SUSTAINABLE DEVELOPMENT:
IMPLICATIONS FOR WORLD PEACE




Sustaining Peace in Central America:
The Challenges of the Central American
Alliance for Sustainable Development

by

Michael E. Conroy*
Ford Foundation
Office for Mexico and Central America
and
Department of Economics
University of Texas at Austin


* The analysis and opinions expressed in this paper are those of the author
alone; they do not necessarily reflect the perspectives or the policies of
the Ford Foundation.


The past 20 years have not been kind to Central America 1. The region has suffered from repressive dictatorships, massive violation of human rights, insurgencies and counter insurgencies, low-intensity warfare aided and abetted by external powers, and a dramatic deterioration in the standard of living. Central American governments have taken important initiatives to counter this spiraling deterioration in the region, including unprecedented regional peace accords, negotiated ends to two of the three civil wars that have plagued the area, and now a new Central American Alliance for Sustainable Development.

Central America now faces new challenges and new threats that are potentially capable of casting it back into the political and economic turmoil of the late 1970s and the "Lost Decade" of the 1980s. The international assistance community has become startlingly shortsighted in its reduction of support for the Central American nations since the onset of an initial modicum of peace. The attention that Central America received during the civil- military strife of the 1980s, though mixed in intent and impact, has now been replaced by concerted international neglect that has produced a quieter, more subtle isolation and threatened economic strangulation of the region.

The Central American nations have, however, taken important steps to improve this
set of circumstances. In 1987 five Central American presidents signed an historic set of peace accords that stimulated both a process of ending external intervention in counter- revolutionary strife and the onset of negotiated peace and reconciliation that continue to this date, albeit haltingly. Since 1990 the region has experienced presidential elections and changes of power in every country after reasonably open and contested elections, something never before seen in the history of the region. The end of civil war in Nicaragua and El Salvador, and the impending successful conclusion of negotiations in Guatemala, may bring the region more peace than it has seen in over 25 years. The domestic political space for criticism of human rights violations, condemnation of impunity, and the prosecution of those responsible for political crimes has grown more rapidly than most would have guessed possible ten years ago. Civil society is flourishing in the form of national and regional organizations representing indigenous peoples, small farmers and farmworkers, women, and environmentalists, as well as traditionally better-organized business and professional groups. And they are being given a place at the table in regional presidential and ministerial summits, even if their analyses, requests, and demands are still not often heeded.

This paper offers an analysis of one of the most encouraging developments in the region, the signing and initial implementation of the Central American Alliance for Sustainable Development. The paper describes the historical origins and the content of the Alliance (commonly known now by the shorthand name ALIDES, for ALIanza para el DEsarrollo Sostenible), and places it in the context of sustainable development trends worldwide. The paper offers an analysis of the links between contemporary peace processes in the region and social and economic policy, noting the need for sustainable development, in its broadest definition, as distinct from the harsher measures of contemporary stabilization and structural adjustment policies. The paper concludes with a series of suggestions for policies needed within Central America, among the international financial institutions, and from other international supporters of the region to assist the countries of the region to consolidate peace by implementing the sustainable development process it has already initiated.



Background: Central America's "Lost Decade"

Central America consists of six nations with relatively small, open economies. The total population of the region in 1990 was 31 million, only slightly larger than that of California and Oregon combined. Guatemala is the largest, with 30% of the population of the region; Costa Rica is the smallest, with a little more than 3 million. The aggregate economic size of the five countries, measured by total gross domestic product, in 1990 was less than $25 billion dollars, about the same as an intermediate-size city in the US or Europe.


