LATIN AMERICA AND THE CARIBBEAN

INTRODUCTION

A Shared Vision for the Americas

This shared vision for the Western Hemisphere would have been inconceivable only twenty years ago, when with the exception of North America and the English-speaking Caribbean, only four countries had elected civilian governments. Military dictatorships and state-directed economic systems were the norm, and respect for fundamental human rights under those regimes was nonexistent. Today, all but Cuba have governments chosen by multi-party elections. USAID programs have been critical in the transformation: from dictatorship to democracy; from closed economies to open markets; and from conflict to peace in Central America.

U.S. Support to Latin America and the Caribbean Benefits the United States

One of the United States' most vital national interests - the health of the domestic economy - depends in no small measure on the economic health of the countries in the Latin American and the Caribbean (LAC) region. As Latin American economies have prospered, so have U.S. exports and jobs. The region is the fastest growing market for U.S. exports of goods and services, and also one of the largest. In 1995, the LAC region accounted for more than 70% of all U.S. exports to USAID-assisted countries. Exports of goods to all LAC countries reached $95 billion in 1995, more than three times the level 10 years ago. These exports support two million U.S. jobs. U.S. economic interdependence can also be measured by its direct investment, which totals $102 billion in the region, 19% of all U.S. investments overseas and two-thirds of U.S. investments in all developing countries. The United States is the source of nearly 40% of the imports to Latin America from developed nations. U.S. economic growth and employment depend far more on the growth of LAC economies than on any

The health of the U.S. economy will become even more dependent on the economic health of the LAC region in the future. The Summit of the Americas' declaration committed the countries of the hemisphere to negotiate an agreement for a Free Trade Area of the Americas (FTAA) by 2005. The FTAA will be the world's largest free trade area, encompassing 34 countries with a current total population of about 750 million and a combined gross domestic product (GDP) of more than $8 trillion.

Despite Progress, Poverty Persists in the Region

Over the past three decades, the LAC region has made major developmental gains. Life expectancy between 1960 and 1995 increased from 56 to 69 years, and infant mortality declined from 106 per 1,000 live births to 43. Indicators of adult literacy, school enrollments, and access to safe drinking water have all improved. Malnourishment among children has declined. But wide disparities in income persist, leaving millions of people in dire poverty. Simple measures of per capita income miss a darker reality. In the region, roughly 45% of the population lives in poverty, and in some countries the level reaches 70%. The lack of participation of a major part of the population in the economic and democratic systems presents a fundamental challenge to LAC

Illegal Immigration: Poverty and its accompanying social and political consequences have created pressures which have caused millions of LAC residents to migrate illegally to the United States in search of personal security and economic survival. Nearly three-quarters of all illegal immigrants to the United States have come from LAC. Although Mexico is by far the most important country of origin, illegal immigration from other nations in the LAC region was also very significant. There are far more Illegal immigrants from Central America, the Caribbean, and South America than from the rest of the world combined. El Salvador alone has sent more illegal immigrants to the United States than all of Europe, Asia, and Africa. More illegal immigrants came to the United States from Haiti and the Dominican Republic in 1992 than from the continent of Africa. Haiti, a country which until recently had experienced tremendous political and economic turbulence, has sent 60,000 undocumented Haitians to the United States. The United States has become home to 71,500 undocumented Guatemalans due to its 35-year conflict. Improvements in governance, respect for human rights and increased job opportunities at home will significantly reduce the flow of illegal immigrants to the United States.

Democratic Processes: The region made significant advances in democratization in 1996, particularly with the Peace Accords signed in Guatemala, and fair elections in the Dominican Republic that mark an historic step towards full democracy. National elections in Ecuador and Nicaragua continued the region's steadfast adherence to democratic electoral procedures. Nonetheless, important challenges to fulfilment of democratic aspirations persist. Strong leadership by the United States and other hemispheric partners only narrowly halted a military coup attempt in Paraguay. In many Latin American nations, military and police retain "reserved" powers not susceptible to civilian elected oversight. While democratic procedures in elections and rule of law are improving, many citizens in the region cannot yet effectively participate in their political systems. Indigenous groups in Guatemala, southern Mexico, and the Andean region are still largely excluded from political life. Regardless of electoral reform, political systems will not be truly democratic until the indigenous majority are included,

Environmental Degradation: Economic growth in the LAC region has occurred at a high cost to the environment. Continued uneconomic 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.

