Chapter 28 Postwar Latin America

Section 3 Revolution and Democracy in Central America

The Latin American radicals, reformers, and conservatives did not debate their future alone. After World War II, the United States became deeply involved in Latin American politics. Before the war, the United States businesses had expanded throughout Latin America. American companies owned factories, mines, plantations, electrical utilities, telephone companies, and shipping lines. The United States government, through the "Good Neighbor" policy, sent aid to Latin American countries and helped them to develop their militaries. After the war, the United States sought to promote a stable environment for American investments in Latin America and to prevent the spread of communism.  

The Cold War and Latin America

After World War II, the foremost concern of the U.S. was to rebuild Europe so that a strong Europe could counterbalance the growing power of the Soviet Union. Since available resources went to Western Europe, Latin America received little aid after the war. As the cold war quickly came to dominate the foreign policy of the United States, the problems of Latin America were seen by the U.S. in this cold war framework. The U.S. feared that the Soviet Union would incite revolutions in Latin America in order to expand the Soviet Bloc. The fear of a Soviet presence in Latin America led the U.S. to mistrust the reformers in Latin America. In the eyes of many Americans, Latin American reformers seemed "soft" on communism.  

Cuba. As the Cuban Revolution became more radical in 1960 and 1961, relations between the United States and Cuba deteriorated rapidly. The United States government protested the nationalization of American-owned property in Cuba. The growing power of communists in the revolutionary government led both President Eisenhower and his successor President Kennedy to authorize a covert operation against Castro. In Miami, the Central Intelligence Agency had no trouble recruiting Cubans to participate in a covert operation directed against the Cuban Revolution. Castro's spies infiltrated the operation, however, giving the Cubans time to prepare for it. As a result, Castro defeated the invasion at the Bay of Pigs in April of 1961.

            Embarrassment over the Bay of Pigs fiasco was soon overshadowed by the more dangerous Cuban missile crisis. As part of the compromise that ended the crisis, President Kennedy had promised that the United States would not invade Cuba. Instead, he and succeeding American presidents determined to quarantine, or isolate Cuba as much as possible from the rest of the Americas. The United States declared an economic boycott against Cuba. No U.S. company or individual would be allowed to engage in business with Cuba. Through the Organization of American States, the United States asked other Latin American nations to boycott Cuba as well. With the exception of Mexico, Latin America shunned Cuba.  

Nicaragua. Despite the quarantine, American fears that Cuba would spread the seeds of revolution throughout the region were soon justified. Perhaps the most successful revolutionary movement in the Caribbean region outside Cuba occurred in Nicaragua. In 1979, a coalition of groups ranging from radical revolutionaries known as the Sandinistas  to moderate reformers rose in revolt against the corrupt and oppressive dictator Anastasio Somoza. As Somoza fled with his family the Sandinistas took control of the government.

            Establishing a ruling junta under their leader Daniel Ortega, however, the Sandinistas did not implement the democratic reforms the other members of the anti-Somoza coalition had expected. Instead, Ortega and his colleagues established close ties with Fidel Castro in Cuba and proceeded to build a communist dictatorship in Nicaragua. Confronted by this replacement of the Somoza dictatorship with that of the Sandinistas, many of the former revolutionaries began to agitate for the freedoms they thought they had been fighting for. The United States too opposed the Marxist Sandinistas, seeing them as an outpost of both the Soviet Union and Cuba. Under President Reagan, the United States imposed an embargo on Nicaragua and did its best to destabilize the Sandinista regime.

            Eventually, under one of the Sandinista’s own former leaders, Eden Pastora, some of the disillusioned reformers, supported with arms and money by the United States, organized a new guerrilla group called the Contras to overthrow the Sandinistas. Even after the U.S. Congress cut off funds for the Contras in 1984, covert, or hidden aid continued to flow from government officials within the Reagan White House to the Contras. Under this pressure and due to the inefficiency of their own economic policies, the Sandinista economy declined sharply and the regime lost much of its popularity.  

The spread of revolution. Like Cuba under Castro, the Sandinista regime hoped to export its revolution to neighboring countries. For example, the Sandinistas encouraged radical guerrilla groups in neighboring El Salvador to challenge their conservative government. Honduras too was soon sucked into the storm raised by the Sandinistas. Anxious to stop the spread of the communist contagion, the United States provided massive military and financial aid to transform Honduras into a staging base for Contra activities. Such intervention, although it boosted the Honduran economy, also threatened to undermine the new and still-fragile civilian control of the country that had only just been reestablished after decades of military rule.  

