G - Transnat

Development and Change Vol. 29 (1998), 467±497. # Institute of Social Studies 1998. Publishedby Blackwell Publishers Ltd, 108 Cowley Rd, Oxford OX4 1JF, UK.

(Mal)Development in Central America:Globalization and Social Change

William I. Robinson

ABSTRACT

This article develops a globalization framework and a model of transnational

processes for analysing social change and development, and then applies the

model to Central America. The analysis emphasizes determinacy, in the last

instance, of social forces in historic developmental outcomes, and documents

how social forces in struggles in an emergent transnational environment have

shaped Central America's changing pro®le within the global economy and

society. Revolutionary movements, a new class structure, US geo-political

considerations, and the internationalization of East Asian economies, have all

contributed to a new model of development; from the 1960s into the 1990s

the national model of development is being replaced by a transnational

model. Maquiladora garment production, tourism, non-traditional agricul-

tural exports, and remittances from emigrant workers are coming to eclipse

traditional agro-exports as the most dynamic economic sectors linking the

region to globalized circuits of production and distribution. The article also

examines Central American migration to the US and gender dimensions of the

new transnational model of development.

INTRODUCTION

This article is concerned with globalization and transnational processes, andwith how these processes may help explain development and social changein Central America in recent decades. The economies, states, polities, classstructure, and external relations of the ®ve Central American republics (CostaRica,Guatemala, El Salvador,Honduras andNicaragua)were fundamentallytransformed between the 1960s and the 1990s. Much of the literature onCentral America has focused on one or another dimension of change, such aseconomic restructuring, the armed con¯icts of the 1980s, the peace processesof the early 1990s, `democratization', new social movements, and so on.Analysis of speci®c dimensions of social change is very useful, but I am con-cerned here with the worldwide historical processes and the deeper structuralforces that inform these more conjunctural changes. Presenting a `big picture'

I would like to thank Kent Norsworthy, Asafa Jalata, Gioconda Robinson, Kevin Robinson,

and three anonymous reviewers for critical comments on earlier drafts of this article, and Nora

Hamilton, Norma Chincilla, and Kristine Zentgraf for their contributions.

of historic movement allows us to uncover the interconnections that weavetogether seemingly disparate elements of social change into a coherent whole.

The `big picture' is globalization. Globalization represents an `epochalshift' (Ruggie, 1993; Waters, 1995). It is the underlying dynamic that hasshaped events worldwide on the eve of the third millennium, and constitutesthe `macro-structural-historical' backdrop to Central America's recent past.My argument is that complex transitions began in Central America in the1960s and have continued into the 1990s. This thirty-year transition in theregion can be characterized as Central America's ongoing, gradual, highlycon¯ictive, and highly contradictory, rearticulation to the world economyand global society. When I refer to transitions, I do not mean `to democracy',or `to peace', or `to a market economy'. Rather, I mean a period of ongoing,fundamental change in the social order, involving a complete restructuring ofCentral American countries at all levels: changes of political regime, changesin the economy, change in social and cultural institutions, a restructuring ofclasses, and so forth.

The analytical instrument for understanding these changes are trans-national processes. Globalization involves transnational processes in eachcountry and region of the world. Understanding social change involvesconcrete analysis of concrete events, and sensitivity to the speci®c and con-junctural circumstances of change. However, good social analysis alsorequires that we identify deeper historical and structural processes at workthat form the backdrop, and often exercise structural determinacy, in shapingthe speci®c and the conjunctural. This essay examines transnational processesin the Greater Caribbean Basin; more broadly, it is also concerned withgeneralizing propositions on globalization that can be drawn from the CentralAmerican region and applied to other regions and to the global system as awhole, andwith how this may contribute to an understanding of social changeand development in the twenty-®rst century. Development is conceived herein the broadest sociological sense as an integral social, economic, political,and cultural process embedded in macro-structures and their changes overtime. I wish to highlight the determinacy, in the last instance, of social forcesin historic developmental outcomes, and will focus on how social forces instruggle in an emergent transnational environment shape the pro®le ofparticular countries and regions within the global economy and society.

The article is divided into three parts. The ®rst discusses globalization andtransnational processes. The second explores how these processes haveunfolded in Central America and the Greater Caribbean Basin. As a caveat,this section is necessarily a brief overview of complex issues given spaceconstraints. It is largely limited to structural analysis, although elements of arelational perspective are included. The third section, by way of conclusion,alludes to the issue of agency. It points to both old and new contradictions inCentral America that have not been resolved, to the social forces that can beexpected to protagonize further change in the region, to the prospects fordevelopment, and to directions for future research.

468 William I. Robinson

GLOBALIZATION AND TRANSNATIONAL PROCESSES

The fundamental dynamic of our epoch, from the 1960s on, is globalization.Globalization represents a transition from the nation-state phase of capital-ism to a qualitatively new transnational phase.1 World-system theory appro-priately notes that capitalism has incorporated over the past 500 years allregions and people of the world into a single `modern world system'(Wallerstein, 1974). However, world capitalism is undergoing fundamentalrestructuring that involves institutional and organizational changes ofsystemic importance. This includes, contrary to orthodox world-system andother nation-state-centric theories in the social sciences, a supersession of thenation-state system as the axis of world development and the organizingprinciple of a larger global system. From Westphalia into the 1960s, capital-ism unfolded through a system of nation-states that generated concomitantnational structures, institutions, and agents. In this nation-state phase ofcapitalism, nations were linked together into a larger world system via tradeand ®nancial ¯ows. This was a world economy. Under global capitalism, theprocess of production itself has become transnationalized (see, for example,Dicken, 1992; Gere� andKorzeniewicz, 1994; Howells andWood, 1993). Theworld economy has given way to a global economy. Nations are no longerlinked externally to a larger world system, but internally to a single globaleconomy and society.

Economic globalization is bringing with it the material basis for the trans-nationalization of political systems, of civil societies, and the globalintegration of social life. Globalization has increasingly eroded nationalboundaries, and made it structurally impossible for individual nations tosustain independent, or even autonomous, economies, polities, and socialstructures. The underlying structural dynamic in individual nations andregions of the world over the past few decades has been integration intoemergent global society. This has involved the breakup over the past thirtyyears of national economic, political and social systems reciprocal to thebreakup of a pre-globalization nation-state based world order as global-ization has advanced. Structures, institutions, and agents that were earliernational are becoming transnationalized. Nation-state frameworks ofanalysis that reify the nation-state (con¯ating, in the process, nation-stateswith states) see dynamics between nation-states and their respective nationalstructures, institutions, and agents as the fundamental locus of worlddevelopments and social change. These modes of analysis are ill-equipped tocapture the transnational essence of phenomena that unfold within the formalboundaries of countries. Superseding a nation-state framework of analysis

1. Studies on globalization are voluminous. Among works that share the general perspective

advanced here, see Gill and Law (1987); Robinson (1996a, 1996b, 1996c); Ross and

Trachte (1990); Sklair (1995).

(Mal)Development in Central America 469

enhances our cognitive understanding of the nature and meaning of changetaking placewithin particular countries and regions (Robinson, forthcoming).

Transnational processes in Central America should be seen as changesspeci®c to the region that are linked to broader systemic changes. What arethese systemic changes? At the level of the global whole, it is the transitionfrom a world economy to a global economy. The emergence of globally-mobile transnational capital has allowed for the decentralization andfunctional integration around the world of vast chains of production anddistribution, the instantaneous movement of values, and the unprecedentedconcentration and centralization of worldwide economic management,control, and decision-making power in transnational capital. Transnationalcapital is the agent of the global economy, and it is managed by a trans-national eÂ lite. This eÂ lite is transnational because it is tied to globalized circuitsof production, marketing, and ®nances unbound from particular nationalterritories and identities, and because its interests lie in global over local ornational accumulation. Its members therefore exhibit a congruence ofobjective interests, if not always subjective identities, that set it apart fromspeci®c nation-states. This transnational eÂ lite now controls the levers ofglobal decision-making and its programme, in broad strokes, is to create theconditions most propitious to the unfettered functioning of global capital-ism. It operates through core country states, through supranational formalinstitutions such as the International Monetary Fund (IMF) and otherinternational ®nancial agencies (IFIs), and through informal governmentalinstitutions, such as the G-7 Forum, and informal private institutions, suchas the Trilateral Commission and the World Economic Forum.2

