[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
ASSESSING THE IMPACT OF CUTTING
FOREIGN ASSISTANCE TO CENTRAL AMERICA
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
THE WESTERN HEMISPHERE, CIVILIAN SECURITY, AND TRADE
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 25, 2019
__________
Serial No. 116-65
__________
Printed for the use of the Committee on Foreign Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available: http://www.foreignaffairs.house.gov/, http://docs.house.gov,
or www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
37-708 PDF WASHINGTON : 2020
COMMITTEE ON FOREIGN AFFAIRS
ELIOT L. ENGEL, New York, Chairman
BRAD SHERMAN, California MICHAEL T. McCAUL, Texas, Ranking
GREGORY W. MEEKS, New York Member
ALBIO SIRES, New Jersey CHRISTOPHER H. SMITH, New Jersey
GERALD E. CONNOLLY, Virginia STEVE CHABOT, Ohio
THEODORE E. DEUTCH, Florida JOE WILSON, South Carolina
KAREN BASS, California SCOTT PERRY, Pennsylvania
WILLIAM R. KEATING, Massachusetts TED S. YOHO, Florida
DAVID N. CICILLINE, Rhode Island ADAM KINZINGER, Illinois
AMI BERA, California LEE ZELDIN, New York
JOAQUIN CASTRO, Texas JIM SENSENBRENNER, Wisconsin
DINA TITUS, Nevada ANN WAGNER, Missouri
ADRIANO ESPAILLAT, New York BRIAN MAST, Florida
TED LIEU, California FRANCIS ROONEY, Florida
SUSAN WILD, Pennsylvania BRIAN FITZPATRICK, Pennsylvania
DEAN PHILLIPS, Minnesota JOHN CURTIS, Utah
ILHAN OMAR, Minnesota KEN BUCK, Colorado
COLIN ALLRED, Texas RON WRIGHT, Texas
ANDY LEVIN, Michigan GUY RESCHENTHALER, Pennsylvania
ABIGAIL SPANBERGER, Virginia TIM BURCHETT, Tennessee
CHRISSY HOULAHAN, Pennsylvania GREG PENCE, Indiana
TOM MALINOWSKI, New Jersey STEVE WATKINS, Kansas
DAVID TRONE, Maryland MIKE GUEST, Mississippi
JIM COSTA, California
JUAN VARGAS, California
VICENTE GONZALEZ, Texas
Jason Steinbaum, Staff Director
Brendan Shields, Republican Staff Director
------
Subcommittee on the Western Hemisphere, Civilian Security, and Trade
ALBIO SIRES, New Jersey, Chairman
GREGORY W. MEEKS, New York FRANCIS ROONEY, Florida, Ranking
JOAQUIN CASTRO, Texas Member
ADRIANO ESPAILLAT, New York CHRISTOPHER H. SMITH, New Jersey
DEAN PHILLIPS, Minnesota TED S. YOHO, Florida
ANDY LEVIN, Michigan JOHN CURTIS, Utah
VICENTE GONZALEZ, Texas KEN BUCK, Colorado
JUAN VARGAS, California MIKE GUEST, Mississippi
Alexander Brockwehl, Staff Director
C O N T E N T S
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Page
WITNESSES
McFarland, The Honorable Stephen, Former U.S. Ambassador to
Guatemala...................................................... 7
Gonzalez, Mr. Juan, Associate Vice President, The Cohen Group,
Former Deputy Assistant Secretary of State for Western
Hemisphere Affairs............................................. 17
Jones, Mr. Rick, Senior Technical Advisor for Latin America,
Catholic Relief Services....................................... 22
Rooney, Mr. Matthew, Managing Director, Bush Institute-SMU
Economic Growth Initiative, The George W. Bush Institute....... 30
APPENDIX
Hearing Notice................................................... 49
Hearing Minutes.................................................. 50
Hearing Attendance............................................... 51
OPENING STATEMENT OF CHAIRMAN SIRES
Opening statement submitted for the record from Chairman Sires... 52
RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD
Responses to questions submitted for the record from
Representative Guest........................................... 55
ASSESSING THE IMPACT OF CUTTING FOREIGN ASSISTANCE TO CENTRAL AMERICA
Wednesday, September 25, 2019
House of Representatives
Subcommittee on the Western Hemisphere,
Civilian Security, and Trade
Committee on Foreign Affairs
Washington, DC
The subcommittee met, pursuant to notice, at 2 p.m., in
room 2172 Rayburn House Office Building, Hon. Albio Sires
(chairman of the subcommittee) presiding.
Mr. Sires. Well, good afternoon. First of all, I want to
thank everybody, all our witnesses for being here today. I
convened this hearing to examine the damage caused by President
Trump's decision in March to cut $400 million in U.S.
assistance to the Northern Triangle.
The Trump Administration did not consult with Congress
before it decided to cut these funds. Moreover, administration
officials have openly acknowledged that they did not even
assess the effectiveness of our existing program or the impact
of these programs on migrant flows for the United States before
reaching their decision.
In other words, the Administration displayed an astonishing
level of contempt for Congress and a blatant disregard for the
will of the American people.
I think I speak for many of my colleagues in saying that
this is not how the United States should conduct foreign
policy. In my visit to the region, I have seen firsthand the
impact of our programs on the ground. The U.S.'s strategy for
Central America was designed to improve quality of life in
Honduras, El Salvador, and Guatemala, in order to address the
root causes of migration.
This strategy enabled important progress in a short period
of time. Our assistance helped reduce homicide rates in El
Salvador by more than 50 percent in municipalities where USAID
operated.
In Guatemala, our programs helped create over 78,000 new
jobs in the Western Highlands and Peten Department alone. In
Honduras, our programs helped lift 90,000 people out of extreme
poverty. These are certain areas where our strategy could be
improved upon, and I would welcome an honest conversation about
ways the U.S. could better advance our objectives in the
region.
However, arbitrarily cutting assistance to the region is
absolutely the wrong approach. I strongly oppose President
Trump's decision to cut funding for this program. I commend my
colleagues on both sides of the aisle who have spoken out
against this illogical decision. It would directly undermine
U.S. interests.
I represent a district that is nearly two-thirds Latino.
Many of my constituents are first-generation and second-
generation immigrants from Central America. I repeatedly hear
from my constituents that they did not want to leave their home
countries and leave behind family members. They migrated as a
last resort.
The Trump Administration seems to believe that they can
stop migration by eliminating the right to seek asylum,
encouraging governments in the region into stopping people from
leaving the countries at all. The Administration clearly does
not understand the level of desperation felt by many of those
who make the dangerous journey north. Criminalizing desperation
will only make conditions more precarious for those who have
decided that leaving home is the only option.
I believe that the U.S. must, instead, work as a partner to
help create conditions whereby Hondurans, Guatemalans, and the
Salvadorans can see a future in their home countries.
I was proud to be an original co-sponsor of the Northern
Triangle Enhanced Engagement Act led by Chairman Engel and
Ranking Member McCaul, which passed the House in July. And I
urge my Senate colleagues to urgently pass this bill.
I also thank my friend, Congressman Yoho of Florida, for
working with me on a resolution that highlighted the importance
of continuing our engagement with the Northern Triangle. I
appreciate the efforts of Ranking Member Rooney, who worked
with me, along with Chairman Engel and Ranking Member McCaul,
on the letter we sent to President Juan Orlando Hernandez of
Honduras, urging him to extend the mandate of the mission to
combat corruption and impunity in Honduras.
There is a tremendous and bipartisan agreement within
Congress that we must engage the Northern Triangle countries in
order to enhance security and prosperity and combat corruption.
I hope we can continue to work together on a bipartisan
basis to ensure our policy toward the region advances U.S.
interests and truly addresses the root causes of migration.
Thank you, and I now turn to Ranking Member Rooney for his
opening statement.
Mr. Rooney of Florida. Thank you, Mr. Chairman. Thank you
for holding this important hearing.
The United States and the Central American countries of
Guatemala, Honduras, and El Salvador--the Northern Triangle--
are inextricably linked by geography and deep cultural roots.
We have mutual concern about the illegal migration into the
United States and the economic and security challenges which
precipitate it.
