...Inforpress, No...

...Certainly by the end of the Arana government in 1974, the outlines of the new strategy had become clear...

...policy-making circles...

...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...

...During the 1960s the U.S...

...But in practice the benefits are not so clear: St...

...For full details, see Fred Goff, "Bank of America has a Man-on-the-Spot in Latin American Agribusiness," NACLA Newsletter, Sept...

...66, June 1972, p. 4. Christian Science Monitor, Oct...

...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...

...Inforpress, No...

...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...

...AID to Guatemalan police...

...Equally important, civic action became the model for Guatemala's "development" programs - the "carrot" of the military pacification "stick...

...support of the golpista government...

...The strategy for tourist investment has been to get the government, with AID financing, to provide and pay for the infrastructure (e.g., roads, airports, water and sewage facilities), thus paving the way for private enterprise to move in for the profit-making operations (hotels, etc...

...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...

...counterrevolution in Guatemala...

...ROCAP, "Project Agreement" with ICAITI No...

...The aid agencies have also provided credit to Central American Ad in U.S...

...banks, to be re-lent to private ventures in tourism...

...15 port for/ Guatemalans for Guatemalans But this same law granted special privileges to two exporters of processed beef, thus guaranteeing their monopolistic control...

...Allied with Sunbelt interests and the Cuban exiles was a new breed of local political and economic leaders in Central America, ready to take advantage of the opportunities offered by the post-CACM productive structure...

...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...

...In contrast to reformism which attempts to avert revolution by "winning over" and integrating the working class and alleviating the grossest inequalities, the Plan barely concerned itself with redistribution of wealth to the lower classes...

...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...

...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...

...Lucia" and the tourist industry made the island "a mere conduit pipe for the re-export of the tourist dollar...

...12, 1971, cited in Gail Grynbaum, "Tourism and Underdevelopment," NACLA Newsletter, April 1971, p. 9. 68...

...8 2 What began as a military-political plan for pacifying the guerrilla zone in 1966-68 was generalized to the entire country and institutionalized when Colonel Carlos Arana Osorio, who had been specially chosen to head the Izabal-Zacapa counterinsurgency campaign, became President of Guatemala in 1970...

...4. Washington Post, July 13, 1966...

...established a counterinsurgency base in Izabal, staffed by U.S...

...For example, an AID loan was used to pay for a study of the feasibility of tourist development in Izabal, formerly the stronghold of the guerrilla movement...

...Thus, particularly after the CACM * This delay was caused by several factors...

...But EXIMCO's problems were not over yet...

...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...

...advisers would also respond to the "guerrilla threat" by initiating real social and economic reforms...

...Meanwhile, the region's balance of payments was deteriorating...

...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...

...The campaign to permit casinos was one sign of the new tourism being promoted in Guatemala...

...Consejo Nacional de Planificaci6n Econ6mica (CNPE), Secretaria General, Plan de Desarrollo, 1971-75 (Guatemala: CNPE, 1970), Vol...

...smaller "secondary" financial groups which have emerged first in the Midwest and then in the South and Southwest...

...It is not a strategy in the sense that all of the elements were planned out in totally coordinated fashion, designed to give all of the results it has had (increasing concentration of income, grossly increasing political repression and corruption in the government...

...El Grafico, Sept...

...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...

...ruling class as a result of Nixon's response to the crisis in U.S...

...Embassy * GOVERNMENTS SINCE 1944 -Juan Jose Ar6valo: 1945-1951 -Col...

...2 " A similar partnership existed between Nicaragua's President Somoza and Howard Hughes (and 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...

...This had been demonstrated through the CACM experience: the most privileged U.S...

...Meanwhile, the project itself at Teculutin was turning into a disaster...

...At the same time, the U.S...

...attempt to camouflage counterinsurgency by blending it into the political countryside...

...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...

...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...

...In terms of the ongoing debate within U.S...

...corporations holding exploration concessions in Guatemala, began negotiating with the Guatemalan government to fix the terms of a large-scale nickel mining venture there...

...others favored at least a cut in U.S...

...The drawback law, adopted in April, 1966, has been applied principally to textile and clothing operations in Guatemala: in one case, partly-finished shirts are imported from the United States, the button holes are sewn in Central America, and they are subsequently re-exported to the United States...

...and it is "* Moreira was the owner of a vast fish processing empire - a man who, as one 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...

...Historically economic power and control over state power in the United States have been concentrated on the East Coast, particularly on Wall Street, in the hands of certain financial groups - the Rockefeller Chase Manhattan Group, the First National City Bank Broup, the Morgan Group, the Boston Group, and so on...

...El Grnfico, Aug...

...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...

...Monthly Review, May 1972...

...There is no economic and social base for reformism...

...Thus ended ROCAP's great new experiment in export promotion...

...he's making a good business for himself...

...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...

...There are several indicators that officials in the aid agencies understood but acquiesced in the deteriorating situation in Guatemala...

...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...

...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...

...The fact that the U.S...

...the reason for this difficulty, the company argued, was the Guatemalan government's refusal to issue an "investment guarantee" to insure any loans to INCO...

...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...

...Green Berets, flown into the country, according to one scholar, after the 1966 election...

...The very repression which Guatemalan officials claim is necessary for tourism also discourages tourists...

...Perhaps the most important circumstance surrounding the Mlndez regime was the intensification of the class struggle in Guatemala since the early 1960s and the rise of the guerrilla movement...

...see also BLA, Jan...

...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...

...These objectives coincided with those of the economic interest groups described above...

...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...

...Geoffrey Kemp, "Some Relationships between U.S...

...Allied with the Sunbelt interests were entrepreneurs from the Cuban exile community in Central America, with close links to the Cuban exile community in Miami...

...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...

...SUBSCRIPTIONS: $10 per year for individuals ($18 for two years...

...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...

...They demonstrate that if reformism was ever a viable option for Guatemala since the 1954 U.S...

...2-3, 36 and passim...

...Address all mall to Box 57, Cathedral Station, New York, N.Y...

...8 1 In the end, as one U.S...

...EXMIBAL is 80% owned by International Nickel Company (INCO), which is legally based in Canada but financially controlled by U.S...

...As a result of the brutality of the counterinsurgency campaign, the movement suffered severe setbacks...

...Michael Klare and Nancy Stein, "Police Terrorism in Latin America: Secret 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...

...Aside from the new forms of investment (see below), the growing Sunbelt influence in Guatemala could be seen through a number of non-economic contacts...

...Nevertheless, the principles of the CACM had ceased to be the main pillars of Central's America's economic development...

...In the crucial area of counterinsurgency, for example, Peralta had refused to give the U.S...

...When the Center was finally established in June 1971, it included important features of the private sector, AID-supported proposal...

...This account is based mainly on interviews with U.S...

...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...

...Second-class postage paid at New York...

...Even worse was MRI's performance under its $78,000 contract...

...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...

...In Guatemala, too, individual Cubans achieved political influence in the Arana government, although, as one government insider put it, their means of gaining access to political decision makers was to "buy influence" (financing campaigns, bribing officials, etc...

...this model, introduced via the pacification program in the late 1960s under M6ndez, was institutionalized during the 1970-74 Arana regime...

...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...

...A second objective circumstance in Guatemala was the emergence of a significant revolutionary movement...

...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...

...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...

...This experience revealed clearly what happens when "development" is redefined as bonanza...

...Galeano, p. 15...

