The absence of major developments in Central America over the past year has wrought important change: no longer are revolutionary movements about to triumph or be crushed, no longer do insurrections or invasions seem imminent. Rather, Central America has gone from being an ulcer that a new U.S. Administration thought it could lance and heal in a matter of months to a running sore that will plague the United States for years to come.

Leftist guerrillas and ultra-rightists continue to joust without verdict over the ruins of the isthmus. The United States and Cuba remain deeply involved, but seem unsure of the direction of their policies. Peace negotiations are promoted by such third parties as Mexico and Venezuela, but are never actually held. And, without exception, the region's economies are being eroded by high foreign debts, low world commodity prices and shrinking markets for their products. Through stagnation, Central America has become just the sort of problem that solution-oriented officials in Washington traditionally handle badly.

The Reagan Administration, however, shows few signs of adjusting its perceptions to this qualitative change. Rather, it still seems too much under the illusion created during Mr. Reagan's own election campaign-that, at least in Central America, the United States can lay down the law. After all, if President Carter's soft policies permitted leftist expansionism in the region, a hard-line strategy could surely reverse it. The economic, political and historical dynamics of the region were therefore dismissed as largely irrelevant to the basic power play. And the new Administration marched confidently toward the quagmire.

It began by responding militaristically to what it saw as a military problem posed by the Soviet bloc's insurgent proxies in the region, but the guerrilla movements have survived in El Salvador and Guatemala and have appeared for the first time in Honduras and Costa Rica. In May 1981, it then proposed what became the Caribbean Basin Initiative (CBI) as a way of recruiting Mexico, Venezuela and Canada to help bolster the economies of friendly countries; but Washington's partners soon went their own ways, while additional U.S. aid was too little and too late to prevent economic crises from aggravating political unrest. Most recently, the Administration chose democracy as the theme of Mr. Reagan's 24-hour swing through Central America in December 1982, yet even this seemed little more than a disguise for further isolating Nicaragua and supporting the army-dominated governments of El Salvador, Guatemala and Honduras.

To judge by its record, then, the Administration has not found the right answers. And the reason is that it has not asked the right questions. Certainly no consensus has emerged between Washington's and the region's analyses of the problem: Central America believes political solutions are to be found at home, while Washington's global vision suggests that control of external forces-read Moscow, Havana and Managua-holds the key; Central America blames external forces, such as depressed world commodity prices, for its economic crises, yet Washington acts as if they can be resolved largely through internal austerity measures-as if communism can be combatted with poverty.

Washington's ineffectiveness, however, is matched by similar confusion on the Left. Cuba wavers between supporting armed revolution and negotiated settlements, and between imposing its own leadership and tolerating the idiosyncrasies of different guerrilla groups. The Sandinists hover uncertainly between a Marxist-Leninist state and the social democratic model that many Nicaraguans would prefer, between exporting revolution and appeasing their nervous neighbors. The alliances of different guerrilla groups in El Salvador and Guatemala display even greater ideological disarray, with some organizations favoring the "prolonged popular war" strategy to achieve an absolute victory and others willing to accept a smaller quota of power through peace talks.

Finally, there is the depressing dimension of the region itself, where the struggle for power seems more critical than the battle of ideas, where personalities are more important than principles. And, no matter what fantasies are projected by idealism or ambition, in the end it is sheer underdevelopment-political, religious and cultural, as well as economic-that determines the limits of hope. It is a region where only the short term exists for the tens of thousands who die violently each year, and the long term is only marginally less bleak. And it is a region where the leftist, centrist and rightist solutions all proved wanting in 1982.

II

Nowhere is the lack of progress more evident than in El Salvador. And nowhere is U.S. frustration greater. The year began with the hope that the March 28 elections for a constituent assembly would mark a turning point in the country's unhappy history. To be realistic, it was a hope tempered by awareness that no effort had been made to involve the guerrilla coalition known as the Farabundo Martí National Liberation Front (FMLN) and its non-Marxist allies in the Democratic Revolutionary Front (FDR). But when a large number of Salvadorans turned out to vote-despite stepped-up guerrilla activities and even rebel attacks on some polling stations-optimism seemed justified. On a rare occasion when the Salvadoran people were consulted, they opted for peace. And from that point of view, the elections were a success. But the outcome was not.

Within hours of the polls' closing, the political bickering began, much of it in the office of the U.S. Ambassador to San Salvador, Deane Hinton, who called in party leaders to discuss the results. Washington had clearly hoped that the elections would serve to legitimize the two-year-old de facto alliance between President José Napoleón Duarte's Christian Democrats and the armed forces under Defense Minister General José Guillermo García, thus enshrining the concept of "centrist" government that would justify continuing U.S. military aid against the Left. But the Christian Democrats won only 40 percent of the vote, and a bevy of more conservative parties, led by the Nationalist Republican Alliance (ARENA), ganged up against them.

