As he reflected on the ironies of his first term, Ronald Reagan must have found it remarkable that so many difficulties had arisen in what he thought of as America’s front yard. In comparison, the 1970s must have come to seem almost idyllic, at least on the surface; Mexico, Brazil and Venezuela had grown and prospered, the Panama Canal issue had been resolved. But then a double crisis—conflict in Central America and near bankruptcy almost everywhere—exploded just as Reagan’s watch began.
Of the two, Central America looked to be the bigger headache at the start of 1984. The debt problem was, to most Americans, an ominous but ill-understood technical exercise; Central America was quite another matter. With the presidential election campaign about to move into high gear, there was painfully little to show for the first three Reagan years. In El Salvador, the war was stalemated. The Sandinistas were consolidating their grip on Nicaragua. The economies of traditionally democratic Costa Rica and newly democratic Honduras were in a shambles. Guatemala had experienced one of the most repressive periods of its history. The Administration was vulnerable to a Democratic attack for failing to solve the Central American puzzle in its first three years.
The President decided to turn for advice and counsel to a national bipartisan commission, chaired by Henry A. Kissinger. Its report, submitted on January 10, 1984, concluded that Central America was indeed important to the United States, but circumstances there were ominous: a severe economic decline and "war and the threat of war" almost everywhere: "The hemisphere is challenged both economically and politically. While the double challenge is common to all of Latin America, it now takes its most acute form in Central America."
The report identified Nicaragua and El Salvador as the obvious flash points. The commission went beyond Administration policy to urge a negotiating effort to bring Nicaragua into a regional settlement based on the 21-point agreement of September 1983 among the Contadora countries—Mexico, Colombia,
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