Table 1: Central American Growth and Stagnation: 1960-1988 (PRIVATE)

PRIVATEReal per capita (1988) dollars Change Change Change
Country 1960 1970 1980 19881960-70 1970-80 1980-88
Costa Rica 1435 1825 2394 223527.2% 31.2% -6.6%
El Salvador 832 1032 1125 95524.0% 9.0% -15.1%
Guatemala 1100 1420 1865 150229.1% 31.4% -19.5%
Honduras 619 782 954 85126.3% 22.0% -10.8%
Nicaragua 1055 1495 1147 81941.7% -23.3% -28.6%
Panama 1264 2017 2622 222959.5% 29.9% -15.0%
L.A. Region 1374 1802 2512 233631.1% 39.4% -7.0%
Source: IDB News (October-November 1989)


The historiography of Central America's political and economic turmoil during the 1980's is rich and extensive. After more than 20 years of impressive economic progress during the 1960s and 1970s, including an apparently model process of regional integration, the 1980's brought an exploding debt crisis, falling income levels, brutal structural adjustment, and a severe deterioration in physical capital and social infrastructure2.. Table 1 provides an unusually clear portrait of both economic boom and bust in each of the nations of the region. Table 2 illustrates the highly varied and fundamentally limited nature of economic recovery in more recent years. What these tables don't display is the concomitant social and environmental deterioration brought about by the direct affects of war in Nicaragua, El Salvador, and Guatemala, the 1989 US invasion of Panama, and the indirect effects upon neighboring Honduras and Costa Rica of this civil strife in neighboring nations. By virtually every measure, Central America lost during the 1980s all of the progress that had been made during the 1970s, and was left without the further progress expected in the decade of the 1980s itself.



Table 2: Central American Partial Economic Recovery: 1989-95 (PRIVATE)

PRIVATEReal per capita (1988) dollars
Country 1989 1990 1991 19921993 1994 19951991-95
Costa Rica 2.6% 0.7%-0.4% 4.6%3.5% 1.9%0.2%10.1%
El Salvador -1.5% 2.4%0.3% 4.9%4.0% 2.0%4.0%16.0%
Guatemala 0.8% 0.0%0.6% 1.9%0.8% 0.9%1.6%5.8%
Honduras 1.6% -3.4%-0.7% 3.0%3.6% -4.8%0.7%1.6%
Nicaragua -4.3% -3.0%-0.7% 3.0%3.6% -4.8%0.7%1.6%
Panama -2.1% 4.3%6.6% 4.1%2.2% 0.0%1.0%14.6%
L.A. Region -1.0% -1.6%1.4% 0.9%1.1% 2.7%-1.1%5.1%
Source: ECLAC, Preliminary Overview of the Latin American and Caribbean Economy, 1995


What was the cause of the collapse? According to both the Kissinger Commission in 1984 and the Sanford Commission in 1989, the failure of the economies to continue the growth pattern of the 1960s and 1970s was linked closely to the "superimposition" of a small amount of growth upon a society characterized by fundamental and abject poverty for the vast majority of the population3.. "Despite periods of strong economic growth," the Sanford Commission noted, "the gains from that growth were distributed extremely inequitably." The 1979 Sandinista Revolution in Nicaragua and the onset that same year of civil war in El Salvador were combined with the recoil of international financial flows from all of Latin America after the onset of the Brazilian and Mexican economic crises of 1981 and 1982. It has subsequently become clear that environmental deterioration has also been a ravaging contributor to the deepening of Central American poverty, as deforestation, pesticide buildup, and the deterioration of coastal and marine resources have left Central Americans with less of a basis for meeting their own needs, much less participating in an increasingly open global economy4..

The changing structure of the global economy is also a multifaceted threat to Central America. The implementation of the North American Free Trade Agreement favors Mexico for production of much of the limited set of industrial goods that Central America once exported to the US (largely apparel, electrical equipment, and electronic assembly), reducing profoundly the amount of direct foreign investment that now flows to the region. The creation of the World Trade Organization, for example, has led to the phasing out of the Multifiber Agreement under which much Asian investment in the apparel industry had taken place in Central America, undermining the region's most rapidly growing industry. These conditions have left many Central American analysts concerned that there remains no role for the region other than as a repository for environmentally-objectionable industries producing under socially-objectionable conditions.


Central American Peace Processes and Their Links to Sustainable Development

Nicaragua negotiated a peace agreement ending the contra war in 1988. But the Nicaraguan economy has continued to decline; the expectations of the ex-combatants for land and jobs and social support are far from having been met; and there have been repeated outbreaks of resurgent guerrilla activity, fueled by the continuing failure of the nation's political and economic recovery.