These countries are among the most violent and poorest in
the world. The United States' foreign assistance to these
countries is a critical tool that we can deploy to nurture a
secure and stable Northern Triangle and improve security in the
region. Between 2016 and 2018, the United States allocated over
$800 million in foreign assistance to the Northern Triangle, to
confront the transnational gangs like MS-13 and to strengthen
democratic institutions and try to spur economic development.
We have made some successes like the Feed the Future
Initiative in Honduras, where beneficiaries are 78 percent less
likely to immigrate than the Honduran population as a whole.
U.S. security assistance programs have provided technical
assistance to prosecutors, and training for investigators, to
strengthen the justice system in the Northern Triangle
countries. In El Salvador, from 2015 to 2018, crime dropped 53
percent, in part because of U.S. assistance programs dealing
with the prevention of violence and in support of local law
enforcement to investigate and prosecute MS-13.
U.S. assistance programs have provided economic
opportunities to young people, and provided help for victims of
human trafficking, and have encouraged protection of human
rights defenders, and have addressed food insecurity during
times of critical drought.
Despite this good work, we must acknowledge where our
efforts have fallen short. Regional migration is overwhelming
our borders. Between 2018 and August 2019, immigration
officials at our southern border apprehended approximately
590,000 migrants from the Northern Triangle, which has
contributed to the ongoing crisis at the border.
Further, while violence in the Northern Triangle has been
reduced, the homicide rate remains excessive--3,800 homicides
per 100,000 citizens--one of the highest rates in the world,
and the global average is only 6 per 100,000.
Systemic corruption plagues the region, and unemployment
and limited access to jobs are pushing migrants to seek better
opportunities abroad. We must remain committed to solving these
issues, and U.S. foreign assistance is a big part of the
solution.
In the last few months, about $500 million of Fiscal Year
2017 and 2018 foreign assistance to the Northern Triangle has
been cut. I am deeply concerned about the negative impact this
will have on these countries and on flight migration toward the
United States.
Congress is responsible for ensuring that any adverse
results from these cuts are monitored and addressed with future
funding. Strong oversight of our aid is essential, not only to
guarantee responsible spending of taxpayer dollars but to
ensure that we have clear objectives and are adjusting our aims
for maximum results.
Moving forward, we need to make sure that our foreign
assistance improves the region's physical and economic security
and strengthens civil society. We need to support economic
development and encourage private sector engagement in order to
raise wages, create jobs, and boost the regional economies.
We must also recognize the need to address climate change
and its impact on regional agriculture. Areas in the Northern
Triangle have experienced five straight years of drought,
leading to a continuous crop loss, depletion of food reserves,
and an increase in the price of basic agricultural products.
The coffee sector, one of the region's most important
export industries, has been devastated by a fungus called
coffee leaf rust, which has led to a significant decline in
coffee production.
Let me be clear: U.S. foreign assistance cannot solve all
of these challenges alone. Ultimately, the governments of the
Northern Triangle are responsible for addressing their domestic
needs. New administrations in Guatemala and El Salvador offer
opportunities for cooperation on issues of mutual importance.
Just last week President Bukele of El Salvador agreed on an
asylum cooperation agreement with the United States. This will
only be successful if El Salvador has the support and resources
to develop a really functioning asylum system. I am concerned
about the void in withholding aid would create, a void that
China is more than willing to fill at the expense of our
interests, which would erode our regional credibility and allow
China further to embed their hegemony in our hemisphere; for
example, like the port that the State Department, fortunately,
blocked in El Salvador.
This Congress, I was proud to be an original co-sponsor
with Chairman Sires and the other leaders of the committee of
the United States-Northern Triangle Enhanced Engagement Act,
which authorizes funding and a strategy for addressing the
drivers of illegal immigration. I hope to work further with the
Administration to ensure that our foreign assistance is
effective.
Lastly, I want to commend the Administration and the
governments of the Northern Triangle for continuing to find
ways to resume our assistance in the region.
I look forward to the testimonies and opinions of all of
you today. Appreciate you coming.
And, Mr. Chairman, I yield back the rest of my time.
Mr. Sires. Thank you very much, Ranking Member Rooney.
I will now introduce The Honorable Stephen McFarland,
former U.S. Ambassador to Guatemala. McFarland served as
Ambassador from 2008 to 2011. Prior to his appointment,
Ambassador McFarland served as a U.S. Foreign Service Officer
throughout Latin America for over 30 years, specializing in
democratic transitions, peace processes, human rights, and
security.
Most recently, Mr. McFarland directed the implementation of
USAID's Access to Justice Activity Project in Columbia. We
welcome you to the hearing.
We will then hear from Mr. Juan Gonzalez, former Deputy
Assistant Secretary of State for Western Hemisphere Affairs.
Mr. Gonzalez has spent his career specializing in Western
Hemisphere policy. Prior to his appointment, he served as the
National Security Director for Western Hemisphere Affairs under
the Obama-Biden administration.
He was instrumental in the creation of the U.S. strategy
for engagement in Central America. Mr. Gonzalez holds a
master's degree from Georgetown University's Walsh School of
Foreign Service where he is an adjunct faculty member in the
Center for Latin American Studies. Thank you for being here.
We will then hear from Mr. Richard Jones, the senior
technical advisor in Latin America and the Caribbean for the
Catholic Relief Services. Jones has lived and worked in Latin
America for nearly three decades and has spent the past 20
years with Catholic Relief Services, directing programs on
violence prevention and migration.
He holds a master's in international relations from Johns
Hopkins School for Advanced International Studies. Thank you
for joining us.
Finally, we will hear from Mr. Matthew Rooney--no relation
to Mr. Francis Rooney--a former Foreign Service Officer and
Deputy Assistant Secretary then responsible for relations with
Canada and Mexico, and for regional economic policy. He also
served as counselor for economic and commercial affairs at the
U.S. Embassy in El Salvador and as counsel general in Munich.
Mr. Rooney holds a master's degree in international
management at the University of Texas at Dallas. Thank you for
your service, and thank you for joining us.
I ask the witnesses to please limit your testimony to 5
minutes. And without objection, your prepared statements will
be made part of the record.
Ambassador McFarland, I now turn to you.
STATMENT OF THE HONORABLE STEPHEN McFARLAND, FORMER U.S.
AMBASSADOR TO GUATEMALA
Mr. McFarland. Thank you, Mr. Chairman. Mr. Chairman, Mr.
Ranking Member, distinguished members of this committee, it is
a real honor to be present at this hearing, along with my
esteemed former colleagues, Juan Gonzalez and Matthew Rooney,
as well as Mr. Rick Jones.
My work in Central America began in the 1980's under
President Reagan, continued up to President Obama, and I can
attest that U.S. policy in that region is strongest when it has
bipartisan congressional involvement and support.
As foreign service officer and as an ambassador, I spent a
lot of time outside the traditional power centers--in the
countrysides, in poor neighborhoods of Guatemala and El
Salvador, not to mention Iraq and Afghanistan. I met with
ordinary people who lacked power and influence, and I came to
understand how Central Americans become frustrated with
governments, how many of them migrate to the United States, not
just for income and safety but also to achieve hope and
dignity.
One time in 2002 I joined a USAID-funded acute child
malnutrition project, working in Guatemala's countryside. The
team identified a child who was dying of hunger. We convinced
the mother and the father to take the girl to the feeding
station. Two years old, she only weighed 9 pounds, about 40
percent of what she should weigh.
As we hiked from the farm to the town, the parents told me
their story. There was a drought. Their crop had failed. There
was no government assistance. They had five children, and they
gave what little food there was to the older boys who could
work in the fields.
Droughts returned to Central America this year. One can
imagine how a family now in a similar situation would decide to
migrate to the United States, because no matter how risky the
trip, how harsh the conditions, it is better than watching your
family starve.
I also found the fact that an ambassador would go to these
places and that the U.S. would help these people actually
helped us to secure Guatemalan respect and support for
unrelated U.S. policy objectives. The U.S. assistance cutoff,
sadly, abandons that moral high ground.
In my written statement, I detailed how the assistance
cutoff would actually undermine the Administration's migration
policy, since it would stimulate more migration. I also laid
out why the cutoff does not provide leverage for the U.S. to
use effectively with the governments of Central America.
