Across Latin America social movements are starting to reclaim their societies and economies from the grips of Western control. Radical experiments in Bolivia, Ecuador and Venezuela, for instance, have fostered participatory budgets, alternative development banks, trade based on redistribution from rich to poor. Poverty and inequality have plummeted as a result.

By contrast the harsh poverty of Guatemala seems a world away. In the rural highlands, the indigenous Maya form the majority of the population. Faced with racism and even violence, close to 75 per cent of them are impoverished. While elsewhere in Latin America, poverty has fallen by 12.5 per cent in the last 10 years, in Guatemala it has increased despite strong economic growth rates.

The problem is that Guatemala is enmeshed in a form of so-called ‘development’ that has ensured its economy remains locked in economic dependence on the West, especially the United States, whatever the cost to its people. And that cost has been mind-boggling, with Guatemala being turned, in the late 1970s and early 1980s, into something akin to a real life horror film.

To mark International Human Rights Day Jubilee Debt Campaign has launched a report analysing the extent to which Western-backed institutions like the World Bank supported one of the worst regimes of the twentieth century here. Even by the standards of international lending, it makes for sobering reading.

A century of fruit and domination

In the early part of the twentieth century, the US-based United Fruit Company treated Guatemala as corporate fiefdom, controlling the main port, railways, postal and telegraph systems.

In the 1940s Guatemala embarked on the only genuine development programme the country has ever seen – tens years of democracy which began to extend healthcare, education and social security across the country. When that programme involved taxing United Fruit, which several members of the Eisenhower Administration were closely connected to, and expropriating its unused land the CIA launched a coup.

The coup, documented in Stephen Schlesinger’s must-read ‘Bitter Fruit’, ushered in decades of repressive government, swiftly undoing the progressive reforms. Che Guevara, living in Guatemala at the time, based much of his future strategy on the inability of Arbenz’s government to stand up to US aggression. Many Guatemalans learned a similar lesson and a series of guerrilla armies arose in the face of state repression, and developed close links with the impoverished rural dwellers.

In the late 1970s state terror turned into genocide. Trade unions, social movements and opposition parties were systematically targeted. The leader of the trade union centre (CNT), two of the most prominent social democratic leaders, and the head of the university students association were assassinated.

Meanwhile, in the countryside, the state initiated all-out war against the Mayan population. The ‘scorched earth’ policies of the brutal dictator Rios Montt in 1982 were part of this effort. Whole villages were massacred in what has been described as a ‘grisly holocaust’.

Supporting the terror

The US government gave generous support to Guatemala from 1954 onwards, but as things started intensify in the 1970s, more arms-length institutional lenders like the World Bank started to move in.

It seems incredible that institutions committed to ‘development’ would support regimes who were literally wiping out sections of the population, but then they’ve always had a very different take on what exactly development is.

In the early 1970s Guatemala’s debt was relatively stable, reaching $120million in 1974. Thereafter, debt increased rapidly – by at least $100million a year in 1978, 1979 and 1980, and then over $250million a year in 1981 and 1982 at the very height of the terror. By 1985 the country’s debt had reached $2.2billion – an increase of over $2billion in 10 years.

The majority of this debt came from public ‘banks’ like the World Bank, International Monetary Fund and Inter-American Development Bank. The proportion of money coming from these public institutions rose to over 70 per cent from 1977 until 1980. By the time the peace agreement was signed in 1997, Guatemala was repaying these institutions nearly $130million a year.

One particular project stands out above others: the Chixoy Dam. Supported by the World Bank and Inter-American Development Bank from 1978, the dam was built close to Rio Negro in the highlands, an area particularly targeted by the terror campaign. The creation of the dam entailed the flooding of lands to build a reservoir which in turn meant many communities would have to be evicted.

Campaign groups such as International Rivers have detailed the way that local opposition was met with ever fiercer repression from the armed forces. Then, on 12 February 1982, around 70 community members were murdered in the first of four massacres. In coming weeks more than 400 of their women and children were massacred because of their opposition to the dam.

