Central America’s Innocent Children and its Ravenous Oligarchs: The Circle that Joins Remittances and Violence in Guatemala and El Salvador – by Joaquín Villalobos (El País)

~ This opinion piece was originally published in El País on July 12, 2014 ~


The drawn out crisis of society and security in Guatemala, Honduras and El Salvador has turned into an unprecedented humanitarian emergency. Tens of thousands of children are fleeing north on a 3,000-kilometer journey dominated by danger. The fundamental cause of this crisis comes from the brutally extractive economies prevalent in those countries. The six million migrants from these countries who live in the United States would make up 12 percent of the population of Guatemala, 14 percent of that of Honduras and 40 percent of that of El Salvador. Over the last two decades, these Central Americans have sent their countries the astonishing sum of 12.4 billion dollars in remittances. Exporting poor people has become the local oligarchs’ most profitable business.

The debate about this crisis has been framed in terms of consequences and not causes. People talk about Mexico’s responsibility regarding threats migrants face along their route north, or the delay in US immigration reform and they even talk about organized crime that produces Colombian cocaine. The problem is that remittances have strengthened this extractive model resulting in an artificially financed consumption-based economy the profits of which go to the country’s most powerful families. Just like the earnings from the gas industry, that allows it to be effortlessly rich, earnings from remittances are disfiguring economies, ending incentives for production, multiplying the oligarchs’ wealth, creating inequality of tragic proportions, destroying families and communities and fomenting large-scale social violence and criminality.

El Salvador each year imports around 8.5 million dollars and half of these imports come from remittances. Large shopping centers have multiplied, agriculture abandoned, the economy has not grown for two decades, chronic unemployment abounds, the population leaves in large numbers, people traffickers are economic engines and gangs govern poor neighborhoods. Honduras and Guatemala have joined this model. The rich take charge of remittances to feed consumption; they take the money out of their own country and turn themselves into regional or global business people.

The powerful families from these countries have investments in Florida, Panama, Dominican Republic, Colombia, Nicaragua and Costa Rica. Just one of them invested 250 million dollars in a tourist resort in the Dominican Republic. There are no objective reasons why rich people from Guatemala, Honduras and El Salvador should invest in their countries and make an effort to reduce immigration. The rich see the dangers faced by migrants on their journeys and from mass deportations as transportation risks and the return of merchandise. Remittances have made the rich richer than they were when they were just landholders.

According to data provided by consultant Wealth-X, in Guatemala, Honduras and El Salvador there are 610 ultra-rich with 8 billion dollars and this group takes the lion’s share of 1.2 billion dollars coming in from the United States. In the face of such wealth from the oligarchs, it seems absurd that President Obama wants to use 3.7 billion dollars to deal with the emergency.

Guatemala, El Salvador and Honduras are falling into a vicious circle that connects remittances to violence. More emigration means more remittances, more remittances means less productivity, less productivity means more unemployment, more unemployment leads to more violence and more violence results in more emigration. The gangs are the exponential product of dysfunctional families and the destruction of the social and community fabric left by emigration. Gangs rule neighborhoods and communities through extortion, which really only affects the poor, even down to newspaper sellers. In the Honduran capital, 1,600 small businesses closed because of violence in 2012 alone. Emigration is a violent social catastrophe for the poor and it is big business for the rich.

Public security doesn’t matter to the rich in these three countries. They protect themselves with private security. The police, who are few in number, are poorly paid. In Guatemala, there’s a place created for rich people called Paseo Cayalá. It is a space of fourteen hectares, closed off by walls, with all services inside; it creates a world far from crime and insecurity. Private security agents in Guatemala number 125,000 while the police are just 22,000. It’s the country in Latin America where, in proportion to the number of its inhabitants, they sell the most armored cars. It has one of the continent’s largest private fleet of aircraft: 406 planes and 142 helicopters are registered as privately owned.

Rich people from Guatemala, Honduras and El Salvador have become totally insensitive to the reality that surrounds them. They protect themselves with their own security. They pay starvation wages. They do not invest in their countries and they resist paying taxes. They are fanatics to the idea that foreign investment can solve the problems of stunted states. In 2011 Honduras created a program called Honduras Open for Business (Honduras abierta a los negocios) that gives away land in exchange for others taking control of the country. Three years after the program started, investors have not arrived because Honduras is the world’s most violent country. El Salvador’s businessmen now want to copy this failure.

Neither the United States, Mexico nor cocaine can be blamed for this crisis. Why are children not fleeing north from Costa Rica, Nicaragua or Panama? In spite of the fact that they are also countries with inequality, the reality is that revolutionary Nicaragua, Keynesian Costa Rica and the Panama founded by Torrijos through the recovery of the canal, each have growing economies, attract foreign tourists and investment, don’t have a large-scale security crisis and in the examples of Panama and Costa Rica they do not expel workers but need them. Panama receives remittances worth 214 million dollars and sends 374 million dollars abroad. If China builds the canal in Nicaragua, the three southern countries of Central America will once again become a potential point of attraction for development and the three northern countries will stop sinking.

In 2011 Guatemala hosted a summit with the presidents of Central America, the United States, Mexico and the European Union. On that occasion, then Secretary of State Hillary Clinton told the region’s business leaders: “The rich in each country must pay their share of taxes. The poor must not finance security.” The principal cause of the emergency, however, is the voracious oligarchs of El Salvador, Guatemala and Honduras. This humanitarian emergency is an earthquake that has left behind casualties. It is the extractive economic model that is creating refugees. Undoubtedly it is important to be in solidarity with the children who flee, but the oligarchs must be pressured and sanctioned. Mexican and American taxpayers should not have to take on the costs of this emergency since it means that they are subsidizing the mansions, yachts and aircrafts of those who are responsible for this crisis.

Joaquín Villalobos was a guerrilla in El Salvador and is now a consultant for the resolution of international conflicts. This opinion piece was published under the title, “Niños inocentes y oligarcas voraces: Guatemala, El Salvador y Honduras están cayendo en un círculo que conecta remesas con violencia,” http://elpais.com/elpais/2014/07/11/opinion/1405107829_400238.html.

Translator Patrick Timmons is a human rights investigator and journalist. He edits the Mexican Journalism Translation Project (MxJTP), a quality selection of Spanish-language journalism about Latin America rendered into English. Follow him on Twitter @patricktimmons. The MxJTP has a Facebook page: like it, here.

About Michael Lettieri

Program Officer at the Trans-Border Institute

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