The aid cutoff not only harms economic and social
development and civil society, it is also undermining U.S.
interests in law enforcement, citizen security, and counter
narcotics by ending U.S. support for police, prosecutors, and
the courts, even as narcotrafficking and corruption, which is
an indirect cause of migration, are spreading.
In the case of Guatemala, this is particularly dangerous
given the Administration's decision to support the termination
of the successful anti-corruption effort known as CICIG, and
the controversy surrounding ongoing efforts to replace that
country's Supreme Court.
Earlier this year, DEA arrested a then-Presidential
candidate in Guatemala for alleged narcotics trafficking.
Similar arrests have occurred in Honduras. Ongoing efforts to
retaliate against Guatemalan judges and prosecutors who handled
anti-corruption cases will inevitably harm the prosecutions of
narcotics trafficking and organized crime cases of interest to
the United States.
The U.S. should remember that a major factor that led to
Chavez's takeover in Venezuela was the public's perception that
their institutions were increasingly corrupt; Venezuela of
course is now in the throes of one of the largest mass
migrations in recent history.
Finally, the aid cutoff reduces U.S. credibility. Central
Americans expect the U.S. to know what it is doing, and
assistance cutoff that undermines the Administration's own
policy sends the mistaken message that the U.S. is not serious.
I believe the Administration should take the following
steps. One, restore the programs affected by the assistance
cutoff. Two, seize the opportunity to engage with the newly
elected president of El Salvador, Mr. Bukele, and the
president-elect of Guatemala, Mr. Giammattei. Three, support
anti-corruption efforts, given that corruption indirectly
stimulates migration. Four, reshape U.S. policy toward Central
America to reemphasize progress on the systemic factors that
drive migration and use migration to the U.S. as a pressure
relief valve.
The Administration should engage the region's governments,
civil societies, and private sectors on what has to change and
how each can contribute more, because what is happening now is
not sufficient. There should be greater accountability, and the
Administration should review sanctions as well as incentives to
stimulate appropriate change.
Thank you very much, Mr. Chairman.
[The prepared statement of Mr. McFarland follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Sires. Mr. Gonzalez, you are now recognized for your
testimony.
STATEMENT OF MR. JUAN GONZALEZ, ASSOCIATE VICE PRESIDENT, THE
COHEN GROUP, FORMER DEPUTY ASSISTANT SECRETARY OF STATE FOR
WESTERN HEMISPHERE AFFAIRS
Mr. Gonzalez. Mr. Chairman, Mr. Ranking Member,
distinguished members of the committee, thank you for the
opportunity to testify before you today on this very important
topic. It is a particular honor to be among such august
company, but in particular that of Ambassador McFarland, whom I
met when I was a Peace Corps volunteer in the Western Highlands
of Guatemala, which incidentally is one of the major sources of
migration from Guatemala to the United States.
I was asked to focus on the lessons we drew upon when
designing the original U.S. strategy for Central America, as
well as progress achieved, recommendations for U.S. policy, and
the tangible impacts of cutting aid to the Northern Triangle.
As such, my testimony outlines a few of the many lessons
learned, good and bad, from my time as special advisor to Vice
President Joe Biden from 2013 to 2015 when we designed the
strategy, and then as deputy assistant secretary of State with
responsibility over its execution in the final year of the
Obama Administration.
The bottom line as it relates to this hearing is that U.S.
foreign assistance provides effective leverage to protect our
national security interests and promote democratic values in
Central America. It is a fundamental tool for addressing the
drivers of migration, and cutting it will only serve to
undermine U.S. regional influence.
The first and most important lesson that we learned early
on was that migration enforcement and border security alone
would not stop irregular migration to the United States.
Current migration trends are the result of economic and
social conditions in Guatemala, Honduras, and El Salvador,
countries where poverty, corrupt and ineffective public
institutions, and violence, are compelling people to begin a
dangerous journey to the United States. So we developed a U.S.
strategy in Central America to focus on the drivers of
migration.
Second, Northern Triangle governments are unable to prevent
outward migration on their own without equal parts pressure and
support from the United States. Political pressure is key, as
no amount of foreign assistance will make a lasting difference
without political will on the part of regional governments.
That requires senior administration officials to engage in
candid discussions with regional governments on their
respective private sectors and to press them for reforms that
in many cases go against vested interests. We engaged the
senior-most levels of government and measured political will in
terms of quick results on near-term actions, like targeting
smuggling operations, while advancing structural reforms to
address the systemic challenges over time.
Congress was key to maintaining the pressure, most notably
by including robust conditionality in the appropriations bills.
Third, large and complex strategies cannot be managed
solely from Washington. The Vice President, the State
Department, and USAID set the priorities, negotiated political
commitments, established metrics, and briefed anyone and
everyone on Capitol Hill willing to listen. But when it came to
program design and implementation, we had hired our country
teams, all of which serve under Chief of Mission Authority.
Fourth, migration is a byproduct of a broader problem set
in the Northern Triangle that has broader implications for U.S.
national security. All three countries suffer from a predatory
elite that benefit from the status quo and who for generations
have opposed reforms that would alleviate migration drivers.
The most marginalized communities are also the ones most likely
to migrate.
And, finally, as historic rivals, the only way to get
Guatemala, Honduras, and El Salvador to cooperate on regional
security and economic issues was for the United States to
facilitate and set the pace. In this regard, migration serves
as a sort of canary in a coal mine, foreshadowing much worse
things to come if these countries are unable to maintain the
rule of law, create stable and formal work force, provide
alternatives to criminality, and address rampant corruption.
I cannot emphasize enough just how central combatting
corruption was to our entire approach or how disappointing it
is to see the Central American anti-corruption movement in
retreat. Today the forces of corruption are winning in
Guatemala after successfully ending the mandate of the U.N.-
backed Commission Against Impunity following years of strong
backing from both Republican and Democratic administrations.
So, too, the continued erosion of democracy in Honduras
that culminated in a questionable Presidential result in
November 2017. If the United States is not leading the battle
against corruption in Latin America and the Caribbean nobody
will.
Lastly, bipartisan congressional support is the only way to
institutionalize a multi-year strategy to reduce irregular
migration at the source. We learned that most Members of
Congress supported addressing the root causes of migration from
the Northern Triangle, albeit with varying degrees of nuance.
Republicans, for the most part, preferred to focus on
security assistance and called for robust monitoring and
evaluation mechanisms. Democrats, skeptical of the region's
political will, pushed for increased conditionality related to
human rights and emphasized the importance of supporting
justice and rule of law institutions over military support.
We argued successfully for balance, using our experiences
with Plan Colombia and the Merida Initiative to make the case
that affecting positive change required sustained international
assistance that balances both security and development and is
accompanied by strong political will from regional governments
and the private sector.
But we did not get it right on our first try, and
congressional Democrats and Republicans worked with us to tweak
the strategy that ultimately became the product of
collaboration between the Administration and Congress.
My final point is this: the migration crisis at our
southern border serves as a stark reminder that the State of
security and prosperity in Central America and Latin America
and Caribbean writ large has significant implications for our
national security. Without active leadership and support from
the United States, the situation in the Northern Triangle will
only continue to deteriorate.
We cannot play line defense indefinitely, and it is vital
to our interest to provide foreign assistance and exert
pressure on regional governments to create the necessary
conditions for migrants to stay home.
I urge Congress to continue its bipartisan support for the
U.S. strategy for Central America. Thank you for the
opportunity to testify.
[The prepared statement of Mr. Gonzalez follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Sires. Thank you.
Mr. Jones, you are recognized for your testimony.
STATEMENT OF MR. RICK JONES, SENIOR TECHNICAL ADVISOR FOR LATIN
AMERICA, CATHOLIC RELIEF SERVICES
Mr. Jones. Chairman Sires, Ranking Member Rooney, thank you
for calling this hearing and for the opportunity to look more
deeply at the impact of cutting foreign aid to Central America.
My name is Rick Jones. I am a senior technical advisor for
Catholic Relief Services in Latin America and the Caribbean,
where I have lived and worked for nearly 30 years.