For the survivors the ordeal didn’t end there, as soldiers returned to Rio Negro, burning homes and possessions, killing animals and destroying crops. Barbara Rose Johnston of the Center for Political Ecology records that: ‘Survivors were hunted in the surrounding hills, and forcibly resettled at gunpoint…While resettlement villages were eventually built, the original development plans were discarded and a militarized guarded compound was built in its place.’

Certainly the banks were essential to the project going ahead, but did they understand what they were funding? Campaign group Rights Action says: ‘not to have known at the time about the violence and repression at Rio Negro would have required an extraordinary and sustained dedication to ignorance on the part of World Bank officials.’

The Bank did nothing to stop the project once the atrocities started. In fact, they supported a second project in 1986, making no mention of the massacre.

The Chixoy survivors have led a brave campaign for reparations – despite being repeatedly harassed and criminalised, even after the ‘war’ was brought to an end. There is widespread acceptance – even by the banks – that reparations should be paid. But nothing has been forthcoming.

More ‘development’ for Guatemala

Guatemala remains beset by violence. Assassinations of political activists, journalists and labour leaders continue. Poverty is highly concentrated among indigenous communities. And Guatemala continues to play its vital role in the global economy – as an exporter of fruit and increasingly of metals.

Today Guatemala is in the middle of a new wave of ‘development’. The opening of mines and the building of dams is adding to Guatemala’s growth rate, but doing less than nothing for communities who live on the land where the projects are being built.

A staggering amount of extraction is planned in Guatemala in coming years. In 2007, the government approved 370 mining licences, with 300 more waiting. The Ministry of Energy and Mines says mining revenues have soared from $9 million in 2004 to $522 million in 2010.

In 2004, the International Finance Corporation, a branch of the World Bank, gave $45 million to Goldcorp for work on the Marlin Gold Mine. After activists protested the mining operations, 1 person was killed by security forces and many more injured. The Inter-American Commission on Human Rights has called on the government to suspend operations at the mine on the basis of complaints about serious pollution.

The mines need dams to provide them with power. The Xalala Dam is being constructed on the Chixoy River, downstream from the existing Chixoy Dam. Local activists are convinced that the project will benefit the mining projects, while local communities will suffer. International Rivers claims that the Xalala Dam would displace more than 2,000 people and impact the livelihoods of 14,000 people.

Local communities are fighting back. Across the north of the country it is impossible to miss the opposition to mining. One tactic regularly used is community referenda – a way of re-engaging local communities in struggles. Of the 58 held since 2005, not one has come out in favour of mining. A 2007 referendum organised on Xalala saw 90 per cent of people reject the dam. Not that the government is listening.

This resistance shouldn’t be under-estimated in a country devastated by of violence. Nor should the importance of the opening of the trial of former dictator Rios Montt, for genocide and crimes against humanity, after years of immunity while he remained in Congress.

Unfortunately the governments and institutions that stood behind Montt (Regan called him ‘a man of great personal integrity and commitment’ who ‘wants to improve the quality of life for all Guatemalans’) have not been brought to trial for their role in the terror.

Justice for Guatemala today means supporting those communities still fighting for reparations – and those fighting against the mining projects and dams which have promised so much for the people of the country, and deliver only further impoverishment. It also means fighting the notion that the development banks have ‘changed’ or that what happened in Guatemala was an aberration. Certainly it was extreme, but it flows out of a vision of development which seems Orwellian in its perversity. Their development is not our development.

To take action and find out about more organisations supporting the fight for justice in Guatemala go to: Jubilee Debt Campaign.