I have documented elsewhere (Robinson, 1996a, 1996b, 1996c) how thistransnational eÂ lite has been pursuing since the mid-1980s a `transnationalagenda' involving concomitant economic and political projects. The economicproject is neo-liberalism, a model which seeks to achieve the conditions ineach country and region of the world for the mobility and free operation ofcapital. The neo-liberal structural adjustment programmes sweeping LatinAmerica and the South seek macroeconomic stability as an essential requisitefor the activity of transnational capital and for social reproduction as awhole.The model seeks to harmonize a wide range of ®scal, monetary, industrial,and commercial policies among multiple nations, as a requirement forfully mobile transnational capital to function simultaneously, and ofteninstantaneously, among numerous national borders. In the neo-liberal model,stabilization, or the package of ®scal, monetary, exchange and relatedmeasures intended to achieve macroeconomic stability, is followed by`structural adjustment': (a) liberalization of trade and ®nances, which opensthe economy to the world market; (b) deregulation, which removes the state

2. For detailed discussion on these issues, see, for example, Cox, 1987; Gill, 1990, 1995;

van der Pijl, 1995; Robinson, 1996a, 1996b, 1996c; Sklair, 1995.


from economic decision making; (c) privatization of formerly public spheresthat could hamper capital accumulation if criteria of public interest overprivate pro®t is left operative. This model thus generates the overall con-ditions for the pro®table (`e�cient') renewal of capital accumulation throughnew globalized circuits, and along with it, for social reproduction in the age ofglobalization.

In turn, the political project is the consolidation of political systems thatfunction through consensual mechanisms of social control, that is, through`democracy', or what is more accurately called `polyarchy', to evoke the term®rst coined by Robert Dahl. Polyarchy refers to a system in which a smallgroup actually rules, and participation in decision making by the majority iscon®ned to choosing among competing eÂ lites in tightly controlled electoralprocesses. This type of `low-intensity democracy' does not involve power(cratos) of the people (demos), much less an end to class domination or tosubstantive inequality that is growing exponentially under the global eco-nomy. Under polyarchic political arrangements, social control and domina-tion is hegemonic, in the Gramscian sense, rather than coercive, as it is in anauthoritarian system. Authoritarian systems tend to unravel as globalizingpressures break up previously embedded forms of political authority, dis-locate traditional communities and social patterns, and stir masses of peopleto demand the democratization of social life.Masses push for a deeper populardemocratization while eÂ lites, who have behind them the structural power oftransnational capital and the inordinate political and ideological in¯uencethat this brings, push for managed transitions from authoritarianism topolyarchy (Gill, 1993; Robinson, 1996a, 1996c). With its mechanisms forintra-eÂ lite compromise and accommodation and for hegemonic incorporationof popular majorities, polyarchy is better equipped in the new global environ-ment to legitimate the political authority of dominant groups and to achievethe political stability necessary for global capitalism to operate.

Development theories need to be recast in light of globalization. Product-ive structures in each nation are reorganized reciprocal to the reorganizationof global production, a process through which each national economybecomes subordinated to the global economy, and new economic activitieslinked to globalization come to dominate. The `New International Divisionof Labour' (NIDL) literature has documented the concentration of ®nances,services, technology and knowledge in the North, and the shift to low-wagezones of labour intensive phases of globalized production,3 along with theintroduction in the South of new primary and new tertiary activities thatservice the global economy. These empirical processes are evident butthis NIDL should be seen as a transitional form and not a ®xed structure.

3. On this NIDL, the most requently cited study is Frobel et al. (1980), although there is a

considerable literature on the subject with diverse interpretations. See, for instance, varied

entries in Caporaso (1987).


It emerges from an earlier centre±periphery division of labour that wascreated by modern colonialism and which re¯ected a particular spatialcon®guration in the law of uneven development (Robinson, forthcoming).That particular con®guration is gradually becoming outdated by globaliza-tion, which accelerates diversity between countries and regions and alsobetween population groups within countries. It would be better, as Adler(1996) has argued, to conceptualize an emerging Global Division of Labour(GDL) characterized by variation, specialization, and asymmetries that cutacross nations and regions.

Sassen (1991) has suggested that the international mobility of capitalcreates new speci®c forms of articulation among di�erent geographic areasand transformations in the role played by these areas in the world economy,for example, zones of export processing, o�shore banking, global cities asnodes of worldwide management and control. Here I wish to accomplish twothings; ®rst, to apply this proposition to Central America to explore theregion's changing articulation to the global system in light of the trans-nationalization of capital; second, to expand Sassen's focus to concrete socialforces in historic struggles and how the outcome of these struggles becomescentral to the types of rearticulation that regions and populations will acquireand what modi®ed pro®les they will display in the global system. Theparticular form of rearticulation that emerges through transnational pro-cesses has varied from region to region (see, for example, Gere� andWyman, 1990). In Latin America, the pre-globalization model of society hasbeen replaced with a new transnational model. In broad strokes, the nationalmodel involved: national development projects, particularly along the linesof import-substitution industrialization (ISI) and the expansion of domesticmarkets; the salience of national classes tied to these markets (nationalbourgeoisies and subordinate groups); national political projects (oftenpopulism under authoritarian arrangements), and so forth. In the transna-tional model of society ISI has been replaced by a full neo-liberal opening tothe global economy and Export-Led Development (ELD) that favour newcircuits of production and distribution linked to the global economy; trans-national classes have gained ascendance over national classes; authoritariansystems have been replaced by polyarchic political systems; a culture ofhyper-individualism and consumerism has eclipsed nationalist and develop-mental ideologies; and so on.

Central America is one site of emergent transnational processes. By trans-national processes I mean the economic and concomitant social, political,and cultural changes associated with the transition to global capitalism(Robinson, 1997). A typology of transnational processes is an analyticalconstruct that facilitates analysis of these changes. Presented as an ideal-type,transnational processes include the following four aspects:

(a) subordination and integration of formerly national and regionaleconomies into the global economy, including the introduction of new


economic activities. Di�erent countries and regions assume new specializedpro®les in the GDL;(b) a complete class restructuring, in which domestic classes tend to becomeglobalized, pre-globalization classes such as peasantries and artisans tendto disappear, and new classes and class fractions linked to the globaleconomy emerge and become dominant. This is part of what I refer to morebroadly as transnational class formation, a process unfolding in bothcentre and periphery, including the United States;(c) the transnational project of neo-liberalism and polyarchy takes hold asthe hegemonic project under the guidance of transnationalized fractions ofthe eÂ lite;(d) local political systems and civil societies become transnationalized,states become integrated externally into supra-national institutions andforums that gradually assume more and more functions that correspondedto the nation-state in the pre-globalization period. National states remainimportant, but they become transmission belts and local executers of thetransnational eÂ lite project discussed above.

The next section explores how these processes have unfolded in CentralAmerica.

CENTRAL AMERICA AS A SITE OF TRANSNATIONAL PROCESSES

Central America was ®rst created, and then integrated into the `modernworld system', through colonial conquest in the early sixteenth century,as part of the system's genesis. The colonial structure was established andsustained until well into the nineteenth century, when the region deepened itsinsertion into the world system after independence with the establishment ofwhat Torres Rivas (1993) has termed `agro-export societies'. The region'sinsertion was further deepened and transformed in the twentieth century, andparticularly in the post World War II period, with the expansion of agro-exports and ISI industrialization through the Central American CommonMarket (CACM). Since the 1970s, there has been a transition to a qualit-atively di�erent mode of insertion corresponding to globalization: thegradual entrance of Central America into global society over a period ofseveral decades, culminating in the 1990s. It indicates what Varas (1993) hasaptly called `from internationalization to transnationalization'. Between the1970s and the 1990s, the typology of transnational processes identi®ed abovehas taken hold as the region has become integrated into the emergent globaleconomy and society. This integration has involved the following:

