Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
LATIN AMERICA AND THE CARIBBEAN
FY 1997 FY 1998 FY 1999 Actuals Estimate Request Development Assistance.............. $190,144,000 $212,450,000 $225,185,000 Child Survival and Disease.......... $83,744,000 $81,050,000 $72,293,000 Economic Support Funds............. $95,360,000 $116,000,000 $188,000,000 International Narcotics Control Funds $42,500,000 $19,000,000 $51,000,000 P.L. 480 Title II........................... $104,360,000 $116,254,000 $110,925,000 P.L. 480 Title III........................... $11,385,000 $10,000,000 $10,000,000
U.S. National Interests--A Shared Vision for the Americas
Geographic realities dictate that developments in the LAC region will have an immediate and tangible impact on the United States. U.S. interests are affected not only in the overarching areas of political stability and economic prosperity but also in areas sensitive to cross-border pressures: population and migration; communicable diseases; and the environment. The LAC region is also a major purchaser of U.S. goods and services, with 49% of the region's imports coming from the United States in 1996 (an average increase of 12.1% annually during the 1990s).
The U.S. interest in the LAC region is demonstrated in the Administration's oft-stated commitment to making the vision of the Summit of the Americas in Miami a reality. The Miami Summit defined a hemispheric consensus on the need to consolidate the three transitions sweeping through Latin America and the Caribbean: the transition from conflict to peace and reconciliation, from dictatorship to democracy, and from controlled economies with massive inequity to open markets and determined efforts to alleviate poverty. Each of these transitions advances fundamental U.S. interests. The role of the United States and of USAID has been central to the achievement of significant progress in each of these movements. In the words of the Summit's Action Plan, "...representative democracy is indispensable for the stability, peace, and development of the region...Democracy and development reinforce one another."
By promoting peace in Central America, by supporting emerging democracies such as Haiti, and by strengthening the region's commitment to democratic government, the United States advances its basic values and provides an environment for long-term development and stability. Democratic governments throughout the region are prerequisites for significant progress toward regional economic integration, pollution reduction, ameliorating global warming, preserving biological diversity, halting narcotics trafficking, and preventing the spead of communicable diseases like acquired immunodeficiency syndrome. The existence of secure democracies throughout the region will also lead to reduced emergency assistance.
Fulfilling the Summit's promise will reduce the pressure on the LAC region's poor to seek refuge and opportunity in the United States. Nearly three-quarters of all illegal immigrants to the United States have come from LAC. Although Mexico is by far the largest country of origin, illegal immigration from other nations in the LAC region was also very significant. El Salvador alone has sent more illegal immigrants to the United States than all of Europe, Asia and Africa. The United States has become home to 71,500 undocumented immigrants due to Guatemala's 35-year conflict.
The Development Challenge
In April 1998, President Clinton will join the other democratically elected heads of state in Santiago for a second Hemispheric Summit to commit themselves to a second generation of reforms which are
essential to sustain and complete the three transitions which are changing the profile of the hemisphere. Continued U.S. leadership and assistance will be key to overcoming the varied threats impeding the consolidation of these three transitions, particularly the threats posed by poverty and drugs.
Poverty: Although economic reforms over the past decade have led to renewed growth, reductions in poverty have been minor and the distribution of income, the worst of any region in the world, has not improved at all. Despite major gains in life expectancy, infant mortality, adult literacy, school enrollments, and access to safe drinking water, millions of people (roughly 40% of the population) remain in dire poverty. In the absence of these new reforms to remove barriers to the participation of the poor by assuring access to credit, to formal title to property and land, the Miami Summit goal of reducing poverty by half could take 30 years.
Drug Trafficking: Illegal narcotics are the scourge of the Americas. Illicit drugs corrupt institutions within the LAC region and constitute the leading cause of violent crime in the United States. The U.S. Government remains determined to get countries in the region to reduce the supply of drugs and has a comprehensive program in place to take the profit out of the cultivation and processing of narcotics. U.S. agencies are helping Latin American governments to improve law enforcement systems and educate citizens to the dangers of drugs. USAID helps key source countries provide environmentally sound, economically sustainable alternatives to crops produced for illegal drug production, and to improve the administration of justice.
Other major development challenges facing the region include:
Democratic Processes: Despite the many advances toward democratization over the past decade, important challenges to fulfilment of democratic aspirations persist. In many Latin American nations, military and police retain "reserved" powers not susceptible to civilian elected oversight. Many citizens in the region cannot yet effectively participate in their political systems. They are not assured due process before independent, impartial systems of justice. Strengthening the Rule of Law and enhancing the capacity of local government remain critical challenges in the coming years. Indigenous groups still face serious obstacles to full participation in national economic and political life. Reducing discriminatory barriers is an essential step in promoting greater justice.
