Central America:

Impact of U.S. Assistance in the 1980s

NSIAD-89-170: Published: Jul 11, 1989. Publicly Released: Jul 11, 1989.

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Pursuant to a congressional request, GAO reviewed U.S. assistance to Panama, Belize, and the five Central American countries of Nicaragua, El Salvador, Honduras, Guatemala, and Costa Rica, focusing on the assistance's promotion of U.S. policy objectives in the areas of regional security, democracy, economic stabilization and structural adjustment, and development.

GAO found that: (1) U.S. military and economic assistance to the countries totalled more than $6.5 million during fiscal years 1981 through 1988; (2) the countries' continued regional conflicts, slow economic recovery, and long histories of governmental weaknesses, extreme poverty, and political violence limited their accomplishment of assistance objectives; and (3) U.S. sanctions against Panama and Nicaragua contributed to their already serious economic problems. GAO also found that U.S. assistance: (1) halted further Soviet expansion into Central America, although insurgency, military build-ups, and institutional weaknesses hampered countries' progress toward peace and stability; (2) helped to maintain Costa Rica's and Belize's relatively stable democracies and supported democratic transitions in El Salvador, Guatemala, and Honduras; (3) improved the countries' overall human rights situation; (4) helped the countries achieve judicial reform, although continuing violence, inequitable socioeconomic conditions, and corruption posed significant challenges to the fragile democracies; (5) helped to halt economic decline in El Salvador, Honduras, Belize, Costa Rica, and Guatemala, although each of those countries remained dependent on external assistance; and (6) helped countries to maintain higher living standards, although they remained constrained in their ability to generate jobs and improve inequitable economic conditions.

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