The head of ARENA, retired Major Roberto d'Aubuisson, a man long identified with rightist death squads and even thought to be linked to the March 1980 murder of Archbishop Oscar Arnulfo Romero of San Salvador, himself made a bid to be named interim President by the Constituent Assembly, but this was blocked by the army under pressure from Washington. Instead, Alvaro Magaña, a moderately conservative lawyer with no power base of his own, was appointed President, leaving d'Aubuisson as President of the Assembly.

Since then, El Salvador's new experience in democracy has consisted of endless political in-fighting, some reversal of the timid land reform decreed in early 1980 and little progress toward drawing up the new constitution which must be in place before the general elections scheduled for March 1984. Further, having helped to install democracy the Reagan Administration has been forced to work almost exclusively through the armed forces-and particularly General García-in order to get its way.

Washington's freedom of action, moreover, has been limited by the requirement that, twice yearly, it must certify to Congress that El Salvador is advancing toward democracy and respect for human rights and is making serious efforts to clarify the killing of four U.S. churchwomen in December 1980 and of two U.S. labor advisers in January 1981. The Administration has duly provided this seal of approval whenever required, but it has nevertheless been forced to dedicate enormous energy to the human rights question, ensuring that much-publicized steps in the investigations into the murder of its citizens occur prior to each certification. In October, Ambassador Hinton was even forced to denounce the country's "rotten" judiciary system in order to revive the dormant investigations. Similarly, just days before President Magaña met Mr. Reagan in Costa Rica on December 4, there was an orchestrated flurry of news about the investigations, while a government Human Rights Commission was created. Mr. Reagan was then able to anticipate the next certification in January 1983 by noting that "great progress" was being made on human rights in El Salvador.

Washington's own preferred obsession, however, is the fight against the FMLN, but this too has been fraught with frustration. U.S. military aid, including a squadron of A-37 fighter planes, continued to pour into El Salvador, between 40 and 50 U.S. advisers kept up in-country training and some 1,500 soldiers and officers underwent special counterinsurgency training in the United States. Yet the guerrillas not only survived but probably improved their own military capacity, launching major offensives prior to the March elections, in July and again in October. Little guerrilla activity occurred in San Salvador and other cities, but the army was unable to dislodge the FMLN from its strongholds in Chalatenango and Morazán provinces and around the Guazapa volcano, just north of the capital. The army's response at times even seemed aimed at keeping the rebel movement alive: instead of using guerrilla tactics to defeat the guerrillas, it would wait for the FMLN to seize small northern towns before dispatching convoys of troops-which were routinely ambushed-to evict them. After a couple of weeks, the troops would then return to their urban garrisons and the guerrillas would regroup.

While the guerrillas have not been defeated, however, they have also not advanced significantly. Except in their mountain havens, where some set-piece battles have taken place, they have not gone beyond ambushes and sabotage, both effective weapons in demoralizing government troops and maintaining economic disarray, but neither sufficient to lead them to a military victory. Politically, they have relied on squabbling among the official parties and continued human rights violations by the security forces to improve their image by default. But the population's apparent indifference to their call for a popular insurrection during the March elections was evidence that the powerful pro-guerrilla student-worker-peasant coalitions of the late 1970s had been largely dismantled. The FMLN responded to this lesson-the second unheeded insurrection call in two years-by emphasizing the need for more political work among the masses, but the results have yet to be seen.

While using occasional military offensives to prove they were still alive, the FMLN-FDR have given priority to mobilizing international support for a negotiated settlement. And here, the differences among the five FMLN groups and the two FDR parties have become important. The line-up, though, has not been between Marxists and non-Marxists. The Popular Social Christian Movement, headed by Rubén Zamora, a dissident Christian Democrat, and National Resistance, a member of the FMLN, work closely together and are considered the most disposed to step in from the cold. At the other end of the spectrum are the Chalatenango-based Popular Forces of Liberation, whose legendary leader, Salvador Cayetano Carpio, still has difficulty pronouncing the word "negotiations" and who believes that prolongation of the war is preferable to surrender disguised as peace.

In the middle are the other FMLN groups. The Salvadoran Communist Party, with virtually no guerrilla force of its own, favors a negotiated settlement that would permit it to resume its political work among trade unions. The Revolutionary Party of Central American Workers, on the other hand, has neither political nor military importance, but it follows the leadership of the Morazán-based People's Revolutionary Army, which has the strongest guerrilla force and would support a settlement that gave the Left a genuine share of power. Finally, there is Guillermo Manuel Ungo, the social democrat president of the FDR, whose political future clearly depends on a democratic outcome but who also recognizes that the strength of the FMLN-FDR lies in its unity.

