Thus Came the Modernizers

Several miles west of San Salvador, set off a
few hundred yards from the main road, there
is a tall, white monument. The grass around
it is overgrown. The flame that was to burn
eternally is out. Hardly anyone goes there
anymore.
It is a monument to the Revolution of 1950,
billed with much fanfare as the opening of a
new era in Salvadorean history; likened to the
industrial revolution that led to rapid
capitalist development in countries that El
Salvador wished to emulate.
Emerging victorious from the power strug-
gles of the late 1940s, a coalition of military
men, technocrats, and a tiny industrial
bourgeoisie made an alliance with a sector of
the coffee oligarchy– principally those in-
volved in export. Their project was to moder-
nize Salvadorean capitalism through
agricultural diversification, industrialization
and political reform.
What brought these disparate forces
together and made the plan possible was the
post-war boom in coffee prices from 1945 to
1950.Earnings from coffee sales rose from
$18.7 million to $76 million, with bonanza
crops recorded in 1950.2 Something had to be
done with the surplus.
In the same period, U.S. investors were
eager to invest abroad. It was the beginning
of a major shift in international production
patterns. Gone were the days when third
world countries would produce only
agricultural goods for consumption in the
metropolitan centers. Their labor
force-cheap and abundant-was ideally
suited to produce manufactured goods and
profits. U.S. capital, in El Salvador as
elsewhere, would develop a strong stake in the
economy and play a major role in making
sure that politics protected that stake.
In 1950, Colonel Oscar Osorio became
president in elections that were widely at-
tacked as fraudulent. His neatly trimmed
crewcut suggested the, modern soldier-cum-
technocrat, inaugurated in the era of
developmentalism and reform.
Developmentalism was the creation of con-
ditions to permit the expansion and modern-
ization of Salvadorean capitalism, largely
restricted to agriculture until the 1950s.
Reformism was the policy of adjusting ex-
isting structures to keep the system one step
ahead of its own contradictions. If things got
out of hand, repression would be applied
discreetly.
As the first order of business, the anti-
industrial laws of Martinez had to be buried
and replaced by strong incentives. A govern-
ment office was created to coordinate the
development of commerce, industry and min-
ing.
The power of the state was dramatically in-
creased. New taxes were imposed on coffee
exports to transfer resources to new areas of
investment. A modern infrastructure was
built, starting with the 5th of November Dam
to generate electrical energy. In 1957, ground10
NACLA Report
was broken for a new highway running the
length of the country along the Pacific Coast.
It opened new lands that were ideally suited
to cotton and cattle.
Politically, the official party was born -the
Revolutionary Party of Democratic Unification
(PRUD). Sponsored by the military and the
modernizing bourgeoisie, it was designed to
involve new sectors of society in the “Revolu-
tion”: professionals, a growing service sector
linked to the phenomenal growth of the state,
and the proletariat created by industrializa-
tion. To attract the latter, industrial unions
were legalized but carefully controlled, and
social security benefits were established.
KEEPING THE CONTRACT
Industrialization, the chief priority of the
modernizers, took the form of import
substitution, i.e., creating industries to pro-
duce manufactured goods that were previous-
ly imported. The problem was ob-
vious. The concentration of wealth in so few
hands meant that the country’s internal
market was tiny-reduced to the privileged
few able to buy canned ham, jellies, soap,
crepe paper and the like.
An obvious solution would have been to
break up the great concentrations of land
owned by coffee, cotton and cane growers. In
theory, a caste of small farmers would emerge
with adequate purchasing power to spur in-
dustrial growth. Moreover, El Salvador’s
dependency on basic food imports, along with
the cost of feeding its labor force, would be
reduced.
So much for theory. Politically, it would
have been suicide. Agrarian reform meant
violating the basic terms of the contract that
brought the modernizers to power: the land
would not be touched.
As development proceded in the 1950s,
even the landowning sector began to diversify
its investments. But the implicit understand-
ing was that no one, no program, no govern-
ment would touch the pillar of its wealth.