Cutting foreign aid to Central America, a region which has
become one of the most violent in the world, where rural
poverty is on the rise and people are fleeing for their lives
is counterproductive. It is likely to erase the gains that have
been made, increase the costs, and undermine the credibility
and the security of the United States and the people living in
the region.
There have been gains. Between 2015 and 2018, the CARSI
program achieved a significant reduction of 50 percent in
homicides in El Salvador and 35 percent reduction in Honduras.
Homicides are one of the principal causes of out-migration.
Cutting aid to those programs is likely to only increase the
loss of life and increase the cost of addressing people who are
fleeing the region due to violence.
In CRS, we worked with USAID, the U.S. Department of Labor,
and INL in our Youth Employment Program. We have been able to
reach 10,000 youth who are out of school and unemployed and at
risk of joining gangs or being recruited into them and placed
75 percent of them in jobs, business startups, or back in
school.
An independent study by the Department of Labor
demonstrated that graduates from these programs saw their
incomes continue to rise 2 years after leaving the program.
Aid, in this way, is very effective. The alternative says to
young people there is no hope for you; the only thing you have
to do is to leave the region.
We asked young people in these programs if they have ever
thought about migrating, and 40 percent of them said yes. We
asked them why they stayed, and they said, ``Because this
program gives us hope and a reason to stay.'' And this program
is also cost effective. It costs about $1,000 per young person
for a 6-month training program and placement into a job,
whereas apprehending a young person at the U.S. border costs a
minimum of $50,000 for the same period. Cutting off the aid is
going to only increase the expense to the U.S. taxpayer.
In another positive example of foreign aid, USAID sponsored
CRS to address chronic malnutrition and food insecurity in
Guatemala. And while rural poverty tripled in Guatemala, and
extreme poverty doubled, we were able to reach 100,000 people,
cutting in half extreme poverty, and chronic malnutrition
dropped five times the national rate. We do not need to cut the
aid; we need to put it on steroids.
The FAO has estimated that 1.4 million people in the dry
corridor in Central America are suffering food insecurity due
to drought. This is another driver of migration north.
In June this year, CRS conducted a study in 18
municipalities that were drought affected in the eastern part
of El Salvador, and we found 80 percent of the families were
suffering hunger just from this past year, and we have had 5
years of drought.
When we went to the Office of Foreign Disaster Assistance,
they said they could not support a response to that drought
crisis because aid was getting cut. Right now, as we speak, two
of our programs are being cut--a food security project in the
dry corridor in Guatemala, where we were about to reach 7,400
families, or an estimated 30,000 people, with direct services.
We are also going to have to roll back our program in over
200 communities in Guatemala that was strengthening their
capacity for their own development.
Cutting off the aid in Central America sends a message, and
it says, ``You are on your own.'' And it undermines--not only
do we roll back the gains that we have made, it creates
mistrust, and mistrust translates into people not cooperating
with government, not denouncing organized crime.
Cutting back the aid, in summary, is going to erase the
gains that we have made, increase the cost, undermine the
credibility and the security of the United States, and create a
vacuum, and somebody else is likely to step into that
leadership role.
We need to increase the aid. We need to use the best
results that we get to catalyze transformation at scale. The
poor and the vulnerable people in Central America and the
stability of the region is depending on it.
Thank you very much.
[The prepared statement of Mr. Jones follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Sires. Thank you.
Mr. Rooney, you are recognized for your testimony.
STATEMENT OF MR. MATTHEW ROONEY, MANAGING DIRECTOR, BUSH
INSTITUTE-SMU ECONOMIC GROWTH INITIATIVE, THE GEORGE W. BUSH
INSTITUTE
Mr. Rooney. Thank you, Mr. Chairman. Mr. Chairman, Mr.
Ranking Member, members of the subcommittee, it is an honor to
be with you today to discuss the need for robust engagement
with the nations of Central America, particularly El Salvador,
Guatemala, and Honduras. And it is a particular pleasure to
share this tribunal or this table with such an esteemed group
of colleagues and friends.
The George W. Bush Institute is perhaps not widely known
outside the Dallas Beltway. We are a think-and-do tank founded
by President and Mrs. Bush upon their departure from the White
House in 2009. Our Economic Growth Initiative, which I lead,
focuses on North American economic integration and
competitiveness, immigration reform, the roll of cities in
growth, and the conditions for growth in Central America.
Mr. Chairman, Mr. Ranking Member, members of the committee,
the heartbreaking images of Central Americans risking their
lives to enter the United States have produced an unsatisfying
debate among Americans. There are those who believe that the
poverty and violence in the region are the responsibility of
the United States, and there are those who believe that the
corruption and social dysfunction of the region are entirely
the fault of the Central Americans themselves.
As usual, the truth is more complicated. It is true that
all of the Central American countries have been sovereign
nations for two centuries, and all have had functioning
democracies with market-driven economies for three decades or
more. As a result, they bear ultimate responsibility for
conditions in their countries.
At the same time, the United States has been deeply engaged
in those countries for decades. In particular, the region
embraced free trade in response to a U.S. trade policy approach
that holds that trade is a better tool for economic development
than assistance. Over a decade later, their continued poverty
calls the American approach into question and opens the field
to others. We must prove that our approach works.
As a result, the fact is that the security of our borders
and our communities and the credibility of the concept of
trade-led development are at stake. The challenges are
daunting. The region remains trapped in a cycle of political
uncertainty, institutional weakness, and persistent poverty.
This instability on our extended security perimeter drives
immigration and reduces growth opportunities for the United
States.
Driven by this recognition, the United States has offered
strategically focused assistance to the region. The U.S.
commitment has been significant, yet U.S. peace and security
assistance to the region is a fraction--3 percent or less--of
what those countries spend out of their own resources.
More importantly, dozens of Salvadoran, Guatemalan, and
Honduran law enforcement officers have lost their lives in the
line of duty in the last several years. The Central Americans
are working hard and making sacrifices to address their own
problems.
Our foreign assistance has been instrumental in helping the
Central Americans focus their own efforts to address the
region's challenges, reduce corruption, and enhance
transparency. At the same time, it is true that to break this
vicious cycle once and for all, the United States needs the
region to develop and pursue a long-term growth agenda.
In an effort to encourage the emergence of a growth agenda,
the Bush Institute about a year ago created our Central America
Prosperity Project. At the center of the CAPP approach is a
working group that brings together 30 thought leaders from
Guatemala, El Salvador, and Honduras. Half of our group members
are women, and a third are under the age of 35. Participants
represent business, policy, politics, academia, journalism, and
civil society.
The group came together and agreed that wider use of
digital technologies would curtail corruption and reduce
informality. The Bush Institute, in May 2019, in support of
this conclusion, urged the three countries to develop and
implement a regional digital strategy in cooperation with the
business communities and civil societies.
This proposal has been welcomed across the region, and our
working group in particular felt empowered by the call for
digital inclusion in H.R. 2615, the United States-Northern
Triangle Enhanced Engagement Act.
In the remaining months of 2019, we are working with our
network to organize a series of workshops in the region to
identify the policy impediments to mobile services and develop
national implementation plans. Of course, the region's
challenges go well beyond digital services.
The value of our proposed digital agenda is not that it
addresses every challenge, but it represents a commitment by a
broad network of Central American leaders to the hard political
work of driving the reforms that are needed to strengthen the
foundation for future prosperity.
We believe that this model can make a down payment on the
reforms needed to put Central America on a more robust and more
inclusive growth trajectory, leveraging U.S. foreign assistance
dollars to further promote U.S. interests.
Mr. Chairman, Mr. Ranking Member, members of the committee,
thank you again for the opportunity to be here today. I look
forward to the opportunity to engage with your questions and
comments.
Thank you.
[The prepared statement of Mr. Rooney follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Sires. Thank you very much. We will now move to
questions. I will lead the questioning, and then the ranking
member.
I believe strongly that combatting of corruption should be
at the center of our policy toward the Northern Triangle. How
could the funding cuts impact our efforts to combat corruption,
particularly in Honduras where the mandate of the anti-
corruption mission is due to expire on January 2020?
Ambassador?
Mr. McFarland. Mr. Chairman, I agree with you that the
combatting corruption should be front and center of our agenda.