By postponing elaboration of a detailed negotiating position, the alliance was able last October to issue a new call for an unconditional dialogue with the powers that be. And it even persuaded the acting Archbishop of San Salvador, Msgr. Arturo Rivera y Damas, to deliver the proposal-duly signed by the leaders of the seven groups-to President Magaña, General García and Major d'Aubuisson. But this offer was received no better than earlier initiatives. In August, the Assistant Secretary of State for Inter-American Affairs, Thomas O. Enders, had welcomed President Magaña's idea of forming a Commission for Peace as "an important step toward national reconciliation." And he added: "Dialogue must involve listening as well as talking, giving an opportunity to adversaries to explain how they could participate in the new democratic institutions." But, six months after Mr. Enders' seemingly conciliatory phrases, the Commission For Peace had still to be formed, while the FMLN-FDR's definition of "dialogue" was clearly not what the U.S. official had in mind. Washington therefore dismissed the opposition's new peace offer and El Salvador's government, army and legislative leaders all quickly followed suit.

III

The Reagan Administration's unwavering objective, in fact, would seem to be the cleansing of leftists from Central America. And, in this strategy, Honduras has come to play a crucial role. In a sense this is not new, since the Carter Administration loaned Honduras ten Huey helicopters to patrol its sieve-like border with El Salvador in 1980. In the hope of improving counterinsurgency cooperation between the neighbors, Washington also pressured Honduras and El Salvador to resume diplomatic relations in December 1980 for the first time since their 1969 border war. And in 1981 Washington urged the Honduran army to improve its interception of arms flowing from Nicaragua through Honduras to the Salvadoran rebels. That these efforts were largely fruitless was blamed by U.S. officials on the inefficiency of the Honduran army, although in reality the main shipments of weapons took place in late 1980 and relatively few have entered El Salvador since then.

But in 1982, after General Gustavo Alvarez Martínez took over as chief of the Honduran armed forces, the United States at last had an efficient ally in its crusade. A tough Argentine-trained officer, General Alvarez more than compensated for the fact that the army had formally surrendered power to a civilian government at the time he took over the armed forces in late January. And with Roberto Suazo Córdova the titular President, it soon became apparent that General Alvarez was in charge, assuming responsibility not only for internal security, but also indirectly for expelling the leftists from both El Salvador and Nicaragua. It was, after all, a regional problem, and he saw himself playing the role of a latter-day Francisco Morazán, Central America's nineteenth-century liberator.

In June 1982, the Honduran army acted for the first time in coordination with El Salvador's armed forces by serving as one half of a pincer closing on the Salvadoran rebels in Morazán. And this move was repeated in both Morazan and Chalatenango in October. Honduras' motives, though, were not entirely charitable. In the process, the Honduran army also occupied a series of "bolsones," or pockets of territory, in dispute with El Salvador since the 1969 war. On Honduran maps, the "bolsones" appear as part of Honduras and on Salvadoran maps as part of El Salvador, but they had been demilitarized pending a settlement and served as convenient havens for the guerrillas. But while their absorption by Honduras resolved a short-term problem for El Salvador, it sowed the seeds for a new dispute in the future.

Having suffered a defeat in the 1969 war, most Hondurans still view El Salvador with greater distrust than Nicaragua. But not so General Alvarez, whose anti-communism far surpasses his nationalism. Instead, his attention has been focused almost obsessively on the Sandinists, happily allowing Honduras to be used as the springboard for a counterrevolution.

His passions have been rewarded by Washington. In 1982, U.S. military aid to Honduras tripled to over $33 million, with between 60 and 90 U.S. advisers in the country at any one time. Washington also donated $13 million to enable three Honduran air strips to receive C-5 and C-130 troop carriers in case of conflict with Nicaragua, while U.S. forces participated in joint maneuvers with the Honduran army in July as part of an effort to build up troop strength along the Nicaraguan border on the Atlantic Coast. New "war games" in the same area were scheduled for early December, but were postponed to avoid coinciding with President Reagan's trip to the region.

The covert aspect of Honduras' role against Nicaragua was even more important. Although former National Guardsmen from the ousted regime of General Anastasio Somoza Debayle-the so-called Somocistas-had been allowed to launch attacks from Honduras into Nicaragua soon after the July 1979 revolution, they only emerged as a serious force in 1982 after the Central Intelligence Agency moved to organize them. The purported purpose of the $19-million budget approved by President Reagan in late 1981 was to create a paramilitary force to intercept the flow of arms to Salvadoran rebels. But the real objective was evidently different: to create an anti-Sandinist army capable of destabilizing and perhaps eventually overthrowing the revolutionary regime.