Human Capacity Development: As a central theme of the Santiago Summit, reforms in education have become a hemisphere-wide goal. Although overall enrollment in basic education in the region is now quite high, quality in many areas is quite low, with high repetition rates leading to many disadvantaged students, especially indigenous and female students, not completing primary school. In the face of the Summit goal of universal completion of primary school by 2010, less than 60 percent of children currently complete primary school.
Economic Integration and Free Trade: Leading economists concur that a second generation of reforms is needed for the countries of the region to compete effectively in the global marketplace and to achieve higher growth rates necessary to reduce poverty. While the countries of the region have renewed their commitment to regional integration as part of a Free Trade Area of the Americas (FTAA), a substantial improvement in the ability of some Latin American countries to implement trade policy is required in key areas, such as sanitary and phytosanitary standards, trade-related unfair labor practices, and trade-related environmental policies.
Equitable Access to Productive Resources: Expanded access to productive resources such as land, property and credit is a pressing need, if the benefits of economic growth are to be widely shared. Reforms are necessary to revitalize property registration systems. Although microenterprise credit is widely recognized throughout the region as an important tool for expanding access to productive resources, existing institutional mechanisms can reach only a small percentage of potential borrowers.
Improved business regulations, tax regimes and licensing requirements, and the adaptation of financial sector norms and supervision are necessary for the expansion and sustainability of microfinance services.
Environmental Degradation: Continued exploitation of the environment and natural resource base will reduce future economic growth, raise health costs, and result in an irreplaceable loss of natural resources and biodiversity. Long-term U.S. interests in helping LAC countries protect their environment include: ensuring a growing market for U.S. products through the economically sustainable development of one of the United States' largest markets; preserving the United States own environment by helping LAC countries contribute less to global warming; and maintaining biodiversity areas as sources for medicines and the means to increase food production. More specific interests include reducing pollution in border areas with Mexico to mitigate negative effects in the United States, and creating effective environmental regulatory systems to even the playing field for U.S. and LAC producers under the North American Free Trade Agreement (NAFTA) and the proposed Free Trade Area of the Americas (FTAA).
Population and Health Concerns: The proximity of the LAC region poses special population and health concerns for the United States. Rapid population growth strains the hemisphere's resources, resulting in shortages, environmental degradation, and pollution. Communicable diseases such as cholera, HIV/AIDS, malaria, dengue fever, chagas and measles may cause problems in this country if they are not addressed in the region. The accelerating transmission of HIV within the region is also disturbing. Nearly two million human immuno-deficiency virus (HIV) infections have been recorded in the region, and the epidemic is growing by about 1,000 cases per day. In view of current migration and travel patterns, the epidemic in LAC threatens not only to thwart the region's development but also to aggravate U.S. control efforts.
Program and Management Challenges
Resource allocations in the LAC region reflect U.S. national interests, program performance and overall country development performance. Resources are allocated to sixteen country programs, a LAC Regional program, and a sub-regional program for Central America and Panama. Eight countries have full sustainable development programs (Haiti, El Salvador, Nicaragua, Bolivia, Peru, Guatemala, Honduras, and Jamaica) to achieve strategic objectives in economic growth, environment, democracy, population and health and human capacity development. Of the eight limited programs (Dominican Republic, Ecuador, Guyana, Panama, Paraguay, Brazil, Mexico and Colombia), the latter three focus on specific global concerns: environment, AIDS, and population growth. A very modest level of funding will support a program of information dissemination in Cuba to support the re-emergence of civil society in the country and promote a peaceful transition to democracy. With precisely defined programmatic focus and management efficiencies, LAC programs will be implemented with stable to declining staff levels.
LAC programs are primarily financed through Development Assistance and the Child Survival Account. Several of the LAC sustainable development programs are in countries which are undergoing the transition from war to peace (El Salvador and Guatemala); are beset by narcotics production and trafficking problems (Peru and Bolivia); or are undergoing a major transition from prolonged and debilitating dictatorships (Haiti). In these instances other resources, including
Economic Support Funds............. , International Narcotics Funds, or P.L 480 Title II and III resources are used to complement Development Assistance by addressing the problems of specific groups or in specific areas in ways that also promote sustainable development. Food aid resources have played valuable roles in the region: Title II by providing food directly to some of the most vulnerable households in the region and Title III by encouraging governments to remove many of the underlying policy constraints to improved food security in the agricultural and health sectors.
