Plan of the Alliance for Prosperity in the Northern Triangle: A Step in the Right Direction for Guatemala?
By: Cameron McKibben, Research Associate at the Council on Hemispheric Affairs
The Northern Triangle countries, El Salvador, Guatemala, and Honduras, are often characterized by poverty and violence. With limited economic opportunities and individual security threatened by gang and drug violence, many citizens have opted to migrate north towards opportunity and safety.
An unprecedented number of migrants from Central America, including an increase in unaccompanied minors traveling north beginning in 2009 from an estimated 20,000 to over 50,000, have raised security and human rights concerns in the involved countries.[i] These issues are not only pertinent to the United States and Mexico, but have had serious consequences in the Northern Triangle, which continues to suffer a significant human capital flight. An estimated 9 percent of the total Northern Triangle population has emigrated in recent years, with about 100,000 migrating to the United States yearly and 60 percent remaining as undocumented persons.[ii]
In November 2014, the Northern Triangle announced its development plan, the Plan of the Alliance for Prosperity in the Northern Triangle (PAPNT). Unveiled at the Inter-American Development Bank (IDB) conference “Investing in Central America: Unlocking Opportunities for Growth,” the plan primarily aims to improve the countries’ infrastructure, notably the transportation and energy sectors, in an effort to boost their economies and create jobs.
This analysis looks particularly at the Guatemalan case. Why do people decide to leave? Can the recently announced development plan curtail migration and security? Furthermore, what additional measures can be implemented to aid this initiative?
This discussion will argue that the primary reasons for migration are economic inequality and political exclusion, stemming from the weak institutional capacity of the state. While the inputs of the PAPNT are good in theory, it will require significant foreign aid before it can produce any real outputs. Additionally, this development plan will not be successful without tangible reform to the Guatemalan state and its security apparatus.
The Guatemalan Experience
Beginning its transition to democracy in 1985, Guatemala’s recently developed democratic institutions are weak. Guatemalan society instead remains oligarchical as several families monopolize major sectors of the economy, including the drug trade.[iii] Due to their economic importance, oligarchic elites are able to manipulate the state into securing their interests, thereby granting them near impunity. Furthermore, over 30 years of civil war, primarily waged in the rural areas of the country, have significantly limited investment to these areas. These legacies have led to acute inequality and poverty experienced in Guatemala today, particularly by rural and indigenous peoples. The Economic Commission for Latin America and the Caribbean reports that around half of the national income is shared between the top 10 percent of the population, whereas less than 3 percent is distributed within the bottom 20 percent of the population.[iv]
During the period between 2000 and 2006, Guatemala did make some basic improvement on its inequality and poverty issues. However, this has been identified as mostly benefitting the middle class, exacerbating the perceptions of exclusion as more than half of the Guatemalan population remains in poverty.[v] It is estimated that informal employment in Guatemala accounts for 81 percent of the job market, compared to 71 percent in El Salvador, and the regional average of 65 percent.[vi] Without having access to state-provided opportunities, and also general mistrust of the state, the majority turns to the informal sector, but this estrangement from the state is not new for poor Guatemalans.
Beginning in the 1940s, democratic movements in Guatemala were subdued by a U.S.-backed, CIA-led coup, launched to protect corporate interests in the monopoly of the United Fruit Company. This led to the installation of a military dictatorship, which lasted until the 1980s. The U.S. militarization of Guatemala in the 1960s, under the guise of combating Communism, sparked military targeting of indigenous Mayan and Ladino populations as the “Communist enemy.” Due to deep-seated social discontent, a revolution began, led by the indigenous populations that composed the majorities in the poor, rural areas.
The Guatemalan government forces have since been condemned for committing genocide against the Mayan community and have been cited for widespread human rights violations, including scorched earth campaigns, during the civil war. Most estimates of these atrocities number the death toll to be around 200,000, further alienating the underclass from the government and inciting feelings of mistrust.[vii]
The legacy of its own civil war (1960-1996) has marked Guatemalan society with violence, although is has transitioned from civil conflict to high crime rates, which has intensified as a result of Guatemala’s geographic location as a drug transshipment point.[viii] In 2012, the Guatemalan homicide rate per 100,000 people was 40, compared to the regional average of 25 and about five in the United States.[ix] The rule of law in Guatemalan society is nearly non-existent and private security groups and juntas locales de seguridad (communal security groups) are largely responsible for providing security.[x] In addition, for those without financial means, associating with gangs and drug trafficking can provide income and security that neither the private sector nor the state can. Given that young people make up most of Guatemala’s population, and nearly 30 percent of these young people are ninis (those who neither work nor study), the likelihood of participation in such organizations is higher in Guatemala than in other countries in the region.[xi] As seen in Mexico, the militarized approach toward these groups has only increased their violent tendencies.
The Plan of the Alliance for Prosperity in the Northern Triangle (PAPNT)
The PAPNT is an ambitious plan for the Northern Triangle; however, while it presents worthy goals, it must prioritize what is likely to have the most significant impact on the individual countries. In Guatemala’s case, the primary concern for stability is the weakness of the state. Institutional reform can be included in the short and medium-term agenda set by the PAPNT, but it should be considered a long-term objective.