For this, Washington was able to rely on the cooperation not only of General Alvarez, but also of the Argentine army, which both trained former National Guardsmen in Buenos Aires and dispatched several dozen military intelligence agents to Honduras to advise the new insurgents. Coincidentally, Washington helped pull together numerous exile groups into the Nicaraguan Democratic Front (FDN) and began presenting it as a broad anti-Sandinist-rather than a Somocista-movement. And by August 1982, the results were apparent with the rapid escalation of incursions and border clashes and even the appearance of rebel columns deep inside Nicaragua. The long-awaited invasion-not by Honduran troops, as frequently predicted, but nevertheless an invasion-had begun. And even the publicity given by Newsweek in October to Washington's "secret war" did little to slow the mounting border conflict. In December, however, Congress formally barred the Reagan Administration from supporting military operations aimed at overthrowing the Sandinist government, though some officials suggested that ways of circumventing this constraint might be found.

In fact, only Argentina's role seemed to change significantly. During last spring's Falklands war, Nicaragua gave vocal support to Argentina in the expectation that the Buenos Aires government would withdraw its support for the Somocistas. But while some Argentine military officers did apparently leave Honduras, they were once again very much in evidence there last fall, above all as advisers to General Alvarez. In late November, one Argentine officer, Hector Francés, who claimed to have defected, revealed many details of the Argentine operation in a video-taped statement shown to reporters in Mexico City.

Apparently embarrassed by this and anxious to win renewed support for its claim to the Falklands from the nonaligned nations' movement, Argentina then promised Nicaragua in December that all Argentine advisers would finally be withdrawn from Central America. The coincidental visit to Honduras last December by Israeli Defense Minister Ariel Sharon therefore prompted speculation that Israel might soon replace Argentina as an arms supplier and adviser to the Honduran army and its Somocista allies.

Honduras, however, did not emerge unscathed from its new involvement in the region's problems: for the first time, political positions inside the country began to polarize. It was an unfortunate development because, while the poorest country in the region, Honduras had long lived in peace with itself. The military regimes that ruled the country through much of the 1960s and 1970s were corrupt, but they tolerated press freedom, labor and peasant organizations and the vocal leftism of students. At times, they were even mildly reformist and, between 1978 and 1981, as unrest convulsed their neighbors, they wisely chose a neutralist stance.

But, paradoxically, the arrival of democracy coincided with a souring of the country's mood as General Alvarez, counselled by his U.S. and Argentine advisers, led Honduras into the regional fray. Above all, a new feeling of fear appeared in the air. A number of guerrilla actions took place, the most prominent being the seizure of over 100 hostages in San Pedro Sula's Chamber of Commerce in September. But, no less ominously, repression increased as General Alvarez embarked on what his aides described as "a preventive war" against the Left. By October, the country's bishops were alarmed. "One can easily perceive a clear disenchantment in many sectors of the population that went to the polls with so much hope," they said in a pastoral letter. "There is a general feeling of greater fear and of less freedom." While combating perceived threats to its security from Nicaragua and Cuba, then, the Honduran regime generated potentially more serious instability at home.

IV

It is a familiar mistake. Nicaragua's Sandinist regime has also chosen to emphasize the counterrevolutionary threat from Honduras and Miami and to minimize the role played by domestic policies in stirring new opposition.

The threat from abroad is genuine enough. There are some 5,000 FDN "contras"-armed and trained by the CIA, the Honduran army and Argentine advisers-operating out of camps in Honduras or inside Nicaragua itself. And their targets are not only Sandinist army and militia positions, but also agricultural production, aiming to create a climate of terror that will discourage peasants from picking such vital export crops as coffee and cotton. Further, on Nicaragua's Atlantic Coast and in such border areas as Nueva Segovia, the "contras" also enjoy some support among sectors of the population that did not participate in the 1979 revolution.

Elsewhere, though, the fact that most rebels are-or are believed to be-former National Guardsmen has helped the Sandinists to revive some of the spirit of their 20-year struggle against the Somoza regime, while the disclosures by Newsweek and others served to give credibility to their perennial charges of CIA operations against the regime.

But this external threat has also become the justification for tighter internal control. Nowhere was this policy more disastrous than among the Miskito Indians of the Atlantic Coast, whom the Sandinists first angered by ignoring their strong cultural identity and then further alienated by evicting them from their land beside the Coco River after one Miskito leader, Steadman Fagoth Muller, joined forces with Somocistas in Honduras.