El Salvador negotiated a peace agreement ending its civil war in 1991. But, despite strong economic growth (fed importantly by remittances from emigrants in the United States), many dimensions of that peace agreement have remained unimplemented, partly because of the lack of will on the part of the government, partly because of lack of international financing for the land-transfer and job training programs for ex-combatants that were part of the UN mediated settlement. There has also been a conflict in El Salvador between the economic policy stipulations and requirements imposed by the international financial institutions for stabilization and structural adjustment policies and the programs required for consolidation of peace5.

Guatemala is expected to sign a peace agreement in 1996, ending more than 40 years of civil war, the longest armed conflict in 20th Century Latin American history and a rebellion, the roots of which are linked invariably to the 1954 overthrow of the government of President Jacobo Arbenz. The United Nations Development Program, the Inter-American Development Bank, and the World Bank have all had close links to this negotiated settlement, and it is expected that international support for the outcome will be managed somewhat better than was the case in either Nicaragua or El Salvador.

It is widely recognized that the origins of the conflicts in all three countries were closely linked to prevailing social and economic conditions. Inequity in the distribution of land, lack of democratic processes, and vast inequality in levels of wealth and income were sustained in each by police and military forces whose violations of human rights are now well-established history. Consolidation of peace in all three countries will require social and economic policies and programs that address the root causes of the conflicts. There are those who would argue that contemporary economic policy in the region, based upon orthodox doctrine, will generate economic growth and resolve the underlying problems. There is a more convincing case that suggests that the reduced ability of the state to meet social needs, the deepening income and wealth inequality associated with orthodox policies, and the deepening of urban and rural poverty because of degradation of natural resources preclude the consolidation of peace and create conditions where violence, either the inchoate violence of the street or the organized violence of armed groups and governments, will characterize the remainder of the decade. The Central American governments have decided that contemporary conditions require a new and alternative response to the needs of all of the countries of the region. They have defined that approach as an unusually clearly stipulated form of sustainable development, differing from the orthodox economic growth strategies of recent
years.


The Central American Alliance for Sustainable Development

In 1989 the Central American governments created CCAD, a regional commission on environment and development, designed initially to lead the preparation of a unified regional presentation for the 1992 United Nations Conference on Environment and Development. In August 1994 the Central American presidents, gathered at Guácimo in Costa Rica, issued a joint declaration calling for the creation of an "Alliance for Sustainable Development," as a "comprehensive Central American initiative that addresses political, moral, economic, social, and environmental issues" which they hoped would become a model for other regions6..

On October 12, 1994, the region's presidents (and a representative of Belize's Prime Minister) met in Nicaragua to sign the fundamental document of the Alliance for Sustainable Development (ALIDES), which is attached as Annex 1. Vice President Gore of the United States witnessed the signing and promised wide-ranging US support for the effort. In December 1994 the ALIDES became the focal point for a public agreement between the US and the Central American governments. The so-called CONCAUSA Agreement (based on the somewhat awkward mixed-language acronym for CONvenio CentroAmérica-USA) pledged the United States to partnership with Central America in the pursuit of sustainable development in the region. The differences between the content of the ALIDES and the principal tenets of CONCAUSA, however, illustrate important differences in perception of the meaning of sustainable development.
The Central American presidents committed themselves to a sustainable development process defined much more broadly than the Brundtland Commission definition7.. For the ALIDES, Sustainable development is a process that pursues progressive change in the quality of human life and which targets human beings as the central and
primary target of development. It is achieved through economic growth with
social equity and changes in production and consumption patterns, based on
ecological equilibrium and the support of the region. This implies respect
for regional, national and local ethnic and cultural diversity, and the
enhanced and full participation of all citizens, living together in peace
and harmony with nature, not jeopardizing but rather guaranteeing the
quality of life of future generations.

