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Monday, February 25, 2013

Honduras-U.S. Relations

Peter J. Meyer
Analyst in Latin American Affairs

Honduras, a Central American nation of 7.9 million people, has had close ties with the United States over many years. The country served as a base for U.S. operations in Central America during the 1980s, and it continues to host a U.S. military presence and cooperate on anti-drug efforts today. Trade and investment linkages are also long-standing, and have grown stronger in recent years through the implementation of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). Migration is another central concern in bilateral relations; over 731,000 Hispanics of Honduran origin live in the United States, two-thirds of whom are foreign born. Although the U.S.-Honduras relationship was somewhat strained as a result of the 2009 political crisis in Honduras, close cooperation quickly resumed in 2010. Since then, broad U.S. policy goals in Honduras have included a strengthened democracy with an effective justice system that protects human rights and enforces the rule of law, and the promotion of sustainable economic growth with a more open economy and improved living conditions. 

Political Situation 

Porfirio Lobo was inaugurated president of Honduras in January 2010, assuming power after seven months of domestic political crisis and international isolation that had resulted from the June 2009 ouster of President Manuel Zelaya. While the strength of Lobo’s conservative National Party in the legislature has enabled his administration to pass much of its policy agenda, Lobo has had limited success in resolving the many challenges facing Honduras. His efforts to lead the country out of political crisis, for example, have helped Honduras secure international recognition but have done little to rebuild confidence in the country’s political system. An ongoing constitutional crisis triggered by the National Congress’ December 2012 removal of four Supreme Court justices demonstrates the extent to which democratic institutions remain fragile. Lobo is relatively unpopular as he enters the final year of his term, with 70% of Hondurans disapproving of his performance in office. 

Security and Human Rights 

The poor security and human rights situation in Honduras has continued to deteriorate under President Lobo. Honduras has one of the highest homicide rates in the world, and common crime remains widespread. Moreover, human rights abuses—which increased significantly in the aftermath of Zelaya’s ouster—have persisted. A number of inter-related factors have likely contributed to this situation, including the increasing presence of organized crime, weak government institutions, and widespread corruption. Although the Honduran government has adopted a number of policy reforms designed to address these challenges, conditions have yet to improve. 

Economic Conditions 

Lobo also inherited a weak economy with high levels of poverty and inequality. Honduras suffered an economic contraction of 2.1% in 2009 as a result of the combined impact of the global financial crisis and domestic political crisis. Although the economy has partially recovered, with estimated growth of 3.8% in 2012, the Honduran government continues to face serious fiscal challenges. The central government’s deficit has been growing since 2011, and it has struggled to finance the budget. Public employees and contractors have gone unpaid, and basic government services have been interrupted. Honduras also continues to face significant social disparities, with over two-thirds of the population living in poverty. 

Congressional Action 

Members of the 111
th and 112th Congresses expressed considerable interest in Honduras, focusing in particular on the state of the country’s democratic institutions in the aftermath of the 2009 political crisis as well as the significant security and human rights challenges that have plagued the country in recent years. These issues are likely to remain on the agenda for the 113th Congress.

This report examines current conditions in Honduras as well as issues in U.S-Honduras relations.

Date of Report: February 5, 2013
Number of Pages: 37
Order Number: RL34027
Price: $29.95

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Friday, February 15, 2013

Mexico and the 112th Congress

Clare Ribando Seelke
Specialist in Latin American Affairs

The United States and Mexico have a close and complex bilateral relationship as neighbors and partners under the North American Free Trade Agreement (NAFTA). Although security issues have recently dominated the U.S. relationship with Mexico, analysts predict that bilateral relations may shift toward economic matters now that President Enrique Peña Nieto has taken office. Peña Nieto of the Institutional Revolutionary Party (PRI) defeated leftist Party of the Democratic Revolution (PRD) candidate Andrés Manuel López Obrador and Josefina Vázquez Mota of the conservative National Action Party (PAN) in Mexico’s July 1, 2012 presidential election. As a result, the PRI, which controlled Mexico from 1929 to 2000, retook the presidency on December 1, 2012. Some analysts have raised concerns regarding the PRI’s return to power, but President Peña Nieto has pledged to govern democratically and to forge cross-party alliances.

