[Senate Hearing 114-778]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 114-778

             CENTRAL AMERICA AND THE ALLIANCE FOR PROSPERITY: 
           IDENTIFYING U.S. PRIORITIES AND ASSESSING PROGRESS

=======================================================================

                                HEARING



                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE



                    ONE HUNDRED FOURTEENTH CONGRESS



                             SECOND SESSION



                               __________

                              APRIL 19, 2016
                               __________



       Printed for the use of the Committee on Foreign Relations


                   Available via the World Wide Web:
                         http://www.govinfo.gov





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                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

30-258 PDF                     WASHINGTON : 2018 












                COMMITTEE ON FOREIGN RELATIONS         

                BOB CORKER, Tennessee, Chairman        
JAMES E. RISCH, Idaho                BENJAMIN L. CARDIN, Maryland
MARCO RUBIO, Florida                 BARBARA BOXER, California
RON JOHNSON, Wisconsin               ROBERT MENENDEZ, New Jersey
JEFF FLAKE, Arizona                  JEANNE SHAHEEN, New Hampshire
CORY GARDNER, Colorado               CHRISTOPHER A. COONS, Delaware
DAVID PERDUE, Georgia                TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia              CHRISTOPHER MURPHY, Connecticut
RAND PAUL, Kentucky                  TIM KAINE, Virginia
JOHN BARRASSO, Wyoming               EDWARD J. MARKEY, Massachusetts


                  Todd Womack, Staff Director        
            Jessica Lewis, Democratic Staff Director        
                    John Dutton, Chief Clerk        


                              (ii)        

  


















                            C O N T E N T S

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                                                                   Page

Corker, Hon. Bob, U.S. Senator From Tennessee....................     1


Cardin, Hon. Benjamin L., U.S. Senator From Maryland.............     2


Palmieri, Francisco, principal deputy assistant secretary, Bureau 
  of Western Hemisphere Affairs, U.S. Department of State, 
  Washington, DC.................................................     3

    Prepared statement...........................................     4


Hogan, Elizabeth, acting assistant administrator for Latin 
  America and the Caribbean Bureau, U.S. Agency for International 
  Development, Washington, DC....................................     6

    Prepared statement...........................................     8


Cardenas, Jose, former USAID acting, assistant administrator for 
  Latin America and the Caribbean, former National Security 
  Council Official, Washington, DC...............................    32

    Prepared statement...........................................    34


Swigert, Jim, director, Latin America and Caribbean Programs 
  National Democratic Institute for International Affairs, 
  Washington, DC.................................................    40

    Prepared statement...........................................    42


              Additional Material Submitted for the Record

Responses to questions for the record submitted by Senator David 
  Perdue to Francisco Palmieri, Principal Deputy Assistant 
  Secretary for the Bureau of Western Hemisphere Affairs.........    52


Responses to questions for the record submitted by Senator David 
  Perdue to Elizabeth Hogan, Acting Assistant Administrator for 
  Latin America and the Caribbean................................    60

                             (iii)        

  

 
   CENTRAL AMERICA AND THE ALLIANCE FOR PROSPERITY: IDENTIFYING U.S. 
                   PRIORITIES AND ASSESSING PROGRESS

                              ----------                              


                        TUESDAY, APRIL 19, 2016

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:01 a.m., in 
Room SD-419, Dirksen Senate Office Building, Hon. Bob Corker, 
chairman of the committee, presiding.
    Present: Senators Corker [presiding], Risch, Rubio, 
Gardner, Cardin, Menendez, Shaheen, Coons, Kaine, and Markey.

             OPENING STATEMENT OF HON. BOB CORKER, 
                  U.S. SENATOR FROM TENNESSEE

    The Chairman. The Foreign Relations Committee will come to 
order. We thank you for being here. We have two great panels 
today, and we are going to examine U.S. support for the 
Partnership for Prosperity launched by El Salvador, Guatemala, 
and Honduras.
    Several Senators have expressed interest in holding this 
hearing, given the more than $700 million in appropriations for 
fiscal year 2016 and the $771 million requested for fiscal year 
2017. I think there is a strong desire to make sure that there 
is oversight here, because we want to see it to be successful.
    Comparisons have been made to Plan Colombia, which 
obviously was successful. There is a lot of interest, as you 
can imagine, on this committee to ensure that this is also.
    I think we understand the myriad of issues that these three 
countries are dealing with. We understand how they affect our 
country. And so again, a great opportunity for us to understand 
more what your thinking is, and then, of course, we have some 
private witnesses that will be here after to share their 
expertise.
    But obviously, we want to make sure that Central America is 
able to secure stability, the rule of law, and economic growth.
    We want to understand the strategies. I read all the 
briefing materials last night and this morning, and still have 
some questions as to how this is all going to tie together.
    But we are here today out of our desire to ensure that this 
is successful, and we thank you for being with us.
    With that, I will turn the meeting over to our outstanding 
ranking member, Ben Cardin.