All development would have to proceed on
the basis of existing patterns of land tenure.
To the theorists who argued that without land
10 NACLA ReportMarlApr 1980
reform the internal market would never be,
modernizers countered that another option
was available.
ECONOMIC INTEGRATION
Economic integration – a free trade zone
that would permit the unrestricted flow of
goods, capital and people among the five
republics– became the chosen path toward
industrialization. It would obviate the need
for structural reform, or so it was thought by
the bourgeoisie.
El Salvador and Guatemala, as the two
most developed countries in the region, saw
enormous advantages in the scheme: new
markets for industrial ouput, new investment
opportunities throughout Central America
and, for El Salvador, new outlets to relieve the
troublesome problem of overpopulation.
In the late 1950s, economic integration was
being viewed as a panacea by other forces as
well. In particular, the United Nations
Economic Commission for Latin America
(ECLA) played an important role in pro-
moting the idea of an economic union.
ECLA set out a plan for Central American
intergration that would allow for a ” gradual,
step-by-step approach focused on locating the
best kind of activities in the right place.”3 The
emphasis was on planned, balanced develop-
ment among the five countries, toward
eliminating competition and duplication of
capacity. Most importantly, ECLA argued for
a restricted and highly regulated role for
foreign investment.
The Salvadorean bourgeoisie didn’t like the
sound of these proposals. Neither did a
powerful neighbor to the north.
Initially hostile to economic integration,
U.S. policymakers soon realized that such a
scheme could make political and economic
sense under certain conditions. The advent of
the Arbenz regime in Guatemala
(1950-1954), bent on reforms and ex-
propriating United Fruit holdings, indicated
that trouble was brewing in the region. With
the aid of the CIA, Arbenz was ousted in
1954, but the causes of unrest remained. 4
According to the U.S. view, economic in-
tegration could prevent future Guatemalas,
while providing new outlets for U.S. capital,
bursting to invest abroad in the post-war
period. Furthermore, it could redirect Cen-
tral American trade toward the United States,
at a time when Europe and Japan were mak-
ing important inroads. The flow of U.S.
capital into the region would be accompanied
by rising demand for U.S. products as in-
dustrial inputs.’
U.S. approval of the scheme meant that
restrictions on foreign investment had to be
scratched, alongside notions of mutual co-
operation and balanced development. The
Salvadorean bourgeoisie, enjoying a clear ad-
vantage over its neighbors, was also eager to
give the free market its rein. In 1961, the Cen-
tral American Common Market (CACM) was
born.
Over half of all foreign investments in El
Salvador during the 20th century were made
in the 1960s. Relative to Latin America as a
whole, El Salvador continued to absorb a very
small portion (less than 1%) of direct U.S. in-
vestment.” But the steady rise in the 60s was
clearly aimed at controlling the country’s
growing industrial sector. Foreign investors
flocked to the most dynamic branches: food
products, textiles, chemical, petroleum,
paper products and pharmaceuticals. In most
cases, these investments took the form of joint
ventures with the Salvadorean bourgeoisie.
In 1950, the book value of direct U.S. in-
vestment in El Salvador was $19.4 million,
none of that in the manufacturing sector. By
1967, the total had risen to $45 million, with
roughly a quarter invested in industry.’
The effects of the integration scheme and
foreign penetration were quick to be felt. The
volume of intra-regional trade increased
significantly, at an annual rate of 32% be-
,tween 1961 and 1968; its composition shifted
from unprocessed agricultural goods to non-
durable consumer goods, often produced by
foreign firms and their domestic partners.