Corruption has the following impacts on U.S. interests. One is
indirectly it leads to a lot of factors that drive migration.
It serves as a de facto tax on the formal and informal
economies, and it limits opportunities. It also is an enabler
for narcotics-related activity.
It also harms the interests of U.S. citizens in the
country, as well as U.S. businesses in the country. And,
finally, it creates a situation where, should things go wrong,
the Central American countries could move toward a populist
alternative as happened in Venezuela. I think the things that
we can do are to support local efforts to strengthen courts,
prosecutions, police, prisons. The U.S. leadership and message
is important.
And, finally, the use of sanctions--selected, careful,
legal, but the use of sanctions is critical to sending a
message on corruption.
Mr. Sires. Anyone else?
Mr. Gonzalez. If I may, Mr. Chairman, just I would use--you
referred to the Honduras example. I think we need to look no
further than the experience in Guatemala where, I had the honor
to--when I was at the State Department earlier on, I actually
put together the assistance package for CICIG, the U.N.-backed
anti-corruption commission.
And, as a matter of fact, it was a congressional earmark,
so we were compelled by the U.S. Congress to fund CICIG, and it
was something where over the years it was the United States,
Canada, and Spain that were the main supporters of CICIG's
work.
So on the assistance side the, I think it is, over 1,600
prosecutions in which CICIG supported the judiciary is a direct
example of how you get results in combatting corruption. But
more importantly, I would say, is the assistance also provides
important leverage.
So in addition to the support directly for CICIG, the work
that we are doing throughout Guatemala, the work that we are
doing with the private sector, and, frankly, high-level
engagement by the Administration and leadership in the U.S.
Congress, I think is perhaps just as important as direct
programmatic support to organizations like CICIG and other
civil society organizations.
At the end of the day, the United States--and the
Ambassador knows this better than anybody--the United States
carries an outsized presence in Guatemala, Honduras, and El
Salvador. And if we are demanding results on corruption, and
using foreign assistance as a tool of leverage, it is
incredibly effective, and it has actually allowed CICIG's
mandate to continue up until this year.
Thank you.
Mr. Sires. Yes, sure.
Mr. Jones. Corruption is certainly a critical issue to be
addressed, but we think it needs to be combined also with
development aid. The development aid, for example, through the
McGovern-Dole School Feeding Program allowed us a seat at the
table with the Ministry of Education, where they eventually
adopted a national school feeding law which now Guatemala is
going to take on and take over 50 percent of the feeding in
2018 and 2019, and local purchases, and in 2020.
So we think anti-corruption programs need to be combined
with development that allow us a seat at the table to continue
to foster good governance and good spending.
Mr. Rooney. Thank you, Mr. Chairman. Just to observe, as I
mentioned in my remarks, the working group of Central American
leaders that we convened under our Central America Prosperity
Project identified corruption as one of the core problems
facing the region. Our working group included members of--
leaders of the major business associations from all three
countries, leaders and owners of some of the major corporations
in all three countries, as well as representatives of
regulatory agencies and civil society, and there was a
unanimous sense among that group that corruption was a serious
problem.
The idea of using digital services to attack that problem
kind of starts with the assumption that it is a tough problem
to crack, because ultimately it is difficult to come to any
form of prominence in Central America without being compromised
to some extent or another by corrupt activities.
And the ability to make tax payments, receipt of social
benefits, customs payments, registration of companies,
registration of work relationships, and contracting transparent
through digital services is a remarkable opportunity to break
the cycle.
Mr. Sires. Thank you.
I now recognize the ranking member, Mr. Rooney.
Mr. Rooney of Florida. Thank you, Mr. Chairman.
I would like to ask Mr. Gonzalez and Ambassador McFarland
first, but then anyone, how you see climate change affecting
the regional agriculture and subsistence economy. Last week
MSNBC had a great story about that. They had the reporter
embedded in Guatemala. And, particularly, how effective is our
assistance trying to help with that? And what do you forecast
how bad it is going to be before we can finally do something
about it?
Mr. Gonzalez. Thank you, Mr. Ranking Member, for that
question. It is a salient issue, particularly in places like
Guatemala where a lot of the migration, as you mentioned I
think in your opening remarks, the eastern part of Guatemala,
due to drought, has driven a significant amount of the
migration.
Throughout Latin America, you have this rapid phenomenon of
urbanization. Even though Latin America is a water-rich region,
the urban sectors are very far from water, and increasingly
agricultural practices are done in an environment where, as you
mentioned, climate change is making it more and more difficult
to produce crop yields.
This scenario will only deteriorate over time, and I think
right now what you are seeing in eastern Guatemala is the
beginning of more to come.
Mr. McFarland. Thank you, Mr. Ranking Member. I think
climate change is going to be driving a lot of food insecurity
in the Northern Triangle, in Guatemala in particular where I
have been out in the countryside. One of the impacts it has is
that, since you have a government that traditionally does not
provide a safety net, and people who do not have the mobility
or the ability to simply go to the big cities to look for jobs,
they are in trouble.
It also affects people because it is not just the crops,
the individual farmer's crops that are affected. A lot of these
farmers depend on seasonal labor, in the sugar cane plantations
and in the coffee fincas. And this current year a lot of the
plantations, the sugar plantations, decided not to hire labor
because of a combination of prices and weather. The same for
coffee, so it has that effect as well.
Mr. Rooney of Florida. Does our assistance have any impact
on this?
Mr. McFarland. Sir, I believe it does, or at least it has
until it has been cutoff. It provides various ways of
alternative--of working on alternative crops, trying to
maintain some sort of resiliency and families' access to food,
and, in some cases, emergency food supplies.
Mr. Jones. If I could respond to that. What we need to
understand I think about drought-driven climate change or
climate-driven drought in Central America is that the impacts
are cumulative. In the first year of drought, families eat
less, increasing malnutrition in children. In the second year,
they start to sell their household assets, increasing poverty.
In the third year, they sell the land and they leave.
So we need to understand the cumulative effects of what is
happening in Central America, and this is going to continue to
drive migration. We have had drought 5 out of the last 6 years,
and 6 years of the hottest on record. And so I think this is
what the future is going to look like.
There are specific practices. We have worked with over
3,000 farmers in Central America in the dry corridor to
develop, improve practices, and last year farmers that did not
use our water-smart practices lost 80 percent of their crop
where other farmers only lost 10 percent. That is the
difference between watching your family starve and having to
work a few extra weeks at the end of the year in something
other than farm activities. There are practices that need to be
scaled up throughout the dry corridor in Central America.
Mr. Rooney of Florida. Are you familiar with the World Food
Programme's activities there? The MSNBC article mentioned
showed a couple of feeding opportunities by the World Food
Programme there.
Mr. Jones. Yes. The World Food Programme is very active in
the region, both delivering food aid as well as starting to try
and change the soil and water management practices. We, at
Catholic Relief Services, work very closely with them to
develop the kinds of practices that small farmers can afford.
Mr. Rooney of Florida. Thank you. I yield the rest of my
time.
Mr. Sires. We will just keep asking questions. I have
another question. I am concerned about these cuts. I think they
could not have come at a worse time. Guatemala just had
elections with record low turnout. Obviously, this reflects the
discontent within that country.
The Honduran government is facing large street protests.
What can that lead to? Mr. Rooney? Are we going to have another
Nicaragua or Venezuela on our hands?
Mr. Rooney. Thank you, Mr. Chairman. I hesitate to
speculate about that specifically, but I do think that the
course that these countries are on is not sustainable, socially
or politically. We do have an opportunity with the new
Salvadoran government, and with the Guatemalan government about
to take office, certainly there is a renewed opportunity to
engage with those governments in a constructive way.
I think both have signaled that they want to work closely
with the United States. They have set priorities. To harp for a
moment on my Central America prosperity project, Hobby Horse,
both have set priorities that are consistent with the digital
priority that my working group has identified, so we are
hopeful that they can reverse course and set their countries on
a more constructive course.
Mr. Sires. Anybody else? Ambassador? I am sorry, Mr. Jones,
I will get back to you.