The outgoing PAN government of Felipe Calderón pursued an aggressive anticrime strategy and increased security cooperation with the United States. Those efforts helped Mexico arrest or kill record numbers of drug kingpins, but 60,000 people may have died as a result of organized crimerelated violence during the Calderón Administration. Mexico’s ongoing security challenges overshadowed some of the Calderón government’s achievements, including its successful economic stewardship during and after the global financial crisis. 

U.S. Policy 

In recent years, U.S. policy toward Mexico has been framed by security cooperation under the Mérida Initiative. Congress has provided more than $1.9 billion in Mérida aid since FY2008 to support Mexico’s efforts against drug trafficking and organized crime. Whereas U.S. assistance initially focused on training and equipping Mexican counterdrug forces, it now prioritizes strengthening the rule of law. Along the border, U.S. policymakers have sought to balance security and commercial concerns. The U.S. and Mexican governments resolved a long-standing trade dispute in 2011 involving NAFTA trucking provisions and have sought to improve competitiveness through regulatory cooperation. Bilateral trade surpassed $460 billion in 2011.The February 2012 signing of a Trans-Boundary Hydrocarbons Agreement for managing oil resources in the Gulf of Mexico could create new opportunities for energy cooperation. 

Legislative Action 

The 112
th Congress maintained an active interest in Mexico. The Obama Administration asked for $269.5 million in assistance for Mexico in its FY2013 budget request. The Senate and House Appropriations Committees’ versions of the FY2013 foreign aid measure, S. 3241 and H.R. 5857, each recommend increases in aid to Mexico, with human rights conditions similar to P.L. 112-74. Congress held oversight hearings, issued reports, and introduced legislation on how to bolster the Mérida Initiative and on related U.S. domestic efforts to combat gun trafficking, money laundering, and drug demand.

Violence in northern Mexico has kept border security on the agenda, with P.L. 112-93 increasing penalties for aviation smuggling, P.L. 112-127 tightening sentencing guidelines for building border tunnels, and P.L. 112-205 providing statutory authority for the bilateral Border Enforcement Security Task Force (BEST) program.

Mexico’s recent accession to negotiations for a Trans-Pacific Partnership (TPP) trade agreement generated congressional interest. Congressional consideration of the Trans-boundary Hydrocarbons Agreement did not occur.

This report reflects legislative developments during the 112
th Congress. It will not be updated. Also see: CRS Report R42917, Mexico’s New Administration: Priorities and Key Issues in U.S.- Mexican Relations, by Clare Ribando Seelke; CRS Report R41349, U.S.-Mexican Security Cooperation: The Mérida Initiative and Beyond, by Clare Ribando Seelke and Kristin M. Finklea; and CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications, by M. Angeles Villarreal.

Date of Report: January 29, 2013
Number of Pages: 42
Order Number: RL32724
Price: $29.95

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Thursday, February 14, 2013

Latin America and the Caribbean: Fact Sheet on Leaders and Elections

Barbara Salazar Torreon
Information Research Specialist

A fact sheet listing current leaders and election dates for countries in Latin America.

Date of Report: February 1, 2013
Number of Pages: 4
Order Number: 98-684
Price: $19.95

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Wednesday, February 13, 2013

Gangs in Central America

Clare Ribando Seelke
Specialist in Latin American Affairs

Congress has maintained an interest in the effects of gang violence in Central America, and on the expanding activities of transnational gangs with ties to that region operating in the United States. Since FY2008, Congress has appropriated significant amounts of funding for anti-gang efforts in Central America, as well as domestic anti-gang programs. Two recent developments may affect congressional interest in Central American gangs: a truce between rival gangs has lowered violence in El Salvador, and the U.S. Treasury Department has designated the Mara Salvatrucha (MS-13) as a significant transnational criminal organization (TCO).

MS-13 and its main rival, the “18
th Street” gang (also known as M-18), continue to threaten citizen security and challenge government authority in Central America. Gang-related violence has been particularly acute in Honduras, El Salvador, and Guatemala, which have had among the highest homicide rates in the world. Recently, some governments have moved away from repressive anti-gang strategies, with the government of El Salvador now facilitating a historic— and risky—truce involving the country’s largest gangs. The truce has contributed to a large reduction in homicides since March 2012, but robberies, assaults, and extortions have continued. The truce carries risks for the Salvadoran government, such as what might happen if the gangs were to walk away from the truce stronger, better organized, and with more political clout.

