By James Phillips

NicaNotes

[James Phillips is a cultural and political anthropologist with forty years as a student of Central America. His most recent book is Extracting Honduras: Resource Exploitation, Displacement, and Forced Migration (Lexington Books, 2022).]

(This article was first published in CovertAction Magazine on July 1, 2024.)

In Part 1 of this article, a brief outline of the evolution of the Monroe Doctrine makes clear how utterly destructive that doctrine and its descendants have become to the nations of Latin America and the United States, both to its relationship to Latin America and to the fundamental principles of democracy, freedom and human rights that the U.S. claims to uphold. It is clear that this ideology or mindset of privilege and assumed “police power” over other peoples must be challenged and discredited, and its mechanisms dismantled.

This second part deals specifically with Resolution 943, which proposes to do exactly that. Introduced in the U.S. House of Representatives last December by Representative Nydia Velázquez (D-NY), the resolution offers both a symbolic and a practical challenge to the mindset and policies spawned by the Monroe Doctrine. [The Resolution has been sent to the House Foreign Affairs Committee. To send a message to your US Representative asking them to co-sponsor the Resolution, click here.]

Why the Velázquez Resolution Is Important

Introducing Resolution 943, Velázquez wrote that “the 200th anniversary of the Monroe Doctrine presents the U.S. and the hemisphere with a chance to move past an outdated and ineffective foreign policy strategy. From drug trafficking to mass migration to climate change, the many shared challenges between the United States and Latin America cannot be addressed by the antiquated Monroe Doctrine. These are some of the most pressing issues of our time, and they call for a process that stresses respect and cooperation.”

Resolution 943 calls on the U.S. to abandon the ideology of an imperial power and the mindset of intervention and control. To show exactly why a change is needed, the text of the resolution provides a long (but still only partial) list of the many destructive interventions of the United States in the hemisphere, and then offers eight practical steps toward changing the policy and practice. It calls for a “New Good Neighbor” policy in place of the old one. If even some of the practical steps the resolution proposes are adopted, ideology may begin to change as the reality is changed. In this sense, Resolution 943 is more than a piece of paper, more than a law that is so broad and demanding that it can be ignored like so many other laws. Instead, it is a call to take some bold practical steps toward a different reality. It will not be so easy for the United States to wean itself from its imperial addiction. Resolution 943 is a prescription to address that addiction.

What the Resolution Proposes

These are the practical steps that Resolution 943 proposes:

–The Department of State to formally confirm that the Monroe Doctrine is no longer a part of United States policy toward Latin American and the Caribbean.
–The Federal Government to develop a ‘‘New Good Neighbor’’ policy in place of the Monroe Doctrine.
–Development of a new approach to promoting economic development.
–The termination of all unilateral economic sanctions imposed through Executive Orders, and working with Congress to terminate all unilateral sanctions, such as the Cuba embargo, mandated by law.
–New legislation to trigger the suspension of assistance to a government whenever there is an extra-constitutional transfer of power.
–Prompt declassification of all United States Government archives that relate to past coups d’état, dictatorships, and periods in the history of Latin American and Caribbean countries characterized by a high rate of human rights crimes perpetrated by security forces.
–Collaboration with Latin American and Caribbean governments on a far-reaching reform to the Organization of American States.
-Support for democratic reforms to the International Monetary Fund, World Bank, Inter-American Development Bank, and other international financial institutions.

What are some of the implications of these proposals? A “new approach to promoting economic development” would emphasize development projects that are ultimately controlled by the people of a country for their benefit, rather than by foreign investors and corporations for their exclusive benefit. The “termination of all unilateral economic sanctions” would stop the weakening of the economies of targeted countries, and allow countries to build economies that can provide security and stability for their people. These two measures would very likely have the effect of reducing emigration from Latin American countries.

The “suspension of assistance to a government whenever there is an extra-constitutional transfer of power,” would change the long-time policy of supporting illegal military coups and seizures of power. It would have made the U.S. response to the Honduran coup of 2009 very different—not continued support but rather removal of support. In the case of Honduras, this might have allowed the Honduran people’s massive protests against the coup to prevail and signal the collapse of the illegal coup government. That would have spared Hondurans 12 years of a devastating and corrupt narco-dictatorship.

Former Honduran Commissioner for Human Rights Leo Valladares described how his efforts to compile a report on the disappearances perpetrated during the national security regime of the early 1980s were thwarted in various ways, and his family threatened. Declassification of documents would allow public scrutiny of the “dirty secrets” of past events, and would strengthen demands for accountability from both the U.S. for its actions and from various regional governments in collusion with the U.S. It would likely have made the preparation and publication of reports by truth commissions—Guatemala, Honduras, etc.— easier, safer, faster and more accurate.

Reform of the Organization of American States (OAS) would address the rising demands of Latin American governments, human rights organizations, and others that see the OAS as an extension of U.S. power and control. Recent actions (or inactions) of the OAS that have impeded reforms and anti-corruption efforts in several countries in the hemisphere have added to this criticism of the organization.

