Neoliberalism, the global elite, and the Guatemalan transition: A critical macrosocial analysis by Robinson, William I

Journal of Interamerican Studies and World Affairs Winter 2000

The trajectory of social change in Central America and Latin America in recent decades and, beyond that, the transformations in the global system are the "big picture" that puts into a larger focus issues of democratization and development in Guatemala. Recent change in Guatemala is part of a complex transition that began in Central America in the 1960s and will continue into the twenty-first century. This process involves the region's ongoing, gradual, highly conflictive, and contradictory entrance into the emergent global economy and society.

Central America is an important site of transnational processes, particularly the unfolding of a hegemonic, transnational agenda of neoliberalism and polyarchy. Transnational processes are defined as the economic and concomitant social, political, and cultural changes associated with incorporation into global economy and society. This essay reassesses the Central American conflict in light of these processes, with a synopsis of the globalization process in each country and a deeper examination of Guatemala.

The central argument here is that the transnational model of society in the Isthmus is inherently unstable and indicates contradictions internal to global capitalism, including social polarization between the rich and the poor, the loss of nation-state autonomy and regulatory power, and the deterioration of the social fabric in civil society, accompanied by crises of authority and state legitimacy. The Guatemalan elite's resistance to such reforms as changes in the tax system creates the image of the transnational project as progressive and obscures the essential polarizing and pauperizing consequences of neoliberalism. The constraints of the exclusionary socioeconomic system undermine efforts to open up the political system as contemplated in the 1996 Guatemalan peace accord. Authentic democratization requires a radical redistribution of wealth and power toward the poor majority; but the peace accord ratifies existing property relations and rules out such a redistribution.

GLOBAL CAPITALISM AND THE AGENDA OF THE TRANSNATIONAL ELITE
Globalization entails the transition from the nation-state phase of capitalism to a qualitatively new transnational phase.' Since 1492, the world has been linked into a single social system by trade and financial flows in an integrated international market. But from the late 1960s on-and accelerating now as the twenty-first century opens-this world economy is giving way to a new global economy. In this global economy, nations are no longer linked by external flows and relations but integrated organically through the globalization of the production process itself, along with the integration of the whole social, political, juridical, and cultural superstructure. The emergence of a truly global economy brings with it the material basis for the emergence of a single global society, including the transnationalization of civil society, of political processes, and of cultural life.

The global mobility of capital has allowed for the decentralization and functional integration around the world of vast chains of production and distribution, the instantaneous movement of values, and the unprecedented concentration and centralization of worldwide economic management, control, and decisionmaking power in transnational capital. Global capitalism is organized in a set of increasingly supranational institutions. These institutions include the transnational corporations that own and manage the world's resources and appropriate the wealth produced by humanity; the international financial agencies (IFIs), such as the International Monetary Fund and the World Bank, that impose the conditions necessary for global capital accumulation to take place; the states of the North and their junior counterparts of the South, which create the global and local political, administrative, and legal environment that allow the system to function; and the formal and informal transnational elite forums, such as the Group of Seven, the Trilateral Commission, and the World Economic Forum, that develop strategies to maintain and reproduce the system and supervise its overall operation.

The agent of the global economy is a new transnational elite. This group now controls global decisionmaking and increasingly monopolizes power in the global society. It comprises the owners and managers of the transnational corporations and also the bureaucrats, cadres, and technicians who administer the IFIs, the North and South state bureaucracies, and the transnational forums. Its membership includes the politicians and charismatic figures of public life and the mass media, along with select organic intellectuals, who provide ideological legitimacy and technical solutions for this new global order.
Below this transnational elite in the global hierarchy is a small and shrinking layer of middle classes, who exercise very little real power but who-pacified with mass consumption-form a fragile buffer between the transnational elite and the world's poor majority. Globalization dramatically alters the balance of forces among classes and social groups in each nation, at a level of the global system farther from popular majorities and closer to transnational capital and its representatives. National states increasingly respond to the interests of transnationalized fractions of locally dominant groups.