Then, in March 1982, after two bridges in northern Nicaragua were bombed, a state of emergency was declared, giving the regime wide powers of arrest, suspending the activities of all political parties and imposing censorship on the media, principally the opposition daily, La Prensa. A new official premise also appeared: anyone who did not openly support the Sandinists against "la agresión" was by definition a counterrevolutionary, a category that gradually embraced Archbishop Miguel Obando y Bravo of Managua, La Prensa, the leaders of the Superior Council of Private Enterprise, and opposition parties, including the Nicaraguan Democratic Movement, headed by former junta member Alfonso Robelo Callejas. By squeezing the Center, however, the Sandinists strengthened the opposition.

For the record, the Sandinists insist that they stand by their original pledge to maintain political pluralism, a mixed economy and a nonaligned foreign policy; they explain that any delays in the execution of this program are the result of the external threat. In early December, they even promised that new political parties and electoral laws would be adopted by the rubber-stamp Council of State this year in anticipation of elections in 1985.

But the Sandinists dominate all aspects of the nation's life through their powerful military, party and bureaucratic machines. And they have not only moved farther and faster to the Left than many Nicaraguans hoped, but they have also concentrated power in the hands of the nine-man National Directorate to such an extent that any suggestion of concessions to the opposition is vetoed by the radicals. The issue, then, is not how truly Marxist-Leninist the regime will become, but rather how Stalinist; once again, it is less a question of ideology than one of power. After all, throughout Nicaraguan history, every change of regime has come about through force of arms.

Not surprisingly, then, many Nicaraguans who supported the revolution are disillusioned. It was inevitable that the different groups that fought the Somoza regime should have different ideas about what should follow. And it was unavoidable that many ordinary Nicaraguans would have inflated expectations about how the new government would transform their lives. Yet there is a broad consensus that the revolution has not turned out as expected-that there is both less prosperity and less freedom than anticipated.

During 1982, non-Somocista opposition to the Sandinists began to grow. Robelo, who became the regime's strongest critic after he resigned from the junta in April 1980, went into exile in neighboring Costa Rica in March 1982. The following month, Edén Pastora Gómez, the renowned Commander Zero of the revolution who had left Nicaragua in July 1981 disenchanted with the revolution, publicly denounced the radicalism of his former colleagues. Robelo, Pastora, the Miskito leader Brooklyn Rivera and a long-time fighter against the Somoza regime, Fernando Chamorro Rappaccioli, subsequently formed the Revolutionary Democratic Alliance (ARDE). Unwilling to join forces with the Somocistas in Honduras and threatened with expulsion from Costa Rica if they went beyond political activities, they posed no direct threat to the Sandinists. Yet, adopting a social democratic stance (though not endorsed by the Socialist International), they offered a more realistic option than the Nicaraguan Democratic Front in Honduras.

And as former Sandinist officials became disenchanted with the regime they naturally turned to ARDE. In December, Nicaragua's Ambassador to Washington, Francisco Fiallos Navarro, articulated the feelings of many Nicaraguans when he called for a "dramatic change" in the direction of the revolution, including an end to press censorship, the lifting of the state of emergency and the convocation of early elections. When his ideas, contained in an interview with La Prensa, were censored, Fiallos resigned, noting pointedly in a press conference that Pastora (who is referred to only as "the traitor" in Nicaragua's official press) "is a patriotic man [who] should be part of the process within the revolutionary movement."

Pastora's calls for negotiations with the Sandinists and for elections by June this year, however, were duly ignored, leaving ARDE with the choice of opening up a military front or gambling that mounting internal problems would eventually create an opportunity for action.

V

Costa Rica is clearly unwilling to serve as a military springboard against the Sandinists as it did against the Somoza regime, but most Costa Ricans are as anti-Sandinist today as they were anti-Somoza in early 1979. They also feel the bitterness that comes with being deceived: they-from the then President Rodrigo Carazo Odio downwards-cooperated with the Sandinists because they thought Nicaragua would become a democracy modeled after Costa Rica. In reality, Carazo remained a loyal friend to the Sandinists until he left office in May 1982, determined not to blemish his historic role in the overthrow of General Somoza. But he was almost alone. And, from the day the new President, Luis Alberto Monge, took office, he built his foreign policy around vocal hostility towards Managua. It was popular at home and, he hoped, popular in Washington because, in exchange, he needed massive U.S. aid to save the Costa Rican economy and, thereby, its democracy.

The resulting verbal warfare between San José and Managua has spread tensions throughout the region, with every bombing, kidnap attempt, strike or student march in Costa Rica now unfailingly blamed on the Sandinists, the Cubans or even the Soviets themselves. Despite sporadic acts of "imported" terrorism, though, Costa Rica's democratic system-the oldest in Latin America-has withstood the country's worst economic crisis since the Great Depression without serious strain. And even Costa Ricans' evident fear of Nicaragua's military might has not resulted in pressure to reconstitute the country's army, which was dismantled 34 years ago. Although living standards are falling rapidly, events elsewhere in the region appear to have convinced most Costa Ricans that a period of severe austerity is a small price to pay to preserve their democracy.

