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US Should Encourage Economic Opportunity in Guatemala, Not Environmental Activism

By: Guest Contributor - Nov 14, 2017, 9:50 am
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The Escobal silver mine, located in San Rafael, approximately 40 kilometers southeast of Guatemala City, provides nearly 8,000 Guatemalans with much needed income.

By José Niño

Increasing violence and crime in Guatemala has caused a record number of residents to flee the country in search of better opportunity. Between 2010 and 2014, approximately 723,000 unauthorized Guatemalan immigrants entered the United States, putting a squeeze on American jobs, straining public resources, and feeding the growth of violent gangs like MS-13.

In the face of this escalating immigration crisis, the U.S. State Department has been naïve in its dealings with the country, supporting environmental activists at the expense of development that could break the cycle of poverty and create prosperity that keep Guatemalans at home. To unlock the country’s potential, the State Department needs to promote economic growth in Guatemala — not undermine it.

In a new paper, Professor J. Michael Waller uses the saga of the country’s largest silver mine, a $1 billion investment by American company Tahoe Resources to illustrate the detrimental role the State Department has played in Guatemala.

The Escobal silver mine, located in San Rafael, approximately 40 kilometers southeast of Guatemala City, provides nearly 8,000 Guatemalans with much needed income. Tahoe, which has run the mine since 2014, has generated millions in revenue for the Guatemalan government — revenue that is key to strengthening the institutions needed to combat the country’s drug and crime problems that hinder economic growth and development.

The contributions are more than just direct investments — the company also supports a training school and other community programs that create new economic opportunities in the area that are essential for creating a stable society.

The benefits afforded by the operation of the mine are now under threat from activists who have filed a lawsuit claiming the Guatemalan government ignored the local indigenous population when it issued the mining permit. These protestors also have created a blockade, threatening workers who try to reach the mine and engaging in violence against those associated with the company.

How did the State Department decide to respond to this attack against an American-run company and investor in Guatemala’s future? Sadly, it decided to side with the activists against direct U.S. interests, as evidenced by former U.S. Ambassador to Guatemala Todd Robinson’s track record.

Robinson has a history of working to undermine Guatemalan institutions. Through his cooperation with the U.N. Commission against Impunity in Guatemala (CICIG), Robinson spearheaded efforts to fundamentally re-shape Guatemala’s judiciary by changing the nomination process of judges and the attorney general. Not only was this move in clear violation of Guatemala’s constitution, it elevated anti-development judges to power.

Escobal is just another reflection of Robinson’s anti-development legacy. According to Waller, the State Department provided moral support to the anti-mining activists by echoing their messages on official channels, and Robinson was instrumental in the appointment of an anti-mining judge to the country’s highest court. Guatemalan lawmakers claimed that Robinson pressured them to support activist lawyer Gloria Porras in her bid to run the Constitutional Court, threatening to take away their visas if they did not comply.

Opponents won a partial victory this summer when the Supreme Court suspended operations of the mine for two months over the summer. The future of Escobal now rests with Guatemala’s Constitutional Court, led by Judge Porras, as it debates the lawsuit.

Robinson, or the Department, haven’t discussed the reason behind their actions in Guatemala, but Waller argues it was a misguided focus on fostering civil society programs and building relationships with international non-governmental organizations instead of supporting what Guatemala really needs — the continued tax revenue, jobs and investment provided by Escobal.

The actions of the Robinson-led embassy have already set the country back, but Guatemala and the United States can right the ship.

Luis Arreaga, the new ambassador, is now finding his footing in the country, which gives the United States and Guatemala a fresh start in fostering long overdue economic opportunities. If executed properly, concerted efforts to repair economic relations would be a win-win for both countries.

José Niño is a contributor for the Mises Institute, an organization that promotes libertarian economic policies and political theories.