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Inter-American security; Civil wars and severe economic strains persist

After years in the wings, Latin America has come into a spotlight on the world stage:

* Parts of Central America literally smoldered in 1982, with El Salvador, Guatemala, and northern Nicaragua as battle zones. Honduras and Costa Rica could be sucked into the wars - and the entire region of 20 million people turned into a roaring conflagration.

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* In the South Atlantic, the fallout from the war between Argentina and Britain last spring keeps much of Latin America on edge and strains the area's relations with the United States.

* In the economic sphere, debt-saddled Argentina, Brazil, and Mexico are on the verge of fiscal bankruptcy, severely straining the world's financial system.

For the US, the political and financial problems seem dangerously close to home. For the Reagan administration - which is more inclined than its recent predecessors to hear communist undertones - the possible scenarios seem frightening.

The ''falling domino'' theory haunts the White House when it thinks of Central America, particularly El Salvador with its civil war between a rightist-oriented government and leftist guerrillas. The strains in the inter-American system emerging from the Falklands war dashed the administration's hope of relying on nations like Argentina to help in Central America.

And for an administration dedicated to free enterprise, it is galling to have to commit so much aid (about $6 billion in loans, credits, and advance payments) to bail out debt-ridden Latin American nations. The Argentine peso, the Brazilian cruzeiro, and the Mexican peso weakened to the point that each was devalued in 1982.

Studying these predicaments, the Reagan administration has begun to worry that the US is losing its grip in Latin America.

There can be little doubt that US influence has declined throughout the hemisphere over the past decade. Western Europe and Japan stepped up their economic ties with Latin America at the expense of the US. Latin nations flexed their political and economic muscles through trade with communist-bloc countries and black Africa, and through the North-South dialogue.

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The specter of Cuba and its charismatic leader, Fidel Castro, continued to irritate the US in 1982 - with the Reagan administration refusing to have much to do with the Caribbean island that lies a mere 90 miles off Florida.

But Dr. Castro has been busy building close friendships with Latin America - particularly with Nicaragua, Grenada, and Suriname.

Fresh Cuban contacts with countries like Colombia and Venezuela have caused worry in Washington.

Still, the United States plays a major, if not dominant, role in the hemisphere. Many Latin American nations feel a sense of dependence on the US. Even fiercely independent and nationalistic Mexico, caught up in deep economic troubles, turned to Washington last year for a bailout. The United States supplied loans, advance payments for oil, and agricultural credit assistance - and more of this sort of help is likely in 1983.

Late last year, President Reagan went off on his own personal odyssey to Latin America - visiting Brazil, the biggest country of them all, to assure Brazilians that the US would not let their nation go belly up economically as it grapples with the world's largest foreign debt - some $85 billion. By going to Brazil, the US President also showed the flag and sought to convince all Latin Americans that despite US support for Britain in the Falklands war, the US has Latin American interests at heart.

President Reagan also visited Colombia and two Central American countries in efforts to show the people of these lands that the US is committed to helping them economically and that it will not let Marxist-oriented guerrillas in El Salvador gain the upper hand.

Yet in early 1983 the Salvadorean guerrillas appear to be stronger than ever and winning significant battles despite massive US military aid to government forces. Washington at this writing is ''virtually traumatized'' by the situation , as a State Department source said last month.

In all the major issues of 1982 - the civil war in El Salvador and the turmoil in adjacent Central American lands, the Anglo-Argentine war in the South Atlantic, and severe economic trouble in at least 10 Latin American countries - the Reagan administration could find no easy solutions.

Many US policy analysts see US and Western Hemisphere security as severely threatened by these developments.

Although the Central American quagmire has been a recurring problem for Washington for nearly a decade, the war between Argentina and Britain seemed more frightening, for it tore at the very fabric of inter-Americanism and the Organization of American States.

It involved two close allies of Washington - Britain, its closest friend for 150 years, and Argentina, a linchpin in many hemisphere pacts and a key ally in Washington's anticommunist, anti-Cuban policy. Argentina has been particularly helpful to the US in Central America.

As Argentina's intention to seize the Falklands - a British colony for 149 years - became apparent in late March, Washington scrambled to defuse the impending clash. During a 50-minute phone conversation April 1, President Reagan failed to persuade Argentine President Leopoldo Fortunato Galtieri to hold off on the takeover.

When Argentina actually landed on the islands April 2 and Britain began mounting a recovery armada, Alexander M. Haig Jr., then US secretary of state, shuttled back and forth among London, Buenos Aires, and Washington in a futile effort to prod the two antagonists into negotiations.

More in lament than anger, Washington finally announced it would support Britain, as did most of the European Community. Both Washington and the EC reluctantly branded Argentina as the aggressor in the clash.

Most Latin Americans agreed that Argentina was the aggressor - but supported their neighbor, albeit merely with lip service. Only Peru and Venezuela were willing to commit more than words.

Yet even that token solidarity was significant, suggesting to many that the inter-American system, based on the Rio de Janeiro Treaty of mutual assistance, was doomed. That proved too negative a forecast, but there is little doubt that the system was strained and that the US found itself the punching bag.

Time will tell how serious the strains are. Washington's support of Britain, though understandable, was unpopular. Its refusal to invoke the Rio Treaty - which would have cast Britain as a foreign power ''attacking'' an American power - was similarly unpopular.

At the same time, many hemisphere commentators criticized the Argentine seizure of the Falklands. ''It opens up a Pandora's box of problems for nations with border disputes around the hemisphere,'' wrote El Tiempo, a Bogota newspaper, noting that there are some 20 such disputes.

