Central American Countries Look Beyond US

Threatened by the collapse of U.S. financial markets, the countries of Central America are reinventing globalism as a necessary survival tactic for the economic hard times to come.

For the past decade, the globalism of Central American economies has mostly meant strengthening ties with the United States. But today, with the region’s main trade partner in recession, the vulnerable economies of Central America are looking over the fence of ”America’s backyard” to neighbors farther afield in South America, Europe and Asia.

”For years we have wanted to sustain ourselves based on a model of globalization that was supposed to resolve our problems on its own, but it didn’t prepare our economies to be energy independent, food independent or financially independent,” said Honduran President Mel Zelaya, a born-again leftist who recently signed his country up for Venezuela’s Bolivarian Alternative for the Americas (ALBA), a cooperation agreement among several Latin American countries that adhere to Hugo Chávez’s vision of “21st-century socialism.”


Earlier this month at the Central American presidential summit that focused on the region’s response to the global financial crisis, Zelaya said that the U.S. model of globalism has “only created more underdevelopment and backwardness in our countries.”

Nicaraguan President Daniel Ortega, of Latin America’s old-school left, has called the U.S. crisis ”the funeral of capitalism.” Ortega, also an enthusiastic member of ALBA, has called for ”an alternative model of development” based on solidarity, justice and Latin American integration.

”Just four years ago, this alternative model seemed like a dream, but now it’s becoming a reality,” Ortega said during a recent speech.

As 2009 approaches ominously, the concept of seeking refuge in an alternative model — or at least in alternative markets — is becoming more widely accepted by pragmatists as well as ideologues.

Even Salvadoran President Tony Saca, perhaps the United States’ staunchest defender in Latin America, admits that the status quo of promoting free-trade exports to the United States is about to ”take a severe hit.” Saca is now calling on Central America to shift its focus more toward ”intraregional trade” to offset next year’s expected decline in U.S. consumer demand for Central American exports, such as textiles, meats and computer products.

Money sent home from Central American immigrants working in the United States is also expected to dip next year as more workers get laid off from slumping construction and service industries. A drop in remittances, the main lifeline of foreign income injections in most Central American countries, would provide another major blow to the region, economists warn.


While Nicaragua and Honduras are banking on Chávez’s dwindling oil empire, and El Salvador and Guatemala look closer to home in an attempt to strengthen trade from within Central America, Costa Rica — the region’s most developed economy — is looking across the globe to Asia for answers.

Costa Rican President Oscar Arias surprised the region in June 2007 by making his country the first in Central America to officially recognize China, thereby severing its 60-year-old relationship with Taiwan.

Though Arias, a Nobel Peace Laureate for his work spearheading the Central American peace plan in the 1980s, has drawn heat for his decision to buddy up to China, the Costa Rican government insists it’s only accelerating the inevitable process of recognizing the world’s next superpower.


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