Central America 15 Months On: Reconstruction but No Transformation
by Sally O'Neill March 2000

Screen Shot 2012-11-27 at 5.44.26 PMHurricane Mitch, the worst natural disaster to hit Central America in a century, opened up significant possibilities to tackle the social, economic and ecological vulnerabilities laid bare by the storm. Fifteen months later, the international donor community gathered in Tegucigalpa – the Honduran capital – under the auspices of the InterAmerican Development Bank, to review reconstruction efforts in the region, and to follow up on the commitments made at the May 1999 Stockholm summit.

The post-Mitch period brought some benefits to Central America. For most of the last decade the region had slipped from the international agenda and aid flows had been diminishing. Mitch has reversed that trend. There is now greater visibility for the region’s problems, especially for Honduras which, before the hurricane, was the country with the weakest international profile and links. The inflow of reconstruction funds has helped stabilise the macroeconomic situation of both Nicaragua and Honduras. While both countries have seen their economies go into recessionary decline due to the destruction of crops and economic infrastructure, this has not been to the dire extremes predicted a year ago. International awareness and lobby by citizens groups in the North has led to major efforts to resolve the debt crisis faced by both countries. This resulted in Honduras being declared eligible for HIPC (heavily indebted poor countries) benefits in December 1999. Without the hurricane, access to HIPC would not have occurred before 2005.

Weakened regional integration

The benefits obtained, however, fall far short of the major needs created by Mitch. One of the casualties has been regional integration. Competition for reconstruction funds has put an end to regional cooperation. The key event of the post-Mitch calendar was the Consultative Group donor meeting in Stockholm. The host government Sweden and the member states of the European Union (EU) had hoped that Mitch would breathe life into the badly needed regional integration process. In fact the opposite proved to be the case, as each government focused its energies on getting the largest possible slice of the reconstruction pie.

Not only did the Central American governments find it impossible to negotiate joint priorities for the key social and economic reconstruction projects, all of them did their best to resist the growing pressure from international donors to include and involve organisations from civil society in the preparation and implementation of national reconstruction plans. Mitch has revealed the growing hostility between Central American governments and their national NGOs, but the hurricane has proved to be the much-needed catalyst to revitalise civil society in the region. While governmental coordination has been virtually nil, the NGO sector has restructured regional groups and these have greatly benefited from newly created networks in Honduras, El Salvador and Nicaragua. In Honduras, the country in the region with the weakest NGO capacity, the changes have been dramatic with the creation of Interforos, a coalition bringing together almost 500 grassroots organisations and NGOs.

However, it was not only the Central American governments that reacted in a competitive manner. So did many donors, especially the US which sought to use its $US1bn package to claw back some of the aid space which had been ceded in the last decade to Japan and Europe. This competitive attitude of the donors has allowed the Central American governments to use the shopping list approach rather than face up to the need to restructure their economies and undertake the political and legal reforms needed to reduce vulnerability and tackle widespread poverty which Mitch uncovered.

Donor delays slow down reconstruction progress

One of the few areas on which both governments and civil society are agreed relates to the slow process by donors of converting pledges into actual funds for reconstruction. The Salvadorean foreign minister has complained that less than seven per cent of the funds promised at Stockholm have actually materialised. The delays have proved to be an embarrassment for governments who rushed home from Sweden talking of the imminent arrival of billions of aid dollars. For the donors several factors have caused the delay. A major one is the weak institutional capacity of Central American governments to deliver coherent proposals to flesh out the project profiles mentioned in Stockholm. Another sensitive issue is corruption and the need to establish new ground rules on what constitutes transparency in the handling of funds. In this regard the governments of the two most affected countries – Nicaragua and Honduras – do not have a good record. Transparency International, the Berlin-based watchdog organisation charting corruption around the world, has placed both countries on its ‘emergency’ list reserved for the worst violators.

Civil society has welcomed donor concerns about corruption and has expressed the view that a multitude of actors should be employed to handle Mitch funds, thus ensuring that difficulties with absorption capacity can be overcome. However, many donors, while emphasising the need for civil society to be involved, have failed to follow their own advice by ensuring that their funds are also channelled through local governments and decentralised structures, including NGOs.

Poor coordination among international NGOs

A constant criticism of international NGOs has been their lack of coordination with local structures, especially during the emergency phase. Mitch attracted many European NGOs to Central America, supposedly expert in emergency aid. However, many of them had little previous experience in the region. More accustomed to implementing their own operational programmes in Africa, they ignored local expertise and structures and there was a significant waste of resources and duplication of effort. Described as ‘ambulance chasers‘ by the Nicaraguan Emergency Relief and Reconstruction Coalition, many of these NGOs appeared to have little motivation except to access funds from the EU. The Nicaraguan coalition complained that these NGOs set back and damaged years of hard work by local organisations to develop sustainable approaches to the delivery of aid.

