US to Cut Foreign Aid to Latin America

UNITED States foreign aid for Latin America in 1994 is mostly bad news mixed in with a bit of good.

The Bad News: The end of the cold war means Latin America will be getting the cold shoulder when it comes to United States foreign aid. After pumping billions of US taxpayer dollars into Central America in the 1980s to fight the tide of communism and narcotrafficking, US military and economic aid in the region will drop at least 50 percent.

``The era of US foreign aid as a major factor in Latin American development is passing,'' says Carol Lancaster, deputy director of the US Agency for International Development (USAID).

The Clinton administration announced that the North American Free Trade Agreement (NAFTA) is the economic development model it hopes to see spread through Latin America. ``Trade instead of aid'' is seen as more politically palatable to US voters being asked to belt-tighten at home to balance their federal budget.

``NAFTA is an important symbol of the emerging relationship the US will have with the region,'' argues Ms. Lancaster, who was in Mexico Jan. 14 and 15 explaining the new policy to a hemispheric gathering of USAID mission directors.

Worldwide, more than half of the 108 USAID mission offices are scheduled to be closed over the next two years. The biggest cuts are in Latin America and Asia. The ax will fall on the USAID offices in Argentina, Belize, Chile, Costa Rica, and Uruguay. Also closing is a Caribbean regional office covering seven island nations.

Meanwhile, funding to some of the biggest aid recipients in the region will be lowered. For example, USAID's request for El Salvador in 1994 is nearly 50 percent less than the 1992 appropriation ($267 million), according to USAID's June 1993 congressional budget presentation. Honduras will take a similarly sized cut. Nicaragua will lose almost 60 percent of its bilateral aid, with a budget request for $66.8 million. Peru and Bolivia are also expecting cuts of around 30-40 percent.

And, it's not over yet. USAID officials are glossing over exact figures because they expect another round of budget cuts in the coming months.

But there is good news: Guatemalan and Mexican aid levels are expected to hold about level with 1993 spending.

Ironically, Mexico - the nation in the region most directly benefiting from NAFTA - owes its pardon to the fact that aid spending here fits the profile of new USAID priorities developed by the Clinton administration. USAID, which oversees slightly more than half of the $12 billion-a-year foreign assistance program, is being revamped. The 1961 Foreign Assistance Act created USAID to fund specific programs aimed at containing the Soviet empire. That raison dtre no longer exists.

The scaled-down, reoriented USAID agenda tackles the current ``threats to the peace, stability, and well-being of Americans'' by focusing on four broad objectives: population control, democracy-building, environmental protection, and sustainable economic growth.

Continued support for Guatemala falls into the democracy building category and is considered urgent given the aborted coup in May of 1993. ``We feel that this particular historic moment is the very worst one to be cutting back on external cooperation,'' said Guatemalan President Ramiro de Leon Carpio during a visit to Washington in late November.

Not a large slice of the overall USAID budget, but more than half of some $24 million spent this year in Mexico will go toward family planning programs. Because of immigration concerns, this has been a USAID funding priority for the last two decades in Mexico. Until two years ago, say USAID officials, all contraceptives distributed by Mexican government and private organizations were paid for by USAID. Now, the Mexican government picks up half of the tab and will soon cover the rest.

The Clinton administration has announced a boost in overseas population control spending from $325 million last year to $500 million this year. The goal ``is to provide family planning services to every woman in the world who wants them by the year 2000,'' said US State Department counselor Timothy Wirth this month.

Another large chunk of the aid budget in Mexico is spent on environmental programs. USAID is focusing its efforts on funding a number of wind and solar energy generation pilot projects in remote villages of Mexico where access to the electric power grid could still be years away. US officials see the projects as potentially opening a huge market for US manufacturers of renewable energy equipment.