Mr. McFarland. Yes, Mr. Chairman. I would say in the case
of Guatemala, Mr. Chairman, there is a real opportunity for the
United States to engage with the president-elect. There is a
new president, new congress, and that is something positive.
Same with El Salvador. Honduras is a different story. Could
this discontent somehow lead to a Venezuela situation? As
somebody who served twice in Venezuela and has watched it
closely, it has been on my mind for many years. The two big
factors that led to Venezuela were an economic decline and
increasing popular dissatisfaction, loss of faith in their
institutions, and a wild card, Chavez.
We do not see the wild card on the scene in Central
America, but that does not mean that the person could not
appear. But I think the lack of confidence in elected
institutions and the lack of confidence, the popular concern
about corruption, are warning signs that the U.S., as well as
the leaders in this country, should take into consideration.
Thank you.
Mr. Sires. Thank you.
Mr. Jones.
Mr. Jones. Yes. Thank you, Mr. Chairman. I think, first, we
are very concerned about the loss of human life due to removing
foreign assistance for security issues. And, second, what gets
us at the table with the governments is the humanitarian aid
and development assistance. And as we take that off the table,
the government is only left with taking away the carrots and we
leave them with only sticks. And when that has happened in the
history of Central America, that has been a recipe for
repression and increased violence.
Mr. Sires. Thank you.
Mr. Yoho.
Mr. Yoho. Thank you, Mr. Chairman.
Thank you all for being here. Thank you for your testimony,
and I hope you can help us paint--or not paint--yes, paint a
different direction on what we do, helping countries with our
taxpayers' foreign aid.
We have given Central America over $6 billion since 2007,
and that money goes to good governance, rule of law, war on
drugs, and it can go--you know, job development. It goes
through all of these. We have MCC compacts we have done, USAID;
they are there, and they have been there. It is not like they
have been there for 5 years. We have been there for a long
time.
And I hear from all of you that it is that people are
leaving because it is a lack of rule of law, it is a lack--or
it is the increase in corruption, it is the increase in crime
that we have got to do more. What do we want to do more of?
Things have got to change, and I am probably one of the
dissenting people up here because I think there has to be a
strong language going back to the leaders of those countries to
say, ``We are not going to put money back in here until you
change what you are doing.''
We had the president of El Salvador before he got sworn in,
and I was the dissenting voice. You know, we have had the war
on drugs since 1971. We have spent over a trillion dollars of
the American taxpayers, and I will ask all of you, are we ahead
on the war on drugs?
You know, you talk about Plan Colombia. There is a lot of
celebration about that, but yet the country of Colombia today
has over 500,000 acres of cocaine growing, and so we are going
backward. And I know they have got a plan to reduce that, and I
hope President Duque is successful because we want to do that
and we helped work to make sure they did not get decertified by
the Trump Administration. But strong signals need to go out.
I think what we have done is we have legitimized illegal
narcotrafficking and have gone into different businesses, yet
the Central American countries have now become the transit of
cocaine coming out of Colombia. It is going through Mexico.
Mexico drug cartels are controlling it, and the country of
Mexico is producing over 70,000 acres of heroin.
And then we have heard the allegations of the past
president of Mexico offering I think it was $350 million to El
Chapo to let him kind of roam free. And so we know the root of
this. It is not a lack of money. It is not a lack of what you
guys do because you are the boots on the ground and I applaud
you for being there for 30 years trying to bring sanity to
this. But it is, how do you hold these leaders accountable?
Morales, you know, threw out the U.N. because he did not
want that much scrutiny. There will be a vacuum created, I
agree, and China and/or Russia or Iran or, you know, Cuba has
already got their influences in there, will have that. But what
in the heck do we need to do different? And how can we get
these people to say, ``We are going to change''?
And I challenge the new president of El Salvador. What are
you going to do different than your predecessors, so that they
can look back and say, ``This is the man that changed the
direction of Central America in my country.''
What do we need to do? Because the feel-good stuff that we
have done over and over and over again, and by doing that there
has been a lot of tragedy and suffering, and we see these
people coming across our southwest border; it is not enough.
I came up here to get rid of foreign aid, but I wound up
passing the largest reform to foreign aid and boosted it, so
that we could move countries from aid to trade quicker. Where
can we work in Latin America or Central America to make a
regional difference that shows the rest of those people around
them that is what I want, and that is what I want to hear from
you.
We will start with, Mr. Gonzalez, you are ready.
Mr. Gonzalez. Congressman, thank you for the question. I
think I would start by saying that the provision of foreign
assistance, while completely insufficient, as you mentioned, to
transforming the situation on the ground, I would argue that
the provision of foreign assistance is not a blank check to
these countries.
In fact, we provide foreign assistance to advance our own
national interests, and an example I would give you, sir, is
that we increased the size of anti-gang units that collaborate
with the FBI, and in 2015 that led to a massive arrest of MS-13
gang members, both in El Salvador and in Charlotte, North
Carolina. That is a direct impact.
And outside experts have evaluated USAID programs in El
Salvador and demonstrated that the drop in violence led to a
drop in migration. So it does take time, and it is frustrating,
but I would say it is because no amount of money makes a bit of
difference if you do not have partners that are rising to the
crisis at hand.
Mr. Yoho. Exactly.
Mr. Gonzalez. And so I would say some specific
recommendations, number 1 is demand that these leaders take
immediate steps on short-term and long-term reforms that----
Mr. Yoho. Can I put you on pause for a minute?
Mr. Chairman, I am out of time. Do you have time to have
him answer?
Mr. Sires. Absolutely.
Mr. Yoho. Thank you.
Go ahead.
Mr. Gonzalez. Thank you, sir. So demanding very clear and
measurable action items on the part of these regional leaders
that will demonstrate to U.S. taxpayers that it is worth the
cost. In Guatemala, the effective tax rate is one of the lowest
in the hemisphere because the private sector benefits from the
export of migrants that send remittances back home.
Now, specific recommendations for----
Mr. Yoho. Well, we did not bring up our policies. Our
failed policies on immigration is also a magnet that makes this
situation worse. And I do not mean to get you off track.
Mr. Gonzalez. No. I agree, sir, and I would say just a
couple of very specific perhaps technocratic recommendations.
Number 1 is you need to get the private sector involved. When I
was in government, we started to do that.
Mr. Yoho. Private sector where?
Mr. Gonzalez. In the region and in the U.S., because often
there is a lack of open competition for U.S. companies to
compete in the region, but also these are governments that have
for generations--the private sectors have fought against some
of these reforms that would have prevented migration.
So finding a way to provide incentives, I think the Build
Act that was passed on a bipartisan basis that creates the
USDFC, the Development Finance Corporation, is a good tool to
create opportunities for U.S. business to get involved in
large-scale and smaller scale projects.
But, very specifically, I would say maybe two things that I
think Congress can do. Number 1 is one of the things we toyed
with but never moved forward with: a proposal of creating a
regional account. When Plan Colombia was first started, there
was what is called the Andean Counterdrug Initiative.
Most of that money went to Colombia, but it is a flexible
way to actually be able to move the money in Central America,
so that you are rewarding those countries that are taking the
measures that they need to take. And that money can be either
security or development assistance. So it is a very effective
tool that we used during Plan Colombia.
And then the second, I would say, is one of the most
difficult challenges we had was that the delivery of foreign
assistance is a very slow mechanism. Part of that is how the
State Department manages the appropriation, and part of it is
the negotiation with the Hill. And I think there is a way to
resolve this without reducing the oversight role of Congress
and expediting the delivery of funds to Central America.
Mr. Yoho. Thank you.
Mr. Rooney. If I might, sir, thank you for that question. I
certainly agree that ensuring that we have political buy-in and
political support is the most challenging thing, and in general
U.S. assistance carries out U.S. priorities, and matching those
with internal priorities and collecting the kind of political
support you need internally is a challenge.
My own view is that I think the most powerful tool that we
have is the Central America Free Trade Agreement, which was
structured not just to open the U.S. market to Central American
products and open Central American markets to U.S. products,
but to encourage the Central Americans to integrate among
themselves and to open Guatemalan markets to products from
other Central American countries, and so on.