The transnational elite's program, in broad strokes, is to create the conditions most propitious to the unfettered functioning of global capitalism. In promoting this program, this new global elite has been pursuing a "transnational agenda," involving concomitant economic and political components, in every region of the world since the mid-1980s (Robinson 1996a, b, c, 1997). The economic component is neoliberalism, a model that seeks to achieve the conditions in each country and region for the mobility and free operation of capital. The neoliberal structural adjustment programs sweeping Latin America and the South in general seek macroeconomic stability as an essential requisite for the activity of transnational capital. This model aims to harmonize a wide range of fiscal, monetary, industrial, and commercial policies among many nations as a requirement for fully mobile transnational capital to function simultaneously, and often instantaneously, among numerous national borders.
In the neoliberal model, stabilization, or the package of fiscal, monetary, exchange, and related measures intended to achieve macroeconomic stability, is followed by "structural adjustment," which includes several components: liberalization of trade and finances, which opens the economy to the world market; deregulation, which removes the state from economic decisionmaking (but not from activities that service capital); and privatization of formerly public spheres that could hamper capital accumulation if criteria of public interest over private profit are left operative. This model thus generates the overall conditions for the profitable ("efficient") renewal of capital accumulation through new, globalized circuits, and, along with them, the conditions for social reproduction in the age of globalization. Neoliberal restructuring often results in an increase in poverty and inequality in the adjusted country as wealth is redistributed upward and shifted from the domestic market to the external sector linked to the global economy (Green 1995; Overbeek 1993; Robinson 1999). The unprecedented growth of inequalities worldwide under globalization, along with the emergence of new social hierarchies and cleavages around these inequalities (see, among others, UNDP various years; Korten 1996; Bradshaw and Wallace 1996), is leading to a new global social apartheid and worldwide polarization.

The political component of the project is the promotion of "democracy," or what is more accurately called polyarchy, a system in which a small group actually rules and the majority's participation in decision-- making is confined to choosing among competing elites in tightly controlled electoral processes. This type of "low-intensity democracy" does not involve power (craters) of the people (demos), much less an end to elite rule or to substantive inequality. The crisis of elite rule that developed throughout the Third World in the 1970s and 1980s in the context of globalization was resolved through transitions to polyarchies.

What transpired in these contested transitions was an effort by transnationally dominant groups to reconstitute hegemony through a change in the mode of political domination, from the coercive systems of social control exercised by authoritarian and dictatorial regimes to more consensually based systems of the new polyarchies. At stake was the type of social order-the emergent global capitalist order or some popular alternative-that would emerge in the wake of authoritarianism. The masses pushed for a deeper popular democratization while emergent transnationalized elites-backed by the structural power of the global economy and the inordinate political and ideological influence it brings, and often aided by direct U.S. political and military intervention-gained hegemony over democratization movements and steered the breakup of authoritarianism into polyarchic outcomes.

The transnational elite is now attempting to consolidate fragile polyarchic systems as the political counterpart to neoliberalism. Interaction and economic integration on a world scale are obstructed by authoritarian or dictatorial political arrangements, which cannot manage the expansion of social intercourse associated with the global economy. With its mechanisms for intraelite compromise and accommodation and for hegemonic incorporation of popular majorities, polyarchy is better equipped to legitimate the political authority of dominant groups and to achieve the political stability necessary for global capitalism to operate. The "democratic consensus" in the new world order is a consensus among an increasingly cohesive global elite on the type of political system most propitious to the reproduction of social order in the new global environment.
In Latin America, the transitions from authoritarianism to polyarchy gave functionaries from the IFIs, donor governments, corporate groups, and representatives of transnationalized fractions of the local elite the transnational elites the opportunity to reorganize state institutions and create a more favorable institutional framework for deepening the neoliberal adjustment. With few exceptions, Latin America's new polyarchic regimes, staffed by state managers (the new "modernizers" and "technocrats"), have pursued profound neoliberal transformation. The transnational elite has demonstrated a remarkable ability to wield the structural power of transnational capital over individual countries like a sledgehammer against popular grassroots movements for social change. Indeed, it is global capitalism's power to impose discipline through the market that (usually) obviates the all-pervasive coercive forms of political authority exercised by authoritarian regimes.

TRANSNATIONAL PROCESSES IN CENTRAL AMERICA
The underlying macrostructural dynamic in individual nations and regions over the past few decades has been integration into emergent global society. This has involved the breakup of national economic, political, and social systems, reciprocal to the breakup of the preglobalization, nation-state-based world order. This process of integration into changing world structures takes place through what elsewhere I have termed transnational processes (Robinson 1997, 1998b). Transnational processes are the economic and concomitant social, political, and cultural changes associated with the transition to global capitalism. Transnational processes in Central America should be seen as changes specific to the region that are linked to broader changes in the global system.

