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Progress and Problems in U.S. Aid to the Economic Unification of Central America

B-169350 Published: Aug 13, 1970. Publicly Released: Aug 13, 1970.
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Highlights

Since about 1950 Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua have been working toward economic unification. Objectives are to eliminate barriers to free trade, to develop common external tariffs, and to balance industrial development, including a free flow of capital and labor among the five countries. From July 1961 through the beginning of 1970, the Agency for International Development (AID) has budgeted about $143 million and has paid out $67 million for aid designed to accelerate the economic unification of Central America. AID's Regional Office for Central America and Panama, established in 1962, to encourage and support the Central American Common Market, is responsible for this program. Panama is not a party to the unification plans. This program is part of a larger economic assistance program to the five countries. Total external assistance was about $1.3 billion during the 8-year period. This is equal to about 31 percent of domestic revenues of the five countries, or about 20 percent of the export earnings. The United States provided about $1,017 million, or about 78 percent of the total external assistance. Because of congressional interest in multicountry economic development and the amounts of U.S. monies involved, the General Accounting Office (GAO) reviewed AID's efforts to help accelerate economic unification of Central America.

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