The annual growth rate of intra-regional
trade in manufactures was 26% between 1960
and 1972.8
The other side of the coin of “Central
Americanization,” however, was heightened
dependency on the United States. A large
portion of foreign investment went into “last-
touch” and highly import-intensive in-
dustries. That is, they conveniently required
large amounts of industrial inputs not locally
available- but easily supplied by U.S.
sources. As a result, El Salvador and other
11NACLA Report
countries began to experience severe strains in
their balance of payments. 9
Economic integration did not eliminate
duplication, resulting in excess plant capacity
and high production costs-witness six oil
refineries in the five republics! Moreover, the
benefits of integration were not shared equal-
ly. The less developed members (Honduras
and Nicaragua) ended up paying more for
imports than before, since regionally pro-
duced goods were often more expensive than
U.S. products; they attracted less foreign in-
vestment than the more developed markets of
El Salvador and Guatemala; and their fiscal
revenues declined as untaxed CACM trade
replaced taxed extra-regional imports.’ 0
It was only a matter of time before the
shaky foundations of economic integration
would crumble.
THE FIVE-DAY WAR
The U.S. press dubbed it “the football
war”– a name designed to ridicule more than
reveal the basic causes.
Tensions had been building for some time.
The Honduran market was swamped with
Salvadorean goods, while its raw materials
went to feed Salvadorean industry.
Domestically, the Honduran government was
under pressure to carry out reforms and
redistribute land.
In 1969, Honduras began a campaign
against Salvadorean products, refused to
renew a migration treaty and froze
Salvadorean capital. The agrarian reform
program was kicked off by expropriating the
lands of Salvadorean immigrants. Three hun-
dred thousand had settled in Honduras; many
were descendants of those who fled the peasant
massacres of 1932.
The Honduran government began to drive
out the Salvadorean settlers, who brought back
terrible tales of atrocities that were exploited
by the Salvadorean press. A soccer match
added fuel to the fires. On July 14, 1969, the
army of El Salvador invaded Honduras. Five
thousand died.
El Salvador claimed victory, after the OAS
declared a cease-fire and forced it to with-
draw its troops. But the full effects of the war
Expelled Salvadorean settlers returning from Honduras just before the war of uly 1969.
12Mar/Apr 1980
13
took time to be felt. The entire country, save
a tiny, unpopular few, had rallied to defend
the patria.
With Honduras, El Salvador lost its largest
market for industrial goods. Honduras closed
the road to Nicaragua and still more trade
was affected. The Common Market was in
shambles, but the Salvadorean bourgeoisie
recovered rapidly by securing markets in
Europe and the United States.
No such solutions were found for the
political consequences of the war. The forced
return of farmworkers had a profound impact
on the political crisis about to unfold. The
Salvadorean government reneged on promises
to give them land. Instead, they were herded
into camps-and eventually dispersed to
ancestral regions they had long forgotten.”
The memory of 1932 became more vivid as
a series of protests began. They came close
upon the heels of a strike wave in the cities,
where teachers, bus drivers and industrial
workers defied the labor laws and battled the
National Police.
The urban work force was still very small
(less than 500,000 in 1971), with only 9%
organized in unions.” 2 Organizing was
hampered by restrictive labor laws, repression
and the preponderance of small shops in the
industrial sector.
The labor movement was also divided into
two competing factions. The General Con-
federation of Unions (CGS) was pro-govern-
ment and heavily influenced by the
AFL-CIO. The Unified Federation of
Salvadorean Unions (FUSS) was influenced by
the outlawed Communist Party.
By the strikes of the late 60s, however,
economic conditions had led to a radicaliza-
tion of the movement as a whole. The govern-
ment could no longer count on its cronies to
control the rank-and-file. Repression was in-
tensified to control the unrest, but had the
opposite effect.
Twenty years of modernization– that
“neutral” word- had only shortened the long-
term prospects of the ruling elite. But they
didn’t know it yet. The large landowners still
resisted change and rejected reform. In-
dustrialists, many with landholdings as well,
refused to risk a confrontation. They, too,
kept a watchful eye on the worker’s
movement-ready to crush any challenge
with the army at their side.
In the countryside, the number of landless
increased more than two-fold in the 1960s.’ 3
Migrants swelled the cities,living in turgurios,
or slums, with no basic services and little hope
of employment.