Other Donors
USAID's donor coordination efforts in the LAC region are significant, growing and increasingly important to its programming. Among major bilateral donors, the U.S. ranks third in total Official Development Assistance, after Japan and Germany. Other significant bilateral donors in the region included Spain, France and Canada. USAID's approach is often that of a pathbreaker--initiating pilot efforts in areas such as judicial reform, education for indigenous peoples and alternative dispute resolution which are later picked up and expanded upon by other donors. Collaborative working relations are being fostered with the European Union (EU) within the context of the New Transatlantic Agenda and with Japan under the auspices of the Common Agenda. Multilateral development banks (MDBs) have assumed an increasing role in the poorer countries of the region where USAID has its major activities. USAID works closely with these MDBs and encourages them to expand lending in the social sectors, democracy and governance, and the environment. The banks consider USAID's in-country expertise to be a valuable resource when they enter these new lending areas. The Summit of the Americas also serves as an important framework for more extensive donor coordination.
USAID's donor coordination efforts are producing significant results. In Guatemala, a coordinated USG effort to support the Peace Process helped to launch a successful four year effort which is closely coordinated with other donors. USAID's mission worked closely with the Office of Transition Initiatives, the UNDP, the EU and PAHO to successfully demobilize nearly 3000 former guerrillas--each donor taking responsibility for different aspects of the operation (food, water, medicine, construction/operation of camps, vocational training and outplacement). Similarly, USAID represents the USG on a number of donor committees that support the implementation of key aspects of the Peace Accords from issues as diverse as land, justice sector reform and the indigenous. These efforts ensure that donor contributions are coordinated with each and with the Government of Guatemala. Periodic Consultative Group meetings are held to monitor progress under the Accords and to review implementation.
USAID, the IDB and the World Bank have worked together in Honduras, Bolivia and El Salvador to develop major judicial reform programs which expand USAID-initiated activities. In El Salvador, USAID health and education programs are the basis for major health reform and primary education programs of the multilateral banks. USAID is examining the possibility of even closer collaberation with the IDB to significantly expand the availability of microenterprise credit in the region by marrying the flexibility of USAID grant resources in institutional strengthening with the much larger financial resources of the IDB. All these support U.S. objectives under the Summit of the Americas. These efforts are enhanced by USAID's ability to use its field staff to encourage, and often manage, on-the-ground coordination of assistance activities. USAID influence has been further increased by placing advisors on site at the IDB and the World Bank to assist the U.S. Executive Directors.
USAID implements its program through close collaboration with a number of other U.S. agencies, including the Departments of State, Education, Interior, Justice, Commerce and Agriculture, the Office of the U.S. Trade Representative, the Environmental Protection Agency and the Inter-American Foundation.
FY 1999 Program
The activities planned for FY 1999 will directly contribute to achieving the shared vision for the hemisphere as ratified by the Summit of the Americas and its follow-up process. USAID's program will provide impetus to a 'second generation' of reforms vital for substantially accelerating growth, improving income distribution, ensuring political stability and increasing participation in decision-making by all segments of society.
Under the economic growth goal, USAID proposes $70,129,000 in DA and $62,450,000 in ESF to support the Summit objectives of promoting prosperity and eradicating poverty and discrimination in the hemisphere by strengthening markets; and expanding economic access and opportunity for the poor. USAID also proposes to dedicate $20,476,000 in CSD and 19,000,000 in ESF to expanding and improving basic education in the region.
Under the democracy and governance goal, USAID proposes $38,073,000 in DA and $73,550,000 in ESF which will focus on (1) strengthening rule of law and respect for human rights; (2) supporting elections and the political process; (3) strengthening and supporting a politically active civil society; and (4) making government more responsive to people.
Under the stabilizing world population and protecting human health goal, USAID proposes $60,101,000 in DA, $51,817,000 in CSD and $22,500,000 in ESF to achieve four closely related objectives: (1) a sustainable reduction in unintended pregnancies; (2) a reduction in child mortality; (3) a reduction in maternal mortality; and (4) a reduction in the transmission of sexually transmitted infections and HIV.
Under the encouraging sound environmental management goal, USAID proposes $56,882,000 in DA and $10,500,000 in ESF to be focused on six areas critical to sustainable development: forests, water, agricultural lands, coastal resources, energy production and use, and urban and industrial pollution. To maximize impact, increased emphasis will be placed on policy reform, partnerships with NGOs, engagement of the U.S. private sector commercial interest, and regional approaches including advancement of the Summit of the Americas process.
Given the severely limited availability of economic growth resources, a $20 million Presidential Summit Initiative is proposed to complement the USAID program's support for consolidating the three transitions sweeping the region. Specifically, this Presidential Initiative will address three key themes of the Santiago Summit: weaknesses in basic education, access to financial systems by the poor, and obstacles to the implementation of regional trade expansion. USAID is uniquely positioned to assist LAC countries in these reforms. The Agency's in-country presence and its long history of involvement in institutional development give USAID credibility and access to decision-makers far out of proportion to the assistance levels it provides. USAID grant funds make it possible to leverage the much larger capital resources of the Inter-American Development Bank and World Bank, especially in support of expanded trade and investment.