...El Grnfico, Dec...

...Title IX is an attempt to remove the pressures for real change through small programs -- "micro-development," as one participant called them...

...The more prag- matic U.S...

...Economically, too, the Cubans acquired considerable power...

...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...

...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...

...their mistakes were part of a collective learning experience for the entire continent...

...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...

...From 1963 to 1966, the movement grew, particularly in the Izabal-Zacapa area...

...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...

...World Bank, Reports of the Industrial Finance Mission to CentralAmerica, Annex, (Washington: World Bank, 1971), p.9...

...Once again, as with industrialization during the 1960s, the latter course was chosen...

...The very promotion of medium-sized agricultural enterprises also created a series of new opportunities for corporate agribusiness giants, particularly in storage, marketing and livestock development...

...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...

...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...

...Richard Gott, Guerrilla Movements in Latin America (Garden City, NY: Doubleday, 1971), pp...

...By and large they maintained the investments they had made...

...Stu Bishop, "National Association of the Partners of the Alliance," NACLA Newsletter, Dec...

...Some of those involved in the 1962 urban protests joined the ongoing struggle of the Guatemalan peasants...

...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...

...this is, as one official diplomatically put it, no direct concern of theirs, and would never be a reason for withholding aid...

...advisers, and many of their subordinates.'" Also active in Guatemala after 1966 (although their presence in Guatemala was officially denied) were U.S...

...At the most obvious level, the U.S...

...strategy for Central America stemmed not only from the ever-deepening crisis in the CACM...

...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...

...forces stationed at U.S...

...Miami Herald, Nov...

...A similar law had been adopted in Costa Rica, permitting foreign retirees a whole series of special benefits and opportunities to invest...

...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...

...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...

...Amid an unprecedented economic boom for a tiny group of producers and exporters, conditions for the vast majority of the population are steadily worsening...

...defeat in Vietnam presented a basic challenge to U.S...

...strategy would have to achieve the basic U.S...

...And a few became important entrepreneurs, moving into many different areas of finance and investment (see below), and forming partnerships with local business interests...

...Moreover, even if the revolutionary forces in any one country did take power, this apparatus would facilitate intervention by the others...

...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...

...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...

...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...

...For detailed analysis, see NACLA's Latin America and Empire Report, Oct., 1972 ("Special Issue: Nixon and the Election...

...A Central American technical adviser commented, "He knows exactly what he's doing...

...stake in Central America was rising during the 1970s had political and military as well as economic implications for the region...

...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...

...Washington Post, April 13, 1973...

...This was the very loan which ROCAP had pressured BC1E to grant on unusually lenient terms and without sufficient guarantees, ROCAP...

...they indicated that LAAD would invest in producing ventures only in those situations where marketing was the principal aspect...

...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...

...In 1970 ROCAP made a $30 million loan to BCIE (Central American Bank for Economic Integration), to be used for sub-loans to private non-traditional export and tourist ventures...

...intervention against a reformist "Revolution," it certainly is not an option any longer...

...6 4 The objections were so strong that the bill was withdrawn...

...The official rationale for these programs is to "professionalize" and "humanize" the Guatemalan police...

...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...

...Through these personnel, the techniques of counterinsurgency developed in Vietnam were transferred to Guatemala...

...This issue was not left at the theoretical level...

...The strategy for doing this did not appear ready-made and complete in any one document or project...

...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...

...The preceding examples reveal the U.S...

...firms investing in Central America...

...Since the middle 1960s the U.S...

...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...

...William and Elizabeth Paddock, We Don't Know How...

...AID memo, "Export Development," p. 4. 45...

...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...

...almost all aid during that period had been channeled through CACM institutions...

...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...

...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...

...1, p. 8 (Inforpress Centroamericana, hereafter referred to as Inforpress, is a weekly news summary published in Guatemala since 1972...

...but since there were no indications of such a reform, they accepted the strategy of improving administration of the existing tax laws...

...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...

...4, 1972, Costa Rican press...

...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...

...Thus, for example, the Arana government got into a dispute with the New York Times in 1971-72 over articles carried by it on the repression and the bad climate for tourism in Guatemala.70 At the same time, the Guatemalan government detained U.S...

...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...

...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...

...AID memo, "Export Development," p. 3. 42...

...Subcommittee on Inter...

...To the extent that it proposed any changes, these were marginal and involved no real challenge to the private interests already in power...

...To cite a few indicators: * Particularly in the countryside, poverty is worsening...

...as Culbertson put it, "Public safety is as respectable as our social programs...

...Thus, INCO stalled its investment partly as a tactic to apply pressure on the Guatemalan government to grant the guarantee...

...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...

...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...

...In addition they established California, Florida and the Southwest as the bases for gambling and sun-and-surf tourist industries...

...76 S.Guatemalan Guerrilla Movement...

...But both Guatemalan and international officials acknowledge privately that it has reached unprecedented levels during the Arana regime...

...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...

...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...

...The experience of this defeat produced the armed movement which a socialist oriented revolution demands today...

...Since the early 1960s, the Pentagon attempted to coordinate and centralize military command of Central America under U.S...

...That's why Americans are in the cattle business here...

...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...

...1972 ("Special Issue") and Nov...

...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...

...thus, the drive for tourism has revealed one of the weak spots of the Guatemalan Counterrevolution...

...by building up industries using primarily inputs (natural resources) from Guatemala...

...And finally, the CACM was torn apart by the regional inequalities, leading Honduras to make demands for special treatment after 1966, and eventually in 1970 to withdraw from the CACM.1 But the shift to a new 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...

...What remained to be seen was whether the M6ndez government and its U.S...

...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...

...strategy could not have created), but rather the different degrees of commitment to alleviating the worst and most blatant effects of the existing system...

...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...

...I try to keep the door closed when he comes around...

...see also NYT, April 18, 1971...

...BCIE alone was planning to provide $88 million for tourism projects for 1973-80...

...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...

...capital, and 20% by Hanna Mining Company...

...Richard Webb (consultant), "The Incidence of Government Policy on Poverty in Guatemala" draft report for World Bank, April 6, 1973, pp...

...Another high official hoped that ICAITI would never again be in the position of having to accept budget support on terms such as these...

...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...

...Horace Sutton, "The Curious Intrigues of Cuban Miami," Saturday Review/World, Sept...

...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...

...San Francisco Chronicle, Oct...

...Carlos Castillo Armas: 1954-1957 - Gen...

...This was a situation which forced the revolutionary movements in Central America to regionalize their efforts...

...Frantz Fanon The Wretched of the Earth18 Despite EXMIBAL's overwhelming impact for Guatemala, INCO waited for over two years after signing the 1971 contract before beginning construction of its nickel processing plant.* When it finally did go ahead in mid-1973, its project in the first stage was reduced to about half of its former size, following a recommendation by the World Bank's International Finance Corporation, which provided a $15 million loan...

...Inforpress, No...

...8. Eduardo Galeano, Guatemala: Occupied Country (New York: Monthly Review Press, 1969), p. 20...

...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...

...1974, based on AID documents...

...In both of these latter respects, the new strategy closely resembled the U.S...

...hence, they required no serious domestic reforms...

...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...

...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...

...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...

...Kenneth Johnson, "Guatemala: From Terrorism to Terror," Conflict Studies No...

...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...

...Put simply, it is used in cases where U.S...

...Inforpress, No...

...Similarly, the CNPE had little power for decisionmaking or planning...