''Any nation feeling it has jurisdiction over a disputed area can now move with impunity to take over the area,'' the paper added. Many saw Argentina's request for Latin solidarity as a strange twist in regional affairs. Over the years Latin Americans have expressed pique at the way Argentina had tended to ignore its neighbors, regarding itself as more European than Latin American.

''When the chips are down,'' said Tribuna da Imprensa in Rio de Janeiro, ''Argentina comes running to its neighbors when in earlier times it regarded us as second-class cousins, hardly worth attention.''

Such carping aside, Latin America did not ignore a fellow Latin American needing support - even in a questionable cause.

Argentina's neighbors stood aghast at the use of sophisticated weaponry by both the British and the Argentines in what seemed otherwise a 19 th-century-style conflict. This weaponry played a significant part in the British victory, although it was early apparent that the Argentines were poorly prepared for the conflict.

Argentina, moreover, was in other sorts of trouble in 1982: Mass graves containing the bodies of hundreds, perhaps thousands, of Argentines who disappeared after the 1976 military coup were discovered. They blackened the reputation of an already discredited military.

The nation also held the world's highest inflation rate - 210 percent - for 1982. Its foreign debt was nearly $40 billion; it could not pay even the interest on that debt. The Argentine peso was devalued many times during the year.

The Falklands' war exacerbated that financial problem and the Argentine military kept spending after the war as they rearmed ''to go after the islands again,'' as an Argentine general proclaimed in 1982.

US efforts to slow the rearmament and to get Argentina to adopt a less strident tone on the Falklands were unsuccessful. Some analysts suggested that the US had lost all influence on Argentina.

Closer to home, US relations with neighbors had more ups and downs. In Mexico, US influence seemed to grow as President Miguel de la Madrid Hurtado took office Dec. 1. President de la Madrid and half his Cabinet are US-educated; they looked to Washington for help in meeting Mexico's $80 billion-plus foreign debt. They received a good deal of assistance in 1982. In 1983 that assistance is likely to increase substantially.

The Reagan administration is showing increasing signs of concern about Mexico's problems, including the high unemployment rate (25 percent or more) that is helping to push Mexicans illegally across the US border to find work. Social unrest and revolution are possible in Mexico - but many Mexico-watchers think the country will straighten out its problems.

A Central America domino theory - in which these countries fall into leftist hands one after the other - is being studied in Washington these days. The Reagan administration is considering a sharp increase in aid to El Salvador and is weighing whether to send more military advisers (55 are there already) to help government forces. To some critics this suggests the specter of Vietnam-style escalation of US involvement, but the administration argues that there is no valid comparison.

In Guatemala, Gen. Efrain Rios Montt blocked an elected government from assuming office last year. Many observers said the election had been rigged and did not strongly disapprove of Rios Montt's coup. The Reagan administration, in fact, showed some pleasure at the way Guatemala's new military leader tackled a guerrilla offensive. The rebel challenge was by no means as strong as El Salvador's, but Rios Montt's army routed the guerrillas - and came in for harsh criticism from human rights groups claiming massive civilian casualties.

The Reagan administration knows the antiquated social structures in Central America underlie the region's backwardness, but it believes the real culprits in the region's turmoil are communists, represented by Cuba and Nicaragua. Remove those irritants, the administration seems to be saying, and the danger of the dominoes falling is removed.

US policy toward El Salvador is not outlined with quite so much bombast under Secretary of State George Shultz as it was under former Secretary Haig, but there has been no change in the State Department's fundamental appraisal of the situation: Salvadorean guerrillas are essentially the allies of the Cubans and are responsible for their country's civil war.

US-backed Salvadorean government forces are not doing well in the war just now. Recent guerrilla victories, the mutiny of a top Army colonel, and a chaotic governmental structure made all the more fragile by internal bickering have helped weaken the government, say many policy experts.

The Reagan administration's efforts to shore up Central America and the Caribbean in a regional Caribbean Basin Initiative (CBI) have not been too fruitful. Congress is dragging its heels on economic and trade incentives that would make the program meaningful.

Critics of the CBI see it as a smokescreen to cover additional US aid to El Salvador, which is scheduled to get a good third of the aid dollars in the program. El Salvador does not even have a Caribbean coastline.

Reagan administration spokesmen make no apology for their inclusion of El Salvador in the Caribbean program. The CBI, they say, is designed to counter Cuba's growing influence in the region and to show that the US cares about the future of the islands and countries in the Caribbean Basin.

Some administration officials complain that the jibes at the CBI are not fair. The program is imaginative, they say - much like John F. Kennedy's Alliance for Progress of the 1960s. They note that the Alliance for Progress also was designed to offset Castro's influence.

Congress is likely to let the CBI flounder unless the administration presses for it. Creative programs like the CBI, say many hemisphere observers, might well patch up some of the differences between the US and its Latin neighbors.

There are renewed calls on the Reagan administration to take a less abrasive, cautiously friendly approach to Cuba. There are fresh appeals to Washington to support a negotiated settlement in El Salvador to stop the carnage that has taken the lives of nearly 100,000 Salvadoreans in the past three years.

For the moment, there is no evidence that Washington wants to try such initiatives.

Yet the time may be ripe for programs like the CBI and for diplomacy aimed at resolving the knotty dilemmas of Central America. Such efforts are risky, but with relations at a low point and the inter-American system in a state of shock, many say such initiatives are in order.

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