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Security, Economic Development Closely Linked in Central American Countries

By Kathleen T. Rhem
American Forces Press Service

KEY BISCAYNE, Fla., Oct. 12, 2005 – Security threats in Central American countries "impede development, discourage investment and sabotage economic opportunities," the general in charge of U.S. efforts in Latin America said here today.

Army Gen. Bantz Craddock, chief of U.S. Southern Command, described the "violence of criminality," including gang activity, kidnapping and narcoterrorism, as "an unnecessary tax on Central American economies because of lost foreign investment, medical and insurance costs, damaged infrastructure and lost productivity."

Craddock made his comments to attendees of the U.S.-Central American Conference of Ministers, which is meeting here through Oct. 13. A central theme of the conference is the close link between security and economic prosperity.

Craddock cited a recent study that found the cost of violence represents roughly 15 percent of the gross domestic product of Central American countries -- a total of $36 billion. "Imagine all the good that $36 billion of development could do for the people of Latin America," he said.

Defense Secretary Donald Rumsfeld and several other ministers present also touted the link between security and economic development. "Money is a coward," Rumsfeld said in an address to the conference. "It flees uncertainty; it flees instability."

Belize's minister of defense, Ralph Fonseca, said tourism, which also improves economic conditions in a country, is another factor increasing the need for progress on the security front. Belize derives roughly 20 percent of its gross domestic product from tourism.

Fighting poverty must be part of the security equation, as well. Impoverished conditions lead to increased crime and radicalism.

"Poverty is common core that underscores all categories throughout the Central American region," Honduran Minister of Defense Federico Breve Travieso said. "Without any shadow of a doubt, we need a very special targeted strategy to combat poverty, and this would be a way to prevent the other threats from becoming nourished among themselves."

The three themes of security, poverty and economic progress work together in circular fashion. Fighting poverty leads to less crime and better security, which lead to improved economic conditions, further alleviating poverty. "Security is a direct catalyst to economic development and the alleviation of poverty," Fonseca said.

Rumsfeld praised the Central American Free Trade Agreement as "a key step" in improving conditions across the economic and security spectrum in Central America.

CAFTA is a comprehensive trade agreement among five countries of Central America -- Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua -- and the Dominican Republic and the United States. President Bush signed the agreement in August.

CAFTA's passage by the U.S. Congress "marked a critically important step forward for our region," Rumsfeld said. "And it fixed trading partners of our nations, whose citizens are already united by geography, by shared values, ... and aspirations and increasingly by the bonds of kinship and family."

Craddock explained that CAFTA allows Central American countries and the Dominican Republic to expand and diversify their exports and will bring down costs of basic necessities in Central America. "The fact is, people will have greater access to a wider array of goods and services at more competitive prices," he said.

An executive from a major retailer in Central America estimates CAFTA will result in an average reduction of 15 percent in the cost of goods for Central American consumers, Craddock said.

CAFTA is good for the U.S. economy, as well, he said. "Central America and the Dominican Republic are a larger market for U.S. goods than India, Indonesia and Russia combined," he said, noting that the passage of CAFTA strengthened that market.

Close geographic and economic ties bind the United States and Central America, Craddock said, so it's vital for the U.S. to work closely with countries in that region. He noted it takes just over two hours to fly from Miami to Washington, D.C., and about the same amount of time to fly from Miami to Guatemala City, Guatemala, or San Salvador, El Salvador. Tegucigalpa, Honduras, or Belize City, Belize, are even closer, he said.

One of seven Central Americans lives in the United States, and collectively they send more than $6 billion per year back home, Craddock said. "Hispanics are the fastest growing minority in the United States," he added. "It's anticipated that by the year 2050, one quarter of the U.S. population will be of Hispanic descent."

But even with all this progress, more can be accomplished to help Central American countries face their security threats and economic problems. "To a great extent, these opportunities are held hostage by nontraditional threats," ranging from narcotrafficking and kidnapping to organized crime and corruption, Craddock said.

"The fact is, these threats do not exist in a vacuum," the general added. "They developed over decades and are a closely related to conditions of poverty, inequality and corruption."

Still, Rumsfeld expressed a positive outlook for forward momentum on the myriad issues facing the Central American countries. "I am personally convinced opportunities are limited only by countries' commitment to defending free systems that so many have fought so long and so hard to secure," he said.

"Probably one of the greatest challenges to maintain freedom's forward momentum is to demonstrate to all of our people the truth that free political systems and free economic systems offer the best hope for tangible benefits for them and for their children."

Contact Author

Donald H. Rumsfeld
Gen. Bantz Craddock, USA

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