Economy: maquiladora production (particularly of garments), tourism,non-traditional exports, and remittances from Central Americans workingin the USA, have risen dramatically in prominence as the four new dynamiceconomic activities linking the region to the global economy and have


begun to overshadow the region's traditional agro-export model, whichcorresponded to the pre-globalization period. Neo-liberal restructuring hasadvanced in every country in the region. The ISI model of populist develop-ment has been replaced by the neo-liberal model of free-market capitalism,including sweeping liberalization and privatization.Class Restructuring: the Central American peasantry, artisan class, nationalindustrial and other pre-globalization classes have tended to graduallydisintegrate, and the three principal globalization groups have come to theforefront: transnationalized fractions of the bourgeoisie tied to the neweconomic activities; new urban and rural working classes; and a new classof supernumeraries, or super¯uous labour pools. A huge portion of thelatter have migrated to the USA, where they constitute a de-nationalizedimmigrant labour pool. (This indicates another aspect of globalization,namely, the increasingly transnational mobility of labour and the gradualsevering of labour from speci®c national identities.)Dominant Political Project: the old authoritarian regimes have crumbledthrough transitions to polyarchy, and leftist movements that in the 1980sposed an anti-systemic alternative to integration in the emergent globalorder have been defeated or transformed. In each Central Americancountry, a transnationalized `technocratic' or New Right fraction hasgained hegemony within the dominant classes and is pushing the trans-national agenda of neo-liberalism and the consolidation of polyarchiesthrough diverse institutions, including political parties, states, and theorgans of civil society.State and Political System: each Central American state has been reducedand transformed. The IFIs and diverse UN and OAS units and other trans-national actors have come increasingly to assume functions of statesthrough the design and imposition of economic policies, management ofpeace accords, sponsorship of institution-building, and so on. The ®veCentral American states have moved gradually towards supra-nationalintegration. This integration is political, taking place through new formaland informal forums, such as the Sistema de Integracion Centroamericana(SICA), the Central American Parliament (PARLACEN), and regularpresidential summits and region-wide ministerial meetings. It is alsoeconomic, and includes the negotiation of a new free trade zone based oncollective integration into the North America Free Trade Agreement(NAFTA), and beyond it, the global economy.

Transnational Processes, Social Structures, and Social Forcesin Central America

Seen in more analytical abstraction, the typology of transnational processesis predicated on the notion of a shift from one set of structures to another.The ®rst set corresponds to the nation-state phase of world capitalism, and


the second to the still-emerging transnational stage of capitalism, in whichtransnational processes take hold and begin to exercise a structural deter-minacy in the regional social formation. Social structures are constructed andconstantly reconstructed through the struggles of diverse social forces. Setsof structures usually become stabilized during periods of equilibrium, orstalemate, among contending social forces, and then unravel as internalcontradictions mature and give way to new upheavals. From the 1960sonwards, the post World War II social structure in Central America couldnot be reproduced and began to unravel. As Vilas (1995) notes, this was aperiod of very rapid Ð and successful Ð capitalist development in theIsthmus. Vilas notes that the massive dislocations brought about by capitalistdevelopment and the new sets of social contradictions, rather than the lack ofchanges and development, spawned the social crisis, the political, and laterthe military con¯ict that engulfed the region.

For the purpose of analytical conception, this analysis divides the under-lying historic movement in the region in recent decades Ð that is, the gradualintroduction of globalizing dynamics and transnational processes Ð into athree-part periodization. It then transposes over that periodization an analysisof three distinct blocs of social forces in dispute over the social structure inCentral America. The three overlapping periods are, ®rstly, the `reign of theoligarchies' (1945±70s); this period, occurring during the nation-state phaseof world capitalism, stabilized during the dramatic post World War IIexpansion of the world economy under US domination that followed the1930s crisis of world capitalism. Secondly comes the period of revolutionaryascendance and revolutionary challenge to oligarchic dictatorships (1970s±80s), which represented the response of social forces in the region to oligarchicdictatorship within a structural backdrop of worldwide stagnation andinstability that began in the 1970s. In turn, this period of global uncertaintyre¯ected the dislocations and restructuring associated with the breakup of aworld order based on nation-state capitalism. Finally, there is the period ofthe emergence, ascendance and hegemony of the transnational project forCentral America (1980s±90s). This period is still open-ended. It is reciprocalto the incipient consolidation and hegemony of the new global capitalism.

Three broad social forces representing three distinct projects for the regionwere in dispute during the upheavals and transition in the Central Americansocial formation in the 1960s±90s. The landed oligarchies and dominantgroups tied to the traditional agro-export model sought to sustain andreproduce the old model of capital accumulation, and the particular set ofsocial privileges and relations of domination based on authoritarian politicalsystems. Oligarchic domination was the organic expression of the actualsocio-economic structure. It was the outcome of an intense period of classand social struggle in the region between the two World Wars, andparticularly the 1930s crisis of world capitalism. These struggles ranged fromSandino's 1926±33 movement in Nicaragua, to the failed 1932 uprising andsubsequent matanza in El Salvador, and the CIA-orchestrated overthrow of


Jacobo Arbenz in 1954, marking the end of the reformist period inGuatemala. The dominant groups granted an unusual amount of autonomyto civilian±military dictatorships to contain the contradictions generated bythe socioeconomic structure itself. As the `Autumn of the oligarchs'approached, the popular sectors and the mass revolutionary movementssought radical reformism, such as mass land redistribution, as well as morefar-reaching revolutionary and socialist-oriented alternatives for the region,that would have deeply undermined the class structure, upset relations ofdomination, and redistributed power and resources in favour of popularmajorities.

As the regional con¯ict unfolded in the 1970s and 1980s, on the surface itappeared to be a bipolar contest between the old oligarchies and the popularrevolutionary movements. In fact, globalizing dynamics had begun to have atransformative e�ect on local social forces. A New Right gradually coheredin the 1980s, in ®ts and bouts, into local transnationalized fractions ofdominant eÂ lites and acquired its own political protagonism. Its project was toadvance the agenda of the transnational eÂ lite. This transnational fraction wasnot a group that came into being from outside of the traditional oligarchybut from within, from the same family networks. The New Right's prospectsfor accumulating further wealth and privilege, however, were less linked torestoring the traditional agroexports and industries under pre-1980s socialrelations, as they were to converting the region into a new export platform. Itsought to submit backward oligarchic property relations to a capitalistmodernization through a programme of neo-liberal restructuring and to anew `competitive' insertion into the global economy. The New Right projectsought to modernize the state and society without any fundamental decon-centration of property and wealth, and without any class redistribution ofpolitical and economic power. It also promoted, together with the USA,transitions from authoritarian to polyarchic political systems. The immediateaim was to preempt the movements for a more far-reaching popular demo-cratization through immediate polyarchic reform, such as the replacement ofmilitary by civilian personnel and `demonstration elections' (Herman andBrodhead, 1984). Beyond this conjunctural consideration, however, anyrenewal of capital accumulation in the region would require a political systemwith the promise of achieving more lasting social stability through con-sensual modes of social control rather than the old oligarchic dictatorships.Developing viable polyarchic political systems involved demilitarization,peace negotiations, the institutionalization of procedurally correct electoralprocesses, states with a functional separation of powers, and so on.

The persistence of an oligarchic political structure combined with rapidcapitalist development spurred on by the region's incipient integrationinto the emergent global economy in the 1960s and 1970s had sparkedrevolutionary upheavals by the late 1970s. The revolutionary movementssucceeded in breaking the hegemony of the landed oligarchy and richindustrialists and ®nancial groups that had come into existence within the


CACM. However, due to a complex con¯uence of factors, these social forceswere unable to impose and stabilize their project of a radical redistributiveand socialist-oriented reconstruction of the region. One of these factors wasmassive US intervention. A second was the contradictions and weaknessesinternal to the revolutionary project itself, in the context of a changing worldorder. At the structural level, the emergence of the global economy and thegrowing power of transnational capital and the world market to imposediscipline on anti-systemic movements made inviable the revolutionaryproject. A third was the changing composition of the dominant classes, theirsocio-economic articulation, and their political-ideological project.

These three factors cannot be separated; they are internally related andshould be seen as di�erent dimensions of a process whose structural deter-minacy was the emergence of the global economy and the in¯uence ofglobalizing pressures on the complex set of regional agents and social,economic and political structures. This article is limited largely to structuralanalysis. However, the notion of determinacy here is not one of functionalistteleology. Collective behavioural responses to changing structures in them-selves shape, modify, and feed back into structural change. It was the threat ofrevolution from the popular classes that made inviable the reproduction of theold structures and that led to US intervention. US policy-makers changed theobjective of interventionism, from the mid-1980s onwards, from a militarydefeat of revolutionary forces through counterinsurgency to a more thoroughpolitical and economic restructuring of the region and its social forces via thelinkage of Central America to emergent global structures. This included ashift in policy to `democracy promotion' as a means to neutralize throughincorporation the threat posed by anti-systemic forces in the broader e�ort toconstruct a new historic bloc in the region. From the mid-1980s, changes inthe US strategy and new opportunities Ð as well as constraints Ð opened byglobalization and a changing world order for the distinct social forcesaccelerated the articulation of alternative political-ideological discourse andprojects among sectors of the dominant groups that would gradually cohereinto a New Right eÂ lite (Robinson, 1996a, 1997). The emergence of the neo-liberal New Right in the 1980s in each of the Central American countries wasthus, in part, a result of the revolutionary upsurge, which altered the dominantpower blocs in each country. It was also, in part, a result of the changes in theworld order with the emergence of the global economy and a transnationaleÂ lite as both a political and economic protagonist. The transnational nuclei ofthe local eÂ lite vied for, and achieved, hegemony over the eÂ lite as a whole in the1980s, and went on in the 1990s to assume state power and to implement theprogramme of global capitalism in the region.

