Foreign Aid:

Questions on the Central American Regional Program Need To Be Resolved

NSIAD-86-209: Published: Sep 8, 1986. Publicly Released: Sep 8, 1986.

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In response to a congressional request, GAO discussed the evolution, status, and viability of the Agency for International Development's (AID) regional economic assistance programs for Central America.

GAO found that: (1) according to AID views, studies, and funding actions, extensive regional programs may not be viable; (2) Central American economic and political conditions were not conducive to regional assistance programs, in part because those countries were focusing on domestic issues; and (3) fundamental policy questions on the priority of regional assistance and the need to maintain the AID Regional Office for Central America and Panama (ROCAP) remained unanswered. GAO also found that: (1) AID obligations and expenditures for regional programs were less than planned, primarily due to cancellations or delays in major economic assistance projects the National Bipartisan Commission on Central America recommended; and (2) AID has used over half of its regional program funds for projects its Washington office, rather than ROCAP, managed; and (3) ROCAP is currently taking actions to improve coordination with the bilateral missions to enhance the impact of its existing projects and to better complement AID bilateral programs. GAO believes that the success of ROCAP programs to promote economic growth will depend in part on host country economic and political conditions, and external source flows and credit arrangements.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: AID indicated that it studied the priority and role of regional assistance and decided to retain ROCAP, but at reduced funding and staffing levels. The agency clarified the ROCAP role by addressing long-standing questions and will correct its official strategy statement by June 1, 1987.

    Recommendation: To resolve the long-standing controversy over regional programs and ROCAP, and in view of overall U.S. budget deficit reduction goals, the Administrator, AID, should examine the priority and role of regional assistance in Central America and the need to maintain ROCAP.

    Agency Affected: United States Agency for International Development

 

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