Panama. Growing political unrest also affected nearby Panama. After World War II, Panama shared the same pattern of economic growth and political turmoil as its other Central American neighbors. The most burning question in Panamanian politics, however, concerned Panamanian demands for full control over the Panama Canal. Both the canal and the ten-mile wide Canal Zone surrounding it remained in the hands of the United States. Despite violent opposition from many in the United States, in 1979 the U.S. Senate ratified a treaty that called for the gradual transfer of the canal to the Panamanians by 1999.

            By the late 1980s a new dispute between the U.S. and Panama had arisen. U.S. officials accused Panamanian dictator General Manuel Noriega of aiding Colombian drug lords smuggle their narcotics into the United States. President Reagan tried to pressure Noriega into resigning. When this failed, the president cut off all American aid, both military and economic, to the dictator. When Panamanian soldiers killed one American soldier and detained and beat another in 1989, President George Bush ordered 10,000 American troops to invade Panama and capture Noriega. The invasion was a success and Noriega was captured and taken to Florida, where he was later convicted and sentenced to life imprisonment for drug trafficking.

The Contadora initiative

As violence thus continued to rock the countries of Central America, the larger nations of the region began to search for some means of restoring peace. In 1983, the leaders of Venezuela, Panama, Colombia, and Mexico met and signed the so-called Contadora Document of Objectives. Named for the island on which the meetings took place, the Contadora proposals called for an immediate freeze on arms sales and general military reductions throughout the region. In addition, the agreement called for negotiations rather than violence to settle all regional disputes.

            Although the United States did not ratify the Contadora agreement, in 1987 representatives from all the Central American countries met in Guatemala City for a regional peace conference. During the conference, Oscar Arias, president of the small country of Costa Rica, one of the few economically and politically stable countries in Central America, put forward a comprehensive plan designed to bring peace to the region.

            Like other reformers, Arias saw a strong connection between peace and the growth of democracy. In addition to calling for an end to all fighting in the region and negotiated peace settlements, he also proposed an end to all foreign aid for rebel groups and for substantial democratic reforms in all countries involved in the fighting. In a public speech he made an appeal for what might be seen as a classic statement of the reformists goals:  

“The democracy in which many American nations live today cannot be consolidated without economic development and social justice. Before any political or economic conditions can be imposed on the democracies of the Americas, there must be a commitment from the Western world to strengthen democracy in all our nations. in the Americas, peace must be democratic, pluralistic, tolerant, and free. While dogmatism [intolerance] and intransigence [stubbornness] persist and there is no dialogue, peace will be impossible. Working together for democracy, freedom, and development is working together for peace.”[16] 

Costa Rica, El Salvador, Honduras, Guatemala, and the United States supported Arias’s proposals. Arias received the Nobel Peace Prize in 1987 for his efforts. Not until the early 1990s, however, did signs appear that peace might indeed be at hand in Central America.

            As the Cold War came to an end, and the Soviet Union no longer supported Cuba and other revolutionary movements, the level of revolutionary violence finally began to lessen. In Nicaragua, in 1990 Daniel Ortega agreed to new elections and the return of democratic rule. Although many Sandinista leaders remained in powerful positions, especially in the army, and some Sandinista leaders apparently enriched themselves from the national treasury, Ortega peacefully relinquished power when the people elected reform-minded Violeta Chamorro, owner and editor of La Prensa, Nicaragua’s largest and most respected newspaper, as president.

            BIO Violeta Barrios de Chamorro was born in 1929 into a wealthy ranching family in the Nicaraguan town of Rivas. Well-educated as a child due to her family’s wealth, in 1950 she married Pedro Joaquin Chamorro Cardenal, a member of one of Nicaragua’s leading families. The editor of the family newspaper La Prensa, Pedro Chamorro Cardenal carried on his family’s traditional opposition to the Somoza dictatorship. Frequently imprisoned and sometimes even exiled for his anti-Somoza views, in 1978 he was assassinated, probably by government agents. His murder sparked the revolution that brought down the Somozas.

            As Cardenal’s widow, Violeta Chamorro took a leading role in the struggle against Somoza. She also initially supported the Sandinistas. After Somoza’s flight in 1979, for example, she was one of the five members of the ruling junta that took power. As the Sandanistas turned more and more toward Marxism, however, Chamorro became disillusioned with the movement. Eventually she resigned from the junta and took over the editorship of La Prensa.

            Although members of her own family, including some of her children remained Sandanista supporters, by 1989 Violeta had emerged as the leading opposition candidate to Daniel Ortega. When Ortega finally agreed to free elections, in 1990 Violeta Chamorro became Nicaragua’s first woman president and a symbol of the triumph of democracy. Despite continuing tensions between the Sandinistas and the new government, democracy seemed finally to have arrived in Nicaragua.