The recomposition of the social order involved a new social structure.Political regime change in each country (except Costa Rica) has been onlyone aspect of a broader transition in the nature of political authority and themode of social control in the region. What took place structurally from the1960s to the 1990s was the breakup of authoritarian systems on the heels of


the mass socio-economic disruptions and political mobilization caused bythe large-scale entry of foreign capital through the CACM, new economicactivities, and social class protagonists, which signalled the beginnings ofglobalization in the Isthmus. The outcome of the social upheaval was theconditional defeat of the broad popular sectors in Central America and theconditional victory of the new dominant groups.4 This outcome was formal-ized in the internationally-sponsored peace negotiations of the late 1980s andearly 1990s, followed by diverse concertacion and `reconciliation' forumswhich transferred social contradictions from the military to the politicalterrain, and hammered out fragile and temporary pacts, but did not resolvethe social contradictions that gave rise to the upheaval (Robinson, 1994). Ireturn to this point brie¯y in the conclusion. Before exploring in more detailthe emergent transnational model in Central America, let us undertake asynopsis of change in each country.5

In Nicaragua, the Sandinista triumph of 1979 constituted the seizure ofstate power in one country by a revolutionary movement and an e�ort toimplement the popular project. The overthrow of the Somocista dictatorshipdestroyed the traditional oligarchy. However, the structural constraints ofglobalization and the direct power of the US state conjoined to make analternative to polyarchy and free-market capitalism unworkable. A trans-nationalized fraction among the dominant groups had been coalescing sincethe mid-1960s. These modernizing capitalist fractions in opposition toSomoza's state racketeering and `crony capitalism' had converged with theSandinistas in 1970s class alliances. These fractions stayed inside Nicaraguafollowing the revolution and retained their links to the international capitalistmarket during the Sandinistas' rule. They gradually gained structural strengthand political importance inside Nicaragua in the 1980s, increasingly replacing

4. My analysis runs contrary to conventional wisdom, according to which the old oligarchies

had disappeared by the end of the 1980s but neither the popular forces nor their

adversaries, the new dominant groups and the US, could prevail. According to this view, a

stalemate had been reached. This stalemate created the conditions for an historic

compromise between contending social forces, a `modus vivendi'. Peace settlements and

processes of democratization and demilitarization would allow for competition through

elections and peaceful mobilization. This conventional interpretation fails to note that the

gross social and economic inequalities which ®rst gave rise to the con¯ict were exacerbated

from the 1970s to the 1990s. The dominant groups have not given up their power and

privilege. The structure of property and socio-economic inequality has not been

signi®cantly altered. The lives of the vast majority of Central Americans have deteriorated,

not improved. The larger system of world capitalism that sustains the regional order is

more ®rmly embedded and hegemonic in Central America than before the upheaval. Thus

this popular majority was conditionally defeated in what it set about to do Ð

fundamentally alter the social order in its favour.

5. The following synopses draw on: Acker (1988); Barry (1990); Cuenca (1992); ERIC (1997);

Escoto and Morroquin (1992); Guerrero (1996); Marin (1990); Norsworthy with Barry

(1993); Oseguera de Ochoa (1987); Pensamiento Propio (1992); Posas (1994); Robinson

(1997); Saldomando (1992); Sojo (1991); Solano (1996).


the state as the principal intermediaries between Nicaragua and worldmarkets, and developing ties to the emergent US-led transnational eÂ lite. Theyacted as points of access for US-transnational penetration, including astructural capacity to impose policies on the Sandinista state, such as privateagri-business and industrial subsidies, which undermined the class thatconstituted the revolution's social base and reoriented internal power awayfrom these classes and towards an eÂ lite in the process of reconstitution. By thelate 1980s Sandinista hegemony in civil society had been severely eroded.With the electoral victory of Violeta Chamorro in 1990, a transnationalizedfraction took over key institutions of the Nicaraguan state Ð namely theexecutive, and key ministries such as Finances, the Economy and Develop-ment, and Foreign A�airs Ð even as much of the state, and society at large,was in dispute (1990±5). An embryonic transnational nucleus pursued theprogramme of the reinsertion ofNicaragua into the global economy and a far-reaching neo-liberal restructuring. A careful study of Nicaraguan economyand social structure from the 1970s to the 1990s reveals that the hegemonicgroups are those linked most directly to the external sector, in particular,®nances, new commercial activities, reconstituted agri-business, managementof transnational capital and ties to international agencies.

In El Salvador, a massive popular movement burgeoned in the 1970s andthe guerrilla movement had snowballed into a full civil war by the early1980s. While the revolutionary forces, organized in the Farabundo MartiNational Liberation Front (FMLN), came to threaten state power, the US-led mobilization of counterinsurgency staved o� a triumph similar to thatwhich had taken place in Nicaragua. However, behind the very visible battlebetween the revolutionary armed movement and the US-supported domin-ant groups, a more signi®cant process was taking place: the reorganization ofthe Salvadoran state and economy in conjunction with movement at the levelof the global economy, a recon®guration of the dominant groups, and theemergence of a lucid New Right fraction within the ruling party itself, theNationalist Revolutionary Alliance (ARENA). The insurgency, combinedwith changes in the dominant project itself, shattered the old oligarchy andits project. The programme of limited political and economic reform of theChristian Democratic government which governed in the 1980s under thesponsorship of the US state was a conjunctural strategy and a componentpart of the counterinsurgency campaign. The dominant groups, squeezedbetween the revolutionary forces and limited reform, began to reorganize.The most retrograde elements of the oligarchy formed the ARENA in 1981under the leadership of the extremist Roberto D'Aubuisson. Beyond con-junctural reforms were structural changes and novel opportunities openedup by the global economy in the 1980s. Trade liberalization and economicdevelopment programmes sponsored by the IFIs and USAID stimulateddynamic new external sector activities such as banking and commerce, non-traditional exports, and the very ®rst maquiladora plants. These began tohave a transformative e�ect on the dominant groups' prospects and outlook.


A transnationalized fraction cohered with the help of political clearing-houses and economic associations tied to the transnational eÂ lite, such as theUSAID-funded Salvadoran Foundation for Social and Economic Develop-ment (FUSADES). Representatives of this emergent fraction gained controlover the party, and then of the state, with the election of Alfredo Cristiani in1988. This fraction was able to gain hegemony over the eÂ lite and over thetransition as a whole, and implement sweeping neo-liberal transformationsince 1988.

In Guatemala, the traditional agro-export oligarchy was the most deeplyentrenched and in control of the state Ð which was administered directly bythe military for much of the 1980s Ð and a transnationalized fraction theweakest. As in El Salvador, the US-supported Christian Democratic projectthat came to government in the 1980s as part of broader counterinsurgencye�orts was intended to defuse the popular movement with reforms and tohead the very visible transitions to (largely dysfunctional) polyarchy. How-ever, the Christian Democratic alternatives were not meant to be the bearersof the transnational eÂ lite project in the larger scheme of things. With theintroduction and expansion of new economic activities in the late 1980s,including a powerful new ®nancial sector tied to international banking,incipient export-oriented industry such as maquila textile production, non-traditional agricultural exports promoted by the IFIs, and new commercialgroups, a transnationalized fraction of the eÂ lite assumed its own pro®le andclashed with the old state-protected oligarchy over ®scal, tax, liberalization,and related policies. In the early 1990s, this tiny fraction articulated a coherentprogramme for economic and political modernization attuned to the trans-national eÂ lite agenda, as epitomized in the policy proposals that ¯owed out ofthe in¯uential USAID-funded Association for Research and Social Studies(ASIES). Representatives of this transnationalized fraction assumed the reinsof the state with the electoral triumph in 1994 of the National Action Party(PAN), whose leadership came primarily from professionals, administrators,and technocrats schooled in neo-liberal economics and a modernizingoutlook. Unlike El Salvador, where the insurgency actually came to disputestate power and constitute a dual power, the Guatemalan insurgency did notthreaten the state. The movement could, however, continue an inde®niteinsurgency that would make it impossible to ever pacify the countryside andestablish the stability that transnational capital required for the country andthe region as a whole. The subsequent peace accords of New Year's Eve 1996set the basis for the hegemony of the transnational eÂ lite project for Guate-mala. In 1997, the PAN government adopted the structural adjustment plandrafted by the ASIES, a number of whose leaders joined the PAN economiccabinet, and launched a long-term programme of neo-liberal transformation.

