The Multinational Monitor



The Big Stick Waves Again

In recent weeks, the Reagan Administration's rhetoric about Central America and the Caribbean Basin has reached a desperate - and absurd - level. Reeling from the near-collapse of the Salvadoran government and military, the administration has begun a last-ditch campaign to convince the American people that a massive package of economic and military aid to the region is essential to the national security of the United States.

The leader of the campaign, of course, is Ronald Reagan. On March 4, he warned that other countries in the hemisphere "would follow" if the government of El Salvador lost the war against left-wing guerrillas.

A week later, he proposed a $300 million aid package to Central America - and extended the new domino theory a step further. A leftist victory in El Salvador would increase "the threat to Panama, the Canal and ultimately Mexico," he said.

In a television interview, Defense Secretary Caspar Weinburger added another factor. "Moscow's purpose" in El Salvador, he said, is to force the U.S. to "pull ourselves out of Europe, and out of Japan and Korea, and establish some sort of fortress of America concept."

Secretary of State George Schultz, on the other hand, has stressed business and trade interests. In testimony to a U.S. Senate sub-committee, he said that aid to El Salvador is in the U.S. national interest because "the country itself and the region are close to us. A great deal of our commerce flows through the region.. .It is in our national interest to see this neighborhood prosperous and developing because it provides trade back and forth for our country, jobs here and raw materials coming this way..."

Reagan, too, has emphasized this angle. "50% of everything we import comes through the Caribbean, the Panama Canal," he said in a San Francisco speech. "It is vital to us that democracy be allowed to succeed in these countries." In an address to the National Association of Manufacturers, he linked aid to Central America to the Caribbean Basin Initiative (CBI). "To make sure that this assistance is as productive as possible," he said, "I will continue to work with the Congress for the urgent enactment of the long-term opportunities for trade and free initiative contained in the (CBI)."

But will massive economic and military aid to this troubled region bring "prosperity?" A look at Jamaica - the administration's model Third World country - tells us quite the opposite.

As outlined in our article beginning on page 15, the David Rockefeller/Reagan Administration development scheme for Jamaica has caused serious hardships for Jamaican workers. As the government has cut back on its public spending, hundreds of workers have been laid off; unemployment is now 26% of the work force. Despite new incentives, multinational corporations are not flocking to the island to invest. The bauxite industry has been crippled by falling commodity prices and the big mining companies are getting bailed out by large U.S government purchases of bauxite ore for the U.S. strategic reserves. And, as reported in the Wall Street Journal on March 11, even the Seaga government is beginning to have doubts about the stringent conditions imposed on the country by the International Monetary Fund (IMF). (New measures sought by the IMF "would result in 10,000 additional unemployed workers, i.e. an overall increase in unemployment of 1%," the pro-corporate Prime Minister protested to a group of American diplomats.)

But these problems are not unique to Jamaica. Throughout the Caribbean and Central America, governments are having problems coping with the world recession and the demands of the IMF and U.S. multinational corporations. In a number of countries, U.S. companies have cut back on their investments or are involved in disputes with local governments. One such dispute involving United Brands Corporation and Panama is described on page 7.

The socialist countries of Cuba and Nicaragua are also having their problems and are trying to develop their economies through a limited program of foreign investment (see page 19). These attempts - and their obvious need for stability and cooperation in the region - cast doubts on another Reagan claim: that these countries are leading the "Soviet-inspired attempt to destabilize the region. Reagan's claims that Cuba and Nicaragua are also the primary source of arms for Salvadoran guerrillas have been contradicted by both the Washington Post and the New York Times, which have reported that most of the arms have been captured by the guerrillas from their own government.

What, then, is the fuss about?

Like most of his predecessors, President Reagan sees Central America and the Caribbean as an extension of U.S. territory. While current policy is not directly administered by the corporations - as it was in 1954, when the CIA overthrew a progressive government in Guatemala for the benefit of United Fruit Company - it acts from the same premises: the business of the hemisphere ("our hemisphere" Reagan calls it) is business - American business. The focus of U.S. policy, as it has been for over 100 years, is to preserve the area for American investments and markets, and prevent the basin countries from developing their own independent development strategies. As Roger Burbach of the Center for the Study of the Americas points out in his interview on page 14, this is a primary aim of the Caribbean Basin Initiative.

But guns will not solve the terrible problems of poverty, malnutrition and unemployment in the area. Without addressing these issues, there can be no security in the region, either for the people of the Caribbean and Central America or the United States.

What's needed is a new policy that starts with the legitimate needs of the people of the region. What's not needed is another "big stick" policy. The U.S. should stop its military aid to repressive governments in the region, particularly El Salvador and Guatemala, begin a dialogue with the governments of Cuba, Nicaragua and Grenada, and demand negotiations between the Salvadoran government and the Revolutionary Democratic Front (FDR) of El Salvador. Only with a peaceful settlement of the crisis can life resume for this beleaguered region, and a more equitable relationship between the U.S. and the Caribbean Basin develop.

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