The economies of El Salvador, Guatemala, and Honduras remain sluggish as much of the rest of the Americas experience economic growth. This is due to a combination of high crime, poor education, corruption, and weak foreign investment. To further complicate matters, six million young Central Americans will be looking to enter a saturated labor force over the next decade.
In order to partner with El Salvador, Guatemala, and Honduras to meet the challenges of economic growth and job creation, President Obama has requested $1 billion from Congress to assist Central American leaders in making the difficult reforms and investments required to address the region’s interlocking security, governance and economic challenges. The United States can help promote prosperity and more equitable economic opportunity.
Leaders from all three countries have agreed to work on three areas. The first is security, which enables political stability and economic prosperity. The United States wants to help El Salvador, Guatemala, and Honduras improve public safety in their neighborhoods and more effectively pursue and prosecute transnational criminal networks.
Good governance is an integral part of the new U.S. approach to Central America. It is critical to make public expenditures, the courts, tax collection, and other government functions as fair and transparent as possible to create public trust. “Victims of crimes need to know that criminals will face justice,” said Vice President Joe Biden on his recent trip to Central America. “Citizens and businesses need to believe that the legal system works for them… not against them.”
Finally, more public sector investment is required, even with new international assistance, to address the scale of economic need. Central American economies can grow only by attracting more private sector international investment and making a more compelling case to their citizens to invest at home. This effort requires clear rules and regulations; protections for investors; courts that are trusted to adjudicate disputes fairly; serious efforts to root out corruption; protections for intellectual property; vibrant and critical civil society organizations; and transparency.
The cost of investing now in a secure and prosperous Central America, said Vice President Biden, is modest compared with the costs of letting violence and poverty fester. By balancing U.S. foreign assistance among prosperity, governance and security goals we can help set Central America on a better trajectory. The United States is committed to helping Central America become the embodiment of the Western Hemisphere’s rise – not an exception to it.