In Honduras, both the subordinate and the dominant classes werehistorically the least developed in Central America. The chaotic disequilib-rium among internal social forces for much of the twentieth century, up tothe 1970s, created fertile ground for an unstable string of civilian±military


regimes responding to competing pressures of a small landed oligarchy, mid-sized ranchers, bureaucratic eÂ lites, and mass peasant and worker mobiliz-ations. The weakness of Honduran social forces and the state allowed for thedomination of the country by foreign companies, making Honduras thequintessential `Banana Republic'. A transnational fraction began to coherein the 1980s in consonance with the virtual US occupation of the country as astaging ground for regional counterinsurgency, and the US sponsorship ofbroad economic development and restructuring programmes and of atransition to polyarchy. This fraction was represented within the NationalParty by business sectors that supported Rafael Callejas, who won the 1989elections and proceeded with sweeping neo-liberal reform. Carlos Reina ofthe Liberal Party, whose traditional base is the country's small and mid-sizeddomestic market producers, won the 1993 elections on a populist platform ofopposition to the neo-liberal programme, with the backing of nationalfractions among the eÂ lite threatened by the opening to the global economy,and by broad popular sectors whose opposition to neo-liberal austeritymounted in the early 1990s. In his ®rst year in o�ce Reina attempted tonegotiate with IMF and USAID o�cials for greater ¯exibility in imple-menting the Enhanced Structural Adjustment Facility (ESAF) signed by hispredecessor. Under the threat of a suspension of new bilateral and multi-lateral credits and the denial of much-needed debt relief, however, the govern-ment recommitted Honduras to the terms of the original ESAF, and in 1997signed a new agreement for a dramatic deepening of the adjustment process.Reina's own social base rapidly deteriorated and his government faced aspiral of popular protest and loss of legitimacy in the mid-1990s. While spaceconstraints preclude discussion, the Honduran case illustrates one of themany contradictions internal to global capitalism: the problem of legitima-tion faced by neo-liberal states integrated into the global system, whoseinternal social base is anchored in forces opposed to the transnational eÂ liteproject, but whose linkage to the global economy subordinates these states tothe dictates of that project.

In Costa Rica, a very di�erent path of twentieth century development didnot deter the outcome in the 1980s and 1990s of integration into the globaleconomy under terms similar to those in the region as a whole and thecharacteristic changes in internal social forces. The hegemony of the landedoligarchy was broken in the 1948 civil war and replaced by an alliance ofemergent industrial, commercial, and ®nancial capitalists. This united andrelatively modernized dominant class was able to incorporate the peasantryand working classes into a stable hegemonic bloc and establish a functioningpolyarchic political system. Under the model of ISI industrialization andagro-export expansion, with an important redistributive component andsigni®cant levels of social welfare spending, Costa Rica experienced levels ofdevelopment well beyond its neighbours. This particular model of dependentcapitalist development had become exhausted by the late 1970s and came to acrisis in 1981, when the government fell behind on its debt payments and


temporarily suspended interest payments. The ®nancial crisis gave impetus toa gradual restructuring throughout the 1980s and the early 1990s and reinser-tion into the emergent global economy of the entire Costa Rican productiveapparatus. Under close USAID tutelage, successive governments oversawliberalization, austerity, deregulation, the privatization of public productionand service facilities, and the development of a dynamic ELD model thatbegan to replace the old ISI model. The thorough socio-economic restructur-ing underway generated new entrepreneurial groups favouring the ELDmodel within both parties of the eÂ lite, the social-democratic NationalLiberation Party (PLN) and the Christian-democratic Social Christian UnityParty (PUSC), as transnational nuclei emerged within their ranks. Thesenuclei gained control of their parties, and later on, of the state, with theelectoral victory in 1990 of the PUSC's Rafael Calderon, and of the PLN'sJose Figueres Jr in 1994.

A Snapshot of the New Transnational Model in Central America

Capitalist development in Central America from World War II up to the1970s included an expansion of the agro-export sector, particularly the large-scale introduction and/or extension of beef, cotton, and sugar alongsidetraditional co�ee production, and dependent industrialization in the frame-work of the CACM and the ISI model (Thomas, 1987). This developmentwas linked, in turn, to post World War II world economic growth, includingexpanded demand in core country markets for raw materials to feedindustrial expansion and rising consumer demand. This model becameexhausted and the new transnational model for the region has taken holdsince the mid-1980s.

ISI industrialization is being replaced by maquiladora assemblage forexport, especially garment production, under the model of ELD.6 Economicconsiderations by transnational capital and political considerations by theUS state, combined with shifts in the global economy, resulted in the massiveentrance to Central America of garment assembly. Following the generaltendency in the recent restructuring of capitalist production, the garmentindustry has undergone an increasing decentralization, segmentation, andsub-division of tasks in the production process. This includes the automationof some of these tasks and the transfer to low-wage zones around the globe ofthose tasks that remain labour intensive. The garment industry has threemajor phases: ®bres production, in which the general tendency is towards theproduction of technologically advanced synthetics; textile production, which

6. The turn toward globalization has involved two types of export-oriented industrialization:

the internationalization of national industries established under ISI, and the installation of

maquiladora enclaves. See, for example, Gere� and Hemple (1996). Industrial growth in

Central America has been largely of the latter variant.


remains highly labour intensive; and a ®nal retail phase. This complex `globalcommodity chain', to use the concept developed by Gerre® and Korzenie-wicz, is `buyer driven', dominated by huge transnational retail outlets, suchas Sears Roebuck, J. C. Penney, the GAP, and so on.7

As the global economy emerged in the 1960s and 1970s, US textile-apparelproducers shifted the labour-intensive middle phase to the East Asianlow-wage zone, and developed sub-contracting (outsourcing) networks,whereby East Asian Ð particularly Taiwanese and South Korean Ð capitalorganized local production in consort with transnational capital. By the 1980sand 1990s, this process had resulted in the integration into transnationalaccumulation circuits of East Asian capitalists themselves, who began to shiftproduction to new low-wage zones, particularly mainland China, SoutheastAsia, and Central America and the Caribbean, in the face of rising wage levelsand other factor cost considerations in their home countries. The social dis-locations generated by capitalist development in Central America as globaliz-ation proceeded from the 1960s onwards, together with the disruptionscaused by the political±military con¯agration, had generated a huge pool ofavailable (and potentially revolutionary) labour in Central America by the1980s and 1990s. Moreover, the region was ideally situated geographically foraccess to the US market. This is the economic backdrop to the appearance ofthe garment industry in Central America. The political backdrop was the USCaribbean Basin Initiative (CBI) programme of the 1980s, which allowedfactories operating in the region duty-free access to the US market andprovided further incentives for the massive in¯ux of foreign capital from EastAsia to Central America. Themore conjunctural strategic objective of the CBIon the part of US policy-makers was the expectation that CBI-induceddevelopment would help subdue revolutionary movements in the region.8

From a structural perspective, the CBI was part and parcel of economicglobalization, and illustrates how the US state functions to facilitate theconditions for the globalization of production and to promote the interests ofthe transnational eÂ lite. USAID, for instance, funded and guided CentralAmerican states and local business foundations and think tanks in the estab-lishment of free trade zones and the development of policies and programmesconducive to maquiladora production (and to the neo-liberal project ingeneral).9 In this way, local eÂ lites operating in the state and in civil society

7. On the textile-garment industry and global commodity chains, see Gere� and

Korzeniewicz (1994) and, speci®cally, Taplin (1994). On Central America and garment

production, see Figueroa (1996).