And so to the extent that our assistance can be modulated
to ensure full implementation of CAFTA, which requires the buy-
in of the Central American business community, as Mr. Gonzalez
says, those are interests that have not always been in favor of
increased economic openness and economic policy reform in the
region, because they have a comfortable situation where they
are.
That is, I think, a very powerful tool that we do not make
enough use of. And the ability to encourage regional
integration, both on the political level and on the economic
level, I think would also be useful. The idea, for example,
that the Millennium Challenge Corporation might be able to make
a regional grant as opposed to bilateral grants, correct, yes.
So that is an important opportunity to encourage that
regional economic integration. At the end of the day, the
region is ultimately only going to thrive as a combined region
of whatever it is, 35 million people, rather than a collection
of small markets. Foreign investors, in general, are not going
to be attracted to the Salvadoran market, although they may be
attracted to the Central American market as a whole.
So those things I think, you know, after CAFTA was signed
and implemented, there was a burst of activity by the U.S.
Government to try to carry out programs that would encourage
the business communities to get ready and encourage the
governments to pursue that economic integration. I think that
has tapered off to a certain extent, and that I think is a tool
that we have.
It is more powerful than any attraction that any of our
competitors in the region might offer. The proximity of our
market, size of our market, the commercial and ethnic and
social ties that already exist make it an extremely attractive
market, and I think that tool is underutilized.
Mr. Sires. Do you want to add--do you want to answer that?
Mr. Jones. I would like to add something.
Mr. Sires. I will give him another 20 minutes. Go ahead.
Mr. Jones. We work with over 300 small and medium-sized
businesses that hire the young people who are graduates from
our programs. They get almost no incentives to do so. Providing
incentives to small and medium-sized businesses to hire young
people helps to stem immigration and foster development.
We work with over 1,500 coffee growers in Honduras, and by
supporting them to negotiate--improve the quality and negotiate
the price, they got 15 cents more per pound and earned over
$900,000 selling coffee into the United States. Improving the
ties and the trade between the coffee producers and buyers in
the United States--needs to be incentivized here in the U.S.
and supported.
And I think one of the things that we are talking to as
well is OPIC is talking about investing in one of our projects
that expands a trust fund and loans to rural communities to
expand water services to people. They are paying for those
services, and they are repaying the loans. And OPIC investing
represents a public-private partnership that I think is the
essential way for development to move forward.
Mr. McFarland. If I may, Mr. Congressman, I agree. The
assistance has been effective. However, it has not been enough
to get the lasting, sustainable change that is the U.S.'s
objective. Why is that?
I would argue that the assistance probably isn't large
enough to try to do that, but the key factor--the key factor is
not the size of the assistance. The key factor are the
counterparts that we have to work with in these countries. And
we have a mix there. There are some very good people, and there
are people of vision in all sectors.
But, by and large, there is not a critical mass. We do not
have enough people--we do not have enough counterparts there
who are willing to identify the changes that have to be made so
that Central America is less violent, less inclined to migrate,
and a more prosperous partner.
How do we get there? How do we get there? I remember in
Guatemala 9 years ago, I attended a meeting with then-ex-
president Uribe of Colombia who explained to the private sector
how it was that they did Plan Colombia. And one of the things
he mentioned--I was there because I have friends in the private
sector_One of the things he mentioned, well, the private sector
in Colombia decided it would pay additional taxes in order to
fight the war, and at that point he lost them. They were not
interested in increasing taxes.
So you will have some elites who the incentives we offer
are not enough for them to change. I would say, going back to
our time in the region in the 1980's, sometimes you have to be
tough. Sometimes you have to hold people accountable. Sometimes
you have to use sanctions. It should be careful. It should be
legal. But sometimes you have to press people where they hurt
and induce them to change.
Thank you, sir.
Mr. Sires. Well, you know, one of the countries that I do
not know what happened to it is Nicaragua. It seemed that
Nicaragua was moving forward. And as my colleague Mr. Rooney
said, he does not know what happened, but there seems to be a
turnaround in Daniel Ortega. He has now become the Somoza of
Nicaragua, someone who he fought against.
And to me, when I look at that, I said how can the people
of Nicaragua not be disenchanted, not be depressed, not be
without hope, when they see someone who originally was fighting
for them, got voted out of office, came back, and turned out to
be a real creep.
So I am concerned about these other countries that are
going to wind up in the same way. I am concerned I keep hearing
now that in Guatemala they are growing a lot of coca. That is
very disturbing to me. In Honduras, obviously, they are also
doing the same thing.
So are we losing this battle? You know, I mean, the
president has been given money, but are we losing this battle,
even with the money?
Mr. Gonzalez. I would say yes. I mean, right now we are.
But I think it is--because if the United States is not--and,
you know, I applaud the leadership of Congress that has filled
the space here, but if the United States is not present at a
very senior level, to put it directly to ``knock heads'' on key
reforms, it is not going to happen.
That is plain and simple, and I think that, I am
speculating that, you know, when you have a lack of
institutions that ensure transparency, ensure that there is no
corruption, and that you are providing services to the people
that elected a government, you open a space for populous and
charismatic leaders, like Chavez in his time, like Daniel
Ortega in his time, to make promises, and then ultimately you
end up with what you have today in Venezuela which is
essentially a criminal regime.
And in Nicaragua, you have Daniel Ortega, who is taking
advantage of the fact that everybody is focused on Venezuela to
do horrible things, including having snipers shoot protesters
because they can get away with it.
So I think we need to hedge against future Maduros and
Chavez's--but I would argue as well that allowing the violence
and poverty to fester, combined with what will be approximately
6 million young Central Americans joining the work force over
the next 10 years, is a recipe for disaster in terms of not
just corruption but the presence of criminal organizations, or
even worse, that this committee I think has held hearings on.
And so I do not want to be alarmist, but I do think that if
we actually do not have functioning governments in Central
America, there isn't, frankly, a wall big enough to keep those
problems from our doorstep.
Mr. Sires. Mr. Rooney.
Mr. Rooney. I would also add, if I might, sir, that the
situation has grown more acute in the sense that back in the
day the United States could engage or disengage with the
region. The problems were what they were, but there was no
particular alternative out there at moments when the United
States disengaged to make things worse.
Under the current circumstances, we have extra regional
actors who are happy to fill the void, and happy to actually
facilitate and encourage the kinds of developments that cause
us concern. That means that we do not get a do-over, but that
the situation could get away from us if we turn away and stay
turned away for too long.
So I do think that that is a new factor that we should keep
in mind as we make policy toward the region.
Mr. Sires. Ambassador, what do you think?
Mr. McFarland. Mr. Chairman, I believe the U.S. has
definitely lost ground. I would not say that we have lost this
war. I think we are still in it, but we have definitely lost
ground in the last 12 months, the last 18 months.
I think I share your concern about Nicaragua, and I was
actually a desk officer back in the early 1980's when the
Sandinista regime had just taken over. And it is just bizarre
to see how Daniel Ortega has in fact, as you say, become a
repeat of Somoza.
One of the reasons he did that, though, was that he was
able to persuade the Nicaraguan private sector and their party
to enter a deal with them where a minority party like the
Sandinistas could in fact occupy a majority of power. And so
there is that kind of short-sighted dealing by political and
economic elites is one thing that we have to watch out for.
Mr. Sires. Thank you.
Ranking Member.
Mr. Rooney of Florida. Thank you, Mr. Chairman.
I would like to just continue that just a tad bit. I have
got another question, too, but my understanding is that in
Nicaragua you have a very low requirement for getting elected,
best way to put it, like 30, 35 percent. That was part of the
thing that we--in the Bush Administration we worked against
with Ortega, too, came up in 2007.
And I have got a lot of friends and partners down there,
and they have given me statistics last year about the low
immigration, the low unemployment, the lowering drug use. I
mean, the place was going very well, and all of a sudden, wham,
this guy just flips on a dime.
Is there any--that is what the chairman and I were talking
about the other day. How can anybody explain how he made that
flipflop so abruptly? Ambassadors always have the answers, so--
--
Mr. Sires. Do not answer all at once. Just one.
Mr. McFarland. Mr. Ranking Member, I confess I do not have
a good answer for that. I think part of it comes down to
personalities. Chavez was a fluke, but a very powerful one.
