Last month, the White House announced more than $1.9 billion one “Private Sector Commitments” for Honduras, Guatemala and El Salvador under the “Call to Action” to address the root causes of migration from northern Central America. The irony, which the White House seems to have missed, is that it is promoting the same economic model that has forced so many to leave their homes and emigrate in the first place. The United States has long promoted corporate interests that generate profits for US corporations and local elites at the expense of the majority of the peoples of northern Central America, and it is doing so afresh “Call to Action is no different.
One of the defining characteristics of the economies of Honduras, Guatemala, and El Salvador is the small group of extremely powerful families whose business empires control much of each country’s economy. Commonly referred to as ““the oligarchy,” the power they wield over the political and economic systems of every country cannot be overstated. Many members of the oligarchy have amassed vast fortunes precisely by impoverishing the majority, whether by paying miserable wages on agricultural plantations, profiting from stolen indigenous lands, or influencing political actors to secure cheap government contracts.
One of ““Corporate commitments” announced by Vice President Harris ostensibly to address the migration is that US-based apparel company SanMar will buy more from Elcatex, a Honduras-based apparel manufacturer it partially owns. The Collective of Honduran Women (CODEMUH), an organization of women working in Honduras’ textile mills, has long denounced the low wages, long hours and serious repetitive motion injuries that they suffer in the Honduran textile industry. The Inter-American Commission on Human Rights has approved a petition filed by CODEMUH and the Law Group for Human Rights on behalf of 26 Women who have suffered musculoskeletal disorders as a result of working in Honduras’ garment factories, including three Elcatex workers with alleged permanent partial disabilities. The petition claims these workers are facing “excessive working hours, unsuitable jobs and the introduction of a system in which remuneration depends on the achievement of a performance target.’ Im 2019Elcatex joined other garment factories in Honduras and opened one “Back-Shoulder-School” for the prevention of musculoskeletal disorders. However, these schools have been criticized, claiming that workers are unable to follow some of the recommendations, such as B. taking breaks, to put into practice during the working day.
The White House claims that SanMar’s commitment to buy more from Elcatex will create 4,000 additional jobs and thus help to curb migration. Ironically, Elcatex and many garment factories in Honduras are located in its northern industrial corridor, in a high migration area. If the White House were serious about addressing the root causes of migration, it would recognize that low wages are a key driver. Those of the White House “Call to action for US apparel companies to ensure living wages and labor rights, including changes to prevent workers from suffering permanent injuries.
Who will be the real beneficiaries of SanMar’s increased purchases from Elcatex? According to the White House announcement, US-based company SanMar is itself a shareholder in Elcatex, so profits from this increased purchase will line its own pockets. Elcatex is also owned by Jesus Canahuati, one of Central America’s largest businessmen and part of one of the most powerful families in Honduras.
Another of the “Private Sector Engagement” celebrated by Vice President Harris is that of Fundación Terra, Grupo Terra’s foundation. Grupo Terra is a huge conglomerate owned by Freddy Nasser, one of the most powerful men in Honduras.
Grupo Terra’s energy empire includes Hidro Xacbal, SA, which owns the Xacbal hydroelectric project and the Xacbal Delta hydroelectric project in Quiche, Guatemala. These projects are located in indigenous Maya Ixil territory, where the US-trained and supported Guatemalan military committed early genocide 1980s. How Dr. Giovanni Batz writes in NACLA, “The Ixils have resisted invaders in the past, from the Spanish to coffee finqueros to corporations building mega-projects.” March 2015Ixil communities of Nebaj, whose harvests were increased by the building of a 4 Kilometer long tunnel for Grupo Terra’s Xacbal Delta hydroelectric project protested and publicly opposed the project. Also in 2015Guatemalan security forces repressed the Ixil people who were blocking the construction of the Xacbal Delta project.
