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Capitalism’s “One-Track Mind” for Profits
(Photo: Burns! / Flickr)

Capitalism’s “One-Track Mind” for Profits

(Photo: Burns! / Flickr)

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In May, following a visit to President Nieto of Mexico, President Obama stopped in Costa Rica for the first time. Obama met with Costa Rican President Laura Chinchilla and attended the Central America Integration System as an observing member. His mission: to address the drug trafficking problem in Central America, which is often used as a transit route between South America and the US.

Obama asserted that Latin American governments must work towards alleviating poverty, to reduce the gang activity that facilitates drug trafficking. In his address in Costa Rica, Obama addressed the issue of development in Central America, including the improvement of infrastructure and the increase in trade and foreign investment. But he didn’t say a thing about the ways in which neoliberal policies have fueled widespread poverty and unrest.

These policies have continually favored oligarchic elites: American businesses and all seven [1] Central American countries would increase the profits of the wealthy few. All seven of these Central American countries are ruled by wealthy conservatives, including El Salvador (President Funes) and Nicaragua (President Ortega), who nonetheless rely on wealthy conservatives for electoral votes.

Without proper institutions to regulate where profits from trade and foreign investment go, elite oligarchies will stay in power and increase profits from foreign investments and trade while neglecting the poor and increasing poverty. Without a significant redirection of resources toward impoverished communities, increased trade and foreign investment are unlikely to reduce gang violence and drug trafficking.

Jose Miguel Cruz, professor of criminal violence in Central America at Florida International University, spoke to Truthout about the necessity of “political mechanisms to benefit most of the population.” Cruz explains, “You need to expand regional institutions, too, and national and domestic institutions.” Otherwise, these countries will never get free of the poverty that plagues much of Central America.

Cruz gives the example of how Honduran economic elites “have basically taken over everything. They ‘accumulate’ everything, do not pay taxes, and return very little back to the country.”

Until existing laws are equitably enforced and policies drafted that address the inequities they have created, neoliberal policies will increase poverty and dehumanize the masses as the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR) did. CAFTA-DR is a free trade agreement between El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, the Dominican Republic and the United States that was ratified in 2006. Under its auspices, markets were liberalized and trade barriers and tariffs on guaranteed agricultural and manufactured goods, investments and services were eliminated.

The purported intent was to increase investments and create economic opportunities throughout the region. Although these neoliberal policies undeniably revitalized trade, which grew from an average of 5 percent in the 1990s to 13.9 percent after the agreement, most of the profits gained from trade have benefited the large corporations that have migrated to the region. Few of these profits went to working-class and poor people. Instead, local agriculture and traditional manufacturing were harmed by sometimes-subsidized foreign competition.

After the ratification of CAFTA-DR in 2006, governments shoved the agriculture and manufacturing sectors toward export-driven industries and financial services [2] to increase profits. Farmers were forced off their lands due to laws that required the production of high-demand crops such as biofuels instead of subsistence crops such as the rice, beans, or corn that locals needed to survive. Manufacturing laborers and farmers lost their jobs. As a result, income per capita decreased 19 percent from 1960s numbers, even though living standards have risen in Central America.

Eventually, farmers were forced to move to the cities. There, they had to fend for themselves, left with few resources on which to survive. They had no skills or training for city jobs, and especially not for the new ones that replaced traditional manufacturing employment.[3] The lack of relevant training relegated many poor people to desolate slums, isolated from work opportunities and desperate for money to buy basic necessities such as food.[4] In a world stacked against their survival, many of these people resorted to gangs for their subsistence.[5]

Gangs provided scarce resources like food.[6] To escape poverty and construct new spaces for possible alternative futures, former leftist guerrilla combatants developed local gangs – pandillas.[7] They used violent methods of extortion and racketeering, preying on local businesses and drug traffickers[8] using methods they had learned from being absorbed by maras – transnational criminal gangs.[9] Members of these groups are also sometimes called pandillas and maras.

Maras – immigrants in Los Angeles, California[10] – developed a violent anti-authoritarian attitude[11] as they competed for power as young immigrants from Central America.[12] Maras, then, took this anti-authoritarian culture with them back to Central America. After the Rodney King riots in 1992, these maras were deported back to their countries of origin ( Guatemala, Honduras and El Salvador for most) for protesting racial injustice with violence and looting.[13] After the riots, California decided to crack down on maras by deporting foreign nationals for committing even the smallest crimes.[14] Worse off than pandillas, maras often could not even speak Spanish to get jobs, but could only function on Spanglish.[15] Together, these gangs protested the poor, isolated conditions that they lived in by practicing extortion, racketeering and murder to gain the resources that the governments neglected to provide for them.[16]

Anthropologist and urban social and political research professor Dennis Rodgers explains that gang members are protesting their exclusion from their ability to work in the mainstream labor economy.[17]

Marcos – an imprisoned gang member – told an Oregon TV news station that gangs will continue to extort civilians as long as there are no employment or rehabilitation opportunities for gang members.

