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Friday, April 22, 2011

Panama: Political and Economic Conditions and U.S. Relations

Mark P. Sullivan
Specialist in Latin American Affairs

With five successive elected civilian governments, the Central American nation of Panama has made notable political and economic progress since the 1989 U.S. military intervention that ousted the regime of General Manuel Noriega from power. Current President Ricardo Martinelli of the center-right Democratic Change (CD) party was elected in May 2009, defeating the ruling center-left Democratic Revolutionary Party (PRD) in a landslide. Martinelli was inaugurated to a five-year term on July 1, 2009. Martinelli’s Alliance for Change coalition also captured a majority of seats in Panama’s National Assembly. Panama’s service-based economy has been booming in recent years, largely because of the ongoing Panama Canal expansion project (slated for completion in 2014), but economic growth slowed in 2009 because of the global financial crisis and U.S. economic recession. Nevertheless, the economy rebounded in 2010, with a growth rate approaching 7%, and strong growth is continuing in 2011.

President Martinelli retains high approval ratings, but he has been criticized by some civil society groups for taking a heavy-handed approach toward governing and for not being more consultative. The country experienced labor unrest in July 2010 after the government approved legislation that would have weakened labor laws in several respects, but the government ultimately agreed to repeal the provisions. In February 2011, the government amended the country’s mining code to facilitate foreign investment. Indigenous groups protested the law even though President Martinelli vowed that his administration would not approve any mining concessions in indigenous areas. Ultimately, in early March 2011, President Martinelli called for the repeal of the law.

The United States has close relations with Panama, stemming in large part from the extensive linkages developed when the Canal was under U.S. control and Panama hosted major U.S. military installations. The current relationship is characterized by extensive counternarcotics cooperation; support to promote Panama’s economic, political, and social development; and a proposed bilateral free trade agreement (FTA). U.S. bilateral assistance amounted to $7.3 million in FY2010 while the FY2011 request is for $10.6 million and the FY2012 request for $2.6 million. This funding does not include assistance in FY2008 and FY2009 under the Mérida Initiative to assist Central American countries in their efforts to combat drug trafficking, gangs, and organized crime; beginning in FY2010, Panama has been receiving assistance under the successor Central America Regional Security Initiative.

The United States and Panama signed a bilateral FTA in June 2007, and Panama’s National Assembly approved the agreement in July 2007. Neither the 110
th nor the 111th Congress considered the agreement, but the 112th Congress could consider the agreement this session. Issues that have raised congressional concern relate to worker rights and to Panama’s tax transparency. In the 112th Congress, several measures have been introduced that would express support for the FTA with Panama: S.Res. 20 (Johanns) and S. 98 (Portman), both introduced January 25, 2011; and H.Res. 86 (Frelinghuysen), introduced February 11, 2011. For additional information, see CRS Report RL32540, The Proposed U.S.-Panama Free Trade Agreement, CRS Report R40622, Agriculture in Pending U.S. Free Trade Agreements with Colombia, Panama, and South Korea, CRS Report RL34112, Gangs in Central America, and CRS Report R41731, Central America Regional Security Initiative: Background and Policy Issues for Congress.


Date of Report: April 12, 2011
Number of Pages: 33
Order Number: RL30981
Price: $29.95

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Monday, April 11, 2011

Cuba: Issues for the 112th Congress


Mark P. Sullivan
Specialist in Latin American Affairs

Cuba remains a one-party communist state with a poor record on human rights. The country’s political succession in 2006 from the long-ruling Fidel Castro to his brother Raúl was characterized by a remarkable degree of stability. The government of Raúl Castro has implemented limited economic policy changes since 2008. In September 2010, the government announced that it would reduce the public sector by cutting half a million jobs, but implementation has been slow and missed the original target of March 2011. The government has also expanded categories of self-employment. Few observers expect the government to ease its tight control over the political system, although it has reduced the number of political prisoners over the past several years, including the release of more than 100 since July 2010 after talks with the Cuban Catholic Church.

