The Caribbean Basin Initiative

GAO discussed concerns arising from the Caribbean Basin Initiative (CBI) and identified certain premises that Congress and the administration should consider before acting on proposed legislation. GAO believes that economic recovery in the region depends on solving individual national problems, involvement by each recipient country, effective coordination of CBI funds, and a legal distinction between CBI funds and bilateral cash transfers. GAO noted that the proposed CBI to rehabilitate regional economies has caused several problems, because: (1) legislation designed to induce private sector firms to invest in Caribbean-based economies is lacking in details and specifics; (2) a reduction of tariffs on Caribbean imports will likely have an adverse affect on domestic competition; (3) CBI funds can be easily misused, and (4) new CBI initiatives will make it difficult to attain total coordination of the program.