Price of Free Trade-Famine

Los Angeles Times

Price of Free Trade: Famine

By MARC EDELMAN

March 22 2002

Central America is in the grip of famine, and if President Bush mentions it
when he visits El Salvador on Sunday, he will likely suggest that free trade
is the solution.

Yet Bush's proposed Central American Free Trade Agreement is hardly going to
remedy the worsening disaster in rural Guatemala, El Salvador, Honduras and
Nicaragua. Unregulated markets are a large part of the reason why 700,000
Central Americans face starvation and nearly 1million more suffer serious
food shortages.

Hardest hit are coffee plantation workers and maize farmers. Coffee prices
have spiraled downward since the 1989 collapse of the International Coffee
Agreement, which assigned countries production quotas. In the past few
years, prices plummeted further with a surge in exports from Vietnam and
Indonesia, where the World Bank encouraged expansion of coffee acreage. With
the market glutted, many coffee farmers did not bother to harvest this year.
The result has been evictions from plantation housing, increased migration
to teeming slums and severe hunger among unemployed coffee workers.
Maize farmers too have been feeling the free-market squeeze. Since 1992,
Central America has had intra-regional free trade in grains and almost no
tariff protection against low-cost imports. Forced to compete with highly
subsidized U.S. farmers, many Central American farmers have abandoned food
production, gone bankrupt and lost their land.

Some of Central America's most conservative figures--Guatemalan President
Alfonso Portillo and Nicaraguan Cardinal Miguel Obando y Bravo--acknowledge
that the intensity and suddenness of the food emergency make it a famine,
worse than the hunger characteristic of the region.

Famine is always rooted in economic policies and political decisions, as
Amartya Sen, the 1998 Nobel Prize winner in economics, has long maintained.
Sen also points out that famines do not occur in democracies, where
contested elections and vigorous journalistic oversight force policymakers
to try to prevent occurrences that might threaten constituents or allow
opponents to make political hay.

U.S. policymakers should ask, then, what the widening famine says about
Central American democracy, for which Washington spent billions of dollars
and waged three proxy wars during the 1980s.

Apparently, the gap between rulers and ruled in the four affected countries
is so large that policymakers feel little pressure to address the crisis. No
wonder polls show that a mere 35% of Hondurans, 24% of Nicaraguans, 21% of
Salvadorans and 16% of Guatemalans say they are "satisfied" with how
democracy functions in their countries.

Right now, tens of thousands of Central Americans are heading north. In
contrast to the 1980s and early 1990s, most are not escaping war and
repression. Many are abandoning farms that failed because of globalized
trade and the dumping of U.S. grain. Others are fleeing liberalized interest
rates so high that they have no hope of ever starting a small business.
Still others are trying to escape life in the free trade zones, where
factory owners enjoy huge public subsidies and workers face immense
obstacles in organizing for a living wage.

Central American land could produce decent living standards for small
farmers if they could obtain small-scale irrigation systems, better access
to land, secure title to property, low-cost credit and shelter from unfair
competition and the ravages of global market forces.

These measures would give even the poorest of the poor a stake in their
societies, but they would require elites to take popular needs seriously.
Public sectors eviscerated by privatization and budget cuts can't address
the inequalities that globalization generates.

Rural Central Americans are already reeling after a decade or more of
free-market reforms. President Bush's trade proposals could be the knockout
blow.

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Marc Edelman, a professor of anthropology at Hunter College and the CUNY
Graduate Center, is author of "Peasants Against Globalization" (Stanford
University Press, 1999).