             STATEMENT OF HON. BENJAMIN L. CARDIN, 
                   U.S. SENATOR FROM MARYLAND

    Senator Cardin. Thank you, Mr. Chairman. I really thank you 
for holding this hearing.
    The U.S. investment in Central America is substantial. The 
President's request is a large amount of money, and we have a 
responsibility of oversight. And I thank you for conducting 
this hearing and look forward to both our panels of witnesses.
    Honduras and El Salvador and Guatemala, these are 
democratic countries that want security, and they want their 
country to grow, and they have incredible challenges. The U.S. 
leadership is critical.
    Last year, I visited Honduras and El Salvador and saw 
firsthand the U.S. efforts. I had a chance to meet with our FBI 
and the Transnational Anti-Gang Unit and saw their work 
firsthand in dealing with the challenges of gang violence in 
both El Salvador and Honduras.
    I had a chance during that visit to talk in major detail 
about the challenges that are facing the Central America 
countries. They have gang violence. We know the MS-13. They 
have corruption. Impunity rates are some of the highest in the 
world. They have the highest homicide rates in the world. And 
they have human rights abusers.
    So it is a challenge. It is in our hemisphere. It is in our 
security interests to effectively help these countries deal 
with these concerns. It will affect our country. We know the 
criminal elements on drug trafficking affects America. We know 
that gang violence affects America.
    I had a chance to interview a gang member, a former gang 
member, and he talked about how he had come to my State of 
Maryland in order to set up sister gangs. There was an article 
in yesterday's paper about the trial taking place in Northern 
Virginia involving gang violence.
    So we know that this is imported into the United States. It 
is in our interests to stop the violence in Central America 
before it gets to the United States.
    Of course, we know about the victims of trafficking, of 
those trying to get to the United States, and the impact of 
refugees at our border. So it is in our interests to deal with 
it.
    The U.S. can make a difference. We saw in Plan Colombia how 
we were able to make a consequential difference because the 
United States was willing to step up and really be committed to 
change in a country. I think we can do that in Central America.
    I applaud Vice President Biden for his Alliance for 
Progress. I certainly agree with this program and have 
supported it, and security is important.
    But let me just raise two major caveats. And one is what 
the chairman mentioned, that you need to invest in good 
governance. When you take a look at how the funds are being 
allocated, not enough is being allocated, in my view, to good 
governance to combat corruption, to protect freedoms, and to 
strengthen civil societies.
    Then secondly, there has to be accountability. We are 
investing a significant amount of funds. We need to know that 
they are doing the job that we said it was to do. And we have 
to make sure that the United States is not participating at all 
in any of its funds going to support those who are violating 
the human rights of its citizens.
    So with that in mind, I look forward to hearing our 
witnesses, and I know this will be a productive hearing.
    The Chairman. Thank you.
    I know that both of you know and the audience knows that 
Senator Menendez is, obviously, very interested in this issue, 
and Senator Kaine also. As a matter of fact, it was a comment 
that he made in a hearing that we had months ago that really is 
driving the reason we are having this hearing.
    I do not know if you want to make a comment or not, but we 
thank you for your contribution on this outstanding committee.
    The first panel is from the administration. Principal 
Deputy Assistant Secretary of State Paco Palmieri is being 
joined by USAID Acting Assistant Administrator for Latin 
America and the Caribbean Beth Hogan. We welcome our official 
witnesses and look forward to hearing your testimony.
    I think you all understand that your written testimony will 
be part of the record, without objection. If you could 
summarize in about 5 minutes, we would appreciate it. And if 
you could start in the order the I introduced you, that would 
be great.

  STATEMENT OF FRANCISCO PALMIERI, PRINCIPAL DEPUTY ASSISTANT 
     SECRETARY, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. 
             DEPARTMENT OF STATE, WASHINGTON, D.C.