8. For analysis of the CBI, see for example McAfee (1991), and for discussion on the CBI, the

transfer of textile production to Central America and the regional con¯ict, see Cox (1993).

US state managers operated under the erroneous assumptions that stagnation Ð rather

than the dynamic capitalist growth that had occurred Ð was responsible for instability;

but that is the subject of another essay.

9. For detailed discussion, see the sources listed in note 5.


became integrated into these emergent transnationalized circuits in CentralAmerica, which spurred on the development of transnational fractions amongthe eÂ lite. A nation-state-centric analysis of this situation, which would haveEast Asian capital competing with US capital, conceals the transnationalessence of this phenomenon: in the complex global commodity chain, US,East Asian, and local Central American actors are all components oftransnational circuits of capital accumulation and their constituent agents areengaged in a process of transnational class formation on the basis of anobjective identity of interests and organic integration, and as part of whatSassen (1988) refers to as the formation of a `global marketplace' of sites forglobalized production and services.

Table 1 shows the dramatic appearance of garment-assembly enclaves inCentral America from the mid-1980s to the early 1990s. Given the USeconomic embargo of Nicaragua and the country's relative marginalizationfrom the world market during the Sandinista period, this enclave laggedbehind in that country. In 1991, however, the Chamorro governmentinaugurated a Free Trade Zone outside Managua as part of its USAID-sponsored maquiladora programme, and by 1994 at least eighteen mostlyTaiwanese, South Korean, and US-based sub-contracting ®rms had set upassembly plants for export to the US market (Witness for Peace, 1996).

In the primary sector, traditional agro-exports continue to predominate,but they are diminishing in overall importance relative to Non-TraditionalAgricultural Exports (NTAE), such as fruits, ¯owers, ornamental plants,winter vegetables, and spices. Maquila production and NTAE combinedaccounted by 1993 for more than half of all export earnings in Costa Rica(57.3 per cent), El Salvador (61.3 per cent), and Guatemala (57.7 per cent),while the ®gures for Honduras and for Nicaragua were 37.8 per cent and43.5 per cent, respectively (ECLAC, 1995). As with maquiladora production,the spread of NTAE is linked to broader international restructuring boundup with globalization, including changes in the world food regime (Barnetand Cavanagh, 1994; McMichael, 1995; Nonanno, 1994). The extension oftransnational agribusiness, the conversion of local production from food and

Table 1. Garment Assembly Industry in Central America (measured in importsto US in US$ millions)

1985 1987 1989 1991 1993

Costa Rica 62 92 172 254 377Guatemala 6 20 42 117 218El Salvador 6 13 20 44 103Honduras 17 27 50 107 236Nicaragua Ð Ð Ð Ð 3

(1992)

Source: US International Trade Commission cited in Figueroa (1996).


traditional export crops to new crops, and growth in worldwide trade ofexotic fruits and vegetables are made possible by new transportation,refrigeration and other technological innovations. On the demand side, theyare spurred on by the emergence of new high-consumption middle andprofessional sectors, largely in the North, brought on by the process of post-Fordist income polarization from the 1970s onwards. The spread of NTAEin Central America and elsewhere has been promoted by local states with®nancing and guidance (and often imposition) from USAID and the IFIs. Ithas resulted in heightened land concentration, credits, and other resources inthe hands of local and foreign agribusiness and a further proletarianizationof peasants who become `casualized' farm labour (this modern capitaliststructure is in contrast to the old oligarchic rural structure).10

The new transnational model is dramatized in the growth of tourism,which displaced bananas in 1994 as Costa Rica's principal source of foreignexchange receipts and, in the same year, became the second most importantsource in Guatemala, after co�ee. Regional tourism receipts were close toUS$1.5 bn in 1995, which accounted for approximately 22 per cent of theregion's total foreign exchange earnings in that year (Ecocentral, 1996c).Tourism, together with import±export commercial activity and ®nances thathave ¯ourished with trade and ®nancial liberalization, constitute the dynamiccore of transnational service sector activity in the Isthmus. Under the new`global social apartheid', the structure of global production, distribution andconsumption increasingly re¯ects a skewed income pattern, whereby over thepast twenty-®ve years the income of 20 per cent of the world population hasrisen simultaneous to a decline in income among the remaining 80 per cent.Tourism has become the fastest growing economic activity, and even themainstay, of many Third World economies. However, international tourist¯ows are largely unidirectional, from North to South, while the ¯ow of muchof the income generated by world tourism is from South to North (see, forexample, English, 1986; Harrison, 1992; McLaren, 1997; The New Inter-nationalist, 1993). New technologies and economies of scale in long-distancetravel have made the explosion of international tourism technically possible;but the phenomenon should be seen as a result of the tendency towards socialpolarization inherent in global capitalism, and the new opportunities foraccumulation that this particular structure of world income and demandgenerates.

The escalation of tourism and leisure amenities, as indicated in Table 2,occurs simultaneously with heightened impoverishment of popular major-ities in Central America. However, tourism as a service activity that integratesthe region further into the global economy has signi®cant social, class, and

10. For detailed analysis see Conroy et al. (1996); also Barham et al. (1992) and Clark (1995).

In some cases, most notably Costa Rica, peasant co-operatives have also participated in

NTAE production, but have been increasingly squeezed out by powerful local large-scale

producers and transnational agribusiness.


political rami®cations. Growth of the industry enhances the external orienta-tion of the regional economy, and with it, the strength of those groups linkedto transnational interests, including the commercial and ®nancial sectors.The industry thus induces and is induced by the neo-liberal opening.Notably, each Central American republic has established either a ministry oftourism or an o�cial government tourist institute to promote the industry(Ecocentral, 1996b).

In sum, the most dynamic economic sectors in Central America are thoselinked directly to globalized circuits of production and distribution, whoseintroduction has been facilitated under the neo-liberal model. The objectiveinterests of the agents engaged in these new activities lie in the furtherinsertion of Central America into the global economy and in advancing thetransnational project. The disruption of traditional established communitiesand the contraction of domestic demand that accompanies deeper integrationinto the global economy, a consequence of the internal concentration ofwealth and productive resources towards groups tied to the external sectorand transnational economic circuits and a greater transfer of wealth out ofthe country, also shifts the sources of pro®tability from productive tocommercial and ®nancial activities as outlets for investment. This has led to arelative growth of employment in these sectors. Table 3 provides a roughindication of the shift in the regional labour force out of agriculture andlargely into the service sector (both formal and informal).

Neo-liberal structuring has resulted in a massive transfer of resources fromthe public to the private sphere, and within the private sphere, from thedomestic to the external sector. This change in the model of accumulation hasthus involved a concomitant change from the `developmentalist state' of thenational model to the `neo-liberal state' of the transnational model. TheCentral American states functioned to adjust national structures to emergentglobal structures. In this process, each individual state has been penetrated bytwo new social forces, one from `within' and the other from `without'. Fromwithin, transnationalized fractions of dominant groups vie for, and gaincontrol over local states, particularly over key ministries tying the country toglobal economy and society, such as ministries of foreign a�airs, ®nances,economic development, and Central Banks. From without, diverse trans-

Table 2. Income from Tourism in Central America (in US$ millions)

1970 1980 1992 1993 1994 1995

Costa Rica 22 87 431 577 626 661El Salvador 9 7 49 41 29 39Guatemala 12 183 243 228 258 310Honduras 4 27 32 60 72 80Nicaragua 13 22 21 30 40 50

Source: Ecocentral (1996b).


national actors representing an emergent transnationalized state apparatuspenetrate local states, liaising with transnationalized fractions therein, andhelp design and guide local polities. These transnational actors includeUSAID and other bilateral agencies, representatives from the IFIs, andmulti-lateral political entities such as UN andOAS units. It is noteworthy that everyCentral American republic has established, in co-ordination withUSAID andthe IFIs, technocratic New Right business associations that have activelyengaged in policy development and liaised with local states in promotion ofneo-liberal restructuring and of the new activities associated with the trans-national model (tourism, NTAE, maquila production, and so on).11 Theseassociations provide leadership to increasingly coherent transnational frac-tions among local private sectors, help these fractions to shape state policies,and provide a platform for advancing the globalization of Central America.

