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U.S. STRATEGY FOR ENGAGEMENT IN CENTRAL AMERICA
Summary
Central America is at a pivotal point in its history. Compared to the 1980s, the region is
relatively free from armed conflict, politically stable, and benefiting from a free trade agreement
with the United States. However, a combination of economic stagnation, weak governmental
institutions, and insecurity in some countries has plagued Central America. The recent surge in
migration to the United States and Mexico from Honduras, El Salvador, and Guatemala is just
one result of these challenges and of the inability, to date, to find solutions to the challenges the
region faces. Current efforts by Central American governments, the United States, and other
regional governments have proven insufficient to achieve meaningful progress in addressing
these challenges. U.S. local-level programs have achieved some important successes;
however, a broader, more comprehensive strategy and greater Central American government
resource and political commitment is required to achieve systemic and lasting success at the
national level. It is therefore in the national security interests of the United States to develop an
integrated U.S. strategy for engagement in Central America and to work with international
organizations and regional governments to put the region on a course to sustained, broad-based
economic growth, better government performance, and improved security conditions. This is
consistent with our commitment in the National Security Strategy to work in equal partnership
with the region to advance economic and social inclusion and safeguard citizen safety and
security, among other objectives. While the United States will need to invest significant
resources in such an effort, the success of the strategy will depend far more on the readiness of
Central American governments to continue to demonstrate political will and undertake
substantial political and economic commitments to bring about positive change in the
region. We will work closely with Central American governments and the governments of
Mexico, Colombia, and Canada; multilateral development banks; and other international actors
to establish a shared vision and develop concrete plans for realizing that vision. U.S. support
should be geared toward promoting Central American ownership of both the challenges and the
solutions. The Alliance for Prosperity represents an important effort to develop a unified, Central
American-led plan that could be supported by the international community and be a starting
point for continued multilateral engagement.
Background
Central American countries emerged in the early 1990s from two decades of civil strife and
enjoyed a decade of economic growth and development. By the mid-2000s, however, economic
deficiencies and the growth of gangs and organized crime presented Honduras, El Salvador, and
Guatemala with social and economic challenges, even as Panama and Costa Rica experienced
growth. Current economic and social indicators reflect a region in crisis. Central American
countries represented four of the five countries with the highest homicide rates in the world in
2012. Central America's economic growth has lagged well behind that of the rest of Latin
America, East Asia, and middle income countries, and 50 percent of the population lives in
poverty. Economic productivity grew slowly or remained flat over the last decade and
underemployment hovered between 30-40 percent in the northern triangle countries (El Salvador,
Honduras, and Guatemala.) Energy costs are as much as three times that of the United States,
and 40 percent of electricity production relies on oil. A fungus has devastated coffee plants - the
main cash crop in Honduras, Guatemala, and El Salvador - over the last three years, displacing
thousands of farmers and rural workers. Demographic trends are also problematic, with 63
percent of the 43 million citizens of Central America under the age of 30 with the highest growth
rates in Honduras and Guatemala, where jobs are not being created fast enough to absorb the
burgeoning labor pool. Finally, incidences of sexual abuse and pregnancy among very young
women have grown significantly in recent years in parts of Central America, especially
Guatemala, for reasons that are unclear, but that are pushing young women to leave their homes
in greater numbers.
The United States and other donors have committed significant resources in an effort to address
these challenges, including $642 million in U.S. security assistance since 2008 and more than
$850 million in support since 2005 for Honduras, Nicaragua, and El Salvador through the
Millennium Challenge Corporation; El Salvador's selection in 2010 for participation in the
Partnership for Growth is another example of our commitment to the region. The European
Union, the World Bank, and the Inter-American Development Bank (IDB) have also committed
significant resources. These resources have contributed to localized gains and proof-of-concept
policy examples, but they have not yielded sustained, broad-based improvements in social or
economic conditions.
The implications are stark for the United States if the aforementioned Central American concerns
become a trend. More than five million Central Americans are expected to join the workforce
over the next decade, many of them in Guatemala and Honduras. If economic prospects remain
poor and the crime rate remains high, migration and organized crime may present challenges for
the United States and Mexico. In short, U.S. security is intimately linked to the security and
prosperity of Central America.
Proposed Strategy
Central America alone cannot address these challenges without the support of the international
donor community. An approach is required that will encourage private sector investment and
combine the financial, intellectual, and human resources of North American governments,
Colombia, the European Union, and multilateral development banks. Central American
governments should commit to extensive reforms and increased regional coordination. We know
from our discussions with potential donors that they are prepared to work with us in support of
Central America.
Desired End State
Our objective is the evolution of an economically integrated Central America that is fully
democratic; provides economic opportunities to its people; enjoys more accountable, transparent,
and effective public institutions; and ensures a safe environment for its citizens. Important
successes would include: the establishment of strong regional coordination mechanisms and
institutions; reducing violence to a point where no Central American country is among the top
ten countries in terms of homicide rates; a 50 percent reduction of the youth unemployment rate
in Honduras, El Salvador, and Guatemala; full implementation of ongoing electrical
interconnection projects and other initiatives aimed at making energy more affordable, cleaner,
and more sustainable; and steady economic growth throughout the region such that the poverty
rate is pushed to below 40 percent over the next decade.
Assumptions
In the absence of international cooperation and assistance, certain Central American
countries will continue to suffer from weak economic growth, poor social indicators, and high
levels of crime, generating instability in the form of illegal migration and entrenched organized
crime. Other Central American countries will continue to perform relatively well in terms of
economic growth and social development but will not realize their potential without stronger
regional growth.
Central American governments will continue to demonstrate leadership and contribute
significant resources to address challenges if they are supported by a strong network of
international partners.
Transnational criminal organizations will continue to have a strong presence and influence
in Central America. The United States will continue to assist Central American nations to
combat organized crime.
Consistent with Presidential Policy Directive (PPD)-6 (U.S. Global Development Policy)
and PPD-23 (Security Sector Assistance), an inclusive whole-of-government process that aligns
activities and resources, including specialized technical advice and cooperation, with national
security priorities is most effective at addressing common security challenges in the Western
Hemisphere and achieving the sustainable development outcomes of this strategy.
Implementation
We propose the following approach:
1. Convene Partners to Establish a Common Understanding of the Problem [Completed
November, 2014.]
There are many existing studies carried out by governments, development banks, and think
tanks analyzing the constraints to growth in Central America, including those identified
above. We will convene a major conference in the fall, hosted by either the World Bank or the
IDB, to elevate those findings and identify how the main constraints should be addressed.
This conference would also serve to bring together the key actors who will act in support of
Central America and help prepare a plan of action.
We will use the period prior to the conference to run an intensified interagency process to
hone our strategy and lines of action and map out the resources necessary to implement that
strategy. We will meet with Central American governments and civil society, regional partners


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