...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...

...CIAP report No...

...What had previously been only a differentiation became an open split in the U.S...

...Second and in a similar vein, by 1968 many in Washington saw the impossibility of reformism as an economic strategy...

...In addition to securing the creation of new institutions, AID pushed for the adoption of new incentive legislation designed to attract foreign investors...

...it does not feed Guatemalans...

...M. J. Arce Guatemala, 197023 41...

...on the contrary, in many respects imperialism has nourished the very fires it is attempting to extinguish...

...Nevertheless, there was no question that it did survive these setbacks: "The initial guerrilla failures, far from asphyxiating the movement, catapulted it forward...

...AID mission in Guatemala, memorandum on "Export Development," July 16, 1970, p. 2. 35...

...George, "The Cold War Comes Home...

...NACLA'S LATIN AMERICA & EMPIRE REPORT (Formerly NACLA NEWSLETTER) Vol...

...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...

...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...

...Inforpress, No...

...13, 1973, Prensa Latina, Dec...

...1973 ("From Wall Street to Watergate: The Money Behind Nixon...

...Business Latin America 4 2 observed that this system offered good opportunities for U.S...

...Copyright Vc 1974 by the North American Congress on Latin America, Inc...

...expert put it, "Most of our tourists in Guatemala, around 85%, are businessmen...

...The only movement strong enough to defeat repression and imperialism is a generalized class struggle...

...Largely because of developments in Central America (particularly the collapse of the CACM, the saturation of the Central American market), the U.S...

...Smaller ranchers in other parts of the country protested this discriminatory aspect of the loan, as well as the high interest rates on subloans...

...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...

...But the concerted counterinsurgency campaign has failed to "pacify" Guatemala...

...Inforpress, No...

...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...

...subsequently had to become the guarantor of the Counterrevolution...

...David Tobis, "The U.S...

...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...

...should have needed a $6 million AID loan at 3% interest seemed rather absurd to most Central Americans...

...El Grifico, Aug...

...counterrevolutionary offensive in Guatemala has varied considerably in its means and methods and has been the subject of much debate within U.S...

...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...

...Ithiel Haissman, "Policies and Projects for Agricultural Diversification in Central America" (mimeo...

...In proportion to its population, Guatemala has been among the five highest recipients of military aid in Latin America...

...Miami Herald (MH), July 17, 1970...

...cattle investors - not only in Guatemala, but throughout Central America, especially in Costa Rica...

...El Grdfico (Guatemala), Feb, 26, 1973...

...This was not as direct or obvious as the intervention of 1954...

...In fact, what the 1966-68 experience of the attempted tax reform and the U.S...

...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...

...9 But when the 1967-68 controversy became heated, they did not exert any strong pressures...

...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...

...NYT, July 4, 1972...

...In every sense, then, the basic premises of the Alliance for Progress and its Central American variant, the CACM - reliance on a new middle class to exert political power, to hold the country together socially, and to serve as a buffer for absorbing pressures from the working class - were invalidated...

...It is also a channel to those who are concerned about the dangers of Communism in the hemisphere...

...The United States took immediate advantage of this change in attitude to set up a massive counterinsurgency program...

...AID pushed the Guatemalan government to establish an export promotion center...

...8 The very emphasis on export agriculture conflicts with the rhetorical goal of helping the rural poor...

...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...

...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...

...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...

...CIAP report, No...

...and (c) the rise of new economic interest groups in the U.S...

...minutes of Ad-Hoe ROCAP-ICAITI Committee for Project Agreement 70-14...

...For full details, see "Integrating the Big Guns: The Central American Defense Council," NACLA's Latin America and Empire Report, May-June 1973...

...El Grnflco, Dec...

...Latin America, June 25, 1971, p. 202...

...i.e., in violation of policies which ROCAP itself had previously imposed on BCIE...

...2 6 It seems likely that the degree of Sunbelt expansion in Central America in the future will be affected by the outcome of this struggle within the U.S...

...their inherent susceptibility to instant fortune-making and racketeering...

...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...

...Although a few Americans, such as Leroy Denman, the lawyer for the King Ranch in Texas, have been in Guatemala for years, the majority - most of them from Texas and the Western states - have arrived in the last few years...

...MRI was supposed to provide "training courses" for about 25 "students...

...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...

...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...

...On November 13, 1960, there was a barracks revolt within the Guatemalan military, designed to overthrow the Ydigoras government...

...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...

...88 Latin America, May 12, 1972, p. 147...

...The goals of the reformers never went beyond political stability and unlimited opportunities for U.S...

...One incentive mechanism is the "drawback" system, under which raw materials are imported duty-free into Guatemala (generally from the United States), "trans- formed" there, to take advantage of the cheap labor supply, and then re-exported (generally to the United States...

...officials concerned with Central America that the strategy of industrialization and regional integration had failed and that something new was needed...

...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...

...Susanne Jonas "a References 1. See Susanne Jonas, "Masterminding the Mini-Market," NACLA's Latin America and Empire Report, May-June, 1973...

...19, 1972, p. 333...

...First, given the region's balance of payments crisis, the only alternative to sharply reducing U.S...

...Congress and State Department) to defeat the proposal...

...11, 1971, p. 73...

...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...

...In 1962, the U.S...

...NACLA Newsletter, Oct...

...adviser has suggested, for example, that Guatemala should develop artisan industries, since "Guate- malan women are very good with their hands...

...As Business Latin America, voice of U.S...

...You have a gun Therefore I am hungry...

...Latin America, Sept...

...Moreover, in practice these industries must be foreign (U.S...

...Inforpress, No...

...First, INCO insisted that it had difficulty obtaining long-range financing in the international capital markets for its $250 million investment...

...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...

...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...

...market to sell the finished products...

...Official Emblem of Civic Action in Guatemala...

...4 5 In 1970, ROCAP designed a project to ship tomatoes and cucumbers grown in Guatemala to Miami for sale in Eastern cities in the United States...

...Edward Glick, Peaceful Conflict (Harrisburg, Pa.: Stackpole Bks., 1967), pp...

...6 s* In a similar vein were the Dude Ranch developments in Costa Rica, which combined cattle operations with the "new tourism...

...LAAD and Bank of America officials expressed particular interest in such areas as developing new markets, refrigerated warehousing, and leasing agricultural equipment...

...more specifically, LAAD will help create a class of small dependent businessmen "to further stabilize Central America and protect against nationalist movements...

...owned, or at least joint ventures with U.S...

...The producers were small farmers in Teculutin, Zacapa, who had formed a cooperative...

...Perhaps his prior experience in Vietnam helped him overlook government excesses in Guatemala...

...the United States and the Guatemalan bourgeoisie have been unable to establish legitimacy or consolidate power on a stable, lasting basis...

...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...

...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...

...military supervision through the Central American Defense Council (CONDECA...

...dollar forced U.S...

...Clearly corruption is nothing new...

...Beginning in the late 1960s, the United States had to shift its strategy for Guatemala, and in fact for all Central * See "U.S...

...EXMIBAL was granted the right to mine, refine, and export 60 million pounds of nickel annually for the next 40 years...

...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...

...Strategies for Central America"), p. 31...

...After these companies have been built up and become dependent on U.S...

...AID, Capital Assistance Paper, Proposal and Recommendations for the Review of the Development Loan Committee, Loan Paper for loan to LAAD (Wash.: AID, 1971...