New sectors had emerged in the 50s and
60s: the middle class, employed in the public
sector, professionals, small merchants in the
cities and towns. They would become the
“moderate opposition.” Many would
radicalize themselves and others upon realiz-
ing that moderate methods were an exercise
in futility. The bourgeoisie was blind to its
own fate.
THE ELECTORAL OPPOSITION
Fifty years of military rule in El Salvador
have been punctuated by farce and
fraud–otherwise known as elections. Every
five years, Salvadoreans would elect a new
colonel or general as president. Every two
years, they would choose a parliament to ap-
prove his every decree.
In the late 50s, a fall in world coffee prices
provoked renewed unrest. The regime of
Osorio’s successor, Colonel Jose Maria Lemus,
was unacceptably corrupt. A coup was
launched in 1961 by an alliance of petty-
bourgeois reformers and democratic sectors of
the military. The experience of 1944,
Martinez’ fall, was repeated: The conspirators
did not seek popular support and after three
months, the modernizers reconstituted their
coalition and installed a new government.
In 1962, the discredited PRUD was resur-
rected as the Party of National Conciliation
(PCN)- the official party representing the in-
terests of the bourgeoisie and running
military candidates. The 1962 elections were
uncontested, bringing Colonel Julio Rivera to
power. New parties would emerge, but for the
next 17 years, the PCN would dominate the
electoral process.
The Rivera regime (1962-67) coincided
with the Alliance for Progress– Kennedy’s
answer to the Cuban Revolution and the need
to pacify the hemisphere. Kennedy praised
the Salvadorean model: “Governments of the
civil-military type of El Salvador are the most
effective in containing communist penetra-
tion in Latin America.”‘ 4 Rivera returned the
compliment. The clasped-hand logo of the
Mar/Apr 1980 13NACLA Report
Alliance was adopted as the official symbol of
the PCN.
In keeping with the semblance of political
pluralism advocated by the United States, the
Rivera government opened the way for the
emergence of the first opposition parties and
the first truly contested elections since 1931.
Buoyed by the success of its industrialization
scheme and the CACM, the PCN felt confi-
dent that its program could withstand the
electoral test. The government’s control of the
electoral machinery made any serious loss
unlikely.
Three major opposition parties emerged in
the 1960s to challenge the PCN: the Christian
Democratic Party (PDC), the first and
largest; the National Revolutionary Move-
ment (MNR); and the Party of Renovation
(PAR).
In 1962, a group of professionals, many of
them educated abroad, formed the Christian
Democratic Party of El Salvador. Supported
by Christian Democracy in Europe, its success
was phenomenal. In 1964, the party’s can-
didate became mayor of San Salvador. By
1968, the PDC won 19 seats in the Assembly
to the PCN’s 28. It also controlled one-third
of the country’s municipalities, including the
three largest cities.
Jose Napoleon Duarte, mayor of San
Salvador, became the most charismatic leader
of the PDC. An engineer by profession, he
was a moderate reformer by creed.
Politically, the PDC stood for a program of
“national development” and reform within a
capitalist framework. Its modernization pro-
gram differed from that of the PCN by pro-
mising to share the benefits more broadly.
In the cities, its program and style appealed
to the growing middle class. Its rural consti-
tuency was the middle peasants and small
merchants. Its Christian veneer attracted
those who wanted change but feared associa-
tion with more radical forces. Its concern with
morality also contrasted sharply with the
known corruption of the PCN.
A second reformist party emerged in 1968,
the National Revolutionary Movement
(MNR). It remained small in numbers, com-
prising professionals and intellectuals, but it
would play a significant role in formulating
the strategy of the petty-bourgeois opposition.
Radical opposition to the PCN was focused
first in the Party of Renovation (PAR) and
later in the National Democratic Union
(UDN). Both reflected the politics of the
Salvadorean Communist Party, outlawed
since 1932, and its emphasis on electoral
struggle.
PAR attracted radical professionals and
sectors of the urban working class. Its
presidential candidate, Dr. Fabio Castillo,
placed a respectable third in the 1967 elec-
tions, despite intense harassment. Immediate-
ly after the elections, the party was officially
banned and ceased to exist.
In the late 60s, the Communist Party and
remnants of PAR were influential in the for-
mation of a new party, the National
Democratic Union. UDN emphasized
modernization, independent development
and the electoral path.
FORMATION OF THE UNO
The 1968 elections marked the high point
of the electoral opposition. It looked forward
to further gains in 1970. But the war with
Honduras changed the political climate
abruptly.
A nationalist euphoria pervaded all
political discussion. The PCN ran heroes of
the Honduran war as candidates. It won 60%
of the vote and regained control of city halls
and assembly seats.
In defeat, the opposition found an impetus
toward unity. The Christian Democrats, the
MNR and the UDN formed a coalition- the
National Opposition Union (UNO) to prepare
for the approaching presidential campaign.
Its chances were improving as the economic
and political effects of the war set in.
POLITICAL-MILITARY
ORGANIZATIONS
Electoral defeat, as the result of fraud, had
a different effect upon more radical sectors of
the opposition. The Communist Party (PCS)
continued to insist on the peaceful road to
change and to seek alliances with petty
bourgeois sectors as the only way of defeating
the oligarchy. But many within and outside.
the party disagreed.
In 1970, two new organizations emerged,
emphasizing the need to give the revolu-
tionary struggle an armed capacity. The
Popular Liberation Forces (FPL) developed
16MarlApr 1980
17
from a split within the PCS, precipitated by
the party’s support for the government’s war
with Honduras.
A second group had its roots in the left
wing of the Christian Democratic Party.
Other leftists joined them to form a federa-
tion of guerrilla groups called the People’s
Revolutionary Army (ERP).
One distinction between the two was the
FPL’s emphasis on mass organizing as well as
military action. Within the ERP, disputes
over the importance of mass work reportedly
led to the execution in 1975 of ERP member
and poet, Roque Dalton Garcia, who saw it as
a key element. His death caused a split within
the ERP, with Dalton’s supporters forming
the National Resistance (RN), with its own
armed wing, the Armed Forces of National
Resistance (FARN).
The early activities of these political-
military organizations were small-scale, and
without broad impact on the popular strug-
gle. Their importance grew rapidly, however,
as the electoral road led to nowhere, time and
again; as popular organizations were created
50 YEARS OF MILITARY RULE
1931-34 General Maximiliano Herndndez
Martinez
1934-35 General Andres Ignacio Menendez
1935-44 General Maximiliano Herndndez
Martinez
1944… General Andres Ignacio Menendez
(ruled for several weeks after a
popular uprising toppled Martinez)
1945… Colonel Osmin Aguirre y Salinas
1945-48 General Salvador Castefieda
Castro
1948-50 Military Government Council
1950-56 Major (later Colonel) Oscar Osorio
1956-60 Colonel Jos6 Maria Lemus
1960-61 Government Revolutionary Junta
1961-62 Civilian-Military Directorate
1962… Dr. Rodolfo F. Cord6n (lawyer)
1962-67 Colonel Julio A. Rivera
1967-72 Colonel (later General) Fidel
Sanchez Hern~ndez
1972-77 Colonel Arturo Armando Molina
1977-79 General Carlos Humberto Romero
that bridged the Left’s isolation from the
masses; and as repression and deprivation
continued to set the stage for revolt.
BREAKING POINT
The 1972 elections-an enormous fraud
favoring the PCN over the UNO–marked a
definitive breaking point in El Salvador’s saga
of class struggle. Implicitly, it was a test of the
possibility of achieving structural reform by
taking the electoral route to power. Both sides
failed the test.
The UNO’s candidate in 1972 was Jose
Napoleon Duarte, the Christian Democratic
mayor of San Salvador. The PCN ran Colonel
Arturo Molina, a semi-literate career soldier,
representing the modernizing tendency.
Wealthy landowners, portending a split with
the modernizers, ran General Jose Alberto
Medrano, war hero and former head of the
Naional Guard.
The blatancy and extent of the fraud
shocked even the most cynical. Once the doc-
tored results were announced, militants of the
UNO called on Duarte to declare a general
strike. Duarte did nothing.
One month later, a sector of the Army
jonied with civilian elements to attempt a
counter-coup. The initiative failed, among
other reasons, because Nicaragua (under
Somoza) and Guatemala (under military rule)
sent troops and planes. They did so under the
aegis of the Central American Defense Coun-
cil (CONDECA), founded and promoted by
the United States to control subversion and
police the region. U.S. military advisors
reportedly coordinated these activities from
their communications center at the U.S. em-
bassy in San Salvador.”
A wave of repression was unleashed against
the entire spectrum of opposition. Duarte and
other leaders were exiled; the National Univer-
sity was closed for nearly two years; trade
unions were taken over, their leaders impris-
oned or exiled. Persecution of the Church and
rural workers led to bloody massacres.
The parties that comprised the UNO would
continue on an electoral course until elections
were definitively canceled, in 1979. But new
groups emerged to rival their support and
challenge their strategy. The balance of
forces began to shift–slowly, but irreversibly.
THUS CAME THE MODERNIZERS
1. Osvaldo Escobar Valedo, “Patria Exacta,” Patria
Exacta (San Salvador: UCA Editores, 1978), p. 149.
2. Hector Dada Hirezi, op. cit., p. 28.
3. Ibid., p. 88, citing the Second resolution of the
First Meeting of the Committee for Economic Coopera-
tion of the Central America Isthmus. August 27, 1952.
4. NACLA, Guatemala (Berkeley: NACLA), 1974,
5. Marc Herold, unpublished manuscript on direct
U.S. investment in El Salvador (March 1980), p. 20.
6. Ibid., p. 28.
7. OECD, Stock of Private Direct Investments by
D.A.C. Countries in Developing Countries, End 1967
(Paris: OECD, 1972); U.S. Department of Commerce,
Foreign Investments of the United States (Washington,
D.C.: Government Printing Office), 1953.
8. “Central America: Patterns of Regional Economic
Integration,” Bank of London and South America
Review (June 1979), p. 340-342.
9. M. Herold, op. cit., p. 21.
10. Ibid., p. 22.
11. Rafael Menjivar, “El Salvador: El Eslabon Mas Pe-
queno,” Le Monde Diplomatique en Espanol (Mexico Ci-
ty), September 1979.
12. Chavarria Kleinhenm, op, cit., p. 451.
13. Burke, op. cit., p. 483.
14. Anderson, op. cit., p. 157, citing Mauricio de la
Selva, “El Salvador: Tres decadas de lucha,” Cuadernos
Americanos, No. 21 (January-February 1962), p.
196-200.
15. NACLA, Guatemala, op. cit.
16. Fabio Castillo, “Testimony,” in Human Rights in
Nicaragua, Guatemala and El Salvador: Implications for
U.S. Policy. Hearings before the Subcommittee on Inter-
national Organizations, House of Representatives
(Washington, D.C.: Government Printing Office), 1976.
Information on the political-military organizations
is difficult to find. FAPU publishes an international
bulletin; LP-28 has just begun to publish theirs. All three
popular organizations publish newspapers. Information
in this article on the popular and political-military
organizations came from their publications as well as un-
published interviews by international journalists and per-
sonal interviews by the author.
ALAI, the Latin American Information Service in
Montreal, has republished documents of the Salvadorean
left. Some can be found in their political documentation
series, Nos. 4 and 5, La Izquierda Centroamericana (I)
and (II). Their address is ALAI, 1224 Ste-Catherine O.
403, Montreal, Quebec H3G IP2 Canada.