Wed | Aug 16, 2017

Walter Molano | Foreign policy insurgency

Published:Friday | June 2, 2017 | 6:00 AM
Two major US government initiatives, including the deportation policies of the Obama administration, have lead to national security blowbacks for the US.

Blowback is a term used by the United States intelligence community to describe when policies can be turned around and used against the country that initiated them.

The classic blowback example is the United States training of the mujahideen in Afghanistan to combat the Russians during the 1980s, only to see the same forces morph into al Qaeda in the 1990s.

Today, the intelligence community considers the Central American gangs, commonly known as the Maras, as a national security threat. This is quite a statement, considering that the Maras originated in El Salvador, a tiny country of seven million nestled along the shores of the Pacific.

Yet, these extremely well-organised and violent gangs were born of two major US government initiatives the communist counterinsurgency of the 1980s and the massive deportation policies of the Obama administration.

The 1980s marked the peak of the Cold War. The Soviet Union, along with Cuba, made a bold push to topple governments through the use of armed guerrillas. The US responded by training and arming local military and paramilitary units to repress the insurgent movements through conventional and unconventional tactics, converting much of the developing world into virtual battlegrounds.

Nowhere was this more evident than in the so-called Northern Triangle of Central America, which consisted of El Salvador, Guatemala and Honduras. Sadly, the rural population was at the centre of the conflict. Families were displaced and ripped apart through casualties and forced exiles. Orphans were pressed into service, to be used as messengers and combatants by both sides. At an early age, many of these young children were systematically desensitised, as they were exposed to the savagery of war.

The collapse of the Iron Curtain in 1991 allowed most of the conflicts to come to a close, and many of the young Salvadorean combatants journeyed to the US in search of a better life. One of the favourite destinations was Los Angeles, a hub of economic activity that was close to the Mexican border.

Today, LA has the largest Salvadoran community outside of its home country, with a population of more than a million. Trying to survive in the murderous streets of south LA, they resorted to the brutality and military training that they had honed during the civil war. This allowed them to become one of the most violent groups in the US.

Washington then decided that instead of incarcerating them, they would deport them back to El Salvador. However, upon arrival, the Salvadorean government released them, since they had not committed any crimes inside El Salvador and the judicial authorities had no jurisdiction for acts committed in the US. This brought the process full circle.

National security threat

Armed with the knowledge of the intricacies of the narcotics industry and burnished by the violence of LA, they became one of the most potent forces in the region. The Maras spread quickly to the other members countries of the Northern Triangle and soon emerged as a national security threat.

The Maras have only served to destabilise El Salvador, as it tries to recover from years of civil war. To make matters worse, the country has struggled to maintain macroeconomic stability under the mismanagement of the FMLN - the former guerrilla group that turned in its arms and emerged as a dominant political party.

Since the FMLN came into office, the country's macroeconomic indicators have deteriorated and the credit agencies have steadily downgraded the country's credit rating to the CCC category. However, the government's fiscal position, which is a deficit of 3.5 per cent of GDP, is much better than most of its CCC peers. El Salvador has a small current account surplus, and the debt-to-GDP load is about 60 per cent.

An ongoing spat between the FMLN and the rightwing ARENA party led to the non-payment of some pension obligations. However, the instruments were not rated or cross-defaulted. The incident was purely political, and typically of partisan politics.

It is true that the government will need to introduce new funding resolutions before the end of June to meet its debt obligations, but El Salvador does not justify such a low credit rating. Moreover, the outlook is improving. Elections are less than two years away, and it seems likely that ARENA will come back to power.

Therefore, the pessimism about El Salvador may be overblown. While deteriorated, the macroeconomic indicators are better than most of its peers. The main problems facing the country are the unintended consequences of previous US policy actions.

- Dr Walter T. Molano is a managing partner and the head of research at BCP Securities LLC.

wmolano@bcpsecurities.com