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. Population pressures contribute to increased illegal migration to the United States. Communicable diseases such as cholera, HIV/AIDS, and measles 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 immune-deficiency virus (HIV) infections have been recorded in the region, and the epidemic is growing by about 1,000 cases per day. By contrast, the United States has about one million infections. 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.

Drug Trafficking. Illicit drugs corrupt institutions and tear at the social fabric of the United States and almost all Latin American and Caribbean countries. Too many people in the hemisphere ruin their lives or suffer random violence because of illegal drugs and the antisocial behavior they engender. As part of its program to reduce drug use here, the U.S. Government has embarked on a comprehensive program to get countries in the region to reduce the supply of drugs. Other 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 illegal drug production, and to improve the administration of justice.

External Debt. The international debt crisis that erupted in 1982 threatened the international financial system and turned the 1980s into a lost decade for Latin America. Debts to commercial banks were the major factor, but official debt also contributed. The crisis forced governments to undertake significant economic reforms. By the early 1990s, inflation had declined, growth was recovering, and the major debtors had made arrangements to reduce bank debt in exchange for improved security for remaining balances. Countries on the verge of default in the early 1980s are now returning to the international financial markets. However, success in reducing inflation, growth, and trade is just now bringing peoples' incomes back to levels of a decade and a half ago. Inefficient public institutions, lack of investment in people, and skewed income distribution endanger both prosperity and politicalstability. The challenge for LAC countries is to harmonize macroeconomic stability with quicker reductions in poverty and inequality.

USAID's Strategy in the LAC Region

It is politically intolerable and morally unacceptable that some segments of our populations are marginalized and do not share fully in the benefits of growth. With an aim of attaining greater social justice for all our people, we pledge to work individually and collectively to improve access to quality education and primary health care and to eradicate extreme poverty and illiteracy. The fruits of democratic stability and economic growth must be accessible to all, without discrimination by race, gender, national origin or religious affiliation.

- Summit of the Americas Declaration of Principles

USAID seeks to achieve sustainable development by integrating the elements the Agency has determined to be most critical for reducing poverty in the long run: building democracy, encouraging broad-based economic growth, reducing population growth and improving health, and protecting the environment. The synergy among these strategy elements makes the whole greater than the sum of the parts if each were pursued separately.

Economic growth is essential for improved living standards. But economic growth will not be broad-based, nor will it produce growth that is sustainable, unless it consciously focuses on the other three strategy elements. Efforts to reach the poor are ineffective without a commitment to improving their access to resources, institutions, and decision-making processes. Economic growth is not sustainable without democracy, and democracy opens opportunities for greater participation of the poor by improving business opportunities and increasing earnings potential at the micro level. The gains from economic growth and participation will be diminished if population growth continues at high levels, and the productivity of future generations will be diminished if their natural resource endowments are destroyed by the present generation. Individual country programs are designed to balance activities that promote long-term, broad-based economic growth with those that directly benefit the poor, so as to achieve a significant and sustained reduction of poverty over the long run.

Within this strategic framework, special emphasis must be placed on helping nations emerge from the cycle of crisis by: (a) consolidating the peace process in Central America, (b) strengthening Haiti's fledgling democracy, and (c) combatting coca and cocaine production and trafficking in Bolivia and Peru. USAID support of the peace process in Guatemala, El Salvador and Nicaragua has been essential to ensuring its success. After decades of conflict, Guatemala's signature of a comprehensive peace accord fulfills the commitment made by all five Central American presidents nine years ago at Esquipulas. USAID's eforts in Haiti illustrate how development and humanitarian assistance programs can reinforce each other to produce lasting results. In Bolivia and Peru, USAID is helping transform economies dependent on illicit coca to licit market-based economies based on efficient outward-oriented policies. This strategy recognizes that an effective counterdrug policy needs democratic institutional strengthening programs, especially in justice and law enforcement, as a necessary foundation for alternative economic development programs.