            In El Salvador, the government and the FMLN, under pressure from the United States, Russia, and Mexico, also came to tentative agreement on constitutional reforms. Even Panama began the new decade under a democratic coalition government made up of anti-Noriega parties, as the American invasion force quickly withdrew. Although the coalition did not last long, Panamanians seemed committed at last to maintaining democracy rather than returning to the path of military dictatorship.


Not all the countries of Central America and the Caribbean experienced the kind of political upheaval and bloodshed seen in Nicaragua. The largest country of the region, and the most stable, was Mexico. Even Mexico could not escape some upheaval, however. In 1968, for example, numerous confrontations occurred between radical student protesters and the police. The largest of these demonstrations ended in gunfire when Mexican troops fired into a crowd that refused to disperse in the city of Tlateloco. Hundreds of students died in the hail of gunfire. The government carried out similar hard-line tactics when a radical guerrilla campaign began in 1971 in an effort to undermine Mexico’s democracy. Ruthlessly, the government hunted down and killed or imprisoned the rebels and by the end of the decade the threat of revolution had practically disappeared.  

Economic problems. Despite its relative political stability, like other Latin American countries Mexico suffered considerable economic instability after the war largely due to rising inflation and a negative balance of trade. The discovery of huge oil reserves in the 1970s made the future seem considerably brighter. The nation’s earnings from oil skyrocketed from about $500 million in 1976 to some $13 billion in 1981. At the same time, the government used these revenues to raise even greater development loans. When oil prices slumped in the 1980s, economic disaster loomed. Compounding Mexico’s problems, a devastating earthquake in 1985 leveled much of Mexico City, leaving tens of thousands of people homeless. The costs of rebuilding only further expanded the national debt. By 1988, Mexico’s annual inflation rate had risen to 143 percent and by 1989 the foreign debt was over $100 billion.[17]

            In the face of these economic challenges, the Mexican government began to loosen many of the controls it had placed on the national economy. Under President Carlos Salinas de Gortari, who took office in 1988, the government also began to negotiate free trade agreements with Mexico’s major trading partners. Reversing a longstanding policy of the nationalist party that had ruled the coutry since 1929, Salinas began to permit foreign ownership of Mexican businesses and to sell off the government’s own extensive business holdings in an effort to encourage investment in the country. Salinas also pushed hard for ratification of the North American Free Trade Agreement, or NAFTA—which established a free trade zone with the United States and Canada. Nevertheless, by the mid-1990s, economic pressures forced the government to devalue the peso, further weakening confidence in the Mexican economy. Economic prosperity remained elusive.  

Emigration problems. As its economy floundered, like its Latin American neighbors Mexico too experienced a constantly rising population. With more and more people, jobs became scarcer and scarcer. Many Mexicans, like Latin Americans from further south, looked for jobs in the United States. Thousands began to cross the border into the United States in search of work—some legally, but many more illegally.

            As tensions rose between the U.S. and Mexico over the illegal immigration issue, in 1986 the United States Congress passed the Immigration Reform and Control Act. While legalizing the presence of aliens who had entered the country illegally before January 1, 1982, the Act also tried to restrict further illegal immigration by requiring American employers to check all job applicants for their residency status. Meanwhile, both the Mexican government and the U.S. government hoped that efforts to improve Mexico’s own economy would result in fewer immigrants seeking to cross the border into the United States. 

Echoes of political instability. The growing problems of the 1980s and early 90s also undermined the hold of the ruling PRI on Mexico’s political life. With democratic and pluralistic movements sweeping across other parts of the globe after the downfall of the Soviet Union, so too Salinas and his colleagues began to loosen PRI’s monopoly on Mexican politics. At the same time, more and more people were becoming disillusioned with the seemingly corrupt nature of the Institutional Revolutionary Party. Many began to join opposition parties.

            The first signs of PRI’s eroding position came in the elections of 1988, which many opposition leaders believed had been won by fraud. In 1994, the country was shocked when PRI’s initial candidate for the presidency, Luis Donaldo Colosio Murrieta, a reform-minded politician, was assassinated. Even more shocking was the suggestion that hard-line, conservative elements in PRI itself were responsible for the murder. Despite the turmoil, however, PRI’s second choice candidate, Ernesto Zedillo Ponce de Leon was elected president with just over 50 percent of the vote.

            The position of PRI was also challenged by events in the Yucatan. There, in the southeastern state of Chiapas, a new revolutionary guerrilla group calling itself the Zapatista National Liberation Army emerged in early 1994 to challenge government control of the region. The rebels represented the interests of the local Mayan population, which continued to cherish its own separate sense of identity within Mexico. After some fighting, eventually the government agreed to talks with the rebels, who demanded reforms to improve the economic situation in Chiapas as well as concessions designed to grant greater protection and autonomy to the Mayan population of the region.