    Mr. Palmieri. Thank you, Chairman Corker, Ranking Member 
Cardin, and members of the committee, for this opportunity to 
testify on Central America and our important work in the 
region.
    I also want to thank the committee for its strong 
bipartisan support for our efforts in Central America.
    The security and prosperity of Central America is an 
essential national security priority for the United States. 
Over the next decade, as many as 6 million people will enter 
the labor pool in Central America, where low job growth and 
high crime rates lead many to choose emigration to Mexico and 
the United States over poverty and insecurity.
    To provide a viable alternative, the United States and its 
partners in the region are taking actions that combine 
immediate efforts, such as targeting alien smuggling networks 
and launching public messaging campaigns to highlight the 
dangers of the journey north, with longer term investments to 
address the underlying conditions of the region's longstanding 
economic, security, and governance challenges.
    In our implementation of the U.S. strategy for engagement 
in Central America, we seek the right balance of short- and 
long-term action that will ultimately provide an environment 
where citizens of Central America can remain and thrive in 
their own home communities.
    We believe sustained international assistance that balances 
security, governance, and prosperity, combined with 
demonstrated political will by regional governments and their 
respective private sectors and civil societies, has the 
greatest potential to affect positive change.
    Political will is the most important ingredient. The 
Department of State, the U.S. Agency for International 
Development, and other U.S. agencies work with regional 
governments to strengthen criminal justice, improve governance 
practices, and promote stronger and more equitable economic 
growth. We work with international financial institutions, the 
private sector, and, most importantly, civil society and 
community-based organizations in the region.
    Northern Triangle governments themselves will devote $2.6 
billion in 2016 to support their development plan, the Alliance 
for Prosperity. To ensure sustainability over the long run, 
these governments have taken numerous steps.
    In Guatemala, President Morales just extended the mandate 
of the International Commission against Impunity in Guatemala, 
known by its acronym CICIG, and appointed a new tax and customs 
administration superintendent.
    Facing a skyrocketing homicide rate, the Salvadoran 
legislative assembly unanimously approved a bill on April 1 to 
reduce the ability of gang leaders to direct murders, 
extortions, and other crimes from prison. Last year, we aligned 
U.S. assistance with the government's Safe El Salvador plan. As 
a result, we saw declines in crime and violence in those areas 
where we jointly targeted our support.
    Honduras has lowered its homicide rate by one-third from 
2011 to 2015, and its legislature recently approved, again by a 
near-unanimous vote, the OAS-led Mission Against Corruption and 
Impunity in Honduras.
    However, the tragic murder of indigenous and environmental 
activist Berta Caceres on March 3 highlights the vulnerability 
of human rights defenders and the deficits in civilian security 
in Honduras. We continue to call on the Honduran Government to 
conduct a prompt, thorough, and transparent investigation to 
ensure it brings to justice those responsible.
    We also continue to respond to the sustained, elevated 
levels of unaccompanied children and family migration from the 
region. Our assistance also ensures respect for the rights of 
migrants and protection as guaranteed under domestic and 
international law.
    The Central American governments must demonstrate political 
will to make the difficult decisions that can lead to systemic 
reform. The transformation we seek will not happen overnight, 
and there may be many setbacks on the path to success. But only 
through sustained commitment, both ours and theirs, will 
Central America realize its potential.
    Thank you again, and I look forward to any questions you 
have.
    [The Mr. Palmieri's prepared statement follows:]


 Prepared Statement of Francisco Palmieri, Principal Deputy Assistant 
  Secretary, Bureau of Western Hemisphere Affairs, U.S. Department of 
                                 State