Agency Goal: Promoting Broad-Based Economic Growth

Despite healthy growth, the LAC region has the widest disparities in income in the developing world. The origins of these income disparities and the high incidence of poverty are complex, but their roots can be traced to misquided public policies of the past. There are three basic causes: (1) low quality basic education; (2) limited access to key resources such as land and credit; and (3) regional trade structures that limit growth and bias growth that does occur against the poor. The structural reforms begun in the 1980s have the potential to help lower the incidence of poverty and income inequities. Many of these reforms seek to replace privileged access with equality of opportunity. Structural reform is a difficult process, however, and staying the course is politically painful.

USAID Assistance is Achieving Results

While credit for economic recovery in the LAC region must go primarily to the determination of the Latin American and Caribbean people themselves, the investment by the United States in its foreign assistance program has contributed significantly to this progress:

*Although per capita GDP fell by 8% during the 1980s, it grew by 6% over the last four years and total GDP increased by an average of 3.4% a year during 1991-1994. This pattern slowed in 1995 due largely to setbacks experienced by Mexico and Argentina. Excluding those two countries, all other countries in the hemisphere continued the positive trends of GDP growth per-capita of the 1991-1994 period. Nevertheless, for the region as a whole, real per capita GDP remains below 1980 levels.

*A USAID-supported, non-traditional agricultural export program in Ecuador generated more than $95 million in total non-traditional exports and more than 40,000 jobs (65% for women). In Nicaragua non-traditional agricultural exports increased from $54 million in 1994 to $75 million in 1995.

*In El Salvador, village banking reached a cumulative total of 40,000 beneficiaries, of whom 82% were women in extreme poverty. Small business lending reached 2,200 enterprises, of which 51% are located in ex-conflicted zones. As part of El Salvador's transition from war to peace, USAID contributed more than $60 million to finance land acquisition for almost 20,000 people.

*In Latin America and the Caribbean, USAID programs have contributed to significant improvements in the quality and efficiency of education, especially in Honduras, Guatemala the Dominican Republic and El Salvador. USAID programs have also supported the development of teaching materials and the distribution of textbooks. In Guatemala, the enrollment of Mayan students experienced an average annual increase of 8.75%. This surpassed both the program target and the population growth rate and represented a real increase in Mayan enrollment.

The FY 1998 Program

USAID programs in the LAC region will continue to advance U.S. interests by directly supporting programs that address the Summit objectives of promoting prosperity and eradicating poverty and discrimination in the hemisphere. Three principal objectives are fundamental to achieving USAID's goal of promoting broad-based economic growth in the LAC region: strengthening markets; expanding economic access and opportunity for the poor; and expanding and improving basic education.

Open and competitive private markets stimulate economic activity and accelerate growth, providing increased incomes and employment. USAID assistance to strengthen markets focuses on establishing an "enabling environment," comprising policies, institutions, regulations and attitudes conducive to dynamic economic growth. United States' assistance will be mutually beneficial as improved market efficiency increases the income of LAC countries while at the same time providing trade and investment opportunities for American firms.

Even where markets are functioning well, economic benefits are uneven because of differential access to information, technology, credit and other resources. Measures can be taken to spread the benefits of growth to all groups in society. USAID will support programs which focus on improving access to credit, technology, land and markets, as well as improving the policy environment for small and micro-producers and entrepreneurs. Many of USAID's activities in this area focus on women, who are disproportionately represented among the poor.

I mproved educational access and better quality education for the poor, women, and marginalized groups will help increase incomes. USAID's program focuses on: improving the education policy environment; reforming curricula and educational institutions through teacher training; expanding access to education for girls and other disadvantaged groups; supporting alternative basic education and vocational training programs; and funding scholarships for higher academic training.

Agency Goal: Advancing Democracy

For the LAC region, democracy has become the common guiding principle of economic growth and social development. Elected governments began to replace authoritarian ones in the late 1970s. Nonetheless, these new democracies are incomplete and fragile. A broader concept of democracy, under which citizens have a wealth of outlets to express political choices, is only beginning to emerge in some countries. Citizenship is a concept that challenges Latin American societies, which historically have subjugated individual rights to enable elites to maintain political and economic power. Latin Americans must act as citizens to ensure that government institutions become more transparent, decentralized, accountable, effective, and accessible.

USAID Assistance is Achieving Results

USAID programs in LAC countries have had a significant impact on strengthening the rule of law and respect for human rights.

