U.S. Marshall Plan for the Caribbean: Counterinsurgency
by Robert Holden
by Robert Holden
Money and guns: for more than eighty years, these have been the main instruments of U.S. foreign policy in Latin America. Shifts of emphasis, variations in approach, and some amusing rhetorical flourishes have broken the monotony from time to time, but the main objectives are the old familiar ones: the exclusion of “alien interests” and the maintenance of an open door for U.S. trade and investment.
U.S. capital’s inexhaustible appetite for fresh foreign investment opportunities has been matched by Washington’s willingness to apply raw military power on its behalf. The policy failed badly only once – in Cuba, an early victim of U.S. imperialism that finally excoriated the beast in 1959. Now, the policy is being threatened again in Nicaragua, in Grenada, and on a different level in Guatemala and El Salvador.
Not since the rule of Salvador Allende’s Popular Unity government in Chile from 1970 to 1973 have U.S. interests been so gravely endangered in what Pentagon strategists like to call our “southern flank.” Washington intervened materially to assist the overthrow of Allende, and is once again positioning itself for an intervention more dramatic than the mere transfer of arms and advisors. This time, the U.S. government’s attention has been arrested by the popular upsurge in Central America against the oligarchies that have ruled on Washington’s behalf.
The response of the Reagan administration has been to more than double the flow of weaponry into Caribbean basin countries whose leaders are threatened by popular revolt, and to propose what has become known as a “mini-Marshall Plan.” (All references to the Caribbean basin, or the region, refer to the island nations, the countries of Central America not counting Mexico, and to Colombia, Venezuela, Guyana, and Suriname on the South American coast.)
This fall, the administration will begin consulting the leaders of industry and Congress to formulate a specific program for the so-called economic development, or “Marshall Plan” component of the Reagan policy. By January 1982, according to the State Department’s timetable, a second meeting of the United States and its designated partners in this effort – Mexico, Venezuela, and Canada – will have taken place to decide how the plan will be drawn up.
As outlined by the administration, the United States will attempt to encourage development in the region by stressing the build-up of local private enterprise (through U.S. aid as well as local government initiative), and the provision by the recipient governments of further incentives for U.S. private investment and trade. Mexico, Canada, and Venezuela are supposed to be developing separate plans subject to some kind of coordination with Washington’s.
As described by Thomas O. Enders, Assistant Secretary of State for Inter-American Affairs in testimony last July 28 before the House Inter-American Affairs Subcommittee, the plan will emphasize “the supply side… to create new competitive production capacity and take better advantage of the basin’s existing resources and capital.”
So, Enders continued, “we will begin asking these countries as we meet them: What can you do to retain your skilled labor and capital? How can you create predictable, favorable conditions for enterprise? Such ideas as insurance against political risk for domestic as well as foreign investment, investment treaties ensuring fair treatment, regional investment codes, and in general more favorable tax and legal treatment for investments should be considered.”
Stephen L. Lande, the Assistant U.S. Trade Representative for Bilateral Affairs, told the committee that “the first step is to identify the major impediments to private investment in the basin and in cooperation with the basin countries to try to devise approaches to remove these impediments.”
An official of the Agency for International Development (AID) called for major policy changes to stimulate production for export in the region, and pointed to the example of the Latin American Agribusiness Development Corporation, S.A.1
“We at AID,” added John R. Bolton, AID general counsel, “are vigorous advocates of supply side foreign assistance.”
This openly neo-colonial strategy is being echoed at the World Bank, which has proposed across-the-board currency devaluations, higher prices for basic goods and services, the elimination of trade restrictions, and private takeover of government-owned facilities as a way to establish a “social compact” in which “developing countries would agree to needed economic changes in exchange for the promise of increased aid from the industrial and cred- would, both in bilateral grants and credits from the World Bank.”2
The United States is already implementing this policy at the Inter-American Development Bank, where the U.S. representative, in an “unprecedented” move, vetoed a $20 million low-interest loan to Guyana because it would have supported government subsidies to rice farmers.
Expanded Military Assistance
Expanded military assistance to friendly governments in the region is an inseparable part of the Reagan “Marshall Plan.” In his testimony before the House subcommittee, Enders noted that, in addition to the economic strategy, “military and political answers” are needed to “solve the security and political problems of the area.”
United Nations Ambassador Jeane Kirkpatrick has also called attention to the importance of granting military assistance in tandem with so-called “development” aid.4
The increase in military aid in fiscal year 1982 is colossal. Under the Foreign Military Sales program, the Pentagon has been authorized to sell an estimated $50.7 million worth of military articles in fiscal ’82 to eleven countries: Barbados, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Panama, and Venezuela.