    Chairman Corker, Ranking Member Cardin, and members of the 
committee, thank you for the opportunity to testify on Central America 
and our important work in the region.
    The security and prosperity of Central America is an essential 
national security priority for the United States. Over the next decade, 
as many as six million people will enter the labor pool in Central 
America where low job growth and high crime rates lead many to choose 
emigration to Mexico and the United States over poverty and insecurity. 
To provide a viable alternative, the United States and its partners in 
the region are taking actions that combine immediate efforts, such as 
targeting alien smuggling networks and launching public messaging 
campaigns to highlight the dangers of the journey north, with longer-
term investments to address the underlying conditions of the region's 
longstanding economic, security, and governance challenges. In our 
implementation of the U.S. Strategy for Engagement in Central America, 
we seek the right balance of short and long-term action that will 
ultimately provide an environment where citizens of Central America can 
remain and thrive om their own home communities.
    We know sustained international assistance that balances security, 
governance and prosperity, combined with demonstrated political will by 
regional governments and their respective private sectors and civil 
societies, has the greatest potential to affect positive change. 
Political will is the most important ingredient and a focus of Vice 
President Joe Biden's successful personal engagement with the leaders 
of the Northern Triangle (El Salvador, Guatemala, and Honduras). Over 
the last two years, this has produced significant commitments by 
governments to invest their national resources to stimulate economic 
growth, promote educational opportunities, target criminal networks, 
tackle corruption, and strengthen civilian rule of law institutions.
     By advancing three, inextricably linked objectives--prosperity, 
governance, and security--the Department of State, the United States 
Agency for International Development, and other U.S. agencies work with 
regional governments to strengthen criminal justice, improve governance 
practices, and promote stronger and more equitable economic growth. Our 
efforts build on the political will, commitment, and financial 
investment of our partner governments, international financial 
institutions, private sector, and, most importantly, civil society and 
community based organizations in the region.
    For example, Northern Triangle governments will devote $2.6 billion 
in 2016 to support their development plan, the Alliance for Prosperity. 
To ensure sustainability over the long run, these governments have 
taken numerous steps recently to improve fiscal management and increase 
government revenues. As of early March 2016, El Salvador had collected 
$7.3 million from a special contribution tax for public security, 
enabling the Attorney General to hire 100 prosecutors and support 
vocational training for youth in high crime areas. In Guatemala, a 
number of sectors praised the decision by President Morales to swear in 
Juan Francisco Solorzano as the new Tax and Customs 
AdministrationSuperintendent in March after a high-profile corruption 
scandal led to the ousting of the previous Superintendent last year. 
The Guatemalan government also drafted a proposal to reform the Tax and 
Customs Administration and initiated a campaign to build congressional 
and public support for the reforms. On March 15, the Honduran 
government closed its tax collection entity due to corruption and 
inefficiency and approved a fiscal responsibility law on April 5 that 
will lower the deficit ceiling, increase fiscal transparency, and 
improve budget planning.
    Facing a skyrocketing homicide rate, the Salvadoran government is 
taking steps to address the crippling security situation. The 
Legislative Assembly unanimously approved a bill on April 1 to reduce 
the ability of gang leaders to direct murders, extortions, and other 
crimes from prison. Last year, we leveraged our resources to align with 
the government's Safe El Salvador Plan; as a result, we saw declines in 
crime and violence in areas where we jointly targeted our support. U.S. 
assistance is essential to helping the Salvadoran government turn 
around the negative trajectory on homicide and crime rates and improve 
citizen security.
    Since assuming office in January, Guatemalan President Jimmy 
Morales reaffirmed his support for the Alliance for Prosperity, moving 
to fulfill Guatemala's 2016 Action Plan commitments and to extend the 
mandate of the International Commission Against Impunity in Guatemala 
(CICIG). Guatemala continues to combat human smuggling, increase 
citizen security, and expand programs aimed at building human capital. 
The new administration has developed a strategy to target chronic 
malnutrition and the lack of opportunities for youth in the Western 
Highlands, an impoverished area of the country from which many young 
people migrate. U.S. foreign assistance in areas such as the Western 
Highlands is critical to complement Guatemalan government efforts to 
improve healthcare, education, and nutrition, and create job and 
educational opportunities as an alternative to migration.
    Honduras has made impressive strides in addressing its homicide 
rate, lowering it by one-third from 2011 to 2015, and its legislature 
recently approved--by a near unanimous vote--the OAS-led Mission 
Against Corruption and Impunity in Honduras (MACCIH). However, recent 
developments underscore the importance of continual progress by the 
Honduran government to meet its commitments under the Alliance for 
Prosperity. The tragic murder of indigenous and environmental activist 
Berta Caceres on March 3 highlights the deficits in citizen security in 
Honduras. Honduran President Juan Orlando Hernandez stated the 
investigation into Ms. Caceres' murder is a national priority and 
condemned the murder in the strongest of terms. We continue to call on 
the Honduran government to conduct a prompt, thorough, and transparent 
investigation to ensure it brings to justice those responsible. In 
addition, despite taking key steps to reform its national civilian 
police, Honduras heavily relies on its military police to provide 
citizen security. Returning all domestic law enforcement duties to 
civilian authorities remains a key component of our security 
cooperation in Central America. U.S. assistance will continue to play a 
key role in training and professionalizing Honduran civilian law 
enforcement authorities, enabling them to increase their capacity to 
provide citizen security in Honduras.
    The leak of the ``Panama Papers'' earlier this month demonstrated 
the need for increased transparency in the international financial 
system. It further showed how much work remains to be done in the 
worldwide fight against corruption and illicit financial transactions. 
For its part, Panama has taken important steps to enhance the 
transparency of its financial system, tax regime, and anti-money 
laundering standards, including enacting a law in April 2015 that 
closed a major loophole in the country's anti-money laundering 
regulations. Under the new law, non-financial businesses like law firms 
and real estate agents are required to comply with the same reporting 
requirements on anti-money laundering and counter-terrorism financing 
as financial institutions. In recognition of Panama's recent reforms, 
the Financial Action Task Force removed Panama from its ``gray list'' 
of countries with strategic AML/CFT deficiencies in February 2016. We 
continue to engage the Government of Panama at senior levels to 
implement this new legal regime, and promote efforts to increase 
transparency and accountability throughout the region.
    We also continue to respond to the sustained, elevated levels of 
unaccompanied alien child (UAC) and family migration from the region. 
March 2016 is the eighth straight month in which the U.S. government 
apprehended more UACs and family migrant subjects than in the same 
month in 2015. Northern Triangle governments share our concerns about 
irregular migration and are taking additional steps to respond. The 
Salvadoran government appointed ``Border Coordinators'' at two key 
ports of entry to oversee the interaction of the numerous agencies 
operating at the border, improving communication and coordination. 
Guatemala plans to remodel and expand a migrant reception center to 
enhance its ability and capacity to successfully reintegrate returned 
citizens back into the local community and economy. In Honduras, the 
government continues to make progress in apprehending UACs and family 
units being smuggled out of the country, and will deliver biometrics 
technology to all border posts to increase security this year. 
Continued U.S. support will enhance the capacity of Central American 
and Mexican governments to manage migration flows, combat human 
smuggling and trafficking, and enhance border controls. Our assistance 
also includes capacity building in Central America and Mexico to ensure 
respect for the rights of migrants and protection as guaranteed under 
domestic and international law.
    The Central American governments in the region continue to 
demonstrate significant political will to make the difficult decisions 
that can lead to systemic reform. The transformation we seek will not 
happen overnight, and there may be setbacks on the path to success. 
Only through sustained commitment, both ours and theirs, will Central 
America realize its potential. We are working in partnership with 
regional governments and international donors to leverage our 
collective efforts and seize this important moment to create the 
opportunities to encourage Central Americans to remain at home so they 
can help contribute to the creation of a more secure, democratic, and 
prosperous region.
    Thank you again and I look forward to any questions you may have.