VI

In contrast to Costa Rica, Nicaragua, Honduras and El Salvador, whose destinies seem interwoven, Guatemala has lived its most recent cycle of bloody political instability in dark isolation. Yet most analysts believe that, because of its strategic location, its larger population and its natural resources, Guatemala is the most important country in the region. Guatemala was also where the most significant political changes occurred in 1982, due ironically neither to the United States nor Cuba but to the internal dynamics of a deeply complex nation.

From the moment General Romeo Lucas García took office in July 1978, paramilitary bands set about wiping out the social democratic parties and the left-leaning labor and peasant organizations that had been allowed to emerge in the mid-1970s. Literally hundreds of non-violent opposition leaders were murdered and many more went into exile. By squeezing the reformists, however, the regime stimulated the revolutionary movement which for the first time in the country's history succeeded in mobilizing important sectors of the Indian community, which comprises over half the total population. And as repression in the countryside grew, so did guerrilla strength. But such was the regime's human rights record that Congress was able to prevent even the Reagan Administration from resuming U.S. military aid, which had been suspended since 1977. And Washington's hopes that elections in March 1982 would bring some improvement were frustrated when the army resorted to fraud to impose the victory of the official candidate, General Aníbal Guevara.

But on March 23, three weeks after the elections, before Guevara could take office, General Lucas was overthrown by young officers disenchanted with the corruption of his regime, and General Efraín Ríos Montt, whose election victory in 1974 had been blocked by fraud, was installed in his place. An intense, born-again Christian belonging to a California-based Protestant sect, Ríos Montt immediately set about cleaning up the country with the zeal of a missionary. He promised to end corruption and control the rightist "death-squads" that had long terrorized urban areas. And having first offered the guerrillas an amnesty, which they duly ignored, he declared a state of siege on July 1, and launched a new counterinsurgency offensive across the western highlands.

Unlike the counterproductive repression of his predecessor, though, Ríos Montt's approach was methodical and politically sophisticated, albeit no less brutal. It required massacres of selected Indian villages identified with the guerrillas and, as terror neutralized support for the rebels in surrounding areas, a strategy known as "beans and rifles" was applied, involving distribution of food and creation of civil patrols among the rural population.

In a matter of six months, between 3,000 and 5,000 Indians were killed, some 250,000 were displaced from their homes, 30,000 fled into Mexico, 80,000 peasants were pressganged into civil patrols-and the guerrillas' popular base was largely destroyed. The government also launched a propaganda offensive, blaming the massacres on the guerrillas, an argument that failed to convince Amnesty International, Americas Watch and assorted other human rights groups, but did persuade President Reagan, who proclaimed that Guatemala had suffered a "bum rap" after he met Ríos Montt in Honduras, on December 4. And, having been assured that Guatemala was on the road back to democracy, Mr. Reagan lifted the five-year-old arms sales embargo in January, allowing Guatemala to buy $6.3 million in military equipment from the United States.

The irony is that, without U.S. weaponry or advisers, Guatemala proved infinitely more effective in dealing with its guerrillas than El Salvador. And the depressed and divided state of the Guatemalan Left gave credibility to Ríos Montt's year-end claim that he had defeated the rebels politically. But few guerrillas were among the dead. And Guatemalan history teaches that, in the absence of a political "opening" accompanied by socioeconomic reforms, the guerrillas will recover the center stage, one, five or ten years hence. For the moment, though, Ríos Montt holds the initiative, if only because he is politically unpredictable. Despite his announcement of elections for a constituent assembly in March 1984, for example, he is unlikely to surrender power voluntarily for years to come, if only because of his deep dislike for the country's traditional political parties. But he does have strong populist instincts, and the stern sermons that he has delivered to the private sector could augur some unexpected reforms.

VII

Divided by politics, the five republics of Central America are united by common economic crises. Although deep poverty is endemic to all countries except Costa Rica, the entire region had enjoyed two decades of steady economic growth until the first political convulsions of the late 1970s. But in 1982, full-scale slumps themselves became major contributors to political instability. All five economies recorded negative growth, accompanied by high inflation and rising unemployment. And, in each country, the reason was essentially the same: the 1979 oil-price hike, followed by a slump in commodity export prices, led to increased foreign borrowing at interest rates which poor countries could not afford. Financial crises were then aggravated by the flight of capital escaping political unrest, forcing governments to impose stiff austerity programs in exchange for renegotiation of their debts. All except Nicaragua turned to the International Monetary Fund for assistance.

