Today the U.S. and Mexican governments announced what looks like a bombshell: a monster $10.6 billion package of new U.S. aid to address the root causes of migration. $5.8 billion of it for Central America, $4.8 billion for Mexico. “US pledges $10.6B aid for Central America, southern Mexico,” an AP headline gushes.
Not so fast. There’s almost nothing new here. And there’s no new grant aid here. The Washington Post’s Kevin Sieff and Mary Beth Sheridan get it right:
Of the total $10.6 billion referenced in Tuesday’s announcement, it appears the only new figure is the $4.5 billion in potential loans, loan guarantees and related services through OPIC. That money would facilitate private-sector activity and would be repaid, unlike traditional development assistance through USAID
“OPIC” is the Overseas Private Investment Corporation, a federal agency that provides loans and loan guarantees to private enterprises seeking to make investments in developing countries. The additional money is loans, not aid. It all has to be paid back.
And they’re loans to the private sector—which are not going to address root causes of mass migration from Central America. They won’t reform police, fight corruption, fix justice systems, or anything else that makes threatened people safer from gangs. Private sector loans are hugely unlikely to help struggling small farmers in the Northern Triangle’s countryside. (Unless they choose to leave the countryside and get low-wage jobs in OPIC-financed factories.) These loans will mainly help a tiny elite get wealthier in one of the most unequal regions on the planet.
Here’s how it breaks down:
The $2.1 billion in grant aid listed here is all old money, already committed for 2015 through 2018. Except for $180 million, which is what the Trump administration proposes here in grant aid to Central America for 2019. If approved, that would be a two-thirds cut in 2015-18 aid levels!
It won’t be: for 2019 the House approved $595 million for Central America, and the Senate $515.5 million. If Congress ever passes a 2019 foreign aid budget, it’ll end up giving Central America a multiple of the $180 million proposed here, to help address the causes of migration.
So this is an aid cut and a repackaging of already-given aid and loans, masquerading as a historically generous “Marshall Plan.” Don’t fall for it. And resist this level of cynicism.