Foreign Assistance:

U.S. Support for Caribbean Basin Assembly Industries

NSIAD-94-31: Published: Dec 29, 1993. Publicly Released: Feb 4, 1994.

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Pursuant to a congressional request, GAO reviewed the: (1) impact that U.S. policies and programs have on the growth of assembly industries in the Caribbean Basin and on U.S. investment in these industries; (2) relationship between foreign assistance prohibitions and other foreign assistance objectives; and (3) implications for future U.S. foreign assistance and trade policies in the Basin.

GAO found that: (1) U.S. foreign assistance policies and programs support the growth of assembly operations in the Caribbean Basin; (2) there are a number of factors that affect U.S. foreign investment decisions; (3) U.S. company officials cite access to cheap labor as the most important reason for establishing assembly operations in the Caribbean Basin; (4) assembly industries create jobs but provide an uncertain basis for future development in the Caribbean Basin; (5) assembly plants in the Caribbean Basin have a mixed impact on workers by providing employment with only a subsistence-level of income; (6) most of the 53 plants visited appeared to provide a reasonably safe and healthy working environment; (7) foreign assistance legislation does not provide the Agency for International Development (AID) with a clear mandate to take a new direction in private-sector development and trade and investment programming; (8) AID future orientation to private-sector development is uncertain; (9) the U.S. government lacks an overall export promotion strategy; and (10) AID is in the process of developing a new foreign assistance strategy and reorganizing its agency.

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