[ Last month, the White House announced more than $1.9 billion in
“private sector commitments” to Honduras, Guatemala and El
Salvador-part of Vice President Harris’ “Call to Action” to
address the root causes of migration from northern Central America.]
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THE WHITE HOUSE’S PLAN TO STEM MIGRATION PROTECTS CORPORATE
PROFITS—NOT PEOPLE  
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Brigitte Gynther and Azadeh Shahshahani
August 2, 2022
In These Times
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_ Last month, the White House announced more than $1.9 billion in
“private sector commitments” to Honduras, Guatemala and El
Salvador-part of Vice President Harris’ “Call to Action” to
address the root causes of migration from northern Central America. _

Vice President Kamala Harris gestures as she participates in a
roundtable for her Call to Action initiative for northern Central
America at the InterContinental Los Angeles on June 07, 2022 in Los
Angeles, California., Anna Moneymaker // In These Times

 

The irony apparently lost on the White House is that it is promoting
the same economic model that has caused so many to be forced to leave
their homes and migrate in the first place. The United States has long
promoted corporate interests, which generate profits for U.S.
companies and local elites, at the expense of the majority of the
peoples of northern Central America, and this new ​“Call to
Action” is no different. 

One of the defining features of the economies of Honduras, Guatemala
and El Salvador is the small group of extremely powerful families
whose business empires control much of each country’s economy.
Commonly referred to as ​“the oligarchy,” the power they exert
over each country’s political and economic systems cannot be
overstated. Many members of the oligarchy have amassed enormous riches
precisely by impoverishing the majorities, whether it be by paying
miserable wages on agricultural plantations, profiting from stolen
Indigenous land, or exerting influence over political actors to win
favorable state contracts. 

One of the ​“corporate commitments” announced by Vice President
Harris to supposedly address migration is that U.S.-based apparel
company SanMar will purchase more from Elcatex, a Honduras-based
garment manufacturer that it partially owns. The Collective of
Honduran Women (CODEMUH) [[link removed]], an organization of
women who work in Honduras’ garment sweatshops, has long denounced
the low wages, long hours and serious repetitive motion injuries they
suffer in Honduras’ textile industry. The Inter-American Commission
on Human Rights has admitted a petition
[[link removed]] filed
by CODEMUH and the Law Group for Human Rights on behalf of 26 women
who have suffered musculoskeletal disorders as a result of working in
Honduras’ garment factories, including three Elcatex workers with
alleged permanent partial disability. The petition alleges these
workers face ​“excessive working hours, ill-suited workplaces and
the imposition of a system in which remuneration is dependent on
reaching an output target.” In 2019, Elcatex joined other garment
factories in Honduras in opening a ​“Back and Shoulder School”
to help prevent musculoskeletal disorders. These schools have
faced criticism [[link removed]], however,
as well as claims that workers are unable to put some of the
recommendations, such as taking pauses, into practice during
the workday.

The White House contends that SanMar’s commitment to purchase more
from Elcatex will create 4,000 additional jobs and thus help stem
migration. Ironically, Elcatex and many of Honduras’ garment
factories are located in its northern industrial corridor, in an area
of high migration. If the White House was serious about addressing the
root causes of migration, it would recognize that low wages are one of
the key drivers. The White House’s ​“Call to Action” should
be for U.S. apparel companies to ensure living wages and labor rights,
including changes to prevent workers from suffering
permanent injuries. 

Who will be the true beneficiary of SanMar’s increased purchasing
from Elcatex? According to the White House announcement, U.S.-based
SanMar itself is a part owner of Elcatex, so the profits from this
increased purchasing will pad its own pockets. Elcatex is also owned
by Jesus Canahuati, one of Central America’s biggest businessmen
[[link removed]] and
part of one of the most powerful families in Honduras. 

Another of the ​“private sector commitments” celebrated by Vice
President Harris is that of Fundación Terra, the foundation of Grupo
Terra. Grupo Terra is a huge conglomerate owned by Freddy Nasser, one
of the most powerful men in Honduras
[[link removed]].

Grupo Terra’s energy empire includes Hidro Xacbal, S.A., which owns
the Xacbal Hydroelectric Project and the Xacbal Delta Hydroelectric
Project in Quiche, Guatemala. These projects are located in Indigenous
Maya Ixil territory, where the U.S.-trained and supported Guatemalan
military carried out genocide during the early 1980s. As Dr. Giovanni
Batz writes in NACLA
[[link removed]], ​“The
Ixils have historically resisted against invaders, from the Spanish to
coffee finqueros to corporations building megaprojects.” In
March 2015, Ixil communities of Nebaj whose crops were going to be
affected by the construction of a 4 kilometer tunnel for Grupo
Terra’s Xacbal Delta Hydroelectric Project protested and publicly
rejected the project
[[link removed]].
Also in 2015, the Guatemalan security forces violently repressed
[[link removed]] Ixil
people who were blocking the construction of the Xacbal
Delta project. 