This definition is especially interesting, for it encompasses far more than the sustainable management of natural resources. It recognizes explicitly that social equity is a critical characteristic of preferred economic growth processes and that changes will be needed in production and consumption patterns. It also addresses the very delicate topic (in Central America) of respect for ethnic diversity, as well as the importance of enhanced democratic participation.
The Central American presidents reiterated their commitment to the ALIDES and their explicit linking of it to the consolidation of peace in the region in a further formal declaration, issued in Tegucigalpa, Honduras, on October 25th, scarcely two weeks after the signing of ALIDES. "Convinced that peace is a prerequisite for sustainable development," they expressed support for the prompt conclusion of Guatemalan peace negotiations, "the last remaining internal conflict in the region." 8.
The complete ALIDES document develops at considerable length the principles, key
bases, objectives, and instruments that underlie it. The principles include:

The principal instruments called for were the creation of national councils on sustainable development, in a manner comparable to the instruments recommended in UNCED Agenda 21 documents.

What did the Central American governments have to lose in signing a document with such breadth and lack of specificity? By signing the agreement, the presidents have called attention to the continuing problems of the region with respect to social equity, human rights, and indigenous peoples. There are important components of the ALIDES that are directly at odds with the tenets of the agreements that each has had to sign with the international financial institutions. Rather, they have asserted that their development will require greater social equity, greater protection of natural resources, expanded democratic participation, and expansion of governmental programs for social development. And they have committed themselves to pursuing that approach.
This is also a critical dimension of what they gain from signing the ALIDES. The signing of the agreement, it is hoped, will create a modest amount of international political space for the development of social and economic policy alternatives that may be other than those required by stabilization and adjustment packages9.. Just as the peace agreements of 1987 created domestic political space for closing down the contra camps in Honduras and Costa Rica, over the objections of the US administration at that time, the ALIDES is seen as providing potential bases for strengthening environmental protection, labor laws, and social programs over the continued objections of the domestic and international business sector.

The official US interpretation of the ALIDES, reflected in the CONCAUSA Declaration of December 1994 [reproduced here as Annex 2], provides additional evidence of the courage of the Central American presidents in signing a document based on such a broad definition of sustainable development. The CONCAUSA provides a list of tangible, concrete commitments on the part of the Central American presidents and the US president "to achieve the objectives of the Alliance for Sustainable Development, as established in the attached Action Plan..." (emphasis added). The Action Plan provides great detail on issues of biodiversity conservation, energy development, environmental legislation designed to raise the standards in Central America, and sustainable economic development defined narrowly to focus on eco-friendly processes. There is no reference, however, in any part of the Action Plan to questions of social equity, democratic participation, respect for cultural diversity, or protection of human rights. It is as though the US delegation to the Summit of the Americas simply chose to ignore the extent to which those concepts permeate the ALIDES document10..

International recognition of the uniqueness of the ALIDES has been widespread. Jonathan Lash, president of the World Resources Institute, wrote11.: [The Central American isthmus] is now characterized by burgeoning democracies that have joined in unprecedented efforts to link regional economic viability, political stability, and natural resources protection. Sustainable development has emerged as a unifying and mobilizing idiom for these efforts -- bringing together the region's governments in a struggle to preserve a future for their people. It offers hope of a more equitable way of life based on environmental awareness in the context of social change and increased economic opportunity...

The challenges to the fulfillment of that vision are nonetheless formidable


Principal Challenges to Peace and Sustainable Development

In the time that has passed since the signing of both the ALIDES agreement itself and the CONCAUSA Declaration, it has become apparent that implementation of the agreements faces a wide range of serious challenges. Those challenges may be divided into two broad categories: challenges to implementation of the ALIDES in the Central American nations themselves and challenges to international financial institutions, other governments and
nongovernmental institutions.

Challenges to the Central American nations themselves. Within the region, the problems facing the ALIDES begin with the fact that it is widely seen as a politically important agreement negotiated and signed solely by the executive branches in each country. In none of the countries has it been re-affirmed by the legislatures; nor has the Central American Parliament played a role in analyzing, proposing policy, or monitoring implementation. Although the links between executive and legislative branches vary considerably from country to country within the region, it is reasonable to suggest that the ALIDES would be supported more broadly if the national and regional legislative powers, including the newly-formed Central American Parliament were involved more directly. Efforts are presently underway to meet these challenges.

Both the ALIDES and the CONCAUSA Declaration were developed rapidly, over a period of very few months, with virtually no participation by Central American civil society. The notion of sustainable development, nonetheless, is entering regional and national debates among organizations as diverse as the regional association of national campesino organizations (ASOCODE) and regional and national indigenous peoples' organizations, such as CICA, the Confederación Indígena Centroamericana12.. The Central American Commission on Environment and Development has developed public education campaigns to the the majority of the Central American public learns of the Alliance, and so that its gradual implementation receives greater attention in the media.

