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| >> Regional Overview >> LAC Regional Overview | ||||||||||||||||||||||||||||
THE DEVELOPMENT CHALLENGE: Despite improvements in the economic and social well-being of people living in Latin America and the Caribbean (LAC), the region continues to face serious development challenges which threaten the United States' national security. Inadequate economic growth rates, growing unemployment, extensive poverty, and skewed income distribution increasingly undermine the political and economic stability of the region. Problems associated with narcotics trafficking in Colombia; the coffee crisis and drought in Central America; natural disasters, and a major drop in tourism in the Caribbean region have had a serious impact on long-term prosperity and peace.
Overall economic growth for the LAC region, which was expected to be low prior to September 11, is projected to be 0% to 0.7% for 2001. Annual rates of growth in regional trade have been 10% to 12% over the past decade. In 2001 the rate of trade growth was zero. Concern about Argentina's economic and political stability and default on its foreign debt, reduced foreign investment in LAC economies such as Brazil and Mexico, and a persistent drought in Central America and plummeting world market coffee prices have further retarded economic growth. The economic situation for many LAC countries was further devastated by the slowing of the U.S. economy and the global recession. After September 11, the Caribbean, with its heavy dependence on tourism, has been the most affected sub-region. The trend toward consolidating democracy in LAC remains generally positive. Institution-building efforts to strengthen judicial systems and local governments are paying off, most notably in Bolivia and Honduras. Free and fair elections in Nicaragua and Honduras demonstrated the benefits of the democratic process. Citizens also are continuing to organize into civil society and business organizations to work for reform within the system. But various problems threaten the stability of fragile democratic states. High levels of violence and narcotics trafficking in Colombia are affecting neighboring Andean countries, and continuing instability in Haiti and Venezuela remains unchecked. While more citizens continue to support democracy over other forms of government, disillusionment is high with governments that are unable to reduce poverty, corruption, crime, and violence. Access to primary education is generally adequate throughout the region; however, the quality and relevance of basic and secondary education remain a major problem. Public expenditures on basic education or per child is extremely low compared to other developed countries outside of LAC. On average, it takes 11.8 years for a student to complete primary school, and the number of students who complete secondary school is low. A large percentage of children who complete primary school do not have access to secondary or technical schools, leaving many children with inadequate opportunities to succeed in the workplace. A significant number of high-school graduates lack adequate workforce skills, which is a drag on the region's economies and global competitiveness. The health sector has achieved many successes in vaccination coverage and eliminating or reducing major childhood illnesses. At the same time, the Caribbean has the second highest rate of HIV/AIDS in the world, maternal mortality rates have not been significantly reduced, and malaria and other infectious diseases are increasingly resistant to treatment therapies. Further, the environment in LAC continues to suffer from severe degradation and the rates of degradation are accelerating. The negative effects of this environmental crisis include increased vulnerability to disasters, rising conflict over natural resources, and reduced economic opportunities and growth. The Summit of the Americas continues to influence the U.S. foreign policy agenda in LAC and the LAC Regional program. The Summit has served as a catalyst in forging a vision for regional development among the countries in the hemisphere. Through technical cooperation and donor coordination, significant resources have been directed to the region to support specific development initiatives. USAID has taken a lead role for initiatives related to local government and property registration and has been active in shaping the agenda across other sectors. Since the April 2001 Quebec Summit, USAID has participated in the inter-agency coordination process and has pursued initiatives in trade and investment, anti-corruption, education, health and telecommunications. U.S. national interests in the LAC region include strengthening democratic processes, promoting equitable economic growth and free trade, and reducing poverty. THE USAID PROGRAM:
The Program Data Sheets provided below cover the ten programs for which USAID is requesting funds. These programs concentrate on deepening democracy, assisting sub-regional trading blocs in the Free Trade Area of the Americas (FTAA) process, improving the institutional infrastructure to help the poor access markets, promoting educational reform, training potential leaders, improving regional health policies and services, improving the environmental performance of targeted LAC businesses and communities, conserving the region's biological resources, and advancing development cooperation opportunities in the hemisphere. FY 2002 funds will be used to implement the program as currently planned and described in the FY 2002 Congressional Budget Justification; however, the existing health and trade objectives are being extended. Resources will also be used to launch new regional activities under the Partnership for Prosperity and to support forest management, coral reef management, and educational partnerships with LAC universities. USAID is undergoing a reorganization to reduce the number of activities managed in Washington and, correspondingly, transfer more resources to programs managed overseas. As a result, the LAC Bureau's Office of Regional Sustainable Development (LAC/RSD) will reduce the number of activities that it manages over the FY 2002-2003 timeframe. Some will be transferred to overseas programs in LAC, in the Agency's pillar bureaus, and some will be phased out. LAC/RSD will develop a new strategy once the reorganization and transfer process is complete. ONGOING PROGRAMS FOR WHICH NO NEW FY 2002 OR FY 2003 FUNDING IS REQUESTED: On December 31, 2001, USAID completed two-year assistance provided in the wake of Hurricane Mitch. The following summarizes this and other terminating regional programs:
OTHER DONORS: Consultations with the Inter-American Development Bank (IDB), World Bank, Organization of American States (OAS), Pan American Health Organization (PAHO), and other regional and international institutions allow USAID to promote U.S. foreign policy interests in the region, influence development policy, and shape the direction of other donors' programs. In health, USAID collaborates with PAHO, the World Bank and the IDB on a shared agenda focusing on national health accounts, pharmaceuticals, disease surveillance and environmental health. In the environment, USAID worked with the World Bank to secure over $55 million for Ecuador, Peru, Bolivia, Colombia and Mexico. In democracy, USAID collaborated with other donors (World Bank, IDB, OAS, PAHO and United Nations) to launch the Inter-American Coalition for the Prevention of Violence in the Americas to promote implementation of national strategies to combat crime and violence. In education, USAID is developing a partnership with private companies to support the Presidential Summit initiative, the Centers for Excellence in Teacher Training. In the economic growth area, USAID and the IDB are collaborating on a new rural economic strategy, an assessment of the coffee crisis, and exploring ways to improve the flow of remittances to the region. Program Data Sheets
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