Corporatism in Guatemala, in which “big business” is seen to manipulate the state, has restricted the level at which democratic processes can be absorbed into the political system. The plan considers the creation of special economic zones to promote infrastructure development in rural areas. While this may be well intentioned, the government runs the risk of continued domination and exploitation by the current monopolies that have already overwhelmed the state. Additionally, for these programs to have the intended effect, the state must provide oversight to ensure the provision of jobs for the rural population, particularly for indigenous peoples and women. The concern is: does the Guatemalan state possess the institutional capability of implementing such an ambitious program? Arguably, it would provide another avenue of opportunity for the rich to become even richer at only a marginal increase in genuine opportunities for the poor.
While the travel and gas infrastructure projects that dominate the development plan may help to promote economic growth, targeted social service provision to the poor, rural areas should be prioritized. The crippling problem that Guatemala faces is inequality, which must take priority in the development plan to shrink the gap between the rich and poor and raise its GDP per capita.[xii] This examination contends that improving the provision and accessibility of adequate education is fundamental to human development and addressing inequality. The average length of schooling received in Guatemala is seven years and only 26 percent of Guatemalans complete secondary education.[xiii] The government claims to have spent around 2 billion Quetzales on an initiative that helped send about 800,000 children to school.[xiv] The Guatemalan government has also reported that 95 percent of seven to twelve year olds to be attending school, but it is likely closer to 85-89 percent.[xv] In addition to these progressive programs, more can be done for education.
Education reforms must be pushed in order to decrease the underclass of children growing up on the streets of Guatemala. The government must provide better access to education for the poor population through the construction of schools and training of teachers. Educating teachers domestically should be subsidized in order to incentivize the educated to remain in the country, reducing the effects of “brain drain.”[xvi] Increased exchanges of students to higher-level education in the United States, Canada, and other countries with established education systems should be explored. Moreover, investment in education will also be pivotal in reducing the amount of violence by decreasing the number of ninis that are not provided an alternative, apart from recruitment into drug and militant groups, by the fledgling democracy.[xvii] Although economic development is important, these countries must possess an educated domestic population capable of advancing the state out of corporatist control and towards greater socio-economic and political equality.
Educational reforms must also provide a two-way exchange. A process of collective healing must occur by which the racism and resentment against and intransigent attitudes of superiority over the indigenous population are addressed. For example, being an “indian” in Guatemala often holds negative connotations and is associated with insults such as “no seas indio” (“don’t be an indian”). It will be important for the economic development and social advancement of Guatemala to assimilate the indigenous populations into the system through an inclusive process. Guatemala may look to Mexico’s Comisión Nacional para el Desarrollo de los Pueblos Indígenas (CDI), which replaced the National Indigenist Institute (INI) in 2003. Mexico has incorporated its indigenous population into the system while representing their interests in preserving their traditions and way of life by including the indigenous people within the state institution.
Alongside education, tax reform must be emphasized as essential to decreasing inequality in Guatemala. In 2012, President Otto Pérez modified seven existing laws and established four others directed at providing increased oversight for public funds and tackling corruption. This is significant in the fact that the government, which typically experiences opposition from Guatemala’s economic elites on tax reform, has been able to bargain with these groups.[xviii] The collection of taxes in Guatemala has proved to be a significant impediment to the provision of public goods and reversal of economic stagnation. Nonetheless, it remains to be seen if such reforms can remain untainted by elite corruption and the misappropriation of public funds.
Conclusions and U.S. Involvement
Given the divisions between the poor and the state, especially the demographics persecuted during the civil war, justice and reconciliation from the government is essential. The poor’s justified lack of trust in state institutions directly contributes to illicit activities and the compounding violence, which, along with limited economic opportunity and possibility of upward mobility, or simply to make ends meet, is a major cause of migration.
The Northern Triangle countries have stated that they expect U.S. aid to finance as much as 80 percent of their development plan because the U.S. is the primary market for the drug trade. U.S. policymakers have shown a willingness to invest in the development and security of the Northern Triangle through the Central America Regional Security Initiative, providing at least $642 million USD in assistance since 2008.[xix] However, continued aid, and the U.S. position as Guatemala’s primary import and export market could be used as leverage in order to support a reconciliation process. Oversight must be provided in any instance of Washington-provided aid in order to ensure the appropriate use of U.S. funds to promote better governance and strengthen the Guatemalan state.
In the 1990s, Guillermo O’Donnell described the region as divided into “blue,” “green,” and “brown” zones.[xx] These “brown zones,” in which the provision of public goods is weak and the state is essentially absent are the areas most in need of investment; in Guatemala, these are the poor, rural areas largely inhabited by indigenous populations. Here, democratic institutions are weak, the large monopolistic families manipulate the state, and the latter is incapable of monopolizing the use of violence. This makes security the responsibility of those who can either afford it, typically private entities, or own weapons.