The salience of USAID in this process indicates the manner in which theUS state has assumed a leadership role on behalf of a hegemonic trans-national eÂ lite, rather than `US' activity in rivalry with other core powers forin¯uence in the hemisphere. In this regard, Central America has moved, atthe level of its international relations, from being largely a dependent

Table 3. Labour Force Participation by Sector

1960 1970 1980 1990

Costa RicaAgriculture 52 42 31 26Industry 18 20 23 26Services 30 38 46 48

El SalvadorAgriculture 62 56 43 n/aIndustry 17 14 15 n/aServices 21 30 38 n/a

GuatemalaAgriculture 67 62 57 49Industry 13 17 17 19Services 20 21 26 32

HondurasAgriculture 70 65 60 n/aIndustry 10 14 16 n/aServices 20 21 24 n/a

NicaraguaAgriculture 62 51 46 n/aIndustry 16 16 16 n/aServices 22 33 38 n/a

Sources: 1990 ®gures are estimates from IADB (1994); other ®gures from CEPAL (1994).

11. These di�erent organizations are discussed in the sources cited in note 5.


`protectorate' of the USA, and economically linked almost exclusively to theUS market, to a more diversi®ed pattern of trade, investment, and politicalrelations with other regions in the global system. Complex sets of inter-national agreements have opened up the region to transnational capital. Ifthe CACM was a form of inward integration, intended to create a regionalmarket for multinational (largely US) capital to take advantage of economiesof scale, the type of integration proceeding under globalization is outward,aimed at creating a single Central American ®eld for the unfettered operationof transnational capital.12

Transnational Migration, Gender, and the Greater Caribbean Basin

Transnational processes in Central America are linked to similar processesin Mexico and in the Caribbean Basin at large, including transnationalmigration patterns. Sassen (1988) has alerted us to the relation between thetransnational movement of capital and the movement of labour, and how theinternational migration of labour becomes incorporated into the inter-nationalization of production. She has shown how particular forms ofinternationalization coalescewith local conditions in the countries that supplyemigrant labour, and highlighted the signi®cance of a speci®c set of historicconditions that combine with the more `traditional' variables of poverty andunemployment to induce out-migration. In the case of Central America,those conditions were post World War II capitalist expansion and the revolu-tionary, military, and geopolitical factors discussed above. The `push' factorsin the dramatic rise in Central American, Mexican, and Caribbean immigra-tion into the USA are the disruption of traditional, particularly peasant,communities, and rising levels of informalization, poverty, and unemploy-ment generated by free market forces unleashed by the neo-liberal model.The `pull' factors are the reorganization of the US political economy itselfunder globalization, which has resulted in a transformation of pre-existingsegmented labour markets (see Robinson, 1993). US economic restructuringinvolves social dislocations, new gender and racial hierarchies, and otherchanges deeply tied up with globalization.

US anti-immigrant legislation, for instance, is not intended, rhetoric andcommonplace perceptions aside, to keep out immigrant labour. Rather, theobjective is to generate conditions most propitious to the superexploitation ofthis labour, including absolving employers of any social responsibility thatthey might otherwise incur should immigrant labour enjoy full legal andsocial rights. In textile production, for instance, particularly in seasonal

12. On the increasingly diversi®ed integration of Central America into the global economy,

see, for example, Ecocentral (1996a, 1996c). On the reorientation of Central American

integration process, see, for example, Otero (1992); Salazar (1990).


fashions, proximity to the ®nal retail market is vital; some perishablefoodstu�s and numerous services must also be produced close to consumers.It is advantageous for transnational capital to contract out this productioninside the USA using immigrant labour pools that enjoy no legal rights, facelanguage barriers and a hostile cultural and ideological environment, areeasy to control and can be dispensed with by the state should the need arise.Several studies have demonstrated, in this regard, how Proposition 187 inCalifornia was backed by employers whose objective was to create the mostfavourable conditions for the continued utilization of immigrant labour(see, for example, NACLA, 1995; Perea, 1997). More than 50 per cent of USgarment contractors pay less than the minimum wage, fail to pay overtime, orviolate US labour laws (Figueroa, 1996). The reappearance of sweatshops inNew York, Los Angeles, and other US cities using child, undocumented andsometimes slave immigrant labour is a re¯ection of the structural powercapital has achieved over an increasingly transnational working class whoseability to exercise its own class power is constrained by the juridical andinstitutional structures of the nation-state system (Gill and Law, 1987). Thus,expanded opportunities for Central American (along with other Latino)labour in the lower rungs of segmented agricultural, industrial, and par-ticularly service sector labour markets in the USA is a result of transnationalcapital's search for the most favourable mix of factor costs in the newglobalized production.

As a result of transnational migration and expanded Latino employmentin the USA, there has been an enormous increase in remittances from Latinoethnic labour to extended kinship networks in Central America (see Table 4).This is a complex phenomenon which should be situated within the integra-tion of Central America into the North American economy as the principalinstitutional and territorial form in which the region's integration intoglobal structures is taking place. Remittances have become the mainstay ofsurvival for dense kinship networks, and the money sent to the regionthrough remittances enters both the formal and informal local economies, asdo their bearers, as consumers and as small-scale producers. Remittances

Table 4. Central American Emigrant Remittances, 1980±95 (in US$ millions)

1980 1988 1989 1990 1991 1992 1993 1994 1995

Costa Ricaa Ð Ð Ð Ð Ð Ð Ð Ð ÐEl Salvador 11 194 228 358 467 687 789 967 1061Guatemala 0 43 69 107 139 187 205 263 358Honduras 0 0 0 0 n/a n/a 60 85 120Nicaragua 0 0 0 0 n/a 10 25 30 75

Note:a Costa Rica data collection agencies did not report remittances.Source: World Bank (1997b).


have become the single most important source of foreign exchange enteringthe Salvadoran economy, amounting to US$1.06 bn in 1995. For Guate-mala, the ®gure was US$358 m. Thus the remittance itself is a complextransnational economic practice, not a curious anomaly but a constitutivefeature of the globalization of Central America and part of the transnationalprocesses that are fundamentally transforming the region.

Transnational processes therefore have major implications for the sexualdivision of labour, for gender relations, and for the transformation of thefamily itself. As part of the larger phenomenon of social and economicrestructuring, women have entered the formal and informal labour force inCentral America in mass numbers in recent decades, as Table 5 indicates.Increased formal sector female participation is a result of several factors,among them the predictable pattern that accompanies capitalist developmentin general, the need for families to send increasing numbers of familymembers into the labour market with the decline in real wages and householdincome, the predilection of transnational capital to hire `docile' femalelabour, particularly in maquila production, and so on.13 Just as in theMexicanmaquila and other zones, women in Central America disproportion-ately Ð and in some cases, often exclusively Ð engage in deskilled, labour-intensive phases of globalized production.14 At the same time, women con-tinue their functions in the household economy, a situation that has lockedwomen into both the reproduction and production spheres. Transnationalprocesses are increasing the `double burden' experienced by women in bothproduction and reproduction (Beneria and Feldman, 1992; Faune, 1995).Transnational migration, whether by men or by women, contributes to the

Table 5. Entrance of Women into Formal Labour Force (as percentage ofwomen in the EAP in formal labour force)

1950 1960 1970 1980 19902000

projected

Costa Rica 15 15.8 18.1 21.2 21.8 22.6El Salvador 16.4 16.8 20.4 24.9 25.1 25.3Guatemala 12.9 12.3 13.1 13.8 16.4 19.5Honduras 11.5 12.3 14.2 15.7 18.8 22.7Nicaragua 13.6 17.9 19.7 21.6 25.2 29.1

Source: Wilkie (1993).

13. If female labour initially is (or is perceived to be) more easy to control, this is the result, we

should recall, of gender socialization combined with real relations of patriarchy and gender

inequality and pre-existing sexual divisions of labour which, in combination, render female

workers more powerless than their male counterparts.

14. UNCTAD (1994) notes that 80 per cent of the worldwide workforce in free trade zones is

made up of women, the majority between 15 and 25 years of age, who earn wages 20 to

50 per cent lower than those of men working in the same zone.


disruption of patriarchal family structures and to the reorganization of maleand female economic roles, as do such labour market changes associatedwith globalization as the entrance of women into the formal labour force andthe contraction of male employment (Beneria and Feldman, 1992; Safa,1995, 1997). Latino labour destined for the lower rungs of the US economy isproduced and reproduced in Central America Ð that is, in Central Americanfamilies inserted into rapidly changing local economic structures.