This represents an increase of 135 percent over 1980 sales to countries in the region, and a 96 percent increase over 1981 sales. Funding for military training of the region’s armed forces personnel will leap 178 percent from fiscal ’80 to fiscal ’82, to a total of $4.7 million. Licensed commercial sales of U.S. weapons are estimated to rise 48 percent, to $25.3 million.5
At the same time, the U.S. Department of Justice has permitted the training of counter-revolutionary exiles in bases in Florida where they are openly preparing attacks on Cuba and Nicaragua in violation of the Neutrality Act.6
Recently, the Cuban government announced the arrest of five counter-revolutionaries who landed on July 5, 1981 with weapons, explosives, and a plan to assassinate Fidel Castro.7
And when Secretary of State Alexander Haig accused the Soviet Union of stepping up arms deliveries to Cuba, the Wall Street Journal reported that “U.S. officials have said recently that a series of steps, including some ‘actions,’ are planned for the near future to clarify U.S. policy toward Cuba.”8
U.S. Corporate Interests
What, precisely, are some of the interests at stake for U.S. corporations in the basin? They were plainly, if crudely, expressed by President Reagan nine days after his inauguration. Responding to a news conference question about the election of a conservative government in Jamaica, Reagan said:
“And I think this opens the door for us to have a policy in the Mediterranean (sic) of bringing them back in — those countries that might have started in that direction — or keeping them in the Western World, in the free world. And so, we are looking forward to cooperate with (Jamaican) Prime Minister Seaga.”9
Two months later, a U.S. AID functionary reminded the Senate Foreign Relations Committee that “The United States has vital economic and security interests in Latin America and the Caribbean,” which together account for 77 percent of all U.S. investment in the Third World.
“The continued health and growth of this large market is vital to our need to increase export earnings… [A]nd the importance of foreign sales to our income and employment is likely to be even greater in the future.”10
At the Pentagon, a spokesperson justified the expanded U.S. military presence in the Caribbean (further described below) as a response to U.S. “strategic interests and security threats.” The two main security threats in the Caribbean are Cuban support of insurgent subversion in various countries (by providing arms and training) and the threat to our sea lanes of communication.”11
The military stake in the region was also outlined by Florida Congressman Dante B. Fascell:
“We have both a commercial and a military stake in the Caribbean’s sea lanes — through which travel… all the naval and commercial vessels using the Panama Canal, … a significant proportion of shipping bound to or from the South Atlantic and much of America’s imported oil — and a similar stake in the region as a prime source for critical industrial raw materials. Because of the region’s location, we have a stake in its use as a military basing point for U.S. installations and — perhaps even more — as a potential one for U.S. adversaries.”12
The Caribbean holds about one-third of all U.S. investment in Latin America, or about $5 billion worth. Export-import trade with the region comes to $16 billion a year. It is still the United States’ main source of bauxite, an ore needed to produce aluminum. One-fourth of U.S. petroleum imports are refined or shipped through the Caribbean, and U.S. and Canadian oil companies are intensifying their search for oil in the region, where Guyana and Jamaica are said to be the likeliest sources of rich deposits. Many of the Caribbean governments are offering highly favorable concessions to foreign oil companies, including permission to retain up to 70 percent of their profits.14
Carter and Reagan Policies
Jimmy Carter, of course, understood all of this as well as Ronald Reagan. Indeed, Carter should be claiming the credit for initiating both the “Marshall Plan” idea and the stepped-up U.S. military presence. In the fall of 1979, Carter’s administration revealed the existence of a mysterious Soviet combat brigade in Cuba – a revelation uninhibited by the prompt acknowledgement of the Soviet Union that the brigade had been there since 1962.15
Carter used the presence of the brigade to announce, in a dramatic and war-mongering television address to the nation on October 1, 1979, the following actions:
- More economic aid to Caribbean countries “to resist social turmoil and possible communist domination.”