The PAPNT does circulate some ideas that are vital to long-term development of the region, such as the development of the “economic corridors” to link the Northern Triangle, promoting intraregional trade. However, historically Central America does not have a strong record in collaborative projects. The three countries share involvement in the same major economic industries making them competitors for control of export markets. This raises the question of how much exchange can actually occur within the Northern Triangle. Despite these economic parallels, shared histories of civil war, and subsequent attempts to ameliorate their civil societies, it will still be a challenge for the Northern Triangle to implement programs that work towards improving the lives of the majority of their populations.
Additionally, investment in oil and natural gas reserves shows promise for Guatemalan economy development, but considerable risk remains for exacerbated inequality and violence as a result of the “Dutch Disease.”[xxi] The Economist describes this as the relationship between the increase in natural resource wealth and the corresponding decline in the manufacturing sector, especially agriculture. With an increase in foreign direct investment to extract the natural resources, the manufacturing sector, which largely supports poor Guatemalans, declines, further reinforcing the corporatist system. Still, educational development, legitimate tax reform, and the formulation of legitimate opportunities that target the poor must be prioritized in order to effectively curtail violence and mass migration.
By: Cameron McKibben, Research Associate at the Council on Hemispheric Affairs
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Featured image by: Joshua Berman, “Modern history in Guatemala, on a monument in the cemetery in Rabinal, Guatemala”
Taken from: https://www.flickr.com/photos/tranquilo/577671975
References:
[i] U.S. Customs and Border Protection, “Southwest Border Unaccompanied Alien Children,” accessed January 13, 2015, http://www.cbp.gov/newsroom/stats/southwest-border-unaccompanied-children.
[ii] El Salvador, Guatemala, Honduras, “Plan of the Alliance for Prosperity in the Northern Triangle: A Road Map,” accessed January 9, 2015, http://idbdocs.iadb.org/wsdocs/ getdocument.aspx?docnum=39224238.
[iii] Saul Elbian, “Guatemalans Aren’t Just Fleeing Gangs,” accessed January 9, 2015, http:// www.newrepublic.com/article/118675/child-migrants-guatemala-are-fleeing-more-just-gang-violence.
[iv] Economic Commission for Latin America and the Caribbean, Statistical Yearbook for Latin America and the Caribbean, December 2013.
[v] Lucilla Bruni, Alberto Fuentes, and Tomás Rosada, “Dynamics of Inequality in Guatemala,” United Nations Development Programme, p. 3; The World Bank, “Guatemala,” accessed January 13, 2015, http://data.worldbank.org/ country/Guatemala.
[vi] “Plan of the Alliance for Prosperity in the Northern Triangle: A Road Map,” p. 3.
[vii]The Center for Justice and Accountability, “Guatemala: ‘Silent Holocaust’: The Mayan Genocide,” accessed January 13, 2015, http://www.cja.org/article.php?list=type&type=294.
[viii] Maureen Taft-Morales, “Guatemala: Political, Security, and Socio-Economic Conditions and U.S. Relations,” Congressional Research Service, August 7, 2014.
[ix] “Global Study on Homicide,” United Nations Office on Drugs and Crime, 2013.
[x] Otto Argueta, Private Security in Guatemala: The Pathway to Its Proliferation (Hamburg, Germany: German Institute of Global and Area Studies, 2010), Working Paper No. 144.
[xi] “Plan of the Alliance for Prosperity in the Northern Triangle: A Road Map,” p. 5.
[xii] The World Bank reports that Guatemala has the second lowest GDP per capita 2012 PPP in the Penn World Table 8.0, with only Honduras ranking lower among Latin American economies.
[xiii] Inter-American Development Bank, “Labor Market Indicators,” 2014; Economic Commission for Latin America and the Caribbean, Statistical Yearbook for Latin American and the Caribbean, December 2013.
[xiv] Jessica Shepherd, “For many children in Guatemala, lessons have to be learned on the street,” accessed January 9, 2015, http://www.theguardian.com/education/2011/mar/08/ global-campaign-for-education-guatemala.
[xv] Ibid.
[xvi] Dennis Stinchcomb and Eric Hershberg, “Unaccompanied Migrant Children from Central America: Context, Causes, and Responses,” Center for Latin American and Latino Studies, p. 17.
[xvii] Steven Dudley, “Part II: Gangs, Deportation, and Violence in Central America, InSight Crime, November 24, 2012.
[xviii] Claire Kumar, “Have Guatemala’s rich finally seen the light on tax?” The Guardian, accessed January 16, 2014, http://www.theguardian.com/global-development/poverty-matters/2012/mar/20/guatemala-rich-tax-reforms-combat-poverty; Victoria Steenbergen, “Tax Reform in Guatemala: The Mechanisms of Interest Group Influence,” MPA International Development, Volume 1 (2013).
[xix] U.S. Department of State, “Central America Regional Security Initiative,” accessed January 13, 2015, http://www.state.gov/p/wha/rt/carsi/.
[xx] Guillermo O’Donnell, On the State, Democratization, and Some Conceptual Problems (University of Notre Dame: Helen Kellogg Institute for International Studies, 1993).
[xxi] “The Dutch Disease,” The Economist, November 26, 1977, pp. 82-83. The term was used to describe the decline of the Netherland’s manufacturing sector following the discovery of a large natural gas field in 1959.