*In Honduras, the attorney general's office was created with USAID assistance. During 1995, more than 12,000 criminal prosecutions have been presented around the country. For the first time in the history of Honduras, corruption charges have been pressed against 73 high- and mid-level government officials, including national and local political officials.

USAID continues to play an important role in helping to ensure free and fair electoral contests and to enhance political competition. USAID has helped to create impartial and open electoral laws and regulations and has supported the establishment of accountable and effective electoral institutions:

*In 1996 Ecuador, Nicaragua, and the Dominican Republic conducted free and fair national elections. USAID support was particularly important in galvanizing nongovernmental organization (NGO) involvement in important election activities such as voter registration and domestic electoral observation.

Nongovernmental organizations constitute a vital channel for sharing information and conveying the interests of ordinary men and women to the institutions of government. A vibrant civil society also protects individuals and their communities from arbitrary or unilateral decisions by governments or economic interests.

USAID programs support the development of more transparent and accountable government by: increasing local government participation; increasing citizen access to government information; strengthening mechanisms to promote ethical standards in government; increasing civilian control over military and police forces; and strengthening the effectiveness and independence of legislatures andcivil society.

*A major regional trend toward decentralization has strengthened the role of local governments in promoting government responsiveness and civic participation. Eleven USAID bilateral missions support activities designed to promote decentralization and strengthen the capacity and responsiveness of local government.

*Eleven LAC countries are strengthening local governance and municipal development with USAID assistance. In Guatemala (1994) and Nicaragua (1995), new legislation has permitted municipalities to tax land. Costa Rica and El Salvador are considering similar measures. USAID funding and technical assistance have been key to Bolivia's successful launch of its landmark Popular Participation Program which promotes municipal government effectiveness and increased allocation of resources from the central government to municipalities.

*Legislative modernization projects in Bolivia, Honduras, El Salvador, Nicaragua and Haiti have increased legislators' and committees' access to non-partisan technical information; established budgetary oversight offices; improved bill drafting capacities; and encouraged reforms to promote legislative responsiveness to constituencies.

The FY 1998 Program

The transition to democracy in Latin America and the Caribbean is central to developing regional political stability, decreasing illegal immigration to the United States, increasing trade, and creating conditions which are favorable to positive economic growth. USAID's democracy programs in the LAC region 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.

Democracy funding in LAC will continue to support programs that strengthen the fragile democracies of the region. USAID has been one of the most active donors in this area, and LAC intends to continue its leadership role. USAID programming over the next few years will build on the successes of legal and administrative policy reforms which assure improved effectiveness, efficiency, and access to the justice system. USAID will continue to work with NGOs to build support for more responsive judicial systems and respect for human rights. Training programs will receive continued support to help deal with growing crime and assure respect for human rights in security force operations.

USAID assistance in the area of electoral institutions will be more focused. Emphasis will be placed primarily on broadening citizen participation in the political system. As countries move toward the direct election of local officials, increased emphasis will be placed on municipal elections.

LAC will continue to support and fund civil society programming in response to the explosion of NGO activity focused on building democratic societies. USAID bilateral missions will support broader civic education efforts, and the regional program will continue to support exchanges of information and technical assistance among key civil society NGOs and the creation of a regional network to improve those contacts. As part of the USAID's New Partnership Initiative, USAID missions will increasingly focus on local grass-roots organizations which interact with local government in expressing citizen concerns.

Local government strengthening and decentralization will continue to be a major thrust of USAID programming along with efforts to improve the accountability and legitimacy of key government institutions. Legislative strengthening will also continue to be funded as targets of opportunity emerge.

Agency Goal: Stabilizing World Population and Protecting Human Health

Over the last 30 years, health trends in the LAC region have been encouraging, but significant challenges remain. Efforts to build democracy, accelerate economic growth, and use natural resources in a sustainable way can be successful in the long run only if children are educated and families have access to primary health services. These demands can be met only if population growth is reduced. Smaller families tend to produce children who are healthier, better educated, and earn more. Fewer, more productive adults ultimately buy more U.S. goods and services and participate more in democratic processes. USAID's role in the hemisphere as a leader in public health will be key to encouraging the multilateral development banks and other donors to increase their assistance levels in this sector.