    The Chairman. Thank you.
    Ms. Hogan?

 STATEMENT OF ELIZABETH HOGAN, ACTING ASSISTANT ADMINISTRATOR 
  FOR LATIN AMERICA AND THE CARIBBEAN BUREAU, U.S. AGENCY FOR 
          INTERNATIONAL DEVELOPMENT, WASHINGTON, D.C.

    Ms. Hogan. Thank you very much. Mr. Chairman, Ranking 
Member Cardin, and members of the committee, thank you for the 
invitation to testify today.
    I appreciate your support of USAID's work in Latin America 
and the Caribbean, and I am pleased to update you today on our 
efforts in Central America.
    I would like to focus on what USAID is doing to help 
address the challenges the region faces. We see prosperity, 
improved governance, and security for the objectives of our 
strategy for engagement in Central America as interdependent.
    We know that opening doors to employment and education for 
citizens, especially youth at risk of gang recruitment, crime, 
and violence, will bolster our efforts in security and lead to 
freer, more prosperous societies. That is why our prosperity 
programs include efforts to support small businesses and 
entrepreneurs, to encourage private investment, to train youth 
in job skills, and to improve agricultural productivity.
    In El Salvador, for example, we have helped 10,000 small- 
and medium-sized companies exceed $10 million in domestic sales 
and exports, and create over 15,000 new jobs, 49 percent of 
which are filled by women.
    In Honduras, our Feed the Future program investments 
resulted in an increase of nearly 55 percent in the incomes of 
more than 180,000 program beneficiaries, some of the country's 
poorest people.
    These efforts to grow prosperity are only sustainable in an 
environment where democratic values and institutions flourish, 
where citizens can depend on basic social services, where 
impunity is reduced, human rights are respected and protected, 
and civil society and the media can play their rightful roles.
    The peaceful protests against government corruption that 
characterized the Guatemalan Spring offer real hope that we 
have entered a new era in Central America.
    Our governance projects include help to reform institutions 
to root out corruption; to strengthen civil society's ability 
to hold governments accountable; to foster a culture of respect 
for human rights, especially for the historically marginalized 
groups; and to improve fiscal transparency.
    For example, in Guatemala, we have supported the National 
Forensics Institute since its inception in 2007. This body 
played an instrumental role in analyzing the evidence that led 
to the indictment of the former President and Vice President on 
corruption charges.
    Ultimately, none of our efforts in prosperity and 
governance will take root in societies that are plagued by 
insecurity. The heart of our security work is youth focused, as 
we invest in programs that reach those most at risk for gang 
recruitment, crime, and violence. We are using tested 
approaches in the most violent-prone communities to create safe 
community spaces, to provide job and life skills training, and 
to build trust between police and residents. Already, we are 
seeing tangible results of our crime prevention activities in 
El Salvador, where our initial analysis points to a drop in 
homicides of more than 60 percent in the 76 communities where 
USAID targets its programming.
    As we carry out these plans, we are forming partnerships 
with the private sector and establishing regional networks that 
we hope will accelerate and strengthen our efforts. We 
currently have 60 private-sector partners in the Northern 
Triangle, from whom we leveraged $150 million in fiscal year 
2014 in support of our work for at-risk youth and our efforts 
to increase food security and grow incomes.
    These are challenging efforts that require increased focus 
and manpower, and we are committed to efficient, effective, and 
transparent oversight of the programs through which we are 
implementing the U.S. strategy.
    We use a full range of monitoring and evaluation tools. We 
are commissioning external impact studies to better inform our 
development work, and have established 5-year strategic plans 
to guide our work in each country. In short, we are collecting 
hard data to inform our programming so that we can take 
advantage of what works and make adjustments along the way.
    We are encouraging the Northern Triangle governments to 
employ similar oversight methods, using the Partnership for 
Growth (or PEG) as a model. As you know, the Partnership for 
Growth is founded on principles of country ownership and 
partnership; high-level mutual accountability and transparency; 
rigorous, evidence-based analysis to focus and prioritize 
resources; and a whole-of-government approach.
    Through Guatemala and Honduras, we hope to replicate the 
Partnership for Growth model. We intend to use the lessons 
learned from the implementation of PFG in El Salvador to 
encourage mutual accountability, coordination, rigorous 
measurement, and transparency with the public.
    We believe that with concrete steps and increased 
investments we are seeing from the Northern Triangle 
governments, coupled with our own investments, we are well-
placed for success.
    Thank you, Chairman Corker, Ranking Member Cardin, and this 
committee, for your support and leadership on U.S. engagement 
in the Northern Triangle, and I look forward to your questions.
    [Ms. Hogan's prepared statement follows:]