One type of change is that productive structures are reorganized, in tandem with the reorganization of global production. Each national economy is rearticulated to the global economy as new economic activities linked to globalization come to dominate and as each region acquires a new profile in the global system. There is also a complete class restructuring. Domestic classes tend to become globalized, preglobalization classes such as peasantries and artisans tend to disappear, and new classes and class fractions linked to the global economy emerge and become dominant. The transnational agenda of neoliberalism and polyarchy take hold as the hegemonic project, under the guidance of transnationalized fractions of local elites. Local political systems and civil societies become transnationalized, and states become integrated externally into supranational institutions and forums, which gradually assume functions that corresponded to the nation-state before globalization. A "global culture" of hyperindividualism, competition, and consumerism eclipses nationalist and developmental ideologies.

We see all these changes in Central America, and more broadly throughout Latin America, as transnational processes have taken hold over the past two decades. Facilitated by the neoliberal opening to the global economy and the export-led development (ELD) strategy, maquiladora production (particularly of garments), tourism, nontraditional agricultural exports, and remittances from emigrant workers have risen dramatically in importance and are coming to eclipse the traditional agroexport model as the most dynamic economic sectors linking Central America to globalized circuits of production and distribution (Robinson 1998). The Central American peasantry, artisans, national industrial, and other preglobalization classes have shown signs of gradual disintegration, and three principal groups have come to the fore: transnationalized fractions of the bourgeoisie tied to the new economic activities, new urban and rural working classes, and a new class of supernumeraries, or superfluous labor pools. (A huge portion of the last has migrated to the United States, where it constitutes a denationalized immigrant labor pool.)

The old authoritarian regimes have crumbled through transitions to polyarchy, and leftist movements that in the 1980s posed an antisystemic alternative to global integration have been defeated or transformed. In each Central American country, a transnationalized "technocratic" or New Right fraction has gained hegemony within the dominant classes. This fraction is pushing the transnational agenda of neoliberalism and the consolidation of polyarchies through diverse institutions, including states, political parties, and other organs of civil society.

Neoliberal structuring has resulted in a massive transfer of resources from the public to the private sphere and, within the private sphere, from the domestic to the external sector. The change in the model of accumulation has thus involved a concomitant change from the "developmentalist state" of the national model to the "neoliberal state" of the transnational model.

The five Central American states have moved gradually toward supranational integration. Politically, this integration is taking place through forums such as the Central American Integration System (SICA), the Central American Parliament (PARLACEN), regular presidential summits, and regionwide ministerial meetings. Economically, it includes the negotiation of a new free trade zone based on collective integration into the North American Free Trade Agreement. If the Central American Common Market (CACM) was a form of "inward" integration, intended to create a regional market for multinational (largely U.SJ capital to take advantage of economies of scale, the more recent sets of international agreements represent an "outward" integration, aimed at creating a single Central American field for the unfettered operation of transnational capital.

The IFIs, various agencies of the United Nations and the Organization of American States, and other transnational actors, including the U.S. Agency for International Development and international nongovernmental organizations (often linked to the national states of core countries), have increasingly assumed the functions of states through the design and imposition of economic policies, management of peace accords, sponsorship of institution building, and other activities. In this process, each Central American state has been penetrated by two new social forces, one from "within" and the other from "outside." From within, transnationalized fractions of dominant groups vie for and gain control over local states, particularly over key ministries tying the country to the global economy and society, such as the ministries of foreign affairs, finance, economic development, and central banks. From outside, some of the same transnational actors representing an emergent transnationalized state apparatus penetrate local states, form liaisons with transnationalized fractions therein, and help design and guide local policies.

A REASSESSMENT OF THE CENTRAL AMERICAN CONFLICT
These vast and open-ended transformations should be seen as the evolving outcome to the struggle among social forces in Central America as collective agents in dialectical interaction with changes in the global system.' In broad terms, three social forces, representing three distinct projects for the region, contended during the upheavals of the 1960s to 1990s. The landed oligarchies and dominant groups tied to the traditional agroexport model sought to sustain and reproduce the old model of capital accumulation and the particular set of social privileges and relations of domination based on authoritarian political systems.3 As the "autumn of the oligarchs" approached, the popular sectors and the mass revolutionary movements sought radical reforms, such as mass land redistribution, along with farther-reaching revolutionary and socialist-oriented alternatives that would have deeply undermined the region's class structure, upset relations of domination, and redistributed power and resources toward popular majorities.