Victor Figueroa-Clark defends the FSLN’s programme
In November Daniel Ortega and his FSLN party won Nicaragua’s presidential and parliamentary elections. While supporters say that the Sandinista governments since 2006 represent the second phase of the revolution started in 1979, opponents claim that the FSLN has betrayed its origins, and the government is in the process of installing what they call a ‘Danielista’ dictatorship. With so many former Sandinistas among the ranks of the opposition, a look at the measures taken by the Sandinista government can help to determine whether ‘21st-century Sandinismo’ lives up to its name.
Nicaragua is still the second poorest country in the western hemisphere. An earthquake in 1972 was later followed by civil war, leading up to the revolutionary victory in 1979. After visiting Nicaragua that July, Costa Rica’s president wrote to his fellows at the OAS to say, ‘Today Nicaragua is a nation destroyed.’
There followed a ten-year war imposed by the US’s Reagan administration as part of its efforts to ‘roll back’ communism. The world’s wealthiest country went to war on one of the poorest using a proxy army. The war killed 50,000 Nicaraguans and maimed many more. Enormous damage was done to the economy. In 1987 a hurricane almost finished off what Reagan had started. The gradual withdrawal of Soviet support exacerbated the crisis. The war continued – and in the 1990 elections the US pumped millions into financing the Nicaraguan opposition and the FSLN lost.
Shattering defeat
Despite the war, economic crisis and the collapse of ‘existing socialism’, the FSLN garnered 40 per cent of the vote. But the defeat was unexpected and shattering to Sandinista morale. It ushered in years of neoliberal governments that privatised and ransacked the state, ignoring the 1987 constitution. Rural areas were abandoned, there were no real plans for national development and little investment outside new free trade zones, malls and motorways for the rich. Hundreds of thousands of people lost their jobs, forced into economic exile or the grim shadow world of the ‘informal sector’. Illiteracy, malnutrition and disease began to take their toll.
By the time the FSLN won the 2006 elections, Nicaragua had endured 16 years of this. According to UN figures, 27 per cent of the population suffered malnutrition; 22 per cent were illiterate. In 2005, 48.3 per cent of the population lived in poverty and more than 17 per cent in extreme poverty. A study carried out in 2007–08 found that 58 per cent of Nicaraguans were unable to access adequate healthcare as a result of privatisation and lack of investment.
Per capita GDP grew by only 0.6 per cent a year in the 1990s, and although growth averaged 4 per cent after 2000, this wasn’t enough to bring people out of abject poverty. Inequality was immense and growing. The top 10 per cent of the population accounted for 41.3 per cent of income, worse even than under the dictator Somoza.
Illiteracy has again been eliminated. Photo: Jenny Matthews
National plan
This was the reality that the FSLN was committed to overcoming. Going back to its roots, it concentrated on building relationships with social movements, and these, together with trade unions and the business sector, came up with the National Human Development Plan. This advocated a renewed state role in the economy, prioritising infrastructure and poverty elimination programmes. The FSLN also designed an energy policy that focused on renewable energy, to create reliable energy sources for industry and turn Nicaragua into an energy exporter.
The FSLN knew that coming to power would create international challenges, not least with the US, so they continued the Sandinista commitment to regional integration. The final element of the strategy was to strengthen democracy, building new participatory structures to bypass representative structures permeated with corruption and bureaucracy.