...26, For detailed analysis, see NACLA's Latin America and Empire Report, Oct...

...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...

...imports was to promote Central American exports...

...military applied its Vietnam technology, e.g...

...You can have a gun you can have a thousand bullets and even another thousand you can waste them all on my poor body, you can kill me one, two, three, two thousand, seven thousand times but in the long run I will always be better armed than you if you have a gun and I only hunger...

...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...

...Once the private sector attack was mounted, the Mendez government quickly backed down, leaving Fuentes Mohr alone to defend the tax plan...

...Commerce Department experts worked mainly with the private sector group, which was clamoring to set up an institution with equal or majority control by private business (but with government funding...

...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...

...and Central American officials and advisers...

...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...

...As the primary force behind the overthrow of the Guatemalan "Revolution" in 1954, the U.S...

...the visit was finally cancelled as a result of strong objections by the State Department...

...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...

...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...

...Aside from its "people to people" programs, it has opened up lucrative investment and joint venture opportunities for Alabama businessmen in Guatemala...

...using other criteria, Guatemala came out 71st out of 72 countries studied by the International Monetary Fund...

...private investors...

...In general these industries are supposed to capitalize on Guatemala's abundant resources - cheap labor and agricultural produce...

...For the United States this has meant the promotion of "development" schemes designed to avoid comprehensive reforms...

...No less important, tourism is a way of attracting foreign investors...

...Kenneth Johnson, op.cit...

...It is not a strategy in the sense of a plot...

...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...

...Kirkpatrick Sale, op...

...BLA, March 25, 1971, p. 96: interviews...

...In many respects the Presidency of Richard Nixon in 1968 represented the marriage of these two sets of interests...

...63 As in other areas, tourism investment by private enterprise has been greatly stimulated in recent years by special incentive legislation...

...aid appears somewhat unreal...

...these areas were also ideally located to service the drug traffic and other profitable activities undertaken by organized crime...

...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...

...business circles as a model - a "precedent setter for future mining accords" of this kind, both in Guatemala and in other countries...

...and since there are no limits on size, these ranches are often as large as 4000 acres...

...The concrete result was the transformation of resistance into an armed guerrilla movement...

...El Grifico, Dec...

...Yesterday a national bourgeois revolution [the Guatemalan 'Revolution'] fell, without the capacity or desire to defend itself...

...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...

...a free hand in counterinsurgency...

...was a for-profit corporation to handle contracts with private enterprise...

...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...

...3 6 This decision can be seen clearly in regard to the process of establishing a new export promotion institute or center in Guatemala...

...The latest siren song in CACM is a jumbo loan package amounting to about $140 million [$30 million from ROCAP] which will be available over the next three years to companies going into nontraditional exports, particularly in agribusiness, or into tourism...

...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...

...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...

...and Guatemalan officials...

...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...

...Moreover, the programs and policies of the Arana government have had no positive impact on the poor...

...companies find it cheaper to transport goods to Central America to be elaborated than to pay higher salaries in the United States...

...investor reportedly was Lyndon Johnson...

...Special Forces...

...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...

...4 9 Moreover, control over livestock raising and processing operations has become more concentrated...

...0-1 through 0-7 are from the first series of Inforpress publications, preceding the current series, No...

...but it amounted to a military occupation of Guatemala through the counterinsurgency campaign...

...As seen above, Guatemala's "partnership" with Alabama has provided opportunities for fruitful contacts between Arana and Governor Wallace...

...Ambassador Mein) argued that to press too hard on such sensitive issues as tax reform could bring down the weak Mendez government...

...after considerable public protest, the government got a law passed regulating beef exports...

...it had made significant inroads by 1966, when the U.S.-directed counter-attack began in serious...

...The revolutionary movement was unequivocally fighting for socialism, not for a reformed capitalism...

...organizations have been integrated into the AID effort...

...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...

...By 1968 reformism was no longer a serious possibility for Guatemala...

...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...

...strategy is spelled out in memo on "Export Development...

...77, p. 3; La Hora (Guatemala), Nov...

...2 9 Guatemala did not have any one Sunbelt "angel" of this kind...

...Even more striking in recent years has been the invasion by U.S...

...Other such programs promoted investments and exchange programs of all types with groups based in Florida, Southern California, New Orleans and Texas...

...there actually was an extended high-level debate in 1967-68 about U.S...

...Levinson and de Onis, op...

...Their experience was a crucial lesson not only for themselves but also for revolutionaries throughout Latin America...

...March 1974 Published monthly, except May-June and July-August, when it Is published bi-monthly, at 160 Claremont Ave., New York, N.Y...

...6 Politically and socially, the effects of tourism in a dependent capitalist economy are even worse...

...An additional $20,000 was used for a subcontract with Orbit Sales, administered by MRI...

...El Grdfico, May 8, 1971, May 28, 1971...

...Jacobo Arbenz: 1951-1954 -Col...

...Since 1954 these plans were used only when they were politically convenient and threatened no one...

...The number of tourists and the foreign exchange earnings from tourism more than doubled from 1968 to 1972, and some projected that tourism would become the primary source of foreign exchange by 1975.66 Economically, tourism is seen largely as a way of attracting other foreign investment, both related and unrelated to the tourism itself...

...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...

...The agricultural diversification programs to develop new exports have not helped the rural poor...

...23, May 1972, p. 12...

...Pan Am, of course, would profit by providing transport for the new export industries...

...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...

...Parallel to this discussion was a second debate...

...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...

...but Guatemala's President Arana (through his son) built up a network of business relationships with foreign 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...

...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...

...In 1971, according to one account, local EXIMCO officials were hauled into court for misuse of funds...

...technical expert, "I felt unsafe standing in the same room with him 10 feet away...

...Finally, by January, 1971, with all this help from friends, EXIMCO was able to begin making shipments...

...c) Cattle Raising: "The Lush Pastures of Central America" Aside from Sunbelt smallfry like Orbit Sales, the new strategy has also attracted a new wave of large investors to Guatemala,particularly in agribusiness...

...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...

...imperialism openly...

...Whereas9 Guatemala had received $40 million in loans from 1954 until mid-1966 (not counting the nearly $80 million in U.S...

...Both MRI's were owned by the same man, William Patten...

...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...

...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...

...First, given the U.S...

...70-14 (Agricultural Export Systems), March 30, 1970...

...Since 1954 the focus of foreign interest and control in Guatemala has shifted back and forth between two closely interrelated but distinguishable sets of economic interests in the United States: the traditional Eastern Establishment and the newer Southern-based "Sunbelt" interests.** * In describing the "new economic strategy," we must expand our focus to include all Central America...

...Paddock and Paddock, op...

...Wall Street Journal, Nov...

...this contact with the oppression of the people and with their struggle for land transformed military reformism into a socialist consciousness...

...had been 50 years earlier...

...WSJ, July 27, 1972...

...spend considerable funds on purely military aid...

...The growth of a revolutionary movement was further inspired by the example of the newly won Cuban Revolution...

...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...

...Second and perhaps even more important, INCO was biding its time in order to await optimal conditions in the world nickel market...

...Although the resources were supposed to go to a large number of medium-sized enterprises, in fact (as World Bank officials acknowledged in interviews), they ended up in the pockets of Guatemala's largest ranchers...

...strategy in Guatemala would not be so significant...

...These newer interests, located in the "Sunbelt"-primarily in Florida, Texas, and southern California-have a somewhat different economic base...