There is planning underway at one regional organization, ASIES (Asociación para Investigación y Estudios Sociales) in Guatemala, for a series of "national consultations" on the ALIDES in each country of the region. These meetings will bring together a wide range of government, business, and other nongovernmental organizations to discuss the steps needed in each country to advance the implementation of the agreements. Reports from this process will then be presented to the Central American presidents at their semi-annual regional summit meetings.

The most important locus of active resistance to the notions of sustainable development in the region comes from the business community. In El Salvador, the region's first Business Council for Sustainable Development has been established. It is beginning to lead national discussions of questions such as whether the pursuit of alternative energy sources, the harmonization of environmental regulations toward a higher least common denominator, and increased enforcement of existing environmental legislation will do little but increase costs of production and reduce the attractiveness of foreign and domestic investment in the region, or whether greater environmental sensitivity and improved technology will enhance the nation's entry into an ever-more-environmentally-conscious global market. The devastating reductions in foreign direct investment encountered in 1994 and 1995 increase the importance of these concerns, even if those reductions in investment cannot be directly linked to changes in environmental regulations.

There is, nevertheless, very little expertise available in the region on technologies such as "pollution prevention" techniques; and there is little awareness among government officials of the full range of environmental protection measures that may be required, either for accession to NAFTA or for fulfillment of obligations under the WTO.

Challenges for international institutions. The challenge for international financial institutions (IFIs) posed by the Central American Alliance is directly related to the effort that it represents to open political space for alternative social policies. If the IFIs continue to insist on both stabilization and structural adjustment policies that effectively preclude the expansion of social programs by establishing, for example, early target dates for the elimination of deficits, the privatization of parastatal enterprises, and the reduction of government employment, neither the social equity component of the sustainable development process nor the consolidation of peace to which it may contribute are likely to be furthered. The importance of the critical constraints placed by IFI conditionality upon government policy is expanded greatly by the tendency of the private banking and investment community to use IFI agreements as critical tests of the appropriateness of the investment climate. Explicit recognition by the IFIs that broader social equity concerns may be consistent with more rapid long term growth processes and support for measures that contribute to reducing inequality may have multiplied impacts upon sustainable development by encouraging further private financial and investment flows toward those countries that make progress in this sphere.

The challenge for the remainder of the international support community, including governments with bilateral assistance programs, the United Nations, and private foundations is to accept the directions for Central American development set by the presidents in the ALIDES and to find ways to support that process explicitly. The pressure placed upon the Central American nations by the United States, Canada, and the European Union since 1990 to respect and improve democratic processes is a positive example which has produced tangible results. The failure of President José Elias Serrano of Guatemala to maintain international support, when he unilaterally closed the Guatemalan Congress in 1994 and decreed dictatorial powers for himself, is another illustration of how far other governments have gone in the direction of a pro-democracy conditionality for assistance.

The changes that have occurred in the US Congress since the 1994 signings of the ALIDES and the CONCAUSA Declaration may now seriously undermine the ability of the US government to fulfill its commitments to support even the more-narrowly-defined sustainable development steps in biodiversity, alternative energy, and environmental legislation. Of the $24 million initially pledged by USAID for regional support of ALIDES, only a little more than $1 million had been appropriated by early 1996. And the oft-projected impending demise of USAID would, in fact, create a major setback to regional efforts for more sustainable development.

Whether the Central American Alliance for Sustainable Development becomes a well- intended, well-written, but futile attempt to alter the course of development in a group of closely linked nations or whether it becomes the model for future development and global economic integration intended by its co-signers now depends on the abilities of both Central American societies and their international supporters to respond to these challenges. It is increasingly clear that without sustainable development of the sort defined and selected by the Central American presidents, the fundamental causes of the civil strife of the past 20 years will not be eliminated. The region is small, however, and the global resources needed to assist the Central Americans to become a model for the global linking of sustainable development and peace by implementing the programs outlined in the Sustainable Development Alliance are also relatively quite small. There is growing evidence of Central American commitment to those goals. What seems most lacking is a concerted willingness on the part of the region's international partners to provide the external support, both political and financial, that is now more critically needed than ever.




