The 2018 Trump administration’s budget proposal calls for significant cuts to development assistance, including for democracy building programs, around the world in almost every significant category of spending. Latin America isn’t spared; some of the region’s poorest and most unstable countries—Nicaragua, Paraguay, Brazil, Venezuela, Ecuador and Jamaica—may see their development assistance cut completely. In all, total aid to Latin America and the Caribbean would be slashed by 36 percent.
Less than a year ago three of the major “sender” countries of immigrants (Guatemala, Honduras, and El Salvador) to the U.S. were about to receive the sort of assistance that would create the jobs and opportunities encouraging workers to stay. Under the Trump skinny budget that would be wiped out. Development aid originally intended to address the deterioration of law and order south of the border from Mexico to Nicaragua would drop by $290 million, leaving police, security forces and judges at greater risk of extortion and corruption. Is this the policy we want south of the U.S., so often decried by President Donald Trump as the soft underbelly of U.S. border security? It’s not; slicing support for programs that address the root problems is precisely the wrong way to go.
If adopted as proposed, Trump’s cuts to the State Department will reverse decades of advances and good will, and weaken U.S. policy objectives championed by the Trump administration, including reducing immigration and stemming the flow of narcotics into the country. But Congress, businesses and Latin Americans need to speak up as the budget is under discussion to highlight and defend the continued importance of development assistance programs. Those investments are essential to sustain U.S. power, economic opportunity and stability in the region.
During the second half of the 20th century, development assistance in the Americas was a keystone of U.S. foreign policy. During the Cold War, the U.S. spent millions of dollars to halt the spread of communism. Toward the end of the century, as the threat of communism disappeared, the U.S. focused on promoting development and stability in the hemisphere. In countries like Brazil and Argentina, the U.S. shifted its focus to programs to promote growth and regional cooperation, through education exchange and business training programs.
As Latin America developed economically and transitioned to elected governments, the U.S. shifted its strategy again. This time the emphasis was on the connection between economic development and greater political freedom and democracy. That coincided with shrinking budget for the United States Agency for International Development (USAID), and the amount of political and economic openness in the region. The result was the opportunity to address the critical, synergistic nexus between economic and political development.
But the reduced resources and the opportunities presented by positive developments in the region opened a window. As former Ambassador and Assistant Secretary of State for Inter-American Affairs Alexander Watson explained, “In Latin America the traditional USAID, which is no longer loans but grants, is relevant in very specific situations addressing very specific problems.” The problem, he added, is that the one-time icon of U.S. development assistance, no longer has “the kind of scope it used to have.”
Despite the reduced resources and the shift from large loans—which were the cornerstone of aid strategy in the 1960s and 1970s and gave USAID an outsize role in policy discussions in the region—the political openings in terms of improved governance and greater accountability and an uptick in the global economy presented a turning point in U.S. development relations. Some countries were better positioned—because of previous political and economic reforms—to seize these opportunities. For others that weren’t there yet, the goal of U.S. assistance was to give an institutional and political boost. Mark Feierstein, former special assistant to the President in the Obama administration and assistant administrator for Latin America and the Caribbean in USAID explained, “A goal of development assistance should be to help countries reach the point where they no longer need foreign assistance—to graduate countries, if you will. Countries like Argentina, Chile and Costa Rica used to receive foreign aid. Other countries, like Colombia, Peru and Mexico, should aspire to reach the point where they no longer need foreign aid either.” In recent years, USAID has focused on helping them reach that stage.
Trump’s proposed budget risks not just diminishing the U.S.’s role in the region without regard for the specific, focused changes in aid strategy, it also falls far wide of the need to address the shifting context and impact of U.S. foreign assistance. U.S. aid programs in the Western Hemisphere face drastic cuts in the areas of foreign military financing; food security; counterterrorism; democracy and humanitarian assistance; economic growth, education, and environmental; global health; international security and nonproliferation; and oceans and international environmental and scientific affairs. USAID in Central America is cut by almost 75 percent and USAID in the Caribbean is cut by 62 percent.
The cuts in the Trump budget seem to have been proposed without regard for the socioeconomic and political realities of the region and the administration’s own policy objectives. Beyond the cuts to the Central American budget mentioned above, the proposed deep cuts in aid to Colombia (a 16.1% reduction in the Trump budget) is a genuine threat to the success of the peace process between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC). The peace process is largely the fruit of a bipartisan development assistance program stretching back to the administration of President Bill Clinton. Under Trump’s current plan, U.S. aid to Colombia would be reduced, affecting reintegration and state building programs in conflict affected areas at a time when the country already confronts the demobilization of more than 7,000 former FARC combatants. No stranger to the challenges of post-conflict and anti-narcotics programs, Ambassador Watson said, “Funding for Colombia to attend to post-conflict areas is absolutely crucial to increase presence in rural zones and coca growing areas and to deploy assistance to victims. In Mexico cuts in the counter-narcotic enforcement efforts is pretty disturbing, to say the least.”
And in Haiti, the proposed reductions in assistance threaten to exacerbate the island’s suffering. According to the proposal, aid to Haiti would be cut by 17.5 percent, taking the U.S. budget for the island from $190 to $157 million approximately. To put it in context, Haiti is the poorest country in the region, ranking as the sole country in Latin America categorized in the Low Human Development category (163 out of 188 in the world).
It’s the administration’s cuts in Central America that most conflict with the Trump government’s own objectives. According to Feierstein, “[A solution to the migrant crisis] will not be achieved by building a wall but by investing in these countries, creating jobs and better life opportunities and reducing violence.” Watson echoed Feierstein’s sentiments about cuts to Central America—“If you cut back on that stuff you’ll be shooting yourself in the foot.” He also expressed his concerns for the proposed cuts in counter-narcotic operations in Mexico for the same reasons.
Perhaps the most troubling, long-term impact of the proposed budget cuts is that it distracts from a real debate that needs to happen: the role of U.S. development assistance in a changing world and region. U.S. development assistance can and needs to be a tool in U.S. foreign policy. And that role needs to be addressed in context. This budget proposal is not the way to start that discussion. Though both Watson and Feierstein endorse a managed, intelligent scaling back of development aid in parts of the Americas where sustained growth and stability have been achieved, they share concerns about the drastic and seemingly counter-strategic nature of Trump’s proposed budget.
The good news for the region? Trump’s budget is probably dead on arrival. If politicians, business interests, and Latin American governments can coordinate their shared interests and concerns, it’s likely that stakeholders can convince Congress and the Trump administration that cutting development assistance across the board will handicap the growth and stability of some of the U.S.’s closest trading partners and allies and diminish U.S. influence in the region. And in a shifting geopolitical environment that would leave a vacuum that would likely be filled from outside the hemisphere (we’re looking at you, China).
Instead of drastic reductions in assistance across the board, voices from around the Americas need to step up to explain how development assistance can be scaled back thoughtfully and strategically, all with a clear-eyed focus on U.S. interests. We think that can happen.