As the regional conflict unfolded in the 1970s and 1980s, it looked on the surface like a bipolar contest between the old oligarchies and the popular revolutionary movements. In reality, however, globalizing dynamics had begun to transform local social forces. A "New Right" gradually cohered in the 1980s, in fits and bouts, into local transnationalized fractions of dominant groups and acquired its own political protagonism.4 Its project was to advance the agenda of the transnational elite. This transnational fraction came into being not from outside the traditional oligarchy but from within, from the same family networks. Its prospects for accumulating wealth and privilege, however, were linked less to restoring the traditional agroexports and industries under pre1980s social relations than to converting the region into a new export platform. It sought to submit backward oligarchic property relations to a capitalist modernization through a program of neoliberal restructuring and to a new "competitive" insertion into the emerging global economy. This New Right project sought to modernize the state and society with no fundamental deconcentration of property and wealth, nor with any class redistribution of political and economic power.

The New Right also promoted, together with the United States, transitions from authoritarian to so-called democratic political systems. The immediate aim was to preempt the movements for farther-reaching popular democratization through immediate reforms, such as the replacement of military by civilian personnel and controlled elections. But beyond this conjunctural consideration, the insertion of the region into global capitalism would require a political system that could promise more lasting social stability through consensual modes of social control rather than the old oligarchic dictatorships. This involved demilitarization, peace negotiations, the institutionalization of procedurally correct electoral processes, states with a functional separation of powers, and so on.

The persistence of an oligarchic political structure, combined with rapid capitalist development, sparked the revolutionary upheavals by the late 1970s. In the 1980s, the revolutionary movements succeeded in momentarily gathering disparite popular social forces into a movement that broke the hegemony of the landed oligarchy, wealthy industrialists, and financial groups that had come into existence with the CAM. The popular social forces, however, could not impose and stabilize a radical redistributive and socialist-oriented reconstruction of the region. One reason was massive U.S. intervention; a second was the revolutionary movement's own contradictions and weaknesses in the context of a changing world order. The latter included an inability to agree on tactics and strategies of the struggle and, more significant, a chronic disunity over the terms of the reconstruction (reflecting, in part, the complexity and the diverse, even antagonistic interests that made up the popular forces). These factors undercut the consolidation of a new, revolutionary bloc. At the structural level, the growing power of transnational capital and the world market to impose discipline on antisystemic movements made the revolutionary project inviable.

The third reason for the failure of the popular movements' plans for reconstruction was the changing composition of the dominant classes, their socioeconomic articulation, and their political-ideological project. The emergence of the neoliberal New Right in the 1980s in each of the Central American countries was partly a result of that very revolutionary upsurge, which altered the dominant power blocs in each country. It was also partly a reflection of a transnational elite that emerged as both a political and an economic protagonist.

These three factors cannot be separated; they are different dimensions of the same globalizing process. It was the threat of revolution from the popular classes that led to U.S. intervention. From the mid1980s on, U.S. policymakers began to redefine, in ad hoc fashion, the objective of interventionism, from a military defeat of revolutionary forces through counterinsurgency to a more thorough political and economic restructuring of the region and its social forces via the link to emergent global structures (Robinson 1996c, esp. chaps. 1, 2, 1996b). This included a shift to "democracy promotion" as a means to neutralize the revolutionary threat through incorporation. The changes in U.S. strategy helped accelerate the articulation of alternative political-ideological discourse and projects among sectors of the dominant groups that would gradually cohere into the New Right elite. The transnational nuclei of the local elite vied for, and achieved, hegemony over the elite as a whole in the 1980s, and went on in the 1990s to assume state power and to attempt to implement the program of global capitalism in the region.
Political regime change in every country except Costa Rica has been one aspect of a broader shift in the nature of political authority and the mode of social control. The recomposition of the capitalist order has involved a new social structure, based on changes in the economy, state, regime, social, and political system.

This analysis runs contrary to conventional thinking, according to which the old oligarchies, by the end of the 1980s, had virtually disappeared, but neither the popular forces nor their adversaries, the newly dominant groups in Central America together with the United States, could prevail. According to this view, the struggle had reached a stalemate that created the conditions for a historic compromise between different class and social forces in favor of a mutual accommodation. Negotiations and peace settlements led to a broad consensus that shifted the region's struggle from the military to the political-civic arena. This shift, in turn, was to be framed by regionwide processes of democratization and demilitarization. Competition between different social projects would now take place through elections and peaceful mobilization.
This writer would argue, in contrast, that the revolutionary upheavals ended not in stalemate and compromise but in the conditional defeat of the broad popular sectors in Central America and the conditional victory of the newly dominant groups. The popular majority was conditionally defeated in what it set about to do-fundamentally alter the social order in its favor. The dominant groups secured control of the project of global capitalism, but have been unable to stabilize that project and achieve its hegemony, in the Gramscian sense.