USAID Assistance is Achieving Results

Over the past three decades, the United States has invested substantial resources to improve population, health and nutrition conditions in the Americas. These investments are paying off.

Unintended pregnancies are being reduced.

*The contraceptive prevalence rate (CPR) is improving. For example in Guatemala, CPR increased from 27% in 1987 to 31% in 1995. Among indigenous Mayan couples, the CPR almost doubled from 5.5% to 9.6%. In the Dominican Republic, USAID-supported CARE programs in the three border regions showed CPR increases from 47% in 1993 to 63% in 1995.

Child mortality rates are being substantially reduced.

*Important advances in vaccination coverage were reported for 1995. Region-wide, over 80% of children were fully vaccinated by their first birthday. Accomplishments in Honduras were particularly high; 95% of all children were vaccinated. In Peru, where USAID is the principal donor to vaccination programs, measles coverage increased from 74% in 1994 to 96% in 1995. Region-wide, there were only 2,741 cases of measles in 1994, a 99% drop from the over 200,000 cases reported in 1990.

Maternal mortality is also being reduced.

*Bolivia has decreased its maternal mortality rate from 480/100,000 in 1989 to 390/100,000 in 1994. Efforts to track the maternal mortality rate and affect a decrease in these rates are underway in other USAID Missions, especially in Peru.

Efforts are underway to reduce sexually transmitted infections and HIV transmission.

*Condom distribution and Behavior Change Communication strategies are important parts of USAID's HIV/AIDS prevention programs. In Brazil, following the introduction of the USAID-sponsored social marketing brand, condom sales increased 61% from 1994 to 1995.

*There has been an increase in the treatment of sexually transmitted diseases (STDs), which can be a co-factor for transmission of HIV. In Haiti, the treatment of STDs increased dramatically from 10% in 1991 to 69% in 1995. In Bolivia, for some groups at high risk for AIDS, USAID assistance helped reduce sexually transmitted disease by up to 35%.

The FY 1988 Program

The USAID strategy relies on achieving 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.

The heads of state endorsed two critical concepts in the Summit of the Americas plan of action: equitable access to a basic package of health services; and reforms in management and financing to ensure such access. USAID's strategy for population and health emphasizes high-impact, lower-cost basic services, such as child survival, maternal health, family planning, sexually transmitted diseases and HIV/AIDS. Access to and impact of such services will be improved where current availability is poor, as in Haiti, Guatemala, and Bolivia. In countries where access is better, such as Ecuador and Jamaica, sustainability and quality of such services will be improved.

USAID is engaging governments at the policy and operational levels to allocate resources more cost-effectively, to decentralize population, health and nutrition services, to recover and contain costs, and to encourage an appropriate service delivery mix by government, NGO and for-profit providers. Reproductive health activities are being expanded to link or integrate family planning with other high-priority activities, including prenatal and postnatal care, safe delivery, diagnosis and treatment of sexually transmitted diseases. LAC's approach to HIV/AIDS programming is being revised and updated to respond to transnational patterns of transmission, multi-country issues and changing transmission patterns within the region.

The LAC region has been the world leader in immunization programs with the recent certification that polio transmission has been ended only the latest example. Building on the success of polio elimination, measles now has been targeted for elimination by the year 2000. USAID will continue to focus on reducing child mortality by sustaining gains in vaccination and diarrheal disease control, while increasing attention to acute respiratory infections. Regional activities will facilitate an understanding of lessons learned among countries and will strengthen their efforts to design, implement, and monitor programs in the sector.

Agency Goal: Encouraging Sound Environmental Management

Awareness is growing throughout the LAC region that environmental degradation, economic decline, and social and political instability are closely linked. Addressing environmental issues requires dealing with factors that affect public welfare and human rights, as well as the physical resources on which life depends. Sound environmental and natural resource management is no longer perceived as a luxury, but as an integral part of growth -- a principle that must be followed if the benefits of development are to be realized and human welfare maintained and enhanced.

USAID Assistance is Achieving Results

Examples of recent accomplishments attributable to USAID efforts are:

*In Guatemala, USAID has worked closely with the government to expand the country's national park system from 148,000 acres to 2 million acres. As a result, key areas of the Peten forest the largest tropical forest in Latin America north of the Amazon -- are now protected.