 Prepared Statement of Elizabeth Hogan, Acting Assistant Administrator 
      for Latin America and the Caribbean Bureau, U.S. Agency for 
               International Development, Washington, DC

    Mr. Chairman, Ranking Member Cardin, and distinguished members of 
the committee, thank you for the invitation to testify today. I am 
grateful for the committee's support for the United States Agency for 
International Development's work in Latin America and the Caribbean, 
and am pleased to have this opportunity to update you on our efforts in 
Central America.
                          development context
    As you know, social development and economic growth in Central 
America have been stymied by a dramatic rise in crime and violence--
particularly in the Northern Triangle countries of El Salvador, 
Guatemala and Honduras. While the homicide rate has declined in 
Honduras, it is still unacceptably high. In El Salvador, the statistics 
from 2015 are particularly alarming--over 100 murders per 100,000 
people. This surpasses the murder rate at the peak of El Salvador's 
civil war in the 1980s.
    The recent wave of insecurity is rooted in increased gang violence 
and transnational crime, deep-seated social and economic inequity, lack 
of economic opportunity, and high unemployment. These problems are 
exacerbated by systemic challenges across local and national 
governments in the region. Institutions are plagued by lack of capacity 
to govern, antiquated management systems, and corruption that continues 
to undermine efforts to improve security and advance prosperity. 
According to Transparency International (2015), three of the five most 
corrupt nations in Latin America and the Caribbean are in Central 
America.
    We continue to see the consequences of these problems manifest at 
our border as children and families make the dangerous journey to the 
United States. This migration is deeply concerning to us and our 
interagency partners, and USAID is determined to help migrant 
returnees, while simultaneously addressing the underlying causes that 
drive people away from their homelands. In the immediate term, USAID 
supports the work of the International Organization for Migration to 
upgrade reception centers across the Northern Triangle, improve intake 
and referral services for returned migrants, and provide technical 
assistance to governments to improve their own child protective 
services and migration data analysis.
                 regional response from central america
    These obstacles are deeply entrenched, and years in the making, but 
they are not insurmountable. As we have seen in Colombia, where peace 
is within reach after decades of internal conflict and poverty, real 
development gains occur when there is a strategic and determined effort 
on the part of host governments, an engaged civil society, and 
sustained commitment by the United States.
    We have already seen promising signs of the Central American 
governments' commitment in the form of a serious, regional plan, the 
Alliance for Prosperity, which aligns closely with much of our United 
States Strategy for Engagement in Central America. The Alliance for 
Prosperity lays out the Northern Triangle governments' shared 
commitment to grow their economies, create employment, and improve the 
life prospects of their citizens, particularly the poorest and most 
vulnerable. We are encouraged that the governments of Guatemala, 
Honduras, and El Salvador passed 2016 budgets totaling $2.6 billion to 
support the Alliance for Prosperity.
    Policy reforms undertaken in the past several years have translated 
into tangible results on the ground. Newly elected President Morales 
has committed to extending the mandate for the International Commission 
Against Impunity in Guatemala (CICIG) beyond his own term in office. 
With USAID support, the Guatemalan judicial system, Office of the 
Attorney General, High Impact Court, and National Forensics Lab have 
made progress in combatting impunity. Honduras initiated top-to-bottom 
reforms of its National Police and has embraced violence prevention as 
policy.
    Neighboring El Salvador has developed the most comprehensive 
national security plan in the Northern Triangle--Plan Seguro. El 
Salvador has started Plan Seguro implementation in ten of the country's 
most violent communities, and USAID and the Department of State's 
Bureau of International Narcotics and Law Enforcement Affairs (INL) 
have concrete plans to support their efforts. Plan Seguro is financed 
by newly imposed taxes on telecommunications companies and Salvadorans 
who earn more than $500,000 per year.
    These particular actions and local ownership of the Alliance for 
Prosperity demonstrate political will from the Northern Triangle 
countries. Nevertheless, a strong partnership with the United States is 
necessary to achieve and sustain our shared objectives of prosperity, 
improved governance, and security, which underpin both the Alliance for 
Prosperity and the United States Strategy for Engagement in Central 
America. This partnership is in line with USAID's overall mission to 
partner to end extreme poverty and promote resilient, democratic 
societies while advancing our security and prosperity.
                               prosperity
    One of our key priorities is to spur greater prosperity in the 
Northern Triangle by supporting broad-based economic growth programs 
designed to expand business, employment, and educational opportunities 
to the poor and those most likely to migrate. We know that opening 
