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Generating terror in Guatemala

Nick Dearden traces the legacy of World Bank-funded development in Guatemala through massacres, massive public debt and continued poverty for the majority

December 12, 2012
9 min read


Nick DeardenNick Dearden is the director of UK campaigning organisation Global Justice Now. He was previously the director of Jubilee Debt Campaign


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In Xococ community members exhume the bodies of those who were killed in the violent massacres throughout the 80s and 90s. (Photo: Bert Hanson)

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.

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Nick DeardenNick Dearden is the director of UK campaigning organisation Global Justice Now. He was previously the director of Jubilee Debt Campaign


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