The economic measures of the national plan have had concrete results, partly thanks to government efforts, partly due to high coffee prices. The government has worked hard to find new markets in Latin America, the EU, Russia and China, and through ALBA (the Bolivian Alliance for the Americas trade group), Nicaragua’s exports to Venezuela have risen massively. As a result, GDP has grown by a quarter since 2005. Exports are up 77.3 per cent since 2006 and currency reserves have doubled. In 2010 GDP grew by 4.5 per cent, the highest growth rate in Central America. It is clear that the Sandinista economic policy has been a success, and although it remains vulnerable to fluctuations in commodity prices, there has been progress in diversifying products and markets.
Economic growth has been possible because the shortages of fuel and blackouts of yesteryear have been ended. Oil from Venezuela has subsidised this process and allowed the government to diversify energy production. Nicaragua now has hydroelectric, geothermal, wind and solar energy plants. The electricity grid has been extended to connect the Caribbean coast, although 100 per cent coverage is still to be achieved. The aim of the renewable energy projects is to make Nicaragua’s energy 90 per cent renewable by 2017, although it is unclear how far Nicaragua’s dependence on oil has been reduced.
Other infrastructure projects have included the construction and improvement of 6,000 kilometres of roads and new bridges connecting the Pacific and Caribbean coasts. Much work has also gone into improving water systems, providing clean water to hundreds of thousands of people.
Health and education
As in the 1980s, the most noticeable changes have been brought about in health and education. Government statistics point to a reduction in maternal mortality, and although the detailed figures are contested by the opposition, the overall trend is down. Medical brigades from Cuba and Nicaragua have returned to the countryside. The majority of municipal health centres are now open 24 hours.
The extension of free healthcare has been supplemented by the provision of food, transport and energy subsidies for the poor. With free school meals, these have allowed Nicaragua to reduce malnutrition.
In education the Sandinista government has restored free schooling and eliminated illiteracy for the second time in 30 years. Critics point out that thousands of children are still not enrolled in the education system, but the government says it is taking steps to resolve the problem. According to the Ministry of Education, spending on education has increased from 4.8 per cent of GDP to 5.5 per cent in 2011. Nicaragua currently spends 53.9 per cent of its budget on health and education. While much remains to be done there has been a notable change of emphasis.
The opposition implodes
Meanwhile, the political opposition to the FSLN has imploded. In November, Ortega won the presidential election with 62.5 per cent of the vote and the FSLN won a majority in Congress. The strength of popular supportt for the FSLN platform was such that its opponents even promised not to scrap Sandinista subsidies or health and education programmes.
Lacking a popular agenda, the opposition concentrates on trying to undermine the legitimacy of the Sandinista government, using its excellent international contacts and domination of the media. A lack of mass political support has provoked it into extremism. It is as if it cannot believe that its lacklustre showing can be due to a lack of convincing political arguments, and can therefore only be the result of an ever more pervasive ‘Danielista’ dictatorship.
Neither Ortega nor the FSLN is perfect and they reflect existing contradictions in Nicaraguan society. However, since 2007 Nicaragua has made significant progress. It remains poor, and clearly has a long way to go before overcoming the challenges of poverty, deprivation and the legacy of chronic want and underdevelopment. However, under the Sandinistas it has made a promising start to what will be a long journey.
Dr Victor Figueroa Clark completed his PhD on the Sandinista Revolution at the LSE, and is a guest teacher in the LSE’s International History Department where he teaches US-Latin American relations. He is currently writing a political biography of Salvador Allende, due out in Autumn 2013 with Pluto Press.