Among the numerous extra-regional players in the Central American drama, only Mexico and Venezuela-perhaps because of their own development difficulties-have recognized the importance of economic viability to political tranquility. Meeting in Costa Rica in August 1980, Mexico's then President José López Portillo and Venezuela's President Luis Herrera Campíns agreed to provide oil to the entire Caribbean Basin with a 30-percent credit-and without political strings. This facility alone cost each country some $350 million per year, while both made significant development grants and loans in the region, notably to Nicaragua (which additionally received 100-percent credit for its oil imports from Mexico). And, despite growing domestic economic difficulties in 1982, both Mexico and Venezuela decided to maintain the so-called San José Accord on the grounds that, if they were in trouble, weaker countries were even worse off.

In contrast, while the U.S. Congress last September approved $350 million in additional aid as part of the Caribbean Basin Initiative, the U.S. program was not only politically selective (excluding Cuba, Nicaragua and Grenada), but it was also built largely on the dubious premise that private enterprise could lift the region out of its slump. In the end, even this premise could not be tested because, despite strenuous Administration efforts, the "lame-duck" Congress adjourned in December without approving the trade preferences and investment incentives contemplated in the CBI. The "one-way" free trade area for the Caribbean Basin had in fact been endorsed by the House of Representatives before running up against an unrelated filibuster in the Senate, and President Reagan promised to resubmit it in the 1983 congressional session. But, even if the CBI is eventually adopted, businessmen are unlikely to invest in countries with sinking economies and political unrest.

In fact, despite their sharp political differences, the governments of Central America seem agreed that the answer to their economic problems lies in strengthening the public sectors, either by the proceeds earned through increased world commodity prices or by more direct financing. And, unable to borrow more from commercial banks, they are increasingly dependent on such multilateral institutions as the World Bank and the Inter-American Development Bank and on the U.S. Agency for International Development. The scale of the problem can be well illustrated: at a time when the United States was offering $350 million as its contribution to socioeconomic progress in the region, the five countries calculated that, together, they needed an emergency $5 billion in financial support and a further $20 billion in development aid through 1990. And, without a world economic recovery or a massive injection of funds, political stability will remain elusive.

The Reagan Administration, though, has been absorbed in the search for less costly "political solutions," mainly through isolating the Left in individual countries and the region as a whole. But the questionable success of this crusade has subjected Washington to widespread criticism, not only, predictably, from the Soviet bloc, but also from its allies in Latin America and Western Europe. As a result, rather than changing its approach, the Administration has been forced to dedicate much of its time and energy to blocking the more conciliatory "solutions" offered by Mexico, Venezuela, Panama, France and the Socialist International.

The most ambitious initiative came from Mexico's López Portillo who, during a visit to Nicaragua in February 1982, offered to act as "communicator" to enable Washington to negotiate with Havana and Managua. But while Mexico's then Foreign Secretary held talks with the three governments, the Reagan Administration showed only sufficient interest to avoid offending Mexico. In the case of Cuba, Retired General Vernon Walters, an ambassador-at-large in the State Department, held secret talks in Havana with President Fidel Castro, but there was no follow-up. And, in the case of Nicaragua, Washington initiated an exchange of position papers with the Sandinists, but then buried the dialogue by failing to respond to Nicaragua's last diplomatic note in August 1982.

Part of the weakness of Mexico's advocacy was that the López Portillo government was closely identified with both the Sandinists and El Salvador's FMLN-FDR (which, with France, it had recognized as "a representative political force") and had been unable to coordinate its initiatives with Venezuela, which was aligned with the United States in the region. But, by mid-1982, Venezuela's position began to change, not only because the Christian Democrats were excluded from the Salvadoran government (Duarte and Herrera Campíns are old friends), but also because Washington's support for Britain in the Falklands war stirred anti-U.S. sentiments in Caracas and, indirectly, prompted Herrera Campíns to seek a rapprochement with both Nicaragua and Cuba.

By September 1982, Mexico and Venezuela were able to launch their first joint political initiative. In personal letters to Reagan and the leaders of Nicaragua and Honduras, López Portillo and Herrera Campíns warned of the threat of war between Nicaragua and Honduras and offered to serve as hosts for a "peace" summit between Honduras' Suazo Córdova and the Coordinator of the Nicaraguan junta, Daniel Ortega Saavedra.

But, once again, Washington seemed to resent this "interference" in its sphere of influence. And in response, the Administration organized a regional Forum for Peace and Democracy in Costa Rica, October 4-including Honduras and excluding Nicaragua-which issued its own peace plan calling for an end to arms trafficking and export of "subversion" in the region and for the withdrawal of all foreign military advisers from Central America. Honduras then endorsed this plan, which seemed directed entirely at isolating the Sandinists, and turned down the Mexican-Venezuelan proposal. From the San José meeting also emerged the theme-the search for democracy-that enabled President Reagan to embrace the leaders of all Central American countries except Nicaragua during his trip to the region.

