Faced with a burgeoning crisis at the southern border, President Joe Biden has pledged to increase economic assistance to countries in Central America’s Northern Triangle. He’s right to do so. But money alone won’t be enough.
The three Northern Triangle countries — Guatemala, El Salvador and Honduras — are some of the least developed nations in the Western Hemisphere, with poverty rates twice as high as in the rest of Latin America. The impact of the pandemic and two hurricanes in 2020 compounded the region’s misery, displacing hundreds of thousands and causing Central America’s economies to shrink by 6%. All three countries rank among the most violent and corrupt places on earth. Surveys show that more than 1 in 5 citizens say they’ve had to pay bribes to receive government services.
The Biden administration has called for providing $4 billion over four years to the three countries to address the “root causes” of emigration. That’s roughly double the amount spent by Donald Trump’s administration, which in recent years cut off aid to punish the countries for failing to crack down on migration. The U.S. has an interest in holding the region’s leaders accountable for their citizens’ welfare, but amid public-health and environmental calamities, Trump’s policy toward Central America was cruel and shortsighted. Wisely, Biden wants to reverse it.
At the same time, the administration should be clear-eyed about what this new assistance can achieve. Although the three countries got about $2.4 billion in aid between 2013 and 2018, a Government Accountability Office report concluded that “limited information is available about how U.S. assistance improved prosperity, governance, and security in the Northern Triangle.” Rather than rely on opaque bureaucracies to administer aid programs, the U.S. should adopt a more targeted approach. Diplomats in the region should work with civil-society groups that promote public transparency and the rule of law. “Place-based” strategies that steer resources to areas that produce the highest numbers of migrants should be expanded. Biden should also boost support for anti-corruption commissions that have effectively exposed cases of embezzlement and collusion between government officials and organized crime.
Perhaps more important, the U.S. should try to promote economic growth in the three countries. Negotiating digital trade agreements would reduce operating costs for businesses and spur investment in the region’s nascent technology sector. Linking the U.S.-Mexico-Canada Agreement with the Central America Free Trade Agreement would encourage companies to reshore supply chains to the Northern Triangle by giving goods manufactured there duty-free access to the U.S. market. By one estimate, shifting just 5% of current investment in supply-chain production from China to Central America would create 1 million jobs in the region.
The factors causing so many to flee the Northern Triangle won’t subside overnight — but solving America’s border crisis requires that policymakers address them. A strategy that improves governance and promotes opportunity stands the best chance of helping the region’s people build better futures at home.
— Bloomberg Opinion