Complete Thesis_double spaced abstract.pdf

General Lucas (1978-1982):
Economic Development and National Reconstruction through the use of Foreign Aid
General Lucas was one of, if not the largest beneficiary of the military’s practice of self-
enrichment. The practice of rewarding allies and supporters in the military with economic
opportunities in the private sector led to considerable infighting and competition within the
military and between the private sector elites and the military. The tactics used by the military in
the political arena to repress and control the population, the systematic murder or disappearance
of any political adversaries or competition, was used more prolifically in the economic arena as
politics and economics became closely tied. In 1981-1982 the lines between favored and out-of-
favor were clear; Guatemalan business elites, members of the MLN, the middle class, U.S.
business investors, and junior officers had grown increasingly incensed by the rampant corruption
during a period of economic recession and internal warfare. As the Lucas regime displayed even
more openly corrupt, violent and economically unstable behavior segments of the elite population
began to distance themselves from the Lucas regime; further cultivating their close ties with the
United States government and American business elites. This involved intense lobbying efforts
in Washington D.C. by Guatemalan elites. It also involved the strengthening of ties between like
institutions in each state; such as the Chamber of Commerce. Finally it involved increasing the
partnerships of U.S. firms and Guatemalan firms in ventures outside of agriculture.
In search of new revenues the Lucas administration siphoned funds designated for
infrastructure projects, widely inflating the construction costs of existing projects, and increased
taxes on coffee exporters (Black, 1984, 119). The United States government and the IMF sent
conflicting signals to General Ydígoras; the United States continued to send aid to the
Guatemalan government. Also, the IMF continued to lend to Guatemala, US$110 million. IMF
conditionality on loans required Guatemala to cut their already “lowest per capita in Central
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