This outcome was formalized in the internationally sponsored peace negotiations of the late 1980s and early 1990s, followed by diverse concertacion and "reconciliation" forums. These meetings transferred social contradictions from the military to the political terrain and hammered out fragile, temporary pacts, but did not resolve the social contradictions that gave rise to the upheaval.

SYNOPSIS OF CHANGE IN EACH COUNTRY
In Nicaragua, the Sandinista triumph of 1979 constituted the seizure of state power in one country by a revolutionary movement and an effort to implement the popular project. The overthrow of the Somocista dictatorship destroyed the traditional oligarchy. But the structural constraints of globalization and the direct power of the U.S. state combined to make unworkable an alternative to polyarchy and global capitalism.

Modernizing capitalist fractions had been coalescing since the mid-1960s and, in opposition to Somoza, had linked with the Sandinistas in 1970s class alliances. These fractions stayed inside Nicaragua following the revolution and retained their links to the international capitalist market. They gradually gained structural strength and political importance in the 1980s, as they increasingly replaced the state as the principal intermediaries between Nicaragua and world markets and developed ties to the emergent U.S.-led transnational elite. In highly simplified terms, a transnationalized fraction took over key institutions of the state following the 1990s elections, even as much of the state, and society at large, was in dispute after 1990. This embryonic transnational nucleus pursued the program of reinserting Nicaragua into the global economy and a far-reaching neoliberal restructuring.

In El Salvador, a massive popular movement burgeoned in the 1970s, and the guerrilla movement snowballed into a full civil war by the early 1980s. While the revolutionary forces eventually threatened state power, the U.S.-led counterinsurgency staved off a triumph similar to that which had taken place in Nicaragua. Behind the highly visible battle between the revolutionary armed movement and the U.S.-supported dominant groups, however, lay a more significant process: the reorganization of the Salvadoran state and economy in conjunction with movement at the level of the global economy, a reconfiguration of the dominant groups, and the emergence of a lucid New Right fraction within the ruling party itself, the Nationalist Revolutionary Alliance (ARENA).

The transnationalized fraction gained control over the ARENA party-which, ironically, had first been formed by the most retrograde elements of the oligarchy-and control of the state with the election of Alfredo Cristiani in 1988. The insurgency, combined with changes in the dominant project itself, shattered the old oligarchy and its project. The insurgent fraction was able to gain hegemony over the elite and over the transition as a whole and to implement sweeping neoliberal transformation after 1988.

In Honduras, both the subordinate and the dominant classes were historically the least developed in Central America. The chaotic disequilibrium among internal social forces from early twentieth century into the 1970s created fertile ground for an unstable string of civilian-military regimes responding to competing pressures of a small landed oligarchy, midsized ranchers, bureaucratic elites, and mass peasant and worker mobilizations. The weakness of Honduran social forces and the state allowed foreign companies to dominate the country, making Honduras the quintessential "banana republic."
A transnational fraction began to cohere in the 1980s in consonance with the virtual U.S. occupation of the country as a staging ground for regional counterinsurgency, U.S. sponsorship of economic development and restructuring programs, and a transition to polyarchy. This fraction gained representation in the National Party through Rafael Callejas, who won the 1989 elections and proceeded with sweeping neoliberal reform, a process continued and deepened by the subsequent Liberal Party government.

In Costa Rica, a very different path of twentieth-century development did not deter the outcome in the 1980s and 1990s of integration into the global economy under terms similar to those of the region as a whole. The hegemony of the landed oligarchy was broken in the 1948 civil war and replaced by an alliance of emergent industrial, commercial, and financial capitalists. This united and relatively modernized dominant class incorporated the peasantry and working classes into a stable hegemonic bloc and established a functioning polyarchic political system. Under the model of import substitution industrialization (ISI) and agroexport expansion, with an important redistributive component and significant levels of social welfare spending, Costa Rica experienced development well beyond that of its neighbors.

By the late 1970s, however, this model of dependent capitalist development had become exhausted. The financial crisis of 1981 gave impetus to a gradual restructuring throughout the 1980s and 1990s, along with the reinsertion of the country's productive apparatus into the emergent global economy. Under close AID tutelage, successive governments oversaw liberalization, austerity, deregulation, privatization, and the development of a ELD model that began to replace the old ISI model. Socioeconomic restructuring generated new entrepreneurial groups within both parties of the elite, the National Liberation Party (PLN) and the Social Christian Unity Party (PUSC).