Since the early 1960s, U.S. policy has consisted largely of isolating Cuba through economic sanctions. A second policy component has consisted of support measures for the Cuban people, including U.S.-sponsored broadcasting and support for human rights activists. In light of Fidel Castro’s departure as head of government, many observers called for a reexamination of policy. Two broad approaches toward Cuba have been at the center of debate. The first is to maintain the dual-track policy of isolating the Cuban government while providing support to the Cuban people. The second is aimed at changing attitudes in the Cuban government and society through increased engagement. Since taking office, the Obama Administration has lifted restrictions on family travel and remittances, moved to reengage Cuba on migration and other bilateral issues, and, in January 2011, announced further measures to ease restrictions on purposeful travel and non-family remittances. The Administration has criticized the government’s repression of dissidents, but it has welcomed the release of political prisoners as a positive sign. Since late 2009, the Administration has continued to call for the release of a U.S. government subcontractor, Alan Gross, who was recently sentenced to 15 years in mid-March 2011.

Congressional interest in Cuba is continuing in the 112th Congress, focused on a number of issues, including U.S. sanctions, the human rights situation, Cuba’s imprisonment of a U.S. government subcontractor, the status of Cuba’s economic reforms, and its offshore oil development. To date, several legislative initiatives have been introduced that would ease sanctions, including H.R. 255 (overall sanctions) and H.R. 833 (agricultural exports); two initiatives take different approaches toward Cuba’s offshore oil development, H.R. 372 and S. 405; two initiatives would modify a trademark sanction, S. 603 and H.R. 1166; and one measure, S. 476, would discontinue Radio and TV Martí broadcasts to Cuba. While Congress has not completed action on any of the FY2011 appropriations measures, it has approved series of shortterm continuing resolutions (P.L. 111-242, as amended), the last of which provides funding through April 8, 2011, under conditions provided in enacted FY2010 appropriations measures. This has extended the less restrictive definition of “payment of cash in advance” for U.S. agricultural exports to Cuba, and also continued Cuba broadcasting and democracy funding.

For additional information, see CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances, by Mark P. Sullivan and CRS Report R41522, Cuba’s Offshore Oil Development: Background and U.S. Policy Considerations, by Neelesh Nerurkar and Mark P. Sullivan.



Date of Report: March 31, 2011
Number of Pages: 61
Order Number: R41617
Price: $29.95

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Thursday, April 7, 2011

Haiti’s National Elections: Issues and Concerns

Maureen Taft-Morales
Specialist in Latin American Affairs

In proximity to the United States, and with such a chronically unstable political environment and fragile economy, Haiti has been a constant policy issue for the United States. Congress views the stability of the nation with great concern and commitment to improving conditions there. Both Congress and the international community have invested significant resources in the political, economic, and social development of Haiti, and will be closely monitoring the election process as a prelude to the next steps in Haiti’s development. For the past 25 years, Haiti has been making the transition from a legacy of authoritarian rule to a democratic government. Elections are a part of that process. In the short term, elections have usually been a source of increased political tensions and instability in Haiti. In the long term, elected governments in Haiti have contributed to the gradual strengthening of government capacity and transparency.

Haiti is currently approaching the end of its latest election cycle. Like many of the previous elections, the current process has been riddled with political tensions, allegations of irregularities, and violence. The first round of voting for president and the legislature was held on November 28, 2010. That vote was marred by opposition charges of fraud, reports of irregularities, and low voter turnout. When the electoral council’s preliminary results showed that out-going President Rene Préval’s little-known protégé, and governing party candidate, Jude Celestin, had edged out a popular musician for a spot in the runoff elections by less than one percent, three days of violent protests ensued. Tensions rose as people waited to see which candidates would proceed to the second round, whether Préval would continue in office beyond the constitutional expiration of his term, or if some sort of provisional government would have to be established.

The Haitian government asked the Organization of American States (OAS) for help and delayed releasing final results, which were due out December 20, 2010, to give the OAS team of international elections experts enough time to investigate and verify the process. The team began its work on January 1, 2011, and gave President Préval a report with its recommendations on January 13. The Haitian Provisional Electoral Council (CEP) released the final results of the first round of voting on February 3, sending Mirlande Manigat, a constitutional lawyer and university administrator, and Michel “Sweet Micky” Martelly, a popular singer, to the run-off race. The governing party’s candidate was eliminated from the race by a narrow margin. After months of dispute, the second round of elections took place on March 20, 2011. The OAS electoral observation mission reported that the second round was more organized and peaceful than the first, and that incidents of ballot stuffing and voter intimidation were isolated. Preliminary results are expected by March 31, and final results by April 16.

