Central America: Real Economic Help is Workable Now
The political problems of Central America and their implications for the United States naturally have been foremost in the minds of those few Americans who have thought about the area at all. U.S. involvement historically has been motivated mainly by political considerations, and political events dominate the media currently. The economic situation today, however, is the one that requires our most urgent attention. In Central America's current state, political solutions are more likely to flow from economic events than the other way around. The people of Central America want jobs and food more than they want either revolution or elections; they cannot understand why we don't help.
William H. Bolin retired this year as Vice Chairman of the Bank of America NT&SA, and is currently a Senior Fellow at the Latin American Center, University of California, Los Angeles. Throughout his career with the Bank since 1947, he was involved in lending operations to less-developed countries, especially in Latin America, where he lived for a total of ten years, including three- and-a-half years in Central America. He was Chairman of the International Division of the American Bankers Association in 1982-83, and has served as Director or Trustee of the Overseas Development Council, the Council of the Americas, Pan American Development Foundation and the Committee for the Caribbean (now Caribbean-Central American Action).
The political problems of Central America and their implications for the United States naturally have been foremost in the minds of those few Americans who have thought about the area at all. U.S. involvement historically has been motivated mainly by political considerations, and political events dominate the media currently. The economic situation today, however, is the one that requires our most urgent attention. In Central America's current state, political solutions are more likely to flow from economic events than the other way around. The people of Central America want jobs and food more than they want either revolution or elections; they cannot understand why we don't help.
Ask Central Americans in any country or any walk of life today where they want American involvement, and nine out of ten will reply in economic terms. Most realize that there are definite limitations on the possible degree of American political or military involvement-and most are glad.
Not so with economic involvement. It is a matter of eternal puzzlement to our Central American neighbors that, after the vast sums we have spent in the most distant arenas of the world power struggle, we cannot muster the modest amounts that now would make such a telling difference in their small economies. That perception and the resulting frustrations and resentment can produce populations widely hostile to the United States-for the first time. Such a possibility, in my view, is the most worrisome Central American threat to U.S. long-term security, and to its moral position in the hemisphere.
In its report of January, the National Bipartisan Commission on Central America-generally known as the Kissinger Commission-recommended a five-year program of economic aid for Central America. At the time of writing, that recommendation is before the Congress and its disposition is uncertain. Many, both in the Congress and in the public at large, are concerned that an economic program cannot begin to take effect for some time, and that the resources required may be too vast to contemplate at the present moment, particularly given the overall budget situation.
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There is a distinct rumble. Is it the noise of an impending second crisis of Latin American and other developing country debtors, or is it the start-up of world economic recovery, which will gradually pull lenders and borrowers alike away from the edge of a financial abyss?
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Many argue that forgiving international debts will help relieve poverty in the world's poorest countries. But an enormous amount of money is already given to aid the poor, with little of it reaching those in need. Widespread corruption, weak political institutions, and a lack of accountability all hinder the provision of important social services in developing countries. The international community must figure out a way to ensure the proper use of debt-relief dollars-before the problems plaguing many of the world's poorest countries grow any worse.