In December 2020, Guatemala’s special prosecutor against impunity, Edwin Alberto Hernandez Roque, general manager of Hidro Xacbal, SA, accused of bribery allegedly benefiting Hidro Xacbal, SA with energy contracts, as part of a case alleging that a network of businessmen and former Officials use the Ministry of Energy and Mines to gain illegal economic benefits. in the 2021Hernandez Roque agreed to cooperate with prosecutors on the case in exchange for having the charges against him dropped.
Another part of Grupo Terra’s fortune comes from the sale of energy to the State of Honduras. Honduras’ state-owned electricity company, Empresa Nacional de Energía Eléctrica (ENEE), has run a huge deficit for years, partly due to inflated prices being paid for energy produced by private companies. Many lucrative energy contracts have been awarded by the country’s post-oligarchy governments 2009 Coup. According to an investigation by the Jesuit organization ERIC, the ENEE pays 70% of its annual budget for buying energy from private companies, of which Grupo Terra is the biggest winner – their companies get $327 million one 2019 to the 11 energy contracts. ERIC goes on to report that the ENEE pays six times as much to private companies for electricity generation as it costs the ENEE itself to generate it. Solar projects are particularly lucrative for private companies, as Honduras pays an exorbitantly higher price for solar energy than other Central American countries.
That 2009 coup followed 12 Years of looting and corruption, and now Honduran President Xiomara Castro and a new Congress have pledged to fight corruption and restore state institutions. As part of this, Honduras recently passed a new energy law that, among other things, allows the government to renegotiate the contracts under which it purchases energy from private energy producers and set more reasonable tariffs. The US Ambassador to Honduras took to Twitter to criticize the law as it was being introduced in Honduras Congress, expressing concerns about its impact on foreign investment. This raises concerns that America’s true motives are corporate profit.
Vice President Harris’ announcement also celebrated that Luxembourg-headquartered telecommunications company Millicom would invest $700 million “to build out and maintain its cellular and broadband networks.” While better Internet is certainly a good thing, the idea that Millicom is doing it for reasons other than increasing its corporate profits is ridiculous.
The mobile and broadband market in Central America is highly concentrated; Millicom Tigo controller 53.1% in Guatemala and 62.5% in Honduras. Tigo Guatemala is Millicom’s most profitable company with an astronomical operating profitability range. The company reports significant potential for increasing profits by expanding Internet accessibility. The Tigo Money service, a mobile wallet linked to one’s phone number, receives remittances sent by migrants to family members back home.
Investing in expanding the business is certainly a good business move for Millicom, and with very little competition, it’s virtually guaranteed that this investment will result in significant profits. However, most of the profits go to its Luxembourg headquarters and its shareholders on the Nasdaq exchange, not Tigo’s customers in Central America. Thousands upon thousands of Tigo users will continue to migrate to the United States each year and enrich Millicom’s profits by sending remittances home through Tigo Money.
At a recent House Foreign Affairs Committee hearing, Rep. Ilhan Omar (D-Minn.) expressed skepticism about the “Corporate Commitments from Call to Action. Referring to a recent delegation she had been part of to Central America, she explained “What we heard were many stories about transnational private investment as the main cause of migration…. about mega-projects displacing communities, about labor exploitation.”
Rather than addressing the root causes of migration, the White House announcement is a celebration of international corporations and Central American oligarchies tightening their stranglehold on the economies of northern Central America. If the White House were serious about addressing the real root causes of migration, it would have honestly contended with the bloody US history of intervention in the region, including coups and funding and support for military regimes that committed widespread atrocities. The US must finally get rid of it ““Banana Republic” mentality, which sees the region as a source of natural resources and cheap labor, and begin to respect the autonomy and self-determination of the peoples of the region.
At least that of the White House “Call to Action should urge US companies operating in the region to pay living wages and respect labor rights, respect indigenous peoples’ land and territorial rights, and comply with relevant national laws, rather than trying to violate them weaknesses. The current “Call to Action is the opposite: it offers companies free PR and helps whitewash their brands for companies that could benefit from expropriations, labor abuse and corruption. It pretty much sums up US priorities towards Central America: The real interest is and always has been corporate profit.