Endnotes




1. For purposes of this paper, Central America will be defined to include the five nations traditionally associated with the region, plus Panama; from north to south they are: Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama. Belize began to participate in regionwide activities when it sent a representative of the Prime Minister to several summit meetings in 1994; and it became a signatory of the Central American Alliance for Sustainable Development. But it's recent social, economic, and political history remains quite different from that of the rest of the nations of the traditionally-defined region.


2. Cf., for example, Richard Fagen, Forging Peace: The Challenge of Central America, (New York:
Blackwell/PACCA, 1987); Héctor Pérez-Brignoli, A Brief History of Central America, (Berkeley: University of
California Press, 1989; John A. Booth and Thomas W. Walker, Understanding Central America, Boulder:
Westview Press, 1989; Valerie Miller, High Hopes, Harsh Realities: The Challenge of Development in Central
America, (Cambridge, Mass.: Unitarian Universalist Service Committee, 1992); and the forthcoming Michael
E. Conroy, Douglas L. Murray, and Peter M. Rosset, A Cautionary Tale:Failed U.S. Development Policy in
Central America, (Boulder: Lynne Rienner Publishers, 1996).



3. Kissinger Commission, Report of the National Bipartisan Commission on Central America, (Washington
DC, 1984); International Commission on Central American Reconstruction and Development, Poverty,
Conflict, and Hope: A Turning Point in Central America, (Durham: Duke University, 1989).



4. USAID, Environmental and Natural Resource Management in Central America: A Strategy for AID
Assistance. USAID Bureau for Latin America and the Caribbean, 1989.



5. Cf., J. Boyce, "External Assistance and the Peace Process in El Salvador," E. Wood and A. Segovia,
"Macroeconomic Policy and the Salvadoran Peace Accords," and M. Pastor and M.E. Conroy, "Distributional
Implications of Macroeconomic Policy: Theory and Applications to El Salvador," all in a Special Section of
World Development entitled Adjustment Toward Peace: Economic Policy and the Salvadoran Peace Accords,
Volume 23, Number 12; December 1995.



6. The documents of the Central American Alliance for Sustainable Development are available in a number of
places and publications; one of the most convenient is a WorldWideWeb site in Costa Rica organized by Earth
Council: www.ecouncil.ac.cr.



7. The Brundtland Commission, known more formally as the World Commission on Environment and
Development (WCED), provided the now-famous specification of the meaning of sustainable development:
"Sustainable development is development that meets the needs of the present without compromising the
ability of future generations to meet their own needs." WCED, Our Common Future, (New York: Oxford
University Press, 1987).



8. http://www.ecouncil.ac.cr/centroam/sica/teguceng.htm; 3/16/96.


9. One central bank official, who preferred to remain anonymous, described it as "seeking entry to the World
Bank through the sustainable development 'side door' rather than having to enter through the narrower front
door."



10. A less charitable interpretation, offered by some Central American diplomatic sources, is that the U.S.
government focused on that interpretation of sustainable development most consistent with its trade interests,
seeking conservation of biodiversity for pharmaceutical firms, an emphasis on energy development that favored
privatization and the importation of foreign technology, and higher environmental legislative standards to lessen
the competitiveness of apparel and assembly firms in the region.



11. Jonathan Lash, "Remarkable Events in Central America" International Perspectives on Sustainability,
World Resources Institute, March 1995.



12. ASOCODE's III Regional Congress of campesino organizations, held in Tegucigalpa in January 1995,
adopted a Plan of Action which adopts sustainable agricultural development as the principal goal for its
regionwide activities, using language drawn directly from the ALIDES. The meeting also began the process of
defining campesino-based agricultural policy that would be appropriate to that goal. CICA is presently
working with European Union funding to develop both its own institutional structure so that it can participate
representatively in on-going regional summit meetings and to expand sustainable productive activities for its
member organizations.
Sustaining Peace in Central America




Sustainable Development Symposium
Sustainable Development Symposium Papers