At the Summit of the Americas in Santiago, the heads of state of the hemisphere's 34 democracies will propose a series of initiatives to advance free trade, democracy, prosperity and sustainable development. These initiatives, the Santiago Plan of Action, focus on four main goal areas: 1) economic integration and free trade; 2) education; 3) strengthening democracy and human rights; and 4) eradication of poverty and discrimination and are expected to produce tangible results over the next three to five years.
To further economic integration of the hemisphere, the Summit will launch negotiations on the Free Trade of the Americas as well as propose new measures related to strengthening the integration of financial markets as well as increased cooperation in infrastructure development and science and technology.
Preparations for the Summit have affirmed a growing consensus that education reforms are vital for economic growth, social advance and deepening of democratic trends in the hemisphere. New initiatives will be set forth in Santiago aimed at strengthening the teaching profession; assuring adequate investments at the primary and secondary school level; providing local communities with more control over schools; and establishing standards for educational performance and monitor progress against those standards. These efforts are intended to assure rapid progress toward the goal of quality primary education for all children in the hemisphere.
The proposed Santiago Plan of Action will also focus on a second generation of reforms aimed at guaranteeing all citizens full participation in the political and economic life of their respective nations. Concrete measures associated with second generation political reforms include: strengthened rule of law to guarantee all individuals the right to due process; decentralization and extension of democracy to local and subnational governments; and creation of conditions for a vibrant civil society. These efforts, in combination with ongoing initiatives to combat corruption and ensure freedom of the press, are aimed at deepening democratic trends throughout the Americas.
Second generation economic reforms underscore the need to remove barriers that deny the poor access to economic opportunity. These measures include access to credit and other financial services, to secure title to land and other property, and to quality health care. Within these programs, special emphasis will be given to eradicating discrimination based on gender or race, and to ensure the broadest possible participation in the benefits that economic growth and increased trade provide for the hemisphere.
LATIN AMERICA AND THE CARIBBEAN
PROGRAM SUMMARY
FY 1999 Funding Request
(Thousands of Dollars)
COUNTRYEconomic Growth and Agriculture Population
and
Human HealthEnvironment Democracy Human Capacity Development Humanitarian
Assistance
TOTALBOLIVIA
DA
CSD
INC
PL 480 Title II
3,350
20,000
15,165
6,215
5,300
4,200
3,000
23,910
28,015
6,215
23,000
23,910BRAZIL
DA
CSD
2,000
2,500
6,117
8,117
2,500DOM. REPUBLIC
DA
CSD
300
3,166
2,000
3,358
6,824
2,000ECUADOR
DA
CSD
750
5,505
1,450
3,600
1,000
10,855
1,450E L SALVADOR
DA
CSD
8,890
2,800
7,478
4,645
4,215
3,300
20,550
10,778GUATEMALA
DA
CSD
ESF
PL 480 Title II
2,700
16,250
5,900
4,985
5,500
500
2,800
8,250
2,000
10,505
16,900
6,985
25,000
10,505GUYANA
DA
1,200
1,100
2,300HAITI
ESF
PL 480 Title II
Title III
49,275
28,100
10,036
38,036
14,553
20,000
10,000
140,000
20,000
10,000HONDURAS
DA
CSD
PL 480 Title II
2,909
5,236
4,040
2,600
4,600
2,500
4,403
15,345
6,540
4,403JAMAICA
DA
CSD
1,950
2,107
1,700
4,113
1,026
8,170
2,726MEXICO
DA
CSD
INC
450
5,582
300
1,000
5,882
450
1,000NICARAGUA
DA
CSD
PL 480 Title II
6,700
3,400
3,640
1,300
4,500
3,000
2,362
15,900
6,640
2,362PANAMA
DA
1,550
3,300
4,850PARAGUAY
DA
2,000
525
2,000
4,525PERU
DA
CSD
INC
PL 480 Title II
6,250
25,000
12,822
7,687
5,100
2,200
250
49,745
26,372
7,937
25,000
49,745CEN Regional
DA
CSD
2,900
3,000
5,500
8,400
3,000LAC Regional
DA
CSD
ESF
INC
30,680
700
6,672
4,500
7,000
22,300
2,000
8,400
42,180
15,072
23,000
2,000TOTALS
DA
CSD
ESF
INC
PL480/Title II
/Title III
70,129
66,225
45,000
60,101
51,817
28,100
56,882
10,536
38,073
68,586
6,000
20,476
14,553
110,925
10,000
225,185
72,293
188,000
51,000
110,925
10,000
Mark L. Schneider Assistant Administrator Bureau for Latin America and the Caribbean
![[USAID Home]](/images/usaid.gif)
[USAID Home]
[CP 99 Home]