doors to employment and education for citizens--especially youth at 
risk of gang recruitment, crime, and violence--will bolster our efforts 
in security and lead to safer, more prosperous societies.
    USAID will continue to support El Salvador in its own efforts to 
grow the economy at the municipal and national levels. At the local 
level, our work includes projects that help local communities promote 
economic development and business opportunities. At the national level, 
we are assisting the government to create a more welcoming business 
environment, encourage private investment, and improve the ability of 
small and medium enterprises to take advantage of market opportunities.
    USAID's investments have helped enable domestic sales and exports 
by 9,000 Salvadoran companies that have exceeded $100 million and led 
to the creation of over 15,000 jobs. More recently, USAID's partnership 
with the El Salvadoran small business development agency has expanded 
services in two of Plan Seguro's most violent municipalities, bringing 
together small business owners, municipal authorities, and police to 
create viable business development zones.
    In Guatemala, our prosperity programs are geographically focused in 
the rural Western Highlands, where poverty levels are the highest. 
Chronic malnutrition rates remain around 50 percent country-wide and 
average 66 percent in indigenous communities in the Western Highlands. 
As a result of USAID's Integrated Program, targeted communities have 
seen a reduction in the prevalence of poverty, improved nutritional 
status for children, increased income and employment, greater 
agricultural productivity, improved access to water, and better health 
and educational services. For instance, in the 2,500 communities where 
we work, the prevalence of poverty was reduced from 85.9 percent in 
2012 to 72.9 percent in 2014, according to an independent evaluation. 
According to preliminary data from the latest mid-term evaluation, 
chronic malnutrition was reduced from 67.4 percent in 2013 to 64.9 
percent in 2015 for children under five in the same target communities.
    We plan to significantly expand the Integrated Program to help 
address the causes of migration by youth from the region. This includes 
exploring new economic opportunities in sectors beyond agriculture, as 
well as ramping up workforce readiness and vocational education 
opportunities. With additional FY 2016 and FY 2017 resources, we can 
expand the reach of our Integrated Program to all of the targeted 
municipalities in the Western Highlands with the greatest levels of 
migration.
    In Honduras, USAID will use additional resources to build on our 
successful Feed the Future (FTF) programming, which has shown 
significant results in reducing extreme poverty. While monitoring FTF 
investments, we have tracked program progress and found that between 
2011 and 2015, incomes increased by nearly 55 percent for more than 
180,000 of the poorest individuals. Within the last fiscal year alone, 
the number of FTF beneficiary families whose incomes rose beyond the 
extreme poverty line increased by 30 percent (8,719 in FY 2015, 
compared to 6,626 in FY 2014).
    Across all three countries, we will invest in clean energy programs 
and trade facilitation that promote regional electricity integration, 
in support of President Obama's Energy Security Task Force for Central 
America, and prepare the poor to actively participate in the 21st 
century workforce. Our investments will promote clean energy, and 
improve the poor quality of electricity in the region. Less expensive, 
more reliable energy will improve the competitiveness of the business 
sector while enhancing energy security.
                               governance
    Economic growth and security are only sustainable in an environment 
where democratic values and institutions flourish, citizens can depend 
on basic social services, impunity is reduced or eliminated, human 
rights are respected and protected, and civil society and the media can 
play their rightful roles. The peaceful protests that characterized the 
``Guatemalan Spring'' offer real hope that we have entered a new era in 
Central America. Ultimately, the success of our efforts depends upon 
strong and effective governance by the Northern Triangle countries.
    We plan to invest the increased FY 2015 and FY 2016 funding in new 
initiatives to promote good governance and accountability in the 
Northern Triangle. In Guatemala, USAID will complement a Millennium 
Challenge Corporationsupported tax administration program to assist 
private sector and civil society groups in monitoring the effectiveness 
of the tax and customs services. In an effort to address rampant 
corruption and build on the wave of public sentiment and support for 
reform, we are considering support for the start-up of the Government 
of Honduras and Organization of American States' new anti-corruption 
initiative, known by its Spanish acronym MACCIH. This would include 
resources to help stand up the investigative unit and support the civil 
society observatory, which will monitor and promote the implementation 
of reforms to the criminal justice system. With FY 2016 resources, we 
will continue to support programs that address chronically low tax 
revenue collection, improve fiscal transparency, and expand justice 
sector reform throughout the region. USAID provides technical training 
to judges, lawyers, and court personnel, as well as technical 
assistance to the juvenile justice system on important rehabilitation 