...Integrating the Big Guns...

...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...

...control, and the principal base of support for U.S...

...In the summer of 1972, the beef export boom contributed to skyrocketing meat prices within Guatemala...

...Los Angeles Times, Nov...

...Guatemala's very need to create a favorable image to attract tourists makes it very vulnerable to the international press...

...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...

...The new strategy was designed to prevent the outright collapse of the Guatemalan economy, but without making any fundamental socio-economic reforms...

...For the previous 5-6 years it had had a contract as "marketing adviser" to ROCAP...

...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...

...Business Latin America (BLA...

...The shift in U.S...

...see also Partners literature...

...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...

...25 per year for profit-making and government organizations ($48 for two years...

...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...

...In the late 1960s, he worked for ADELA (a LAAD partner), and subsequently moved on to LAAD, where he helped secure the $6 million AID loan.ss16 malnutrition and starvation persist in a country like Guatemala that exports primarily foodstuffs...

...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...

...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...

...Second, the Mlndez government promised to be much more "cooperative" than the nationalist military govern- ment of Col...

...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...

...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...

...EXMIBAL), a subsidiary of two U.S...

...the farmers in the cooperative, of course, were left holding the cucumber bag...

...A number of them are former U.S...

...Tobis, "United Fruit is not Chiquita...

...firms in order to be assured of a U.S...

...However, it is a strategy in that several of the crucial elements were deliberately planned...

...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...

...Watergate and Indochina," Monthly Review, June 1973...

...A spokesman for giant multinational investors in Latin America, however, regarded the "solidarity" established by Partners as "bullshit" - "small guys looking for small guys...

...0-1, p. 1 (Nos...

...63, p. I; Inter-American Committee on the Alliance for Progress (CIAP), Domestic Efforts and the Need for External Financing for the Development of Guatemala, No...

...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...

...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...

...Ambassador Turner Shelton...

...Peralta, weie reluctant to give the U.S...

...In theory, the CACM strategy represented an attempt to incorporate and thus in a sense to buy off the working class - to apply the basic premises of the Alliance for Progress to Central America...

...Kirkpatrick Sale, "The World Behind Watergate," New York Review of Books, May 3, 1973...

...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...

...The specifics of this debate are difficult to ascertain because all documentation is classified and many of the participants are reluctant to discuss it in detail...

...Complicating MRI's involvement in the EXIMCO venture was the existence of a second MRI (Marketing Resources International Inc...

...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...

...thus examples from those countries will help clarify the general tendencies...

...the ripening of the cucumber crop with no means of transporting it to the United States...

...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...

...The model for the program was taken directly from Vietnam - as were many of the principal U.S...

...Moreover, it would be misleading and unrealistic to see the debate as one between two equal alternatives...

...2 4 These were indicators of the more general problem of market saturation in Central America...

...assistance to the Guatemalan police - nearly $6 million since 1957, according to official figures...

...policy-making circles, this meant that in almost every situation since the late 1960s, the "hard-liners" have won out over the "reformers...

...Victor Perera, "Guatemala: Always La Violencia," NYT Magazine, June 13, 1971...

...a non-profit corporation established to do contract work with the U.S...

...For Guatemala, this debate and its resolution markeda turning point: this was the last time the United States flirted with the reformist alternative for Guatemala and with the use of aid as leverage for obtaining reforms...

...So long as the best land in Guatemala continues to be owned by a minority who grow crops for export, there are no real prospects for agrarian reform or significant change of any kind in the countryside...

...19, 1972, p. 333...

...By early 1973, however, the world market situation had improved and prices were expected to climb further by 1975.73 began to fall apart in the late 1960s, the only force capable of holding together the country or the region was the military...

...businessmen in Guatemala met with U.S...

...military advisors that they proposed cutting off all U.S...

...But within a month, the business community and right-wing groups forced the government to rescind the sales tax measure, thereby causing serious cuts in the budget and in the salaries of government workers...

...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...

...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...

...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...

...interests in the region.9s U.S...

...government agencies such as ROCAP...

...These Eastern groups form what we may call the "financial oligarchy...

...House, Committee on Foreign Affairs...

...9 7 These and other trends were accentuated in 1973 by the international crises - particularly the international crisis of the dollar (to which the Guatemalan economy is tied) and the oil crisis, which threatened to paralyze some areas of the economy, with disastrous effects on employment, balance of payments, etc...

...Marketing Research International Ltd...

...These investors naturally wanted to keep the CACM going in some form - at least as a commercial unit...

...What have been the effects of the agribusiness boom and "Green Revolution" for the majority of Guatemala's rural population, whom the Arana government is claiming to help...

...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...

...El Grdfico, Aug...

...El Grtflco, Feb...

...aid to Guatemala unless the official blood-bath was stopped...

...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...

...News from Guatemala (published by Guatemalan Consulate in New York), April 1973...

...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...

...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...

...Los Angeles Times (LAT), Nov...

...Since the early 1960s Alliance for Progress agencies had pressured Guatemala to institute some kind of tax reform...

...The Central Americanization of the counterinsurgency campaign requires a corresponding Central Americanization of the liberation struggle...

...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...

...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...

...3 The law made special provision for so-called "draw-back industries" (see below...

...Moreover, "since the U.S...

...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...

...For one thing, though cattle raising has increased, beef consumption in Guatemala has actually declined during the last decade...

...Determinants of Tax Performance in Developing Countries: The Case of Guatemala" (Eugene, Ore.: Ph.D...

...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...

...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...

...William Allen, "How Eddie, Marcia and I Smuggled Pickled Frogs through Guatemala - and Lived to Tell All...

...And there was no way to implement an all-out counterinsurgency campaign without waging war against the Guatemalan people...

...objective in Guatemala...

...10025, or Box 226...

...Arms Control Project, Feb., 1970...

...The army worked closely with civilian agencies, but with the military remaining in command...

...After the "Liberation" he became Secretary General of the "Liberation" party and remained a leading right-wing politician...

...military advisers in interviews, the Guatemalan armed forces were "weak, disorganized and unprepared to meet the guerrilla threat...

...the benefits of those programs have been diverted to those who already own property...

...military training programs - the armed forces had become the pivotal point of Guatemalan and Central American dependency vis a vis the United States, the strategic lever of U.S...

...and on several occasions Costa Rican leaders charged publicly that the MANO Blanca and high Guatemalan officials were involved...

...A further indicator of the free-enterprise ethic dominat- ing all U.S.-sponsored efforts was the private sector background and orientation of the "experts" sent by the United States to advise on export promotion...

...22, 1972, and No...

...The need for a new strategy stemmed, first, from the bankruptcy of the "development" schemes of the 1960s...

...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...

...International Monetary Fund figures obtained in interviews...

...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...

...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...

...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...

...8 8 In addition, the ratio of U.S...

...New York Times (NYT), July 19, 1970...

...PLANNED CYNICISM Illustrating certain aspects of the new economic approach was the Plan Nacional de Desarrollo (National Development Plan) of 1971-5...

...Thus, M6ndez was permitted to take office, but not to exercise power...

...this was to be part of a much larger program, involving a subsequent World Bank loan of $15 million...

...CNPE, Plan, Vol...

...Edelberto Torres Rivas and Vinicio Gonzilez, "Naturaleza y Crisis del Poder en Centroamirica," Estudios Sociales Centroamericanos No...