And finally we arrive at Guatemala, which we can now assess in comparative and historical perspective. The traditional agroexport oligarchy was the most deeply entrenched, and it controlled the state-- which was administered directly by the military for much of the 1980s; a transnationalized fraction was the weakest. As in El Salvador, the U.S.-supported Christian Democratic Party, which came to government in the 1980s as part of broader counterinsurgency efforts, was intended to defuse the popular movement with reforms and lead visible transitions to (largely dysfunctional) polyarchy. But the Christian Democratic alternatives were not meant to carry the transnational elite project in the larger scheme of things. With the introduction and expansion of new economic activities in the 1980s-including a powerful new financial sector tied to international banking; incipient export-oriented industry, such as maquila textile production; nontraditional agricultural exports promoted by the IFIs; and new commercial groups-a transnationalized fraction of the elite assumed its own profile and clashed with the old state-protected oligarchy over fiscal, tax, liberalization, and related policies.

This tiny and poorly organized fraction articulated, in the early 1990s, a coherent program for economic and political modernization attuned to the transnational elite agenda, as epitomized, for example, in the policy proposals that flowed out of the influential USAID-funded Association for Research and Social Studies (ASIES). Representatives of this transnationalized fraction, after a false start with the election of Jorge Serrano in 1990, assumed the reins of the government with the electoral triumph in 1994 of the National Action Party (PAN), whose leadership included professionals, administrators, and technocrats schooled in neoliberal economics and a modernizing outlook.

Unlike El Salvador, where the insurgency actually came to dispute state power and constitute a dual power, the Guatemalan insurgency did not threaten the state. But the movement could continue an indefinite insurgency that would make it impossible ever to pacify the countryside and establish the stability that transnational capital required for the country and the region as a whole. The subsequent New Year's Eve 1996 peace accords set the basis for consolidating the transnational elite project for Guatemala. In 1997, the PAN government committed itself to deepening and consolidating a long-term program of neoliberal transformation first launched in 1989 with little success.

The relative strength of the oligarchy and underdevelopment of the transnationalized fraction in the Guatemalan case partly accounts for the tardiness of the transnational project and the severe difficulties of its implementation. The counterrevolution of 1954 and the "counterinsurgency state" that followed gave the oligarchy an internal cohesion that allowed it to resist change in the 1980s (see Jonas 1991).

In comparative perspective, the particular constellation of social forces and historical events in the other Central American countries generated conditions relatively more responsive to the transnational project than those in Guatemala. The old oligarchy was crushed in Nicaragua in 1979, displaced in Costa Rica in 1948, and transformed in Honduras by U.S. intervention and regional dynamics. In El Salvador, U.S. and transnational actors promoted tax, land, and other reforms as a component of the counterinsurgency program-in the process, weakening the old oligarchy and strengthening a transnational fraction-in response to the strength of the revolutionary movement. Guatemala's counterinsurgency rested on postponing any reform; for example, the IFIs did not impose conditionality on Guatemala (Jonas 1991, 81, 88). Counterinsurgency was midwife to the transnational project in El Salvador and an obstacle in Guatemala.

GUATEMALA'S PROSPECTS FOR DEMOCRACY AND DEVELOPMENT
In light of the "big picture" presented here, what are Guatemala's real prospects for democratization and development? To phrase the same question in an entirely different manner is to ask, in the current globalized environment, what sources of power can the Guatemalan popular sectors develop to confront transnational social forces averse to the kinds of structural transformation that could benefit the poor majority? And what policy recommendations would support that process?
It is useful to remember that social change is driven by contradictions that make it impossible to continue an existing set of historical arrangements. The underlying structural dynamics at play in Central America have been a transition to a transnational model of society along with changes in the global system. Yet this globalization of Central America has not resolved the social contradictions that generated the regional upheaval in the first place, and it has simultaneously introduced a new set of contradictions. There has been a continuation-and actually a deepening--from the 1970s to the 1990s, under new circumstances, of an extreme concentration of property and wealth, and of political power, in the hands of tiny minorities, side by side with the impoverishment and powerlessness of a dispossessed majority. (The only exception was Nicaragua, but those changes have been largely reversed.) The lives of the vast majority of Central Americans have grown worse, not better.' The very conditions that gave rise to the Central American crisis in the first place remain, for the most part, unaltered.

