Xi Jinping in His Own Words
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This year marks the bicentennial of Central American independence from Spain and the birth of five small states: Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica. The milestone, however, arrives at a time when the region has little to celebrate. Antidemocratic kleptocracies dominate the isthmus and Nicaragua has become an outright dictatorship. Scant economic growth and endemic corruption and violence are pushing a flood of Central American migrants to the United States.
In the past few decades, U.S. influence in the region has waned as China and Russia have made inroads across Latin America by striking commercial, military, and diplomatic deals. The United States is still an economic superpower, however, and the main commercial partner to every country in the region. The Biden administration can and should leverage U.S. influence to promote the rule of law in Central America.
An intricate web of influence peddlers rule most Central American countries. Kleptocratic leaders use their positions in government to enrich themselves. Organized criminal networks—such as the Zetas in Guatemala—operate smuggling, narcotics, and human trafficking rings. Predatory economic elites pay and exact bribes, evade taxes, and generally exercise unfair market advantages. These actors dedicate considerable social, political, and financial capital to maintain the status quo and avoid accountability and have shaped political systems that, with the exception of relatively stable Costa Rica, can no longer be classified as representative democracies.
Nicaraguan President Daniel Ortega won a fourth term this month only after jailing some three dozen opposition leaders, including rival candidates for the presidency. El Salvadorian President Nayib Bukele recently removed all five judges from the Supreme Court; their replacements allowed him to run for a second term in 2024, contrary to the long-standing constitutional prohibition against presidents serving consecutive terms. This comes after Bukele dispatched soldiers bearing assault weapons into the Congress last year, in an effort to intimidate lawmakers into approving a crime fighting plan. These moves have fueled concerns that the country could follow Nicaragua’s lead and descend into dictatorship. Honduran President Juan Orlando Hernández, meanwhile, has been accused of accepting bribes from major drug traffickers.
Things are no better in Guatemala, where President Alejandro Giammattei fired an anticorruption prosecutor, Juan Francisco Sandoval, after Sandoval began investigating how the government of Guatemala paid a Russian company for shipments of COVID-19 vaccines that never arrived. Sandoval and former prosecutors and judges—such as myself—who pushed to investigate corruption have been forced to seek refuge in the United States after the Guatemalan government threatened their arrest.
The United States cannot deal with these states as though they are democracies. The Biden administration must use sanctions, criminal prosecutions, trade regulation, and support for judicial reform to force change in Central America.
The Biden administration recently announced the creation of two task forces that could curb corruption in the region. The U.S. Department of Justice will lead a new anticorruption task force with input from the Department of State; it will investigate and prosecute cases in Guatemala, Honduras, and El Salvador, the three countries that comprise the so-called Northern Triangle. Meanwhile, Joint Task Force Alpha, a new partnership between the Department of Justice and the Department of Homeland Security, will help dismantle transnational human trafficking rings in the region.
The U.S. government also recently launched a “naming and shaming” campaign in Central America. In July, the U.S. State Department issued a public list of “corrupt and undemocratic actors,” sanctioning public officials across all branches of governments in the Northern Triangle. In early November, the U.S. Congress passed, with bipartisan support, the Reinforcing Nicaragua’s Adherence to Conditions for Electoral Reform (RENACER) Act, which will require the executive branch to more closely monitor and sanction the corrupt Ortega government. The Magnitsky Act, the Engel List (the United States-Northern Triangle Enhanced Engagement Act), and economic sanctions of the Office of Foreign Assets Control (OFAC) also offer venues to sanction corrupt officials and their enablers.
The United States cannot deal with these countries as thought they are democracies.
But although sanctions are valuable tools, they will not be sufficient to reestablish democracy in the region. Legal systems designed to allow for impunity must be reformed in every Central American country. Bad actors must be criminally prosecuted, both to remove them from their positions of power and to deter others who are tempted to emulate their example.
It is within the power of the United States to prosecute these individuals. As the 2021 Global Financial Integrity report on Financial Crime in Latin America and the Caribbean points out, financial crimes and criminal activities are cross-border, and therefore multi-jurisdictional. For corrupt and criminal networks in Central America, the United States is often a destination for illicit assets. Many corrupt officials have bank accounts or property in the United States; this places at least part of their crimes within U.S. jurisdiction. The U.S. government must trace the illicit assets that are channeled into U.S. sectors such as real estate. (Purchasing property in the United States is a common way for Central American kleptocrats to launder their money.) The perpetrators and their enablers must be punished to create a region where the law is respected.
Another way that the United States can deter crime and corruption in Central America is through trade agreements. Currently, Northern Triangle seaports and airports are awash in narcotics, weapons, and other illegal goods. Washington should expand its Container Security Initiative, developed after the 9/11 attacks, to prescreen containers coming in and out of Central American ports. The United States should also revisit the Dominican Republic-Central America Free Trade Agreement (CAFTA): the pact contains anticorruption provisions but doesn’t provide mechanisms to ensure compliance. The United States could renegotiate the treaty to correct that deficiency and potentially add provisions conditioning access to U.S. markets to adherence to the rule of law.
The U.S. government is already taking steps to harness trade as a way to strengthen Central American democracies. The RENACER Act, for example, proposes reviewing whether Nicaragua should be allowed to remain in CAFTA. The Biden administration should weigh whether other states ought to be excluded from the pact based on their governments’ faltering commitments to democracy. Forcing governments to demonstrate their respect for the rule of law in order to retain free-trade privileges with the United States—their biggest trading partner—is a powerful tool for democracy promotion.
A priority of any U.S. foreign policy strategy for the region should be to help Central Americans guarantee the independence of their judicial systems. Time and again, corrupt politicians have stymied judges and prosecutors who have attempted to root out malfeasance. The Biden administration has already proposed a regional anticorruption commission for Central America. It should get to work as soon as possible and seek to foster collaboration on criminal investigations that cross borders. It is not possible for small countries to confront transnational criminal networks by themselves. A regional commission could also hold the possibility of promoting stronger institutions in its member states, which desperately need to modernize their laws regulating the civil service, budgets, taxes, and financial industries.
Finally, it is important to recognize that Central American countries are almost all postconflict zones, home to deeply inequitable societies. In places such as Guatemala, it has become impossible to speak of a social contract between the state and the citizens. In addition to the reforms the Biden administration could push for, it is important to encourage a cross section of Central Americans to collaborate to create sustainable peace in their countries. Entrepreneurs, indigenous leaders, journalists, religious figures, and scholars would all benefit from the rule of law. The United States could take on a mediating role to facilitate dialogue and enable these representatives to work toward systematic change. That effort, which could help replace crime and corruption with peace and prosperity, would have beneficial effects far beyond Central America.
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