Most local NGOs in Central America, aware of the acute shortage of funds for the region, were anxious to deliver emergency aid in a manner that would enable a rapid return to self-reliance during the rehabilitation phase. After the acute emergency phase was over local NGOs sought to change from a procedure of free donations to food-for-work schemes, but were often hampered in these efforts by the presence of international NGOs with paternalistic approaches and poor knowledge of communities, as well as a lack of accountability procedures.

With the outbreak of hostilities in Kosovo many of the opportunistic NGOs fled. However, by the end of 1999 a number of NGOs had made the decision to remain and commit themselves to medium-term programmes of rehabilitation. This is especially true of Honduras where the number of resident European NGOs increased from 7 in 1997 to 31 following Mitch.

Civil society regroups

The absence of formal structures for coordinating international NGO activity was a major failure during Mitch. This was in stark contrast to the behaviour of local NGOs. In El Salvador, Honduras and Nicaragua national coordination structures were established to focus the national agendas beyond building bridges and roads. While El Salvador and Nicaragua have a long tradition of NGO coordination forged during decades of civil war, the most interesting new development came from Honduras, a country where civil society has traditionally been weak and divided. The creation of Interforos has broken the history of lethargy and division and out of the disaster has emerged a civil society that is more articulate and assertive in its dealing with government and the donor community, as well as being a key actor in the community reconstruction processes.

On the ground, the results of reconstruction led by community effort are impressive. Where local groups have obtained access to resources they have been able to mobilise and the physical improvements in water schemes, sanitation, housing and agricultural rehabilitation have been dramatic. A remarkable feature of the reconstruction process has been the participation of women right across Central America. Mitch has offered them new opportunities for empowerment and change. At the same time economic difficulties caused by the hurricane have led to more stress which in turn has increased domestic violence against women and children. This is most obvious in the large shelters where thousands of families are still housed despite government promises that these were temporary measures and families would not remain there more than six months. In both Honduras and Nicaragua, the governments have failed to find the political will to tackle the issue of land for reconstruction of houses in urban areas and for distribution to small farmers who have lost their productive assets. As always, local landowners have sought to exploit the situation and there has been serious land speculation in areas adjacent to hurricane-damaged zones.

Local government loses out

The other losers in the reconstruction process have been municipal governments and local councils. For most of the 1990s, de-centralisation was the hallmark of the return to democracy and a cornerstone of the process for good governance. But most municipalities are underfunded, overworked and lack basic human and material resources to carry out their tasks. In Nicaragua, most of the hurricane damage occurred in the northern part of the country that is largely controlled at local level by opposition Sandinista-led councils. The government has withheld aid from these groups. In Honduras the reconstruction process has been criticised for its excessive centralisation, controlled directly by the president. This centralisation has meant that the areas most affected have failed to draw up appropriate maps of existing high risk areas, nor strategies for local reconstruction. But there are some signs of hope. In Tocoa, in northern Honduras, the affected communities have set up 452 local development committees and signed agreements with local government and Honduran and international NGOs to determine priorities for reconstruction. In Nicaragua, with the support of UNDP, over a dozen NGOs worked in four municipalities coordinating assistance to 123 communities. What is new and unique about these interventions is that the NGOs are leading the process and municipalities are extremely willing to accept the added technical advantages that NGOs have in terms of capacity, as well as their detailed knowledge of community needs and leadership qualities.

A lost opportunity for transformation

Despite these efforts, 15 months after Mitch it seems fair to conclude that the opportunity that the hurricane offered to transform Central America into a more just, efficiently governed region, with greater civil society participation, has been lost. Official efforts have concentrated on repairing physical infrastructure which had originally been put in place to service the needs of the export sectors of the economy in the hope of retaining the presence of the transnational corporations that dominate agricultural exports and the free trade zones. Faced with doubts about transparency, corruption and weak local capacity, the international donor community has been slow to disburse the funds pledged at Stockholm. Thousands of victims have been left to fend for themselves and most social reconstruction is the responsibility of local and international NGOs, most of whom are working independently of each other when not stepping on each others toes. Areas with a poor previous history of NGO presence have simply failed to access reconstruction aid.

Although Central America has been repeatedly hit by earthquakes, volcanic eruptions, tidal waves, hurricanes and droughts, no country in the region has an adequate disaster preparedness or disaster prevention strategy. Nor has Mitch forced them to remedy this lack, as was obvious in late 1999 when heavy rains swept away roads and bridges including new ones installed after Mitch. If any lessons have been learnt from Mitch there are no mechanisms for ensuring that this information will be shared. Thousands have shown their lack of faith in a new future by marching with their feet, mostly northwards as illegal immigrants. Central American governments are quite willing to allow international cooperation to foot the bill for reconstruction, hoping that the contributions will be large enough to compensate for social injustice and their inefficiency.

The signs of hope come from communities who refuse to remain as victims, renewed vigour and coordination among civil society, hundreds of micro-projects that are bringing new skills and resources to desperate communities, women who are leading the process of reconstruction, and some donors who are serious about decentralisation, transparency and combating poverty.

Sally O´Neill is Regional Director, Trocaire