*Nearly three million acres of agricultural and forest land have been brought under modern management systems in six countries (Guatemala, Honduras, Jamaica, Nicaragua, Panama, and Peru) through 1993.

*The protection of over 20 million acres of habitat for globally significant biodiversity in 39 parks has been significantly improved.

*An innovative solid waste program in the shantytowns of Lima, Peru is run by four women-owned and managed microenterprises. These businesses collect domestic solid wastes, reclaim recyclables, and dispose of the remainder in sanitary landfills, thus improving sanitation, protecting the environment, and providing employment for local men and women.

The FY 1988 Program

USAID focuses its activities under this agency goal on the four most important renewable resources for sustainable development: forests, water resources, agricultural lands, and coastal resources. The new budget realities have resulted in a shift in the types of programs. To maximize the impact of USAID's reduced resources, a greater proportion of our budget is now placed on policy reform, on regional and sub-regional approaches, on forming stronger alliances with our NGO partners, on trying to leverage and coordinate with other bilateral donors and the multilateral investment banks, and on engaging the resources of the private sector.

USAID programs help improve the management of protected areas and promote sustainable use of biological resources. Sustainable land management strategies are helping to reduce pressure on biodiverse ecosystems. Endowment funds represent long-term, stable sources of conservation financing and USAID has helped launch a variety of mechanisms to build financial solvency in local governments and conservation organizations. One of the highest priorities is to increase grass-roots commitment to conservation, especially among those communities living in and around parks and reserves.

In past years, USAID's environmental programs in LAC countries focused on "green" environmental issues--promoting sustainable agriculture, sustainable management and conservation of natural forests, and conserving biodiversity. Given the increasing impact of pollution due to rapid industrialization and urbanization, USAID is addressing "brown" issues, including conservation and sustainable energy management; and urban and industrial pollution. USAID assistance to governments in developing and implementing sound environmental regulations will not only improve the quality of life in LAC countries will enable them to meet the environmental standards which will be part of the Free Trade Area of the Americas.

By the end of FY 1998, an additional three million acres of land will be brought under sustainable use; five million acres of globally significant habitat will be protected in 10 additional parks; and an additional 52,000 individuals will be trained in environmentally and economically sound production techniques. In addition, USAID, through the LAC Bureau and its field missions will build upon urban and pollution prevention activities begun under the Environmental Initiative for the Americas.

MANAGEMENT CHALLENGES

Resource Allocation. The USAID strategy of advancing broad-based economic growth, building democracy, stabilizing population growth, and protecting the environment and natural resource base is most effective through progress in each of these mutually inter-dependent and reinforcing areas. Therefore, the assistance strategy for the LAC region places major emphasis on the need for full sustainable development programs that address the connections linking each strategic area. The challenge for USAID is to achieve these objectives with limited resources.

Resource allocations in the LAC region reflect U.S. national interests, program performance and overall country development performance. Resources are allocated to twelve sustainable development countries (Haiti, El Salvador, Nicaragua, Bolivia, Peru, Guatemala, Honduras, Jamaica, Ecuador, Paraguay, Guyana and the Dominican Republic) to achieve strategic objectives in economic growth, environment, democracy, and population and health. Three of the four other sustainable development programs (Brazil, Mexico, and Colombia) focus on specific global concerns, such as environment, AIDS, and population growth. The fourth program, Panama, addresses a major U.S. interest, the successful implementation of the Panama Canal Treaty. 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. Through more precisely defined, programmatic focus and management efficiencies, LAC programs will be implemented with stable to declining staff levels in the field and in Washington.

LAC programs are primarily financed through Development Assistance. Several of the LAC sustainable development programs are in countries which are undergoing the transition from war to peace (El Salvador, Nicaragua, and Guatemala) which 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, and/or P.L 480 Title 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. Limited programs are also implemented with Development Assistance in several countries in which the U.S. has a specific national interest, i.e. Panama, or in which there are major issues of global concern ( Mexico, Brazi and Colombia).