...Scramble for Resources," Business Week, June 30, p. 61...

...6, 1971, El Grafico, Aug...

...The courses were universally regarded as a fiasco...

...But the development of the liberation forces in Guatemala was not stopped by the events of 1954...

...and in fiscal year 1973, Guatemala was second only to Bolivia in the amount of military grants received from the United States...

...Thomas Bodenheimer, "Food for Profit," NACLA Newsletter, May-June 1971, p. 11...

...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...

...capital, technology and markets, LAAD will then sell its stock in the firms to local businessmen...

...4. Counterinsurgency and Vietnamization In addition to the new economic strategy, the failure of reformism made necessary a harder-line political-military approach...

...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...

...Carlos Castillo Armas...

...Presidents (New York: Praeger...

...According to its Central American representative, LAAD hopes to show Central Americans that "capitalism can really work...

...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...

...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...

...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...

...large-scale extension of Sunbelt economic and political influence there...

...A similar situation exists for the urban poor living in the "marginal areas" of the cities...

...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...

...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...

...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...

...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...

...In place of agrarian reform, the government, with AID advice, has proposed colonization programs, whose fundamental purpose is to move the peasants out of areas where their demands for land have already created serious pressures (e.g., South Coast), to large, less fertile "reserve" areas such as the Pet6n...

...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...

...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...

...First, despite the demise of the CACM as a model, the region remains a unit and, as the U.S...

...Los Angeles Times, June 15, 1972...

...Latin America, Mar...

...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...

...Few Guatemalan government officials really believed that the Arana government took the Plan seriously...

...b) the failure to "pacify" Guatemala...

...According to a BID consultant sent to Central America to evalute them, these programs are...

...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 meet this need, AID secured overnight a $.5 million "contingency" (emergency) fund grant for the area...

...Washington Post, April 5, 1971...

...officials (including U.S...

...Complementing the casino crowd, a number of giant U.S...

...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...

...CASINOS, CUCUMBERS, CUBANS, COWS, AND COLONELS 1. The New Panacea: Non-Traditional Exports By 1968, it was clear to U.S...

...ICAITI officials were so disgusted with the whole operation that their main objective was to dissociate ICAITI from these courses...

...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...

...Simultaneously, of course, the military side of the pacification was stepped up to previously unprecedented levels, converting the area into a bloody war zone, and taking the lives of thousands of peasants...

...You have a gun because I am hungry...

...Southern Command, meant that the military was the new cutting edge of the regional integration movement...

...strategy in Vietnam...

...Supplementing military aid has been U.S...

...Notas sobre el Sistema Imperialists de Dominacibn y Explotaci6n en Centro-am~rica," OCLAE (Cuba) No...

...American Affairs, Partners of the Alliance (Wash.: GPO, 1966...

...The two primary U.S...

...Replacing the Alliance for Progress model was a model of politics run by the military, of politics as special warfare...

...Seeing that previous measures had been insufficient, the United States launched an all-out pacification campaign (see below...

...6 9 * But politically Guatemala's dependence on tourism cuts two ways...

...From the 1957 assassination of Castillo Armas until 1966, Guatemala had received very little Alliance for Progress funds directly...

...Following the November 1960 military uprising, Guatemala received the first U.S.-sponsored civic action program in the hemisphere...

...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...

...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...

...Also in the early 1970s, Guatemala became the scene of a new oil rush...

...Henceforth, any U.S...

...aid" has often set into motion forces which it could not subsequently control - forces which contributed to the liberation struggle...

...Inforpress, No...

...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...

...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...

...El Grafico, June 21, 1971, June 22, 1971, and Jan...

...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...

...Latin American Radicalism (New York: Vintage Books...

...Inforpress4,No...

...Costa Rican Tourist Agency ad: "A tourist is a friend who comes here to invest...

...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...

...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...

...ROCAP officials felt that although BCIE's legal advisers did not like the operation, they "might be persuaded to accept it...

...One Guatemalan insider suspected that the free zone might eventually become a haven for casinos and similar types of enterprises...

...Gary Wynia, Politics and Planners (Madison: University of Wisconsin Press, 1972), p. 70...

...chemical companies - only to discover that the pests in question were absent from the soil in this part of Guatemala...

...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...

...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...

...Berkeley, CA 94701...

...And while realizing the need to increase government revenues and public investment, the aid agencies no longer pushed seriously for a structural tax reform...

...M6ndez, by contrast, according to some sources, had previously "conferred with Ambassador John Gordon Mein and had promised to seek more U.S...

...see also Haissman, op...

...Even though the guerrillas had been severely weakened by the brutal U.S...

...1, 1972, p. 278...

...Edwin Lieuwen, Generals Vs...

...As one such rancher explained it: "Here's what it boils down to - $95 per cow per year in Montana, $25 in Costa Rica...

...The approach to the rural sector, for example, was to focus on improving productivity, while leaving intact the land-holding structure.' 8 The real importance of the Plan for the Arana government was that it provided a veneer of respectability in Washington to a grossly unrespectable government...

...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...

...Investment Bubble in Central America," NACLA's Latin America and Empire Report, May-June 1973 ("U.S...

...Ambassador Mein and attempted to exert pressure (through the U.S...

...This rejection of reformism in favor of political expediency was definitive...

...16_ er year for non-profit institutions ($30 for two years...

...ICAITI had no control over this $78,000, for which MRI was directly accountable to ROCAP...

...New York Times, Feb...

...AID Project Sheet: Human Resource Development...

...According to Gert Rosenthal, the Guatemalan Secretary of the National Economic Planning Council (CNPE), the Plan was basically written before the March 1970 presidential election, in a "neutral" or "non-ideological" style so that it could be adopted by any of the three candidates who might win the election.' Although it was more comprehensive than previous "development plans," the new Plan for the 1970s was in many respects similar to and continuous with the "planning" process initiated by the Castillo Armas counterrevoluion...

...Even though, as the BID consultant demonstrated, it is financially and economically "inefficient" to channel all efforts through the largest landowners, these landowners have been allowed to continue "abusing international assistance, channeling large sums of money into their own pockets...

...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...

...This new strategy, which was largely a response to the contradictions of reformism and to new conditions in Central America , in turn contained its own contradictions...

...Journal of Commerce, Feb...

...napalm on villages harboring guerrillas (dropped by U.S...

...But tourism received a new impetus as part of the export promotion fever - and also, perhaps, because inflation and devaluation of the U.S...

...Fortunately for the United States, large nickel deposits had also been discovered in Guatemala, a much more "secure" country for the U.S...

...Interestingly, it was the Wall Street Journal, spokesorgan of Wall Street, which first exposed the Vesco-Figueres relationship...

...After 1960, therefore, Empresa Explotaciones Y Exploraciones Mineras de Izabal S.A...

...objective of pacifying Guatemala without requiring any basic reforms...

...The only means of obtaining such revenues was a tax reform...

...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 national bourgeoisie organizes centers of rest and relaxation and pleasure resorts to meet the wishes of the Western bourgeoisie...

...tourists to switch their vacations from Europe to the nearer, cheaper, and tied-to-the-dollar resorts in the hemisphere...

...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...

...Inforpress, No...

...strategy was to integrate regionally the forces of repression at the top, while keeping the people in these countries isolated from each other...

...immigration officials...

...but other than that - so long as their real objectives (pacification, freedom for foreign investors) are assured - to continue their business in Guatemala as usual...