Ortega, and particularly Ortega as influenced by his wife, has
somehow become the mirror image of the person he sought to
overthrow. How that happens I do not know.
What can the U.S. do about it? I think the U.S.--I think it
is appropriate for the U.S. Government to be sanctioning people
as hard as they can, and perhaps try to work harder with the
neighboring countries to see what they can do.
Mr. Gonzalez. If I may, Congressman. So I was actually in--
as part of the electoral observation mission that observed the
2006 elections in Nicaragua--and previous to that Ortega always
made it through the first round. But because the requirement to
win was lowered, he was able to actually win.
Mr. Rooney of Florida. But there was a third candidate in
there, too.
Mr. Gonzalez. That is correct.
Mr. Rooney of Florida. We tried to get that guy out of
there, and he would not quit.
Mr. Gonzalez. It would be--once they went to second round,
it was everybody but Ortega that they would vote for. Then he
changed the constitution to allow him to run for office, and
that has allowed him to endure. So you have there, number 1, is
something that happens throughout Latin America, which is
leaders--political leaders who change the rules in order to
stay in power. And that is true of people that we love to work
with and people that we do not like to work with.
Mr. Rooney of Florida. Right.
Mr. Gonzalez. But I have got to tell you, I think Ortega
revealed his stripes, but that was always part of the plan. And
the plan was to maintain a dynasty of power in Nicaragua. I
think once he leaves, he is going to want his wife to stay, he
is going to want his family to stay in power, and he is going
to continue to change the rules of the game so that he can do
that.
And I have got to single out an initiative from the House
actually, the NICA Act, that said that the United States should
vote against multilateral development bank loans that went to
the government until they changed. I think that is real
leadership, and I think it caught the attention of the private
sector. And those sorts of initiatives I think are examples to
be modeled in other parts of Central America.
Mr. Rooney of Florida. Can I ask one more? One quick one.
Several of you have mentioned the role that the local elites
and local large family companies in those countries have played
in dealing with taxes and things like that. I wonder if you
have any information on how they have stymied competition and
have made it difficult or disincentivized American companies
from going to work there. I have got a little firsthand
experience in some of that, so I am asking.
Mr. Gonzalez. So two things very briefly, sir. First, when
as part of the Peace Accord in Guatemala it called for actually
increasing taxes, the private sector sued and successfully won.
So they have used litigation.
But then there is another statistic that when I was in
government we did an internal study and found that in Guatemala
in particular roughly 30 percent of private sector contracts
fell through because of corruption. That is a big number. And
when you are a U.S. company and you see that, maybe you do not
expose yourself to that level of corruption, but, you have to
ask yourself, why aren't U.S. companies involved in the
infrastructure space or active in energy integration in Central
America?
And I would say that the first reason is that these
countries do not work on a regional basis, so the market is not
as large. And the second one is corruption. People aren't
willing to take the risk.
Mr. Rooney of Florida. Yes. We have done construction work
all over that area, and our motto is never contract with the
government. If it is a government agency, stay away; only
private people.
Thank you, Mr. Chairman.
Mr. Sires. Mr. Vargas.
Mr. Vargas. Thank you very much, Mr. Chairman and Ranking
Member for holding this hearing. Again, I thank the witnesses
for being here.
I do want to followup a little bit on Nicaragua, in
particular Father Jose Alberto Idiaquez, who is the Jesuit
rector of the UCA, the Universidad Cetroamericana Simeon Canas.
The church there has been denouncing the violence, as you know,
and I know that his life a couple times was threatened. And I
wanted you to respond, if you could, at the level of threat
that a number of these church officials have and what the
danger is to them and what we can do to help.
I do not know who wants to handle that. Mr. Jones, why
don't you go ahead and give it a shot first.
Mr. Jones. OK. I do think we know of--I know personally of
at least 10 different clergy, religious men and women, who have
been threatened in Nicaragua. I think what we need to do to
support them is that they have access to moving to other
countries similar to what the church did in Colombia for
decades, to be able to move people who are threatened, to
provide them asylum, to protect them, as well as to assist the
people who are working in Nicaragua.
Mr. Vargas. If I can interrupt you for a second, though. I
was in El Salvador as a Jesuit back in the 1980's, and most of
the priests do not want to leave. That is the whole point. I
mean, it is their communities, it is the people, you know, who
they administered to as Jesuit priests and as other priests.
They do not want to leave.
So what can we do in the sense of keeping them there in the
country and providing some sort of safety, some sort of help to
these people? Because they actually do not want to leave. I
mean, there are some priests that may want to leave and should
leave because the danger is so high. But most of them do not.
Most of them want to stay with their flock, as they say.
Mr. Jones. Yes. I think in that regard recognizing them and
supporting them in the work that they do and recognizing that
publicly can provide a certain level of recognition and respect
in that we are watching these particular individuals and
following them, and that is publicly known. I think that can
help to protect people.
I think also continuing to foster the dialogue, that the
Catholic Church has been very much engaged in trying to bring
things back to the dialogue and the table, and I think we need
to continue to push for that in general in Nicaragua; continue
to push for monitoring of human rights abuses and those people
who have been imprisoned in Nicaragua needs to happen.
Mr. Vargas. Anyone else want to take--yes, Ambassador
McFarland, go ahead.
Mr. McFarland. Yes, Congressman. I had the privilege of
knowing two of the Jesuits who were killed.
Mr. Vargas. Yes. I knew all of them. They were my
superiors. They were at the UCA at the time. I was in
Chalatenango, so I knew them all. Which ones did you know, just
out of curiosity? Father Ignacio Ellacuria?
Mr. McFarland. Father Ignacio Ellacuria and Father Segundo
Montes.
Mr. Vargas. Oh. Segundo Montes. He was my actual superior.
Mr. McFarland. I am so sorry.
Mr. Vargas. Yes.
Mr. McFarland. I understand that priests do not want to
leave their flock. So I think the first question is we need to
ask whether the threat is sort of generalized or whether it is
specific, and what we saw in El Salvador, and also in
Guatemala, were specific, deliberate attacks. These are people
well-loved by their people.
How to deter that? I think there are a couple of ways. I
think it is possible, although I do not know how feasible it
is, for the Catholic Church, for the Jesuit orders, to have
people go with them, so that there are witnesses. And that has
a slight deterrent effect. It might help. They are not armed,
but they are there. They are witnesses.
And I think the other thing is the voice of the
international community, the United States, the House of
Representatives. This makes a difference. It can push off an
attack. It can--``well, maybe we will go after somebody else,
maybe we will do something else, but maybe we won't kill.''
Mr. Vargas. OK. Well, thank you. I hope that we do more,
and we can do more, as a body. And, last, I would just like to
comment that I think it is obvious that if we are not more
engaged in Central America, their problems are going to get
bigger. And us defunding some of the programs that we have I
think is going the wrong way. And, as you all know, China is
very interested in the area, and all of Central and South
America. So I think we need to be engaged, and I hope we get
more engaged, not disengaged.
And I also happen to represent San Diego. I represent the
entire California/Mexico border, and the migration coming up
from people of course that is escaping violence and poverty
continues to grow. So I, again, hope that we do not disengage.
I hope we continue to engage.
I know my time is almost up. But, again, I want to thank
all of you for being here, and I hope that we remain very
vigilant in Nicaragua, especially when it comes to the Catholic
Church. Last time, in El Salvador, the military took it upon
themselves to go into the UCA and murder all the priests there
because they had the opportunity. I hope that opportunity does
not come up in Nicaragua, that we are more vigilant.
Thank you.
Mr. Sires. Thank you, Congressman.
I thank you all for being here today for this important
hearing. I am deeply concerned about the Administration's
assistance cuts. I look forward to continuing to work with my
colleagues on a bipartisan basis to push back against this
illogical approach and return to a policy that advances the
shared interests of the United States and the people of
Guatemala, El Salvador, and Honduras.
I thank the witnesses and other members for being here
today. With that, the committee is adjourned.
[Whereupon, at 3:21 p.m., the subcommittee was adjourned.]
APPENDIX
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OPENING STATEMENT OF CHAIRMAN SIRES
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RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD
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