Latin America

U.S. and Mexico rush out $10 billion strategy to curb migration, but what's new?

In a new joint strategy for Central America and southern Mexico, both countries appears to have overlooked 'regifting' of already pledged funds.
19 Dic 2018 – 6:41 PM EST

The United States appeared to take a big step to mending fences with Mexico on Tuesday by announcing a $10.6 billion strategy for Central America and southern Mexico to curb illegal immigration, organized crime and drug trafficking.

But a closer look at the numbers indicates that the offer isn’t quite as good as it looked at first sight. In fact, the U.S. funds appeared to be a regifting of previously pledged fund, much of which has already been spent.

“Don't get too excited,” tweeted Adam Isacson, at the Washington Office of Latin America, a policy watchdog. “It's nearly all private-sector loans and guarantees. Money that has to be paid back—not assistance. The rest is aid that the U.S. was giving anyway.”

In a note to the media, the State Department said it was “committing $5.8 billion through public and private investment to promote institutional reforms and development in the Northern Triangle.”

But the bulk of that money came from the Overseas Private Investment Corporation (OPIC) which offers loan guarantees to U.S. companies seeking invest in the region, and is designed to make money for the government in the form of interest on the loans. The State department said more than $1 billion had already been invested since 2017.

It added that OPIC “could” invest up to $2.5 billion more in this region “if commercially viable projects are identified.” Another $2 billion was identified for projects in southern Mexico.

Another $320 million announced on Tuesday was already approved for infrastructure, education and governance projects El Salvador, Guatemala and Honduras. It also included $1.8 billion in already disbursed U.S. funds between 2015 and 2018 for El Salvador, Guatemala, and Honduras.

The State Department said the Trump Administration was requesting an additional $180 million in bilateral assistance for the region in its 2019 request, which analysts noted would represent a significant 30% drop in funding for the three Northern Triangle countries.

While analysts welcomed the willingness by both sides to work together, they were left scratching their heads over what was new in the commitment from the Trump administration, and why it was being announced now.

“This is smoke and mirrors. Loan guarantees are not the same as official development or other traditional foreign assistance,” said former U.S. ambassador John Feeley. He further observed that “although the 2019 budget has yet to be settled, it appears the actual amount of new program assistance to Central America announced on Tuesday is actually lower than Congressional targets for the region and, in any case still yet to be presented in any official budget proposal by the White House to Congress.


'Re-gifting'

“This is just a repackaging of mostly already appropriated money, like giving someone a birthday gift twice, but in a new box the second time around. In Mexican Spanish it’s called a roperazo, a re-gift,” he added.

The State Department declined to comment on the assistance numbers announced on Tuesday.

The announcement came after Mexican President Andres Manuel Lopez Obrador, better known simply by his initials, AMLO, had proposed creating a long term ‘Marshall Plan’ with Trump to develop the impoverished countries of Honduras, El Salvador and Guatemala, as well as Mexico’s poor south. The Marshall Plan was a massive U.S.-funded effort to rebuild Western Europe after the end of World War II.)

Tuesday’s announcement came as a surprise as Trump and AMLO had appeared destined to clash over Trump’s insistence of building a $5 billion wall along the border. Washington wants Mexico to do more to stem the migrant flow, including housing some on Mexican soil while their U.S. asylum claims are processed. This summer Trump even threatened to eliminate aid to the region if illegal immigration was not halted.

But on Tuesday the State Department said it “wishes to recognize Mexico’s willingness to develop a framework to ensure migration occurs in a legal, orderly, and safe manner.”

Mexico’s government warmly welcomed the announcement. “The agreements established here mean more than doubling the foreign investment in the south of Mexico from 2019,” Mexico's Foreign Minister Marcelo Ebrard, told a news conference in Mexico City. Under the new strategy the Mexican foreign ministry said in a statement that the Trump adminsitration "undertook to expand resources" to Central America and to work together on a comprehensive development plan for the region.


Mexican columnist Carlos Puig, writing in the online newspaper Milenio, noted that the Ebrad may have overlooked "the small print" in his embrace of the U.S. offer.

"The foreign ministry statement, maybe in the rush, omitted some details in the release from US State Department," he wrote.

Mexico has pledged to find $25 billion to develop the south over the next five years.

The timing of the announcement also mystified some analysts who noted that the White House was under fire from conservatives for appearing to have caved in to Mexican demands, while Trump’s wall remains unfunded.

Despite the positive signs there was still plenty of skepticism Wednesday on Capitol Hill. “I don’t see it,” said one congressional staffer. “His (Trump’s) budgets have all had cuts. A fact sheet is one thing, a budget is another,” he added.

Isacson also lamented the lack of new funding for key programs such as police reform in Central America and community funding to protect communities from gang violence.

“This is money for private banks. Even if you believe that it might create jobs, it doesn’t do anything for the small farmer in the drought-stricken ‘dry corridor’ where the migration is coming from,” said Isacson. “All this might do is create more low wage factory jobs for people to migrate to the cities.”


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