Winning elections, losing the revolution

The FSLN of today is very different from the organisation that emerged from the revolution, argue Alberto Cortés-Ramos and Martha Isabel Cranshaw
After the FSLN lost the 1990 elections, Daniel Ortega gradually became the main visible reference in the party leadership. This process, which started before the elections, was reinforced by the so-called ‘Ortega–Alemán’ pact in 2000. By this, each recognised the other as the main leader of their respective parties and decided to divide control over public institutions among their loyal partisans in a booty‑type way, typical of the Latin American caudillo traditions.
Rosario Murillo, Ortega’s wife, has played an increasingly important role in this new dynamic within the party, especially after the serious accusation of sexual abuse made by Murillo’s daughter against Ortega in 1998. Faced with this accusation, Murillo stood by her husband, playing a key role in his defence. Afterwards her loyalty gave her great power. She was the head of the 2001, 2006 and 2011 election campaigns. Indeed, after the 2006 victory she was kind of de facto prime minister, putting in key figures loyal to her and dismissing ministers, officials and party cadres that threatened her power or did not toe her line.
Radical ethic overturned
A second aspect of the transformation of the FSLN has to do with ethics. FSLN founder Carlos Fonseca Amador imbued the organisation with a strong ethical component, derived from its revolutionary ideas and expressed in a contempt for material accumulation. This ethic was reinforced by the theology of liberation and the significant presence of the poet Ernesto Cardenal and other members of the popular church. This radical ethic was essential for the FSLN to maintain the moral authority and support of the Nicaraguan people during the hard years of war caused by the counter-revolution.
The billboard reads ‘To fulfill the people is to fulfill God’. Christian references are now common in Sandinista communications. Photo: Jenny Matthews
However, shortly after electoral defeat, there was a debate within the FSLN about what to do with the state enterprises and properties. One side said the FSLN should defend the state and cooperative property created during the revolution, while the other advocated transferring as much property as possible to party members, to be later transferred to the party itself. This ‘pragmatic’ position won with the support of Daniel Ortega, generating a profound disenchantment within and outside Nicaragua, especially when the commitment to transfer property to the party was never fulfilled.
This privatisation and appropriation of public property, known as the ‘piñata’, was the germ for a new generation of Sandinista businessmen during the 1990s. And with it came a new atmosphere of resignation. Orteguismo assumed that in order to survive the Sandinistas had to employ the same means and morality as their opponents. This transformation led to later divisions within the FSLN. Dissidents were expelled and the pragmatic group, headed by Ortega, consolidated party control.
Adapting to neoliberalism
The emergence of a Sandinista entrepreneurship, linked to the hegemonic group, took place in the international context of neoliberal development and privatisation of the public sector, a trend against which Ortega offered no serious resistance. Again, this marked a break with the position of the party during the revolution. At that time, the FSLN was seeking a radical transformation of the productive structure, property and social relations. It was trying to create a new kind of society, democratic and just, with a mixed economy in which both public and social ownership would play a strategic role.
During the 1990s and up to the present, the FSLN not only abandoned the revolutionary programme but adapted itself to neoliberalism. Two indicators confirm this shift. First, the FSLN did not oppose a free trade agreement when it was negotiated by President Bolaños, and did not attempt to reject or renegotiate it once it took office in 2006. Second, while the Ortega government has received massive financial support from Venezuela, it has channelled it through the Sandinista business sector rather than through the state. Today, 22 years after the discontinuation of the revolution, the FSLN has economic interests in various sectors of the economy: tourism, construction, financial sector, agricultural production, trade, services and petroleum products, among others. This has facilitated it reaching agreements with Nicaragua’s traditional big capital and leading families, which has undermined the transformative potential of the FSLN.
Religious transformation
Meanwhile, the religious transformation of the presidential couple has influenced the whole way the party operates. This has led to conservative policies, including the prohibition of therapeutic abortion and the rejection of gay marriage.
Unlike the FSLN during the revolutionary period, the Ortega–Murillo couple broke with the feminist movement and are now allied with conservative figures, such as Cardinal Obando y Bravo, who was a bitter enemy of the revolutionary process in the 1980s. Now the discourses and iconography of the party are full of Christian religious references and symbols.
During the revolution, the Sandinistas promoted grassroots empowerment and democratic participation, even if the ‘Contra’ war and permanent militarisation undermined this effort. Today’s ‘councils of citizen power’ might echo this effort, but in practice have proved to be partisan and even instruments of personal power that exclude the participation of independent civil society organisations.
While access to certain public services has improved under Ortega, in general social policy is aimed only at the survival of the beneficiary families and not the transformation of Nicaraguan society. The government has accepted IMF proposals for reform of social security, against union opposition, and health policy has been skewed towards Sandinista business interests in the pharmaceutical sector.
A final point has to do with the other powers of the state. From the Ortega-Alemán pact onwards, the supreme court and the electoral supreme council became institutions controlled by supporters of the two caudillos. Later, Ortega took advantage of the confrontation between right-wing rivals Aleman and Bolaños to complete Sandinista control of these powers. This has allowed openly partisan use of the justice administration and corrupt handling of recent elections, which have resulted in accusations of fraud both locally and internationally.
The Sandinistas may be winning elections again, but they are now accommodated to a neoliberal logic. As the great poet Pablo Neruda said in another context: ‘They, of that time, are no longer the same . . .’
Alberto Cortés-Ramos is professor of political science at the University of Costa Rica. Martha Isabel Cranshaw is co-ordinator of the Leadership Committee of Nicaraguan Migrants

Guatemala 1954
‘I want all of you to be damn good and sure you succeed,’ President Eisenhower told a meeting in the White House, three days before the overthrow of the elected president of Guatemala, Jacobo Arbenz, in June 1954. Arbenz, a moderate reformer, had angered the United Fruit Company by promulgating agrarian reform. The company, Guatemala’s largest landowner, had a tight web of personal connections with the Eisenhower administration. In August 1953, Eisenhower personally authorised the CIA to remove the Guatemalan president. The CIA recruited and armed hundreds of Guatemalan exiles and foreign mercenaries, then transported them to the Guatemalan border, where they launched an ‘invasion’ in June 1954. CIA planes bombed Guatemala City and strategic sites, while the agency’s radio station broadcast misinformation. This unsettled the population and wore down the resolve of Guatemala’s military leaders, who, after nine days, persuaded Arbenz to resign.