Status of Close-out Programs. Country programs in Argentina and Uruguay were closed out by the end of FY 1995 and programs in Belize, Chile, Costa Rica, and the Regional Development Office in Barbados were closed by the end of FY 1996. A recent Agency review of country programs determined that two additional country missions may have to be terminated in the years 1999 and 2000, although support for certain programs may continue from LAC regional activities.

Donor Coordination

Donor coordination is a critical tool to build on USAID's substantial investment in the region, leveraging additional resources to promote U.S. objectives. Multilateral development banks (MDBs) have assumed an increasingly important role in the poorer countries of the region where USAID has its major activities. USAID works closely with these multilateral development banks 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 resources when they enter these new lending areas. The Summit of the Americas also serves as an important framework for more extensive donor coordination.

The results of greater donor collaboration are evident. In Honduras, Bolivia and El Salvador, for example, USAID, the Inter-American Development Bank (IDB) and the World Bank have worked together 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 has established a joint working group on democratization in Latin America with the European Community. All these support U.S. objectives under the Summit of the Americas.

*USAID technical support and dialogue has helped the IDB and the World Bank redefine their land titling and registration activities for the LAC region. The IDB will direct $50 million to these activities in six countries, and the World Bank will providet $70 million in five countries.

*USAID technical support and dialogue has resulted in the IDB taking the lead in an effort to establish a $200 million regional agricultural technology fund that will generate approximately $10 million yearly for agricultural research in the hemisphere.

In Haiti, USAID played a strong leadership role coordinating donor support for reconstruction. USAID participated in programming missions with the IDB, the World Bank and other donors to develop major projects in primary education, potable water, and other social programs. IDB loan approvals to Haiti in 1995 reached $318 million. USAID collaboration with other bilateral donors, including the European Community, resulted in important judicial reforms in Haiti.

These efforts supporting U.S. objectives are the fruit of a strong USAID field presence. USAID influence has been further increased by placing advisors on site at the Inter-American Development Bank and the World Bank to assist the U.S. Executive Directors.

LATIN AMERICA AND THE CARIBBEAN

PROGRAM SUMMARY

FY 1998 Funding Request (in Thousands of Dollars)

COUNTRY	ENCOURAGING ECONOMIC GROWTH	STABILIZING POPULATION GROWTH and Protecting Human Health	PROTECTING THE ENVIRONMENT	BUILDING DEMOCRACY	PROVIDING HUMANITARIAN ASSIST.	TOTAL
BOLIVIA DA INCF PL 480 TITLE II	3,524 22,000	16,600	5,500	4,500 3,000	20,291	30,124 25,000 20,291
BRAZIL DA		5,500	5,500	150		11,150
DOM. REPUBLIC DA	1,100	5,570		2,700		9,370
ECUADOR DA	500	4,000	3,000	1,500		9,000
EL SALVADOR DA	12,010	11,125	6,500	3,600		33,235
GUATEMALA DA PL 480 Title II	4,488	12,215	4,635	2,000	12,122	23,338 12,122
GUYANA DA	700			1,500		2,200
HAITI ESF PL 480 TITLE II PL 480 TITLE III	13,200	24,800	10,000	22,000	14,314 10,000	70,000 14,314 10,000
HONDURAS DA PL 480 TITLE II	3,885	8,550	3,715	2,200	4,735	18,350 4,735
JAMAICA DA	2,750	5,000	3,350			11,100
MEXICO DA INCF	200	3,400	5,400	250 1,000		9,250 1,000
NICARAGUA DA PL 480 TITLE II	7,340	7,000	2,200	4,800	764	21,300 764
PANAMA DA	500		2.800			3,300
PARAGUAY DA		2,000	525	2,800		5,325
PERU DA INCF PL 480 TITLE II	6,153 20,000	23,040	3,400	1,900 5,000	48,917	34,493 25,000 48,917
CEN Regional DA	2,750	4,400	6,875			14,025
LAC Regional DA ESF INCF	22,000 20,000	4,000	6,500	5,400 26,000 2,000		37,900 46,000 2,000
TOTAL DA ESF INCF PL 480 TITLE II PL 480 TITLE III	67,900 33,200 42,000	112,400 24,800	59,900 10,000	33,300 48,000 11,000	101,143 10,000	273,500 116,000 53,000 101,143 10,000

Mark Schneider

Assistant Administrator

Bureau for Latin America and the Caribbean