U.S. agencies have been engaged on both the law enforcement and preventive sides of dealing with Central American gangs; an inter-agency committee developed a U.S. Strategy to Combat Criminal Gangs from Central America and Mexico that was first announced in July 2007. The strategy focuses on diplomacy, repatriation, law enforcement, capacity enhancement, and prevention. An April 2010 study by the Government Accountability Office (GAO) recommended that U.S. agencies consider strengthening the anti-gang strategy by developing better oversight and measurement tools to guide its implementation. U.S. law enforcement efforts may be bolstered by the Treasury Department’s October 2012 decision to designate and sanction MS-13 as a major TCO pursuant to Executive Order (E.O.) 13581.

In recent years, Congress has increased funding to support anti-gang efforts in Central America. Between FY2008 and FY2012, Congress appropriated roughly $35 million in global International Narcotics Control and Law Enforcement (INCLE) funds for anti-gang efforts in Central America. Congress provided additional support in FY2008 and FY2009 for anti-gang efforts in the region through the Mérida Initiative, a counterdrug and anticrime program for Mexico and Central America, and, more recently, through the Central American Regional Security Initiative (CARSI). Congressional oversight may focus on the efficacy of anti-gang efforts in Central America; the interaction between U.S. domestic and international anti-gang policies, and the impact of the Treasury Department’s TCO designation on law enforcement efforts against MS-13.

This report describes the gang problem in Central America, discusses country and regional approaches to deal with the gangs, and analyzes U.S. policy with respect to gangs in Central America. Also see CRS Report R41731, Central America Regional Security Initiative: Background and Policy Issues for Congress, by Peter J. Meyer and Clare Ribando Seelke.

Date of Report: January 28, 2013
Number of Pages: 24
Order Number: RL34112
Price: $29.95

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Monday, February 11, 2013

Peru in Brief: Political and Economic Conditions and Relations with the United States

Maureen Taft-Morales
Specialist in Latin American Affairs

This report provides an overview of Peru’s government and economy and a discussion of issues in relations between the United States and Peru.

Peru and the United States have a strong and cooperative relationship. Several issues in U.S.-Peru relations are likely to be considered in decisions by Congress and the Administration on future aid to and cooperation with Peru. The United States supports the strengthening of Peru’s democratic institutions, its respect for human rights, environmental protection, and counternarcotics efforts. A dominant theme in bilateral relations is the effort to stem the flow of illegal drugs, mostly cocaine, between the two countries. In the economic realm, the United States supports bilateral trade relations and Peru’s further integration into the world economy. The United States is Peru’s top trading partner. The U.S.-Peru Trade Promotion Agreement (PTPA) went into effect February 1, 2009. The Obama Administration requested $74 million in foreign assistance for Peru for FY2013 to advance these objectives.

Ollanta Humala, of the left-wing Gana Peru, was sworn in as Peru’s president in July 2011 for a five-year term. Gana Peru initially won 47 seats out of the 130 seats in the unicameral Congress, requiring Humala to rely on political alliances with lesser parties in order to pass legislation. As Humala has moderated his stance, he has lost left-leaning allies within his and other parties. Deep social divides over how to pursue development continue to undercut political stability. The more radical elements of Humala’s original support base and his party urge the pursuit of more leftist policies, such as nationalization of strategic industries, which Humala called for during the election campaign. Forces that resist more radical policies include a strong business sector; a conservative, wealthy elite; a centrist middle class; and a divided Congress. Social unrest, especially over exploitation of natural resources, remains a challenge for the Humala government. It has established an office of conflict prevention and taken other actions to reduce social conflict.

Since 2001 Peru’s economy has been stronger than all others in the region, with its growth due mostly to the export of natural resources. High economic growth, along with social programs, has helped to lower Peru’s overall poverty rates. Nonetheless, in some jungle, mountain, and rural areas of the country, over 60% of the population continue to live in poverty. The income distribution gap remains quite large as well. This economic disparity has contributed to rising social unrest. President Humala submitted, and the legislature approved, a bill increasing royalties mining companies must pay. The government estimates the royalties will generate about US$1 billion a year, which it will use to finance social development programs intended to narrow both the social divide and the economic distribution gap. 

Date of Report: January 23, 2013
Number of Pages: 16
Order Number: R42523
Price: $29.95

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