The call for “democratic reforms to international financial institutions” calls attention to the ways in which these institutions have for many years been a primary vehicle of control over the nations of Latin America. For decades, beginning in the 1950s, Latin American governments were strongly encouraged to borrow large sums from international financial lenders in order to finance major infrastructure and other programs that would lay the ground for industrialization and attract foreign investment. Once countries had achieved this level of “development,” they would begin to generate income and could pay off the loans they had incurred.

This plan never materialized for many countries. They ran up large debts to the financial institutions, but a variety of conditions doomed them to remain producers and exporters of raw materials rather than manufacturers of finished products. The prices they received for their raw materials—agricultural products, minerals and metals, lumber, and more— were never enough to allow them even to pay their debts. Worse, the interest on the debts had to be paid regularly, so that paying down the principal became a long and often impossible task. The external debt became an eternal debt. When desperate governments went to the IMF for loans to help them get out of this “debt trap,” the IMF regularly imposed conditions that governments had to meet in order to receive funds. Even if governments met these conditions, they would only be incurring more debt in order to pay for current debt—a never-ending cycle.

Worse, meeting the conditions imposed by the international financial institutions had a steep political price. Conditions usually included freezing workers’ wages and removing the subsidies that governments had implemented to keep down the prices of basic items—food, medical care, water and electricity, transportation—so that everyone could afford them. Another condition was that governments sell to private companies the basic services that governments had been providing. This meant a rise in cost to the people. Rising popular protest at the austerity imposed by conditionality led to the fall of various governments in Latin America. The electoral defeat of the democratic socialist government of Michael Manley in the 1970s Jamaica was a prime example. The international financial institutions became primary vehicles for controlling poor and dependent governments, and for eliminating governments that the United States did not like.

Resolution 943 is a condemnation of the damage wrought by the Monroe Doctrine, a challenge to develop a new way of looking at hemispheric relations, and a new set of policies to reshape those relations. Recent moves by the Honduran government are a step toward the future proposed by Resolution 943.

Honduras Leads the Way

The Honduran government of President Xiomara Castro has moved in a very practical way toward making real the democratic reform of international economic institutions. Her government has taken steps to withdraw Honduras from an arbitration mechanism at the World Bank that has allowed private corporations and investors to sue governments and prevent them from taking measures to withdraw from contracts that seem to threaten national sovereignty. The arbitration mechanism is exercised by the World Bank’s International Center for Settlement of Investment Disputes (ICSID). The Xiomara Castro government is moving to formally withdraw from the ICSID.

Since President Castro took office in January 2022, foreign investors have brought at least ten cases through the ICSID targeting Honduras. The largest was brought by Próspera Inc., the investor for a “special zone of economic development and employment” (ZEDE, Spanish acronym). Several ZEDEs were proposed and approved under the previous Honduran government of Juan Orlando Hernández who had to pack the Honduran Supreme Court in order to allow the government to contract with the private investors creating ZEDEs. He is now in prison in New York for massive drug trafficking during his time as Honduran president. Próspera Inc. used the ICSID arbitration mechanism to demand $10 billion in compensation from the Castro government if the government withdrew from the contract with Próspera. That sum is roughly one-third of the Honduran national budget.

Castro has argued that both the ZEDEs and the ICSID violate Honduran sovereignty—an argument widely supported in Honduras. She has received support from a group of at least 85 respected international economists who wrote in an open letter published in Progressive International. The letter reads:

“We, economists from institutions across the world, welcome the decision by the Honduran government to withdraw from the International Centre for Settlement of Investment Disputes (ICSID). We view the withdrawal as a critical defense of Honduran democracy and an important step toward its sustainable development.

For decades, international arbitration courts like ICSID have allowed corporations to sue states and restrict their freedom to regulate in favor of consumers, workers and the environment. Since 1996, governments in Latin America alone have been forced to compensate foreign corporations over $30 billion, intimidating regulators away from raising minimum wages, protecting vulnerable ecosystems, and introducing climate protections, among other domestic policy priorities. We find scant economic evidence that mechanisms like ICSID stimulate meaningful foreign direct investment, in return.”

Honduran withdrawal from the ICSID has also received support from members of the U.S. Congress, at least 50 of whom signed a letter on March 21 to Secretary of State Antony Blinken and U.S. Trade Representative Katherine Tai. They commended the Biden administration for its opposition to the ICSID and its removal. “This would send a powerful signal that the U.S. government is committed to a new model of partnership in the region—a model that uplifts and protects democracy, rule of law, human rights, and the environment.” There are also letters from state legislators and from law students, among others, in support of the Biden administration’s working to eliminate the ICSID mechanism.

A “new model of partnership” is what Resolution 943 and the annulment of the Monroe Doctrine are all about. These moves may be the beginning of a healing, perhaps even a cure for the imperial addiction that has long held the United States in its grip, and provide a measure of protection against the so-called Christian Nationalism that has infected the United States.