The neoliberal model specifically precludes policies, such as agrarian reform and redistributive measures, that could ameliorate current social conditions. The new model of capital accumulation might result in renewed growth in the region: but it is not likely to bring about development, whether this concept is understood in integral terms as a process of social transformation that empowers poor majorities to improve their material and cultural conditions, or even in more narrow terms of a sustainable expansion of productive forces. For instance, the maquiladoras constitute an enclave with little or no backward and forward linkage to host nation economies and very low value added. They characterized by the superexploitation of workers and by conditions of extreme oppression within the free trade zone enclaves. Tourism does stimulate greater local economic activity, but it does not generate integrated development. It is generally low-skill, low-wage, seasonal employment, and it depends on highly elastic and unstable demand, over which host countries have very little control.

Neither do nontraditional agricultural exports (NTAEs) hold much promise for regional development, as several recent studies have shown (Conroy et al. 1996; Barham et al. 1992). It may also be noted that disruption of traditional established communities and contraction of domestic demand accompanies deeper integration into the global economy, a consequence of the internal concentration of wealth and productive resources toward groups tied to the external sector and transnational economic circuits and a greater transfer of wealth out of the country. This results in a shift in the sources of profitability from productive to commercial and financial activities as outlets for investment. Any prospects of authentic development, barring a break with capitalism, must involve restoring the profitability of productive investment. This might require a type of state intervention in the accumulation process that is anathema to the neoliberal model.

The transnational model of society in Central America is inherently unstable, and it indicates contradictions internal to global capitalism, including the worldwide social polarization between rich and poor, the loss of nation-state autonomy and regulatory power, and the deterioration of the social fabric in civil society, accompanied by crises of authority and state legitimacy. The Guatemalan elite's resistance to even the most minimal reforms (such as the tax system) creates the image of the transnational project as "progressive" and obscures the essential polarizing and pauperizing consequences of neoliberalism. Let us recall that the transnational elite wants to stabilize its project in Guatemala not to democratize and develop the country but to secure Central America for global capitalism.

By promoting global capitalism in Guatemala, the transnational elite is antioligarchic, but this should not obscure its overarching project of constructing a neoliberal order in Guatemala. The peace accord was the only instrument available for the transnational elite to push forward its agenda. Implementation of the accord, a prerequisite for stability, sets the entire stage for restructuring the Guatemalan state and society, including relations among dominant groups and fractions, for the larger project of constructing a neoliberal order as part and parcel of the transition. A progressive tax reform could redistribute income downward and finance social spending; but the reform designed by the IFIs proposes indirect taxes levied largely on consumption, in a regressive tax system in which 80 percent of the taxes already comes from indirect levies and only 20 percent from direct taxes on income and wealth (Latin America Data Base 1997).

The IFIs see the tax reform as an essential macroeconomic instrument for resuming transnational capital accumulation in Guatemala and proceeding with a more sweeping adjustment. "The commitment to raise the tax base is not just a hollow demand or capricious recommendation on the international community," explained the World Bank representative in Guatemala, "but rather a fundamental prerequisite for accelerated and equitable economic growth" (Latin America Data Base 1997). The poor and popular classes are thus being asked to finance, through austerity, an accord whose purpose, from the transnational elite's perspective, is to stabilize the country so that a neoliberal order can be constructed.

Similarly, by way of further example, the "land reform" (registry and sale of available private lands) is not intended to benefit the dispossessed rural majority, much less achieve social justice. It is a measure that will further facilitate the transition begun several decades ago to a more fully capitalist agriculture, including a market in land and labor, in the countryside (USAID 1990). In this sense, it is similar to the types of land policies associated with the Green Revolution and with 1960s land reform programs promoted by the capitalist powers in the Third World. These programs were aimed at extending and intensifying capitalist agriculture, including the introduction of the types of agribusiness schemes contemplated for Guatemala. In this way, they resulted in an increased concentration of land, a rise in inequalities, and the proletarianization and further impoverishment of the rural population (McMichael 1996).

It is not clear to what extent the 1996 peace accords can contribute to democratization and development in Guatemala. Those accords could, alternatively, actually end up legitimating the emergent neoliberal order by preventing fundamental change in the socioeconomic system and delegitimating opponents of this system (dispossessed campesino squatters, for instance) as "extremists who reject peace." To the extent that they end some of the most brutal human rights abuses, open up even partial and limited space (polyarchy is preferable to dictatorship), and at least legitimate, if not realize, such demands as indigenous rights, the accords are of major importance. But to argue that in doing these things they pave the way for democracy and development (they do not in themselves) is tautological: parallel reasoning leads to a conclusion that the old dictatorships really paved the way for democracy and development because they generated the social forces and historical conditions that brought about changes such as those contemplated in the accords.

