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Central America Today: Violence and Inequality (Surprise)
August 6, 2007

I'm once again obliged to defer the resumption of my recounting of the history of U.S. involvement in El Salvador to discuss briefly current events in Central America, reports of which have been particularly grim of late.


High Government Links to Murder of Salvadoran Emissaries: As reported in La Prensa (Article 1 and Article 2) a deputy of the Guatemalan Parliament, Manuel Castillo—who is also widely rumored to be head of the Jutiapa Drug Cartel—was linked this past week by a government official to the murder of three Salvadoran dignitaries and their driver in late February (see my Weekly commentary for March 19, 2007), due to phone calls he conducted with a known international narcotics trafficker so far identified only as Montaña 3 (the sensational killing has long been suspected to have been motivated by a botched theft of a drug load).

Violence in the Guatemalan Presidential Campaign: As reported in Saturday's New York Times the campaign for president in Guatemala has turned exceedingly violent, even in light of that country's bloody history. There are so far reports of 61 violent incidents against candidates and political activists, with 26 dead. The violence is largely attributed to narcotics traffickers, who are trying to infiltrate the political system (they head several municipal governments, where the local areas have become the sites of airstrips for smuggling operations, and the narcotrafficantes hope to gain additional protection through national Parliament seats).

Álvaro Colom, a businessman and the leading presidential candidate—whose uncle was a presidential candidate in 1979 before being gunned down—stated: "I hate to say this, but it's more violent now than it was during the war." (Nearly 200,000 died in the country's civil conflict, which raged from 1960 to 1996. Today, nearly 6,000 people annually die from violence.)

Ironically (if sadly), Manual Castillo, the deputy cited above as being linked to the murder of three Salvadoran dignitaries, is running for mayor of Jutiapa—and he is expected to win, in no small part due to excessive giveaways, some involving land (contingent on his winning, of course).

Another dubious candidate for national office is Efrain Ríos Montt, a former general and dictator who is running for parliament, and is also expected to win, seriously complicating chances of prosecuting him for war crimes conducted when he led the country. A number of U.S. Congressmen issued a letter to Guatemala's attorney general calling for Ríos Montt's arrest before he can take office.

Also running for office is Nobel Peace Prize winner Rigoberta Menchú, a Quiche Indian whose platform calls for a break from the country's violent past. With few resources, she is not expected to win, and is running far behind others in the race.

Murder rate Increases in El Salvador: La Prensa reported that 335 people were murdered in El Salvador in July, an average of 11 per day, an increase of 100 over the same month last year. Social groups have called for an investigation into death squads linked to the police in the aftermath of the murder of a farmer by a police sergeant and two other police officers in the town of Nueva Esparta, 124 miles from San Salvador, the capital.

Adoption of the Dollar Leaves Many Behind in El Salvador: A Los Angeles Times article by Marla Dickerson noted that El Salvador's adoption of the dollar as its official currency has been onerous to the country's burgeoning poor, while doing little to help the overall country. Touted by the ruling ARENA party and its allies in the financial and commercial sectors, dollarization was supposed to "bulletproof the banking system, lower inflation, reduce interest rates and ignite economic growth by attracting more foreign investment." Normally an antidote to extreme inflation, dollarization was arguably unnecessary in El Salvador, where inflation was a modest 4.3%, and the supposed benefit for exports it was supposed to provide due to the international weakness of the dollar turned out to be fictive because most of El Salvador's exports go to the United States. On the plus side, it has managed to lower market interest rates and thus help banks borrow dollars cheaply in U.S. financial markets and re-lend them profitably at home without exchange-rate risks. But economic growth has been a lackluster 2.6% annually, a whole percentage point lower than it was for the six years prior to dollarization. Investors still see the social and political situation in El Salvador as too volatile to justify the risk, plus it has a relatively small domestic market, and relatively high wages compared to its neighbors (which is an indication of just how endemic poverty is in the region). The government's refusal to raise taxes to improve security, fight poverty, and boost productivity by investing in infrastructure and education for its workforce entrenches the economic sluggishness (all of which hammers the final nail into the coffin of Paul Wolfowitz's recent remarks that El Salvador has "the strongest economy in Central America").

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