The United States is providing $14 million in election support through the U.S. Agency for International Development (USAID). The Obama Administration considers Haiti its top priority in the Latin American and Caribbean region.

This report provides an overview of the controversies surrounding the first round of voting in late 2010, and concerns related to the second and final round of the elections. In addition to ongoing issues regarding the legitimacy of the upcoming March 20 elections, other questions have raised concerns within the international community and Congress. These include the destabilizing presence of former dictator Jean-Claude “Baby Doc” Duvalier, and former President Jean- Bertrand Aristide, and the newly elected government’s ability to handle the complex postearthquake reconstruction process and its relationship with the donor community.



Date of Report: March 23, 2011
Number of Pages: 19
Order Number: R41689
Price: $29.95

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Tuesday, April 5, 2011

Colombia: Issues for Congress


June S. Beittel
Analyst in Latin American Affairs

President Juan Manuel Santos took office in August 2010 in Colombia after winning 69% of the vote in a runoff election held in June 2010. Santos defeated Colombian Green Party candidate Antanas Mockus. In his first months in office, President Santos has taken the country in a new direction, building on the accomplishments of his predecessor, Álvaro Uribe, who served for two terms, pursuing social, economic and political reforms in a program he calls “democratic prosperity.” Santos has strengthened relations with neighboring countries, including Venezuela and Ecuador, which had been strained under Uribe. Early indications are that he wants to broaden the scope of U.S.-Colombian relations to include issues such as energy and technology. Former President Uribe pursued an aggressive plan to address Colombia’s decades long conflict with the country’s leftist guerrillas and rightist paramilitary groups and to reduce the production of illicit drugs. Uribe is credited with restoring public security and creating a stable environment for investment.

In recent years, Colombia, in close cooperation with the United States through a strategy known as Plan Colombia, has made significant progress in reestablishing government control over much of its territory, combating drug trafficking and terrorist activities, and reducing poverty. The improving security conditions and the weakening of the Revolutionary Armed Forces of Colombia (FARC) guerrillas are evidence that the strategy is working, according to supporters. Critics, however, argue that while pursuing these security gains, U.S. policy has not rigorously promoted human rights, provided for sustainable economic alternatives for drug crop farmers, or reduced the amount of drugs available in the United States.

This report provides an overview of recent political developments in Colombia. It reviews the administration of President Uribe (2002-2010), continuing into the election of President Juan Manuel Santos and his first months in office. The report then provides background on the longstanding conflict with internal armed groups that has marked Colombia’s modern development, examining the roots of the conflict and its major actors as well as their present status. The report considers ongoing challenges such as human rights, demobilization and displacement, drug trends, and Colombia’s regional relations. It outlines the National Consolidation Plan which updates Plan Colombia with a whole-of-government approach to eliminate the insurgency, and it describes the U.S.-Colombia Defense Cooperation Agreement. The report raises some of the major policy issues that the U.S. Congress has had, and will continue to pursue, in relation to U.S.-Colombia policy, such as the U.S.-Colombia Free Trade Agreement.



Date of Report: March 18, 2011
Number of Pages: 44
Order Number: RL32250
Price: $29.95

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Central America Regional Security Initiative: Background and Policy Issues for Congress


Peter J. Meyer
Analyst in Latin American Affairs

Clare Ribando Seelke
Specialist in Latin American Affairs


Central America faces significant security challenges. Criminal threats, fragile political and judicial systems, and social hardships such as poverty and unemployment contribute to widespread insecurity in the region. Consequently, improving security conditions in these countries is a difficult, multifaceted endeavor. Because U.S. drug demand contributes to regional security challenges and the consequences of citizen insecurity in Central America are potentially far-reaching, the United States is collaborating with countries in the region to implement and refine security efforts.


Date of Report: March 30, 2011
Number of Pages: 40
Order Number: R41731
Price: $29.95

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