The transnational elite has also disassociated Indian cultural issues from socioeconomic changes and autonomous political power for the indigenous. Moreover, achieving even the limited objectives of the accords has proved elusive. A spate of land invasions that began even before the accords were signed and that intensified throughout 1997 and 1998 was met by forcible evictions, large displays of police power, injuries, and death. In 1998, the government negotiated with international donors a modification of the targets of the peace process regarding tax reform, agrarian policy, justice, rural development, public security, and constitutional reforms affecting the military and the indigenous (Spence et al. 1998; Latin America Data Base 1998). The accords' contribution to democratization and development should be gauged not by what was agreed to on paper but by the extent to which proposed changes are actually implemented and by how much they affect the poor majority.
"Success" in a political endeavor is often defined, from the summits of power, as how broadly the ruling structures are imposed and reproduced, how much accommodation and conformity around these structures is achieved among the different components of the privileged strata, and how much social control is maintained at the base. Authentic democratization in Guatemala would require incorporating the excluded majorities in the vital decisions that affect their lives. It would mean political outcomes in the interests of these majorities, predicated on the construction of a democratic socioeconomic system, and therefore a massive redistribution of political power, in Guatemala and in Central America. Political power, in turn, flows from economic power, and economic power is based on control over society's resources, wealth, and culture. Democratization in Guatemala therefore requires a radical redistribution of wealth and power toward what has been termed "the 87 percent majority" (Jonas 1991).

What type of policy recommendations flow from this analysis? We could say that, if it is interested in bringing about democratization and development, the transnational elite "should" promote a far-reaching agrarian reform and income redistribution. It should organize mass health and educational campaigns and special programs for women and children; encourage independent nationwide trade unionism and social movements; place local, grassroots leaders in positions of authority throughout the state's institutions, with special emphasis on the indigenous and women; ban impunity and purge from the state and definitively punish all those responsible for human rights violations and misuse of state institutions. But such policies will not come about until or unless they are forced on the Guatemalan state and the transnational elite by the "87 percent majority," or unless the elite is removed from positions with the institutional power to suppress such policies.
Many in the policy and academic community see such policy recommendations as unrealistic. The current global capitalist order has achieved a remarkable ideological hegemony, in that the structural constraints it sets have become accepted and the only alternatives put forward as legitimate and "realistic" are those that respect those constraints. The extent of social change may be fixed by historical structures, but the outer limits of those structures are always established and reestablished by collective human agency (and our intellectual labor as a form of social action).

Capitalist globalization is the macrostructural-historical backdrop to Guatemala and Central America in the twenty-first century, but this process is not predetermined, insofar as structural change is shaped by agents attempting to influence it from below and above. Varying problems of governability and crises of legitimacy characterize country after country in Central America and all of Latin America. The crisis and eventual collapse of the neoliberal project may create the regional or transnational conditions in which to promote alternatives-alternative projects to the neoliberal one, viable forms of struggle from civil society, and state formations-if and when the fortress of the neoliberal state is pried open. The real question regarding democratization and development, therefore, is what are the popular majority's chances to develop effective new strategies and forms of struggle under the dramatically changed national, regional, and global conditions.

The dominant groups in Central America may have reconstituted and consolidated their control over political society, but a new round of popular class mobilization in the mid-1990s pointed to their inability to sustain hegemony in civil society. Subordinate groups demonstrated a renewed protagonism at the grassroots level, outside of state structures and largely independent of organized leftist parties. Indigenous, women's, environmental, neighborhood, peasant, worker, and other social movements have flourished in civil society. The left's failure to articulate a counterhegemonic alternative and to protagonize a process of structural change from political society has helped shift the locus of conflict more fully to civil society.

Given the ability of transnational capital to utilize its structural power to impose its project even over states that are captured by forces adverse to that project, perhaps the real prospects for counterhegemonic social change in the age of globalization is a "long march through civil society" in the Gramscian sense. This march should be part of a movement of globalization from below, to accumulate counterhegemonic forces beyond national and regional borders and to challenge the power of the global elite from within an expanding transnational civil society.' Continued change-in Guatemala, in Central America, and in global society at large-will be shaped by conflict and crisis among the summits of power as the hegemonic groups find it increasingly difficult to maintain governability and assure social reproduction, by recomposition of civil society at the base, and by the interplay of the two at the local and global levels.
Copyright Journal of Interamerican Studies Winter 2000
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