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
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
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. …