A new Central American family structure is emerging, spurred on by trans-national processes. As in much of the greater Caribbean Basin, structuraladjustment, by contractingmale employment and increasing female economicresponsibility, contributes to an increase in female-headed households (Safa,1995, 1997). In urban zones, women have predominantly become heads ofhouseholds, and are thus responsible for the household economy and also forlinkage to the monetized economy. As Faune (1995: 27) notes:

Faced with [the economic and social] crisis, Central American families and women are

regrouping in a number of di�erent ways. They are diversifying their maintenance and

reproductive strategies. New components of these strategies are: (1) internal and international

migration; (2) informal marketing of products prepared in the home that were previously

used for barter or self-consumption; (3) the sale of personal services.

These households frequently involve several women; kin and daughtersoperating as collective heads of households. In the larger picture of thepolitical economy, women have moved from being producers of labour forincorporation into production processes to producers of `supernumeraries',which has resulted in a dramatic deterioration of women's social status andhas aggravated female degradation.15 These issues are under-theorized andrequire further exploration in future research.

CONCLUDING REMARKS

This article has emphasized the underlying structural dynamics at play inCentral America, which I have characterized as `transnational processes'. Theglobalization framework developed and applied here may o�er an important

15. For discussion on the linkages between supernumeraries and women's changing roles and

status in the context of globalization and restructuring, see Beneria and Feldman (1992),

Faune (1995) and Safa (1995, 1997). For one discussion on gender and family dimensions of

Central American migration to the USA, see Zentgraf (1995). On the problem of a growing

`super¯uous' population, the ILO (1996) reported that chronic unemployment is worsening

worldwide, that nearly one-third of the world's EAP is unemployed, and that the

phenomenon a�ects the rich as well as the poor countries. The extent of the problem in

Central America is seen inNicaragua, where under- and unemployment for 1994 represented

74.3 per cent of the EAP (CEPAL, 1995a), and in Guatemala, where it represented 37.3 per

cent (CEPAL, 1995b). Costa Rica, El Salvador, and Honduras report only `open

unemployment' and this is not a reliable indicator of the supernumerary population.


macro-structural framework missing from analysis of social change anddevelopment in Central America in general, and particularly of the regionalcon¯ict and its outcome from the 1960s to the 1990s. Social change is drivenby contradictions that make the continuation of an existing set of historicarrangements impossible. I have referred to the basic structural change inthe region as a transition to a transnational model of society reciprocal tochanges in the global system. The point I wish to emphasize here, by way ofconclusion, is that the globalization of Central America has not resolved thesocial contradictions that generated the regional upheaval in the ®rst place,and has indeed introduced a new set of contradictions. The very conditionsthat gave rise to the con¯ict are still present and have, in fact, been aggravatedin recent years. These conditions are the extreme concentration of economicresources, of wealth, and of political power, in the hands of eÂ lite minorities,side by side with the pauperization and powerlessness of a dispossessedmajority. Detailed discussion is not possible here, but we may note thatpoverty has increased (see Table 6), and inequality has intensi®ed in everycountry of the Isthmus (World Bank, 1997a).

The neo-liberal model speci®cally precludes the types of policies, such asagrarian reform and redistributive measures, that could ameliorate theseconditions. The new model of capital accumulation is not likely to bringabout development in the region. The maquiladoras constitute an enclavewith little or no backward and forward linkage to host nation economiesand very low value added; they are characterized by superexploitation ofworkers and by conditions of extreme oppression within the free trade zoneenclaves. Tourism does stimulate greater local economic activity but it doesnot generate integrated development. It is generally low-skill and low-wageseasonal employment and is dependent on highly elastic and unstable demandover which host countries have very little control. Elasticity and instability intourist receipts make it impossible to assure a return on ®xed investment in theindustry and pit each Central American country in competition with theothers, as well as with other regions such as the Caribbean.16 Neither doNTAEs hold much promise for regional development, as several recent

Table 6. Population in Poverty, 1980±90 (percentages)

Costa Rica El Salvador Honduras Guatemala Nicaragua

1980 25 68 68 63 621990 20 71 76 75 75

Source: CEPAL, cited in Vilas (1995: 148).

16. For discussion, see Ecocentral (1996b).


studies have shown (Barham et al., 1992; Clark, 1995; Conroy et al., 1996). Insum, the tremendous structural power that accrues under the global economyto the transnational eÂ lite and their local counterparts has shifted the terms ofstruggle between dominant and subordinate groups. Despite the illusion of`peace and democracy', the roots of the regional con¯ict persist. The mostlikely scenario for Central America is renewed social con¯ict as subordinategroups whose composition has also been altered become rearticulated,develop new methods of organization in civil society, and launch a freshround of popular struggles against the prevailing social order. The trans-national model of society in Central America is inherently unstable, andindicates contradictions internal to global capitalism, including the world-wide social polarization between rich and poor, the loss of nation-stateautonomy and regulatory power, and the deterioration of the social fabric incivil society accompanied by crises of authority and state legitimacy.Continued change Ð in Central America and in global society at large Ðwill be shaped by con¯ict and crisis among the summits of power as thehegemonic groups ®nd it increasingly di�cult to maintain governability andassure social reproduction and recomposition of civil society at the base, andby the interplay of the two at the local and the global levels.

The dominant groups in Central America have reconstituted and con-solidated their control over political society but a new round of popular classmobilization in the early and mid-1990s pointed to their inability to sustainhegemony in civil society. Subordinate groups demonstrated a renewedprotagonism at the grassroots level, outside of state structures and largelyindependent of organized left parties. Women's, environmental, neighbour-hood, peasant, worker, indigenous and other social movements have¯ourished in civil society at a time when the organized left operating inpolitical society has been unable to articulate a counter-hegemonic alternativedespite its continued vitality. For instance, the FMLN won 45 per cent of thevote in 1997 legislative elections in El Salvador, and the Sandinistas won39 per cent of the vote in presidential elections also held in 1997: but theSandinistas and the FMLN abdicated earlier programmes of fundamentalstructural change in the social order itself. Their programmes in the mid-1990s were con®ned to strategies of state intervention in the sphere ofcirculation to achieve limited internal redistribution while respecting theprevailing structure of property and wealth and the model of free-marketintegration into the global economy under the region's emergent pro®le in theGDL. Popular classes have organized region-wide organizations that broughttogether diverse sectoral groups in each country's civil society Ð re¯ectingthe transnationalization of civil society Ð such as the Central AmericanAgricultural Producers for Co-operation andDevelopment (ASOCODE), theCentral American Federation of Community Organizations (FCOC), and theConfederation of Co-operatives of the Caribbean and Central America(CCC-CA). These popular platforms set out to devise a grassroots regionalintegration model in opposition to the transnational model (Pico, 1994). The


failure of the left to protagonize a process of structural change from politicalsociety has helped shift the locus of con¯ict more fully to civil society. CentralAmerica may be moving to a `war of position' between contending socialforces in light of the failure of subordinate groups to win a `war of manoeuvre'through revolutionary upheaval and the limits to `power from above'. Thisraises critical issues best left for future research: given the ability of trans-national capital to utilize its structural power to impose its project even overstates that are captured by forces adverse to that project, perhaps the realprospect for counter-hegemonic social change in the age of globalization is along march through civil society in the Gramscian sense.

Social change takes place within the bounds of de®nite historic constraints,but we should bear in mind that particular social structures which emerge arenot predetermined. There is no preordained historic script. How socialstructure evolves is a result of the dynamic and dialectical interplay of agencywith structure. Our analysis should be concerned with structural changeand the question of collective human agency. This article has explored anumber of issues as preliminary approximations that provide directions fora rich research agenda on the relationship between globalization, socialchange, and development. Future research should integrate a relational(or behavioural) approach into the structural one undertaken here. Whilecapitalist globalization is the macro-structural-historical backdrop to CentralAmerica in the twenty-®rst century, the region is changing through thecon¯ictive interaction among newly transformed social forces, both dominantgroups pushing the project of the transnational eÂ lite from above andsubordinate groups o�ering resistance and searching for alternative projectsfrom below.

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William I. Robinson is Assistant Professor of Sociology at New Mexico StateUniversity (Department of Sociology and Anthropology, PO Box 30001MSC 3BV, New Mexico State University, Las Cruces, NM 88003-8001,USA). He is author of Promoting Polyarchy: Globalization, US Intervention,and Hegemony (Cambridge University Press), winner of the 1997 Distin-guished Scholarship Award of the Political Economy of the World SystemSection of the American Sociological Association.


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