- The establishment of a permanent military headquarters on Key West, to be known as the Caribbean Joint Task Force.16
Five weeks later, in a message to Congress, Carter proposed to “expand our support for development and security in Central America and the Caribbean” by spending $175 million in the coming year on various economic assistance projects. He added that, “We hope that other nations and international institutions will increase their efforts to accelerate the social and economic development of Central America.”17
The spending program had been planned at least since the spring of 1979, as the rebel forces in Nicaragua were gathering strength for their final victory that summer. A Caribbean Group for Cooperation and Economic Development was formed by the United States and international agencies, and several countries were pledging to spend $275 million on the Caribbean in 1980.18
Military Exercises
As one consequence of the “Soviet brigade” scare, the annual military maneuvers in the Atlantic and Caribbean were expanded. By 1981, the war games had become the “largest U.S. maritime exercise in recent years,” combining “a series of previously scheduled exercises into a compressed time period in order to provide realistic and integrated training in a war-at-sea scenario.”19
This year’s Atlantic-Caribbean maneuver was called Ocean Venture 81, and the Caribbean phase took place from August 3 to August 20 under the command of the Joint Task Force in Key West, with units from the Netherlands and the United Kingdom participating.20
The exercise sent 16,870 U.S. military personnel into the Caribbean on 12 ships and more than 100 aircraft.21
This dangerous22 and provocative show of force may have been Jimmy Carter’s idea, but it is also something Reagan clearly relishes, as he showed by his delighted response to the U.S. provocation over Libya’s Gulf of Sidra in August 1981. Reagan’s recklessness was evident early in 1980, when the presidential candidate told a CBS interviewer that a blockade of Cuba was one way to “show the Soviet Union how seriously we take this aggression of theirs” (in Afghanistan). Of course, he added, that was only a suggestion: “There might even be better options than that.”23
Implications for the Caribbean Basin
If successfully implemented, the Carter-Reagan plan to “help” the countries of the Caribbean basin will further reinforce their dependence on the United States – politically, economically, and militarily.
These countries will continue to be at the mercy of the United States as their principal export market and price-setter for agricultural products (in a region where malnutrition is the main health problem) and raw materials of all kinds.
As these governments offer the required “incentives” to U.S. businesses, the living standards of their people – already afflicted by rising unemployment and price inflation – will decline further, even as more profits are shipped abroad, and as the already stratospheric levels of external debt skyrocket. The prices they get for their commodities will fluctuate unpredictably, but the prices of imported goods, often including food, will climb higher.
The resistance that all of this will evoke among the people will be met by the bullets that the U.S. government has thoughtfully provided to the authorities on generous credit terms. In return for the unpleasant repression that the authorities will be obliged to apply to keep the peace, the Reagan administration will defend their behavior as necessary “authoritarian” measures provoked by “totalitarian” Cuba and the Soviet Union.
This is pretty much how U.S. foreign policy has always been conducted in Latin America. Ronald Reagan has merely restated its premises more plainly, having inherited a situation in which a new and more promising level of popular resistance is taking shape.
But like Jimmy Carter and all the presidents before him, Ronald Reagan will never understand the lesson that has been demonstrated again and again in Asia, Africa, and Latin America, especially in the last twenty years: The struggle may be postponed, but it will never be defeated.
FOOTNOTES
- Latin American Agribusiness Development Corporation, S.A. is a Panamanian-registered corporation whose shares are almost entirely owned by 15 U.S.-owned agribusiness multinationals. It invests heavily in export-oriented ventures in Central America and the Caribbean. The company has received AID loans of $16 million since its founding in 1971. It pays no U.S. income tax because of its foreign registry and because its income is derived from foreign sources.
- Wall Street Journal (WSJ), 8/21/81, p.4.
- Associated Press dispatch in The Plain Dealer (Cleveland) 8/15/81.
- Washington Post, 8/19/81, p.A-18.
- State Department: Congressional Presentation, Security Assistance Programs, FY 1982. Commercial sales calculations in the text exclude Panama because of an unusually large purchase of $29 million in 1980.
- New York Times (NYT), 3/17/81.
- Granma Resumen Semanal, La Habana, 7/19/81, p.1.
- WSJ, 7/31/81.
- Weekly Compilation of Presidential Documents, Vol.17, No.5, p.68.
- U.S. Agency for International Development, prepared statement of Edward W. Coy, acting assistant administrator for Latin America and the Caribbean, 4/2/81.
- Correspondence, Pentagon Public Affairs Office spokesperson to author.
- Mimeographed manuscript, “Challenge in the Caribbean: The United States and Her Southern Neighbors,” August 1981.
- Ibid., and see testimony of Willard Johnson on behalf of TransAfrica before the House Inter-American Affairs Subcommittee, 7/26/79.
- WSJ, 6/19/81.
- NYT, 9/13/79, p.A-16.
- Facts on File, 10/5/79, pp.737-739.
- Weekly Compilation of Presidential Documents, 11/9/79.
- cf supra, #16.
- Pentagon news release No.344-81, 7/22/81. In correspondence to the author, a Pentagon spokesperson attributed the growth of the maneuvers to the increased size of the Navy and to “former President Carter’s October 1, 1979 public announcement of increased military presence in the Caribbean Basin.”
- ibid.
- Correspondence, Pentagon Public Affairs Office spokesperson to author.
- The Navy “accidentally” fired a live missile while cruising in the Caribbean in July. The missile, which apparently failed to hit anything, contained 215 pounds of explosives and had a range of 60 miles. See WSJ, 7/16/81.
- Facts on File, 2/8/80.
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