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ON THE LEFT: Pattern of declining support for region


US Congressional Research Service

ON THE LEFT: Pattern of declining support for region

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Should the Caribbean be worried about receiving reduced support from the United States?

 

The United States has long been a major contributor of foreign assistance to countries in Latin America and the Caribbean. Between 1946 and 2013, it provided over US$160 billion.

US assistance to the region spiked in the early 1960s following the introduction of President John F. Kennedy’s Alliance For Progress, an anti-poverty initiative that sought to counter Soviet and Cuban influence in the aftermath of Fidel Castro’s 1959 seizure of power.

After a period of decline, US assistance increased again following the 1979 assumption of power by the leftist Sandinistas in Nicaragua. US aid flows declined in the mid-1990s following the dissolution of the Soviet Union and the end of the Central American conflicts.

US foreign assistance to Latin America and the Caribbean began to increase once again in the late 1990s and remained on a generally upward trajectory through the past decade.

The establishment of the President’s Emergency Plan For Aids Relief in 2003 and the Millennium Challenge Corporation in 2004 provided a number of countries in the region with new sources of US assistance. More recently, the US provided significant amounts of assistance to Haiti in the aftermath of a massive January 2010 earthquake. Increased funding for counter-narcotics and security programmes also contributed to the rise in US assistance through 2010.

In 2010, Congress and the Obama Administration split the Central America portion of the Mérida Initiative into a separate Central America Regional Security Initiative and created a similar programme for the countries of the Caribbean known as the Caribbean Basin Security Initiative.

After more than a decade of generally increasing aid levels, US assistance to Latin America and the Caribbean began to decline in 2011. This was partially the result of reductions in the overall US foreign assistance budget.

The Obama administration and Congress sought to reduce budget deficits in the aftermath of the recent global financial crisis and US recession and identified foreign assistance as a potential area for spending cuts. US assistance to Latin America and the Caribbean decreased each year between 2010 and 2014. While aid to the region increased slightly in 2015, spending caps and across-the-board cuts that were included in the Budget Control Act of 2011, as amended, could place downward pressure on the aid budget for the foreseeable future.

As a result of stronger economic growth and the implementation of more effective social policies, the percentage of people living in poverty in Latin America fell from 44 per cent in 2002 to 28 per cent in 2013. Likewise, electoral democracy has been consolidated in the region. These changes have allowed the US government to concentrate its resources in fewer countries and sectors.

The Obama Administration’s 2016 budget request would increase assistance to Latin America and the Caribbean for a second consecutive year and reverse the reductions in aid to the region that have occurred since 2011. It included nearly US$2 billion for Latin America and the Caribbean, a 26 per cent increase over the estimated 2015 level.

The requested increase in assistance was almost entirely the result of the administration’s intention to allocate over US$1 billion in aid to Central America to promote prosperity, security, and good governance and to address the root causes of migration from the region. 

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