...19, 1972, p. 330, April 19, 1973, p. 124 Inforpress, No...

...In fact, however, many army officers participated in these groups in their spare time...

...for the Guatemalan people, the new "boom" only accentuates their own misery...

...Another AID-inspired project was a private ("for profit") trading corporation to promote the sale of Guatemalan exports in foreign (non-Central American) markets...

...Of course, it was still possible to advocate this or that specific reform (such as extending credit to small farmers, building more schools, etc...

...Inforpress, No...

...7 2 AVCI ON TOURISM "The national bourgeoisie will be greatly helped on its way toward decadence by the Western bourgeoisies, who come to it as tourists avid for the exotic, for big game hunting and for casinos...

...NYT Sunday Travel section, Jan...

...Victor Perlo, The Empire of High Finance (New York: International Publishers, 1957...

...The other big question facing the M6ndez government was how to finance its ambitious "development" plans...

...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...

...See for example Geyer article in Chicago Daily News, Dec...

...Sources for the following story include: primarily interviews with a number of prominent U.S...

...31 * A month before taking office in 1970, Arana visited the United States for secret discussions with Vice President Spiro, Agnew (who had shifted his allegiances from the Rockefeller to the Sunbelt camp...

...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...

...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...

...The official U.S...

...Inforpress, No...

...Another notable U.S...

...Lucia, a Caribbean island with a great deal of experience in tourism, came to the conclusion that "only 10% out of every tourist dollar stays in St...

...5 0 The cattle boom employs few workers...

...CONCLUSION What are the fruits of twenty years of U.S...

...EXMIBAL promised to become as central to the Guatemalan economy as the United Fruit Co...

...The furor over beef exports coincided with, or was partly sparked by, the Nixon Administration's liberalization and eventual suspension of the U.S...

...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...

...10, 1970, p. 291...

...Only ROCAP officials continued to make excuses for their colleague Patten, insisting that the courses were not a failure "if seen from the right point of view...

...As we shall see, reality has brought results far more extreme than could have been imagined by the aid engineers and strategists...

...Washington Post, Dee...

...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...

...The fact that this process is barely beginning has given imperialism additional time...

...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...

...Public Safety, Table VI for 1974...

...Lester Schmid, "Some Effects of U.S...

...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...

...From both perspectives, the new economic strategy would have to promote agribusiness and non-traditional exports, tourism, and extractive mining...

...When the tourist zone law was debated in Congress in August 1973, attention focused on one feature, authorizing luxury hotels to operate casinos...

...Under the regime of the Counterrevolution since 1954, social and economic conditions for the Guatemalan people have been among the worst in Latin America...

...planners had to determine whether to regulate the new wave of investment through government planning agencies or to leave the field open to any and all foreign (still primarily U.S...

...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...

...5 6 A final, less obvious purpose of LAAD may be to drum up business for the member companies, for example, by financing the purchase of fertilizers, pesticides and agricultural machinery - all of which are produced by the affiliated companies...

...Military Training and Weapon Acquisition Patterns, 1959-69," M.I.T...

...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...

...Particularly since Culbertson's arrival, a number of private U.S...

...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...

...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...

...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...

...78,000 of the ROCAP-ICAITI contract was earmarked for an ICAITI subcontract with a firm called Marketing Research International Ltd...

...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...

...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...

...Their advances became an example and a symbol for all Latin America...

...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...

...thus in effect it pits Central American workers against U.S...

...10 The first issue of the debate was directly linked to the tax reform controversy in Guatemala...

...Susanne Jonas, "Cuban Exiles and Watergate," NACLA's Latin America and Empire Report, Nov...

...Functionally tourism is a form of export, in that it brings in foreign exchange earnings...

...and, as the 1974 "election campaign" has made absolutely clear, reformism has no meaning in the political process...

...Ambassador to Brazil and who recommended U.S...

...He might very well be taking my wallet and I'd be thanking him...

...military adviser complained that Peralta had even restricted his full access to Guatemalan military intelligence reports...

...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...

...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...

...By itself, however, the worsening situation resulting from U.S...

...Guatemalan newspapers...

...of Oregon, 1969), p. 45...

...In 1944, at the close of World War II, Guatemala began a profound national capitalist transformation...

...Many of them became local managers for U.S...

...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...

...has had to wage an open war against an organized guerrilla force...

...Equally damaging are the political consequences of having to project an image of stability in the U.S...

...by alleviating the serious unemployment problem, since many of these new industries were supposed to be "relatively" labor-intensive...

...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...

...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...

...1 3 This was not surprising, given the political situation: the continuing class warfare in Guatemala made pacification the primary government objective...

...The very brutality of the repression is a measure of the continuing "threat" of class struggle in Guatemala...

...for background, see John Saxe Fernandez, "The Central American Defense Council and Pax Americana," in I. L. Horowitz, J. de Castro and J. Gerassi (eds...

...see also MH, Dec...

...officials acknowledged their presence off-the-record, and numerous observers reported seeing them in Guatemalr -- up to 1000 of them...

...of Economics, Univ...

...3 Guatemala under President Ydfgoras served as the principal training base for the 1961 Bay of Pigs invasion...

...As a result, according to 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...

...Such activity is given the name of tourism and for the occasion will be built up as a national industry...

...Perhaps the most important case of the new wave of agribusiness has been livestock development...

...This is one aspect of the dramatic increase in corruption and the use of the state to subsidize private interests...

...They claimed to have extracted more than 50,000 teeth in Guatemala...

...according to one ex-AID functionary, its contracts amounted to around $1 million...

...Fred Block, "Watergate: An Editorial," Socialist Revolution, May-June 1973...

...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...

...As became clear from interviews with both United States and Guatemalan officials, AID and U.S...

...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...

...Next ROCAP pressured BCIE to grant a $370,000 loan to EXIMCO under very irregular conditions...

...Specifically, the function of state planning was "to avoid duplications of effort" within the private sector and to "coordinate" the activities of public institutions in support of the private sector.' Translated into social terms, the intent of the Plan was to reconcile differences among the bourgeoisie...

...hotel chains (e.g., Hilton, Sheraton, Western International) have made sizeable tourist investments in Guatemala...

...Miguel Ydigoras Fuentes: 1958-1963 - Col...

...39, p. I. Arms You have a gun And I am hungry...

...had enjoyed a long and profitable relationship with14 in special courses...

...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...

...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...

...and those which were not planned were logical outcomes...

...Clearly the Guatemalan government cannot tolerate international publicity about the true situation in the country...

...Nevertheless, both President Ydfgoras and his successor, Col...

...The only question under debate was how and with what consequences for the rest of the Guatemalan population...

...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...

...One AID functionary said, "Patten is always trying to put something over on the AID Mission...

...Aid funds have been misused: the World Bank halted all further aid to the Arana government in 1972 as a result of shady dealings with funds for its electric power loan by one of the Cabinet Ministers and Arana's refusal to dismiss that Minister...

...A year later, at the end of 1967, in the midst of a serious financial crisis, the Mendez government presented and finally pushed through Congress a substitute to the property tax - a progressive sales tax which would especially penalize the purchase of luxury goods...

...s 5 Latifundistas received 96.3% of the coffee diversification funds...

...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...

...El Grifico, Mar...

...help) became prosperous investors, and local business groups and politicians- and military officers-turned-businessmen who saw new opportunities to make money overnight...

...and in Central America...

