The Central American Model of Growth: Crisis for Whom?

Abstract

INTRODUCTION Limited by their short-sighted vision, annual conjunctures, and sectorial analyses of economic life, many studies of Central American reality yield little understanding either of the model of development that is being applied in the region or to the significance of the ups and downs that the Central American economies experience as a result of its application. Many such analyses and their predictions are based on variations in foreign commerce, resulting in optimistic visions of development that depend on the level of coffee prices that are determined ten thousand kilometers away in the developed countries. Thus, frosts in Brazil are celebrated as brief victories for the local export economy. This apologetic position, an easy one to adopt if one is working with traditional statistical indicators, is unconsciously based on an ideological vision that results in the utilization of a theoretical apparatus that carelessly disregards specific characteristics of dependent societies. Central America as a region has a Gross Domestic Product (GDP) of more than U.S. $12,000 million (1976), seventh highest' in Latin America, and a population of 17.8 million. Central America ranks third in the export of coffee and sugar, second in export of meat, and first in export of bananas to the North American market. The basic common characteristics of Central American economies are defined by the importance of the agrarian sector (25 percent of GDP and about 70 percent of exports) as a source of social wealth and dividends, by a chronic crisis in agricultural production for the internal market, and by the weakness and newness of the industrial structure. At the same time that there are similarities among the countries, there are even more important internal differences in social structures the locus of results of any development pattern as well as in the well-known macroeconomic variables such as population, size, GDP, and GDP per capita, etc. Paradoxically, Costa Rica and Nicaragua are more similar to each other than to the other Central American countries Guatemala and Honduras being the most dissimilar. The well-known success of birth-control policies in Costa Rica (a decline in births from 45 per thousand to 30 per thousand dur* The author, Professor of Sociology, Confederaci6n Universitaria Centroamericana (San Jos6, Costa Rica), specializes in the history of economic development and social structure. The translator received her Masters Degree in Latin American Studies from California State University, Los Angeles. This article was first published in Guatemala by the University of San Carlos in their journal Alero, IV, 1 (May-June 1979), 37-57.