US to Cut Foreign Aid to Latin America

Article excerpt

UNITED States foreign aid for Latin America in 1994 is mostly bad news mixed in with a bit of good.

The Bad News: The end of the cold war means Latin America will be getting the cold shoulder when it comes to United States foreign aid. After pumping billions of US taxpayer dollars into Central America in the 1980s to fight the tide of communism and narcotrafficking, US military and economic aid in the region will drop at least 50 percent.

"The era of US foreign aid as a major factor in Latin American development is passing," says Carol Lancaster, deputy director of the US Agency for International Development (USAID).

The Clinton administration announced that the North American Free Trade Agreement (NAFTA) is the economic development model it hopes to see spread through Latin America. "Trade instead of aid" is seen as more politically palatable to US voters being asked to belt-tighten at home to balance their federal budget.

"NAFTA is an important symbol of the emerging relationship the US will have with the region," argues Ms. Lancaster, who was in Mexico Jan. 14 and 15 explaining the new policy to a hemispheric gathering of USAID mission directors.

Worldwide, more than half of the 108 USAID mission offices are scheduled to be closed over the next two years. The biggest cuts are in Latin America and Asia. The ax will fall on the USAID offices in Argentina, Belize, Chile, Costa Rica, and Uruguay. Also closing is a Caribbean regional office covering seven island nations.

Meanwhile, funding to some of the biggest aid recipients in the region will be lowered. For example, USAID's request for El Salvador in 1994 is nearly 50 percent less than the 1992 appropriation ($267 million), according to USAID's June 1993 congressional budget presentation. Honduras will take a similarly sized cut. Nicaragua will lose almost 60 percent of its bilateral aid, with a budget request for $66.8 million. Peru and Bolivia are also expecting cuts of around 30-40 percent.

And, it's not over yet. USAID officials are glossing over exact figures because they expect another round of budget cuts in the coming months.

But there is good news: Guatemalan and Mexican aid levels are expected to hold about level with 1993 spending.

Ironically, Mexico - the nation in the region most directly benefiting from NAFTA - owes its pardon to the fact that aid spending here fits the profile of new USAID priorities developed by the Clinton administration. …