...Carlos Arana Osorio: 1970-1974 made clear its position two days after the election results had been published by issuing a public statement to the effect that it would not support any attempts (being made by the military parties) to annul the election...

...but it is a deliberate response to changing conditions in Central America and in the United States...

...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...

...Guatemalan police have also been sent to the United States for training in riot control, firearms, fingerprinting, etc...

...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...

...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...

...2. Thomas and Marjorie Melville, Guatemala: The Politics of Land Ownership (New York: Free Press, 1971), p. 189...

...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...

...The principal differences among the three had to do with the funding of the Center and the composition of its Board of Directors...

...In the words of a U.S...

...ICAITI was supposed to produce a manual based on the Teculutin experience, which would become a "Bible" for future projects of this kind...

...Enrique Peralta Azurdia: 1963-1966 - Julio Cesar M6ndez Montenegro: 1966-1970 - Col...

...and it has brought profits only to the largest ranchers...

...Guatemalans refer to them as "perreras" or "dogcatchers' wagons...

...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...

...In addition, the contract with EXMIBAL was seen in U.S...

...Inforpress, No...

...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...

...Bomb School Exposed," NACLA 's Latin America and Empire Report...

...attempts to contain the class struggle and to maintain Guatemala as a preserve for U.S...

...Rather, the "new" element was the intensification of Sunbelt economic influence and political power in Central America...

...Another complication was MRI's pretense of being a disinterested party with a subcontract to provide technical advice...

...3s Given the commitment to expanding and diversifying Central American exports, U.S...

...throughout the 1960s Central America has served as one of the exiles' principal bases for launching raids against Cuba...

...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...

...Like the "plans" adopted under Castillo Armas and succeeding governments, the new Plan was in fact the creature of the aid agencies themselves...

...30, 1969, p. 34...

...The two main guerrilla groups were the Fuerzas Armadas Rebeldes (FAR) and the Movimiento Revolucionario 13 de Noviembre (MR-13...

...interference in Guatemalan affairs...

...The Guatemalan Congress has become, according to one official, an arena "for selling laws...

...Foreign Policies upon Farmers...

...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...

...internal study prepared for InterAmerican Development Bank, but not published), April 1971, 2.1...

...response to this challenge was to label it "Communist" and to intervene directly in Guatemala in 1954...

...and regional interests would not voluntarily reduce their privileges - not even for the sake of keeping the whole CACM structure together...

...Strategies for Central America, NACLA's Latin America and Empire Report, May-June, 1973.5 America, from reformism to a hard-line policy...

...In effect, the United States had no other choice: the failure of reformism meant that all the other options had been played out and only the military option remained...

...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...

...containment of this movement has become the overriding U.S...

...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...

...exporters were looking for new ways to push their products abroad...

...One of the enterprises was largely controlled by a Cuban exile businessman, Gerardo Sampedro...

...private sector adviser noted, "exports everything he can get hold of," who had received international aid funds for his various enterprises, and who was said to be a friend and financial backer of President Arana...

...Partners (published by National Association of the Partners of the Alliance), Vol...

...Moreover, weakened by its own mistakes, the movement changed its strategy in the 1970s...

...Inforpress Centroamericana No...

...4 7 Labor costs are also very low...

...Patten claimed that MRI's role had been simply to bring Orbit Sales together with the Guatemalan businessmen and farmers' cooperative...

...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...

...Melville and Melville, op...

...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...

...strategy in Guatemala and the rest of Central America was a variant of reformism: Central American economic integration based on industrialization...

...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...

...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...

...MRI),* supposedly to train "students" * MRI Ltd...

...In 1973 both the Secretary of CNPE in Guatemala and CIAP in Washington cited this delay as one of the obstacles to fulfilling the objectives of the National Development Plan 7 - a glaring irony for those who had been counting on the nickel project to "save" the Guatemalan economy during the 1970s...

...The top AID official in Guatemala conveyed the same message in an interview during the 1970-71 state of siege (a time of massive repression and officially countenanced assassinations): "Except for the 9:00 p.m...

...Industrialization" as imposed by the United States and by the multinational corporations had failed to touch Central America's unemployment and fiscal problems...

...Also mentioned in the debate was the concrete possibility of a casino investment by the International Tourist Corporation of Tampa, Florida, owned by Frank Sinatra, who was said to have noted in 1970 that Guatemala's Atlantic Coast was ideal for this type of tourism...

...Politically, this startegy involved the institutionalization of the apparatus of counterinsurgency and repression, and the death or perversion of institutions of bourgeois democracy...

...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...

...8 3 Guatemala's militarization was further extended as military officers began to fill civilian posts under the Arana government...

...One law, presented in early 1973 and approved in July 1973, provided incentives for "pensioners" who wanted to retire in Guatemala...

...To resolve the transport problem, Guatemalan EXIMCO officials, one of whom was a personal friend of President Arana, attempted to get a government subsidy...

...investors have produced a very contradictory situation by 1974, even judged in terms of U.S...

...investors within a framework of dependent capitalism...

...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...

...Miami Herald, Feb...

...First, they recognized implicitly if not explicitly that no Guatemalan government since 1954 has had serious plans for making structural reforms...

...And soon after the defeat of the sales tax, the United States appeared to have settled for the more pragmatic solution of "administrative improvements" in the existing tax structure, leaving the burden on middle and lower income groups...

...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...

...For one thing, it often has such side-effects as destruction of the local culture and relocation of Indians...

...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...

...7 7 Fortunately for the United States, the M6ndez government was more cooperative and less sensitive to U.S...

...Lehman Fletcher et al, Guatemala's Economic Development: The Role of Agriculture (Ames, Iowa: Iowa State University Press, 1970), pp...

...As for Patten himself, the reports were even worse...

...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...

...see also El Imparcial (Guatemala), Jan...

...These and other indicators of a generally worsening situation in Guatemala are logical consequences of the new U.S...

...5. ROCAP memorandum, "Comparative Revenue Performance of the Central American Countries," Feb...

...8 6 * Partners of the Alliance, which is said to be Culbertson's brain child, provides "a channel through which civic clubs, unions, business and professional groups, schools and even private individuals in the United States may work directly with the people of an Andean village...

...Some of the participants in the November 13 uprising took refuge among the peasants...

...Specifically, these groups were: Sunbelt business interests in the United States...

...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...

...This was particularly important at a time when the balance of payments of the United States itself was in crisis, and when U.S...

...Equally important were the advantages of this new strategy for the United States...

...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...

...counterinsurgency aid to stop the guerrilla movements as soon as he took office...

...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...

...S. Menshikov, Millionaires and Managers (Moscow: Progress Publishers, 1969...

...Seen from this perspective, the "debate" over cutting off U.S...

...In Costa Rica this phenomenon could be seen clearly through the economic-political partnership between President Figueres (1970-4) and Robert Vesco...

...During 1972 and 1973 Costa Rica's President Figueres faced numerous attempts by paramilitary organizations in Guatemala and El Salvador (with informal backing from within their governments) to assist right-wing coup attempts in Costa Rica...

...after talking with him, Arana contacted the U.S...

...It became a national joke among Guatemalans that in order to receive massive U.S...

...Where Your Dollar Boys More Than a Doella BEAUTIFUL TEATEMNALA FnowEmAN o4 nUAL Umn D17 supposed to improve the country's balance of payments...

Pushing Counterrevolution in Guatemala

Jonas, Sussane