chapter  9
Transnationals, grupos and business associations in the privatisation of Central America’s telecommunications
Pages 25

Much of the literature on political and economic development in Central America has focused on the role of strong domestic producer groups and their relation to the state. The relative power of national agro-export and agro-industrialist oligarchies and the respective states and military apparatuses have been pointed out as keys to the differences between the five countries of the isthmus1 in terms of peace, development and democracy.2

Over the last 20 years, the Central American economies have been transformed towards market orientation, non-traditional exports, and closer integration into global production circuits. This has been accompanied by a shift in the structure of the local private sector: new economic groups have formed and linked up to transnational capital. Whether this really signifies a break with old patterns of domination or a continuation through new means is a disputed question.3 What is clear is that the nature of interaction between the private sector and the state has changed; while during the period of state ownership of industry and infrastructure, private companies crowded around the large parastatals and developed close relationships with politicians in order to compete for contracts, in the 1980s a new form of relationship between politicians and the private sector emerged. Businessmen with significant personal interests in various economic sectors rose to political power and continued pursuing their interests from those positions.