then, with Contra pressure removed, the
Sandinistas would be able to rule with impunity.
As it turned out, Arias Sánchez’s optimism,
despite many setbacks, proved at least partially
justified. Daniel Ortega had changed: he was no
longer the Marxist–Leninist revolutionary leader
determined to build a socialist Nicaragua at all
costs. The failures in Nicaragua were all too
obvious. Daniel Ortega now took the lead in fol-
lowing the perestroikaline. In April 1990, free
elections were held in Nicaragua and the opposi-
tion won, to the surprise of the Sandinistas.
Ortega handed over power peacefully to Violeta
Chamorro. Violeta Chamorro, in turn, followed
a policy of reconciliation acceptable first of all to
the Sandinistas, who were allowed to retain
command of the army, and acceptable in the end
to the Contras as well, who abandoned the armed
struggle. At least for war-shattered Nicaragua
the future began to look a little more hopeful
as the guerrillas gave up the armed struggle. But
the economy remained in dire straits, with almost
half the population unemployed.
Latin America after the early 1960s experi-
enced accelerating economic and social change.
Its traditional power structures adapted by
increasing reliance on military force and repres-
sion, or they shared power with other sectors of
society but still placed reliance on the military to
check organised peasant and urban labour groups,
as happened in Brazil. Socialist alternatives were
never able to retain power; the hostility of the US
ensured support for anti-socialist opposition
forces in Guatemala (1954), the Dominican
Republic (1965), Chile (1973), Grenada (1983)
and, finally, Nicaragua. The Soviet Union was in
no position to challenge the US effectively in the
Western hemisphere.
During the 1980s, Latin American political
developments came to seem more in conformity
with Western hopes and American intentions.
Military regimes receded in Ecuador, Peru, Bolivia,
Uruguay and Brazil. Colombia, Venezuela and
Costa Rica were already ruled by civilian govern-
ments. Indirectly the US helped to bring about the
fall of the military junta in Argentina. By providing
intelligence to London, crucial assistance was
given to Britain’s recapture of the Falklands in
1982, a blow the junta could not survive. In the
Caribbean, the worst of the dictators, Duvalier,
had been forced from Haiti into exile (1986); the
leftist regime in Grenada, which had lapsed into
murderous infighting, was eliminated by a US
invasion in 1983, to the evident relief of the local
population, but to the embarrassment of Britain,
as Grenada was a member of the Commonwealth.
What had led the Reagan administration to inter-
vene was its determination to halt the spread of
Cuban influence. After a long struggle and despite
many setbacks, US policies also succeeded in mak-
ing authoritarian Marxist rule by the Sandinistas
untenable. US policies in Central America and the
Caribbean in the 1980s were an update of the
Monroe Doctrine.
Panama
The US has continued since the Spanish–American
War of 1898 to occupy the Guántanamo naval
base in Cuba. And ever since Alfred Thayer
Mahan highlighted the crucial strategic import-
ance of a transisthmian canal in the 1890s, the US
was determined to assure itself of predominant
influence in Panama and to exercise sovereign
control over any canal that might be constructed.
In 1903, ardent Panamanian nationalism against
Colombian rule provided the opportunity. The
US helped the Panamanian revolution but exacted
a price: control of the future canal. Herein lies the
crux of Panamanian history in the twentieth cen-
tury. Ostensibly independent and sovereign,
Panama was little more than a US colony for six
decades. Panamanian nationalism was inflamed
by the country’s lack of sovereignty in the Canal
Zone and by the extensive rights the US exercised
over its economy and its foreign policy. It was
ruled by a wealthy and corrupt oligarchy of the
kind common in Latin America but one that was
also required to accept a client relationship with
the US. If popular riots occurred, US troops inter-
vened to suppress them. In Panama too, the
United Fruit Company enjoyed extensive land and
rights. Payments made by the US for use of the
Canal Zone were an important prop for the econ-
omy, at times providing a third of Panama’s
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