and reintegration reforms.
    In El Salvador, we support civil society to advocate for passage of 
civil service laws and transparent policies for hiring and promotion, 
and assist the government to develop a national integrity plan that 
improves transparency in public resource use. For example, USAID, the 
Government of El Salvador, and the Government of Brazil partnered to 
support the launch of a new fiscal transparency portal. The portal, 
which receives more than 10,000 hits per month, provides a user-
friendly platform for researchers, the private sector, and ordinary 
citizens to obtain information about the public budget.
    We are also committed to supporting civil society and human rights 
throughout the Northern Triangle. We work with indigenous groups, human 
rights defenders, and governments to help foster a culture of respect, 
especially for historically marginalized groups. We recognize the 
important role that these groups, particularly indigenous peoples, play 
in sustainable development, conservation, safeguarding biodiversity, 
and adapting to and mitigating the effects of global climate change. 
Our programs work in partnership with these groups by integrating 
consideration of their concerns into our policies, programs, and 
projects; strengthening their traditional resource management 
strategies; helping to legalize and demarcate their territories; and 
helping them to improve their livelihoods.
                                security
    None of our efforts in prosperity and governance will take root in 
societies that are plagued by insecurity. The heart of our security 
work is youth-focused, as we invest in programs that reach those most 
at risk for gang recruitment, crime, and violence. We have supported a 
range of tested, community-level approaches to reduce and prevent crime 
and violence in high-crime communities across the Northern Triangle. 
These approaches include partnering with communities, civil society, 
governments and the private sector to develop crime prevention plans, 
invest in municipal crime observatories, create safe community spaces, 
expand after-school activities, provide job and life skills training, 
and build trust between police and residents.
    Already we are seeing tangible results of our crime prevention 
activities in El Salvador, where our initial analysis points to a drop 
in homicides of more than 60 percent in the 76 communities where USAID 
targets its programming. This statistic is a stark contrast to other 
communities where homicide rates have climbed sharply over the past 
year. Additionally, our 200 youth outreach centers reach around 85,000 
at-risk youth every year who are susceptible to gang recruitment and 
potential migration.
    We will use additional resources to help the Northern Triangle 
governments scale up what is working, particularly in the communities 
from which youth are migrating. We are working with INL to marry the 
United States Government's prevention, law enforcement, and justice 
interventions, focusing on the youth most at risk of falling into lives 
of crime. We are also heartened that the Government of Honduras has 
supported this model and directed its own resources to support this 
program; it is likewise gratifying that so many elements of our model 
are reflected in El Salvador's Plan Seguro.
                           regional approach
    Through our Central America regional platform, USAID recently 
released a new regional strategy to address cross-boundary concerns, 
including human rights, labor, energy and environment issues, and trade 
facilitation. We are developing a new regional trade facilitation 
program that aims to reduce the time and costs to move goods across the 
border, making it easier for businesses to capitalize on market 
opportunities.
    Part of our regional program will expand a successful regional 
trade and market alliance with the Inter-American Development Bank, 
which supports 25,000 small producers in new producer-buyer alliances 
across several agricultural value chains. We also plan to extend our 
regional agreement with the U.S. Department of Agriculture to promote 
food safety, market access, and local capacity in the
    Northern Triangle to export safe, high value agricultural products 
to the United States. In addition, we are planning new regional 
programs to promote human rights and labor rights.
                   partnering with the private sector
    To accelerate progress, we will continue to tap into the resources, 
value chains, expertise, and reach of the private sector. We currently 
boast a roster of 60 private sector partners in the Northern Triangle, 
from whom we leveraged $150 million in FY 2014 resources to jointly 
support our vocational training, education, and employment work for at-
risk youth, and increase food security and incomes for vulnerable 
communities.
                               oversight
    Operationally, we have made several changes to better equip our 
teams to expand successful programs, and design and implement new ones. 
One year ago, USAID instituted a Regional Governing Board comprised of 
Agency leadership in Washington and the field, which meets quarterly to 
identify and share implementation challenges, unblock bottlenecks, 
streamline approaches, and update critical stakeholders including 
Congress. We recently added a civil society consultation to the 
quarterly meetings--in Washington and the field--to ensure that we are 
getting a wide-cross section of input into