No Hope at All
WHILE WE CONCUR with the majority's objections to the belligerent cold-war rhetoric of the President's "Caribbean initiative," we reject its suggestion that Reagan's economical aid package offers new hope to the people of that region.
In fact, the president's proposals consists of band aids for the worst economic basket-cases in the region, patently trivial trade adjustments, and more of the same polices that have failed to help Central America and The West Indies in the past.
Of the $350 million in proposed financial aid, more than two-thirds will go to bail out three financially strapped countries: Jamaica, El Salvador, and Costa Rica. This money will merely permit these countries to handle their huge debt burdens for the rest of the year--not to initiate any new development program.
The "centerpiece" of Reagan's proposals in the listing of import duties on the 13 percent of Caribbean basin products that are not already duty-free. This change--hardly "dramatic" in its impact on the region's economics--doesn't go nearly as far as it might have. Duties on clothing and textiles remain in place, keeping the reins on just the kind of labor-intensive manufacturing that might benefit the region's nations.
The President's proposal for tax incentives for private investment in the Caribbean has already been tried, usually with the same result. U.S. corporations receive more "incentive" to invest in capital-intensive extractive industries, such as bauxite in Jamaica and Guyana, Ore companies set up low-wage assembly industries--baseball stitching in Haiti, to name one--that add very little to a nation's capital stock or level of skills. In short, the President is sending supply-side economics on an island cruise; his proposals will only exacerbate the region's dependence on foreign investment.
The inadequacies of the President's approach stem from his failure to recognize the historical roots of the Caribbean basin's economic distress. The nations of Central America and the West Indies are suffering from a legacy of colonial exploitation that has left most dependent on a single crop--sugar--which they compete against each other to sell to the U.S. These nations lack any substantial industrial infrastructure and are net importers of food because so much of their land is either eroded or under export crops.
Caribbean and Central American nations require a multi-faced development program designed to modernize and diversify agriculture and labor-intensive light manufacturing. As Barbados' ambassador to the U.S. said of Reagan's approach: "We cannot accept the thesis that any one approach can solve all our problems. Development is a little more complex than that."
Of course, this Administration has never been much on complexity. Like the tourists who look out of their Jamaican hotel windows and see bone-white beaches but not the burgeoning squalor of shantytown, Ronald Reagan looks south and sees only Cuban bogeymen,--not a region with a history of colonization, racial injustice, and monoculture.
Unlike the majority, we cannot separate Reagan's economic proposals from his cold-war posturing. The aid he offers is merely a rhetorically; generous disguise for his primarily military approach to the region's problems. Based on faulty economics and a selective reading of history, the President's economic initiatives are worse than useless to our southern neighbors as they struggle to overcome their poverty.