Genocide in Guatemala
General Ríos Montt, who came to power in a coup in 1982, led a scorched-earth policy, burning hundreds of Mayan villages, atrocities which a UN commission defined as ‘acts of genocide’. US president Ronald Reagan declared that Montt had got a ‘bum rap on human rights’, and sent his regime economic aid and military helicopters. To circumvent a congressional ban on military aid (introduced by Reagan’s predecessor Jimmy Carter), Reagan also persuaded Israel to send military assistance. The CIA continued operating in Guatemala throughout this period and CIA assets were responsible, according to an US intelligence oversight report, for ‘assassinations, extrajudicial execution, torture and kidnapping’. Reagan finally persuaded Congress to restore military aid in 1985, even though repression remained severe. The toll of death and suffering of the 34-year civil war (1962–96) makes sombre reading: 200,000 people, mainly indigenous Mayans, were killed, and one million people were forced to flee their homes.
Illustration: Edd Baldry
The Contra war in Nicaragua, 1979–1990
President Reagan unleashed unbridled aggression against a tiny country with a population of just three million. The aim? To overthrow the left-wing Sandinista government, which had led a popular revolution against a dictator in 1979. US ‘low intensity warfare’, which involved the arming of thousands of ‘Contras’ (counter-revolutionaries), left 30,864 people dead and 20,064 wounded. The Contras targeted peasant collectives, schools and health clinics, to spread terror, disrupt the economy and undermine Sandinista social programmes. The International Court of Justice estimated the cost of the war and US embargo at £11 billion. It ruled that the US had broken international law and violated Nicaragua’s sovereignty. The court ordered the US to stop ‘arming and training’ Contra rebels, a judgement the Reagan administration ignored. The Sandinistas introduced democracy to Nicaragua. They won elections in 1984, but after ten years of US‑backed war lost office in 1990. They were re-elected in 2007 (see pages 31–33).

Death squad terror in 1980s El Salvador
After the triumph of the Sandinistas, the Reagan administration was determined to stop another guerrilla-led revolution in Central America. It poured military aid, training and intelligence assistance into El Salvador, one of the most repressive states in the world, whose ‘murders, disappearances and violations of human rights’ were condemned by the UN general assembly. The murder of Archbishop Óscar Romero in 1980 brought worldwide condemnation but the death squads’ leader Roberto D’Aubuisson was entertained in Washington by Reagan administration officials. By 1983, 11,000 people had been killed or ‘disappeared’ by the security forces and their allies. In total 75,000 were killed in the civil war (1980–1992) and one million fled their homes. A UN truth commission found that state forces and right-wing death squads were responsible for 85 per cent of the killings.

Turning against Noriega, 1989
Manuel Antonio Noriega, the military ruler of Panama from 1983 to 1989, had been a useful anti-communist ally to the US. Having trained at the School of the Americas, he was the CIA’s highest-ranking paid informant and, despite being heavily involved in drugs trafficking, was also an informant of the US Drugs Enforcement Agency. George Bush senior had lunched with him and Noriega had even visited the home of CIA director William Casey. But by the mid‑1980s, media exposés of his gun‑running and money laundering became an embarrassment. The US also wanted to ensure that the Panama canal remained in pro-US hands and no longer needed his help in the Contra war in Nicaragua. Bush ordered 26,000 troops to attack in December 1989. Noriega was arrested and taken to the US where he was tried and jailed for drugs trafficking. Having served a seven-year sentence, he is now awaiting trial in Panama.

Grace Livingstone’s book, America’s Backyard: the United States and Latin America from the Monroe Doctrine to the War on Terror is available at a 20 per cent discount to Red Pepper readers. Phone Zed Books on 020 7837 4014 quoting this offer