The switch of emphasis from military to democratic solutions for Central America was clearly the result of Alexander M. Haig's replacement by George P. Shultz as Secretary of State in mid-1982. But, by the end of the year, it also seemed apparent that style rather than policy had changed. When General Haig had been breathing fire toward Central America, Administration officials had urged regional analysts to look at deeds rather than words. And now, though the words are softer, the same advice could apply. Since Shultz took over, the Administration has moved no closer to accepting the Nicaraguan revolution or to recognizing the need for a negotiated settlement in El Salvador. And the region has moved no closer to peace.

VIII

Now, with formula solutions clearly unavailable, the Administration faces a series of thankless options. Most likely and least ambitiously, Washington will just try to muddle through-that is, to involve itself just enough in Central America to contain leftist expansionism but to risk neither economic nor political capital on a more fundamental approach. But this policy leaves a vacuum of clear leadership that could be filled by unpleasant surprises. Traditionally, though, Washington has preferred to react to surprises rather than to anticipate them.

Alternatively, encouraged by the setbacks suffered by Guatemala's guerrillas and by the stalemate in El Salvador, Washington could go all out to reverse President Carter's "loss" of Nicaragua by trying to topple the Sandinist regime. Certainly, Enders and many of the old Southeast Asia hands working with him (including the U.S. Ambassador to Honduras, John D. Negroponte) seem intent on winning the kind of war in Central America that was lost in Vietnam. Further, although congressional restraints may make it difficult to continue providing covert assistance to Somocista "contras," a large amount of weaponry has already been supplied and the Honduran army could serve as a conduit for further aid. But this scenario would also risk sparking a regional war. And there is reason to hope that cooler heads would avoid creating a situation in which Nicaragua might appeal for Cuban help and Washington then decide to send in U.S. combat troops to support Honduras.

A third option, though, does exist. Guided by pragmatism rather than ideology, by long-term U.S. national interest rather than short-term Administration objectives, Washington could embark on an open-minded endeavor to develop political stability and economic viability in the region. It would, of course, require a much greater economic investment than anticipated by the CBI, as well as recognition that leftists exist-and the fruits of this approach might take years to mature. Yet only by accepting the need for fundamental economic and political change can the United States even begin to hope that stability will return to the region.

To build this "new" Central America, however, is not just a question of pouring in more money or accepting the principle of negotiations in El Salvador and with Nicaragua. Rather, Washington must first switch its focus away from Cuba as the problem and toward Mexico and Venezuela as the solution. So far, because the United States has failed to address the key question of change, Cuba has retained the philosophical advantage in the region. And because Mexico and, more recently, Venezuela have criticized U.S. policy, Washington has seen them as somehow allied to Havana. But, because they too see the need for reforms but oppose Marxist-Leninist revolutions, Mexico and Venezuela are, in a more realistic fashion, competing with Cuba.

In essence, they are motivated by self-interest, and have concluded that a Caribbean Basin dominated by either Washington or Havana will be constantly unstable and therefore a problem to them. Their policies, though, have at times seemed contradictory: Venezuela was simultaneously supporting both Nicaragua's Sandinists and the Salvadoran government the Sandinists were purportedly trying to oust; and Mexico, a cheerleader for El Salvador's FLMN-FDR, refused to support Guatemala's leftist guerrillas when that country's civil war threatened to spill over into its territory. Yet, through the San José economic accord, both Mexico and Venezuela are investing heavily in the stability of the region. And, as Latin Americans, their political intervention in Central America is much more acceptable than that of the United States.

The new cooperation between Mexico and Venezuela was in fact one of the few positive developments in 1982. The Reagan Administration, though, is clearly hoping that Mexico's new President, Miguel de la Madrid, will abandon his predecessor's activist policy in the region and that Venezuela will become increasingly absorbed by the campaign for its December 1983 elections. But neither is likely to occur: just after his inauguration, de la Madrid indicated his intention of pursuing a common approach with Venezuela. In the middle of January 1983, the Mexican and Venezuelan-as well as the Colombian and Panamanian-foreign ministers met in Panama to discuss possible new diplomatic initiatives for Central America.

Finally, withdrawal from the region by Mexico and Venezuela would not be in Washington's long-term interest. Rather, with Mexico and Venezuela sharing economic and political responsibility for the future of Central America, the United States might at last risk a creative and imaginative approach to the region's nightmare.

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  • Alan Riding, who is Mexico Bureau Chief for The New York Times, has reported from Central America since 1971.
  • More By Alan Riding