In response to the rebellion of maras, Rodgers explains that Central American governments’ oppressive policies – mano dura (“iron fist”) policies – reflect the elites’ view that poor people are “sub-human.” He tells Truthout, “The elite have a particular outlook, often considering the poor as sub-human, and only looking out for their own priorities.”

Central American governments rely on military personnel and resources in police operations and constrict due process.[18] Suspects can be convicted on subjective evidence like the appearance of tattoos.[19] Mano dura allows the government to “conceal the drivers of drug trafficking and gang violence, including widespread impunity, systemic under- and unemployment, illiteracy and weak education systems, and grinding poverty and inequality,” research director of the Igarape Institute Robert Muggah wrote on Open Democracy.

Mano dura policies contribute to the cycle of poverty. Salvadoran photojournalist Juan Carlos tells Truthout how his friend could not get a job after serving time in prison for gang activity; employers wanted to distance themselves from people with former gang associations. Juan Carlos’ friend ultimately rejoined a gang, feeling it was his only option for survival.

To begin to slow (and someday, halt) this cycle of poverty (thereby decreasing drug trafficking), Central American countries need to change perspectives on poverty, according to Douglas Urbina, official of the National Program of Prevention in Honduras. In an interview in Spanish, he told Truthout ending drug trafficking in the region “requires a more socially aware and prepared police, not a repressive police.”

In June 2013, the Organization of American States (OAS) released a report suggesting legalizing drugs and improving rehabilitation programs. Rodgers concurred with the OAS report. “By legalizing drugs, you’re going to undercut the revenue basis of drug trafficking,” he said. But the OAS report cautions that more studies need to be done on the effects of legalization and warns that proper regulations need to be in place before any legalization can be implemented.[20]

Ultimately, the problem circles back to the Unites States in several important ways, according to Muggah’s comments in an email to Truthout: “[Ending drug trafficking] will also require the United States to revisit its own contribution to the problems of organized crime in the Americas – not least its voracious appetite for illegal drugs, its deportation policies and its continued investment in the ‘war on drugs.'”


1. This is from a combination of reports about each Central America CAFTA-DR member. Costa Rican President Laura Chinchilla, Guatemalan President Otto Perez Molina, Honduran President Porfirio Lobo, and Panamanian President Ricardo Martinelli.

2. D Rodgers “Slum Wars of the 21st Century: Gangs, Mano Dura and the New Urban Geography of Conflict in Central America” Development and Change [2009] 949, p. 959.

3. Ibid, and MG Aguado “CAFTA-DR Governments in Contrast to Small-Scale Owners Parcel Engines of Development” accessed 14 June 2013.

4. D Rodgers “Slum Wars of the 21st Century: Gangs, Mano Dura and the New Urban Geography of Conflict in Central America” Development and Change [2009] 949, p. 959.

5. Ibid, p. 960.

6. Ibid, p. 967.

7. Ibid, p. 963.

8. D Rodgers, R Muggah, and C Stevenson “Gangs of Central America: Causes, Costs, and Intervention” 23 Occasional Paper accessed 14 June 2013, p. 9; and A Arce “Terror remains despite gang truce in El Salvador” KMTR (Springfield, 29 May 2013) accessed 14 June 2013.

9. D Rodgers, R Muggah, and C Stevenson “Gangs of Central America: Causes, Costs, and Intervention” 23 Occasional Paper accessed 14 June 2013, p. 8.

10. A Arena “How Street Gangs Took Central America” Foreign Affairs [2005] 98, pp. 100-101.

11. Ibid, p. 101.

12. D Rodgers, R Muggah, and C Stevenson “Gangs of Central America: Causes, Costs, and Intervention” 23 Occasional Paper accessed 14 June 2013, p. 7.

13. Ibid, p. 6.

14. Ibid.

15. A Arena “How Street Gangs Took Central America” Foreign Affairs [2005] 98, p. 100.

16. D Rodgers “Slum Wars of the 21st Century: Gangs, Mano Dura and the New Urban Geography of Conflict in Central America” Development and Change [2009] 949, p. 961.

17. Ibid, p. 963.

18. A Holland “Right on Crime? Conservative Party Politics and Mano Dura Policies in El Salvador” Latin American Research Review [2013] 44, p. 46.

19. Ibid.

20. JM Insulza “The Drug Problem in the Americas” (Organization of the American States June 2013) p. 94.