In December 2020, Guatemala’s Special Prosecutor Against Impunity
accused Edwin Alberto Hernandez Roque, General Manager of Hidro
Xacbal, S.A., of bribery, allegedly benefiting Hidro Xacbal, S.A. with
energy contracts, as part of a case
[[link removed]] alleging
that a network of businessmen and former public officials used the
Ministry of Energy and Mines to obtain illicit economic benefits.
In 2021, Hernandez Roque agreed to collaborate with prosecutors in
the case in exchange for the charges against him being dropped. 

Another part of Grupo Terra’s fortune comes from selling energy to
the state of Honduras. Honduras’ state electricity company, Empresa
Nacional de Energía Eléctrica (ENEE), has operated at a huge
deficit for years, which comes in part from paying overvalued prices
for energy produced by private companies. Many lucrative energy
contracts were awarded to the country’s oligarchy by the governments
following the 2009 coup d’etat. According to an investigation by
the Jesuit organization ERIC
[[link removed]],
the ENEE pays 70% of its annual budget to purchase energy from
private companies, of which Grupo Terra is the biggest
winner — with its companies receiving $327 million
in 2019 for 11 energy contracts. ERIC further reports that the
ENEE pays six times as much to private companies to generate
electricity as it costs the ENEE itself to produce it. Solar projects
are especially lucrative for private companies, with Honduras paying
an exorbitantly higher price for solar energy than other countries in
Central America.

The 2009 coup was followed by 12 years of plundering and
corruption, and now Honduran President Xiomara Castro and a new
Congress have pledged to combat corruption and restore state
institutions. As part of this, Honduras recently passed a new energy
law, which, among other elements, enables the government to
renegotiate the contracts by which it purchases energy from private
energy producers and set more reasonable rates. The U.S. ambassador to
Honduras criticized the law on Twitter when it was introduced in the
Honduran Congress, expressing worry about its effect on foreign
investment. This raises concerns that the United States’ true
motives are corporate profit. 

Vice President Harris’ announcement also celebrated that
telecommunications company Millicom, headquartered in Luxembourg, will
invest $700 million ​“to expand and maintain its mobile and
broadband networks.” While better internet is certainly a good
thing, the idea that Millicom is doing this for any reason other than
to increase its corporate profits is ridiculous. 

Central America’s mobile and broadband market is highly
concentrated; Millicom’s Tigo controls 53.1%
[[link removed]] in
Guatemala and 62.5%
[[link removed]] in
Honduras. Tigo Guatemala is Millicom’s most profitable company, with
an astronomical operating profitability margin. The company reports
significant potential for increased profit by expanding internet
accessibility. Its Tigo Money service, a mobile wallet linked to
one’s phone number, receives remittances that those who have
migrated send to family members back home. 

Investing to expand its business is certainly a good business move
for Millicom, and with very little competition it is virtually
guaranteed that this investment will result in significant profits.
The profits, however, will largely go to its headquarters in
Luxembourg and its shareholders on the Nasdaq stock market, not to
Tigo’s clients in Central America. Thousands upon thousands of Tigo
users will continue to migrate to the United States every year,
enriching Millicom’s profits when they send remittances home via
Tigo Money.

At a recent House Foreign Affairs Committee hearing
[[link removed]],
Rep. Ilhan Omar (D‑Minn.) expressed skepticism about the ​“Call
to Action’s” corporate commitments. She referred to
a recent delegation
[[link removed]] she
participated in to Central America, explaining ​“what we heard
was a lot of stories about transnational private investments being
a root cause of migration…. about mega projects displacing
communities, about labor exploitation.” 

Instead of addressing the root causes of migration, the White House
announcement is a celebration of international corporations and the
Central American oligarchies intensifying their stranglehold on the
economies of northern Central America. If the White House were serious
about addressing the true root causes of migration it would have
honestly contended with the bloody U.S. history of intervention in the
region, including coup d’etats and the financing and backing of
military regimes as they carried out widespread atrocities. The United
States must finally break free of the ​“banana republic”
mentality that sees the region as a source of natural resources and
cheap labor and begin to respect the autonomy and self-determination
of the peoples in the region. 

At the very least, the White House’s ​“Call to Action” should
call on the U.S. corporations that operate in the region to pay living
wages and respect labor rights, to respect the land and territorial
rights of Indigenous peoples, and to obey, rather than try to weaken,
relevant national laws. The current ​“Call to Action” is the
opposite: it provides corporations with free P.R. and helps companies
that may profit from dispossession, labor abuses and corruption to
whitewash their brands. It sums up U.S. priorities towards Central
America quite well: The real interest is, and always has been,
corporate profit.

_[BRIGITTE GYNTHER
[[link removed]] is the Program
and Research Coordinator at School of the Americas Watch. She has
lived and worked in Central America for the past decade._

_AZADEH SHAHSHAHANI
[[link removed]] is legal and
advocacy director at Project South and past president of the National
Lawyers Guild. She tweets @ashahshahani.]_

_Thanks to the authors for sending this to xxxxxx._

_Reprinted with permission from In These Times
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All rights reserved. _

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* Immigration
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* migration
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* Central America
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* Biden Administration
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* Honduras
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* Guatemala
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* El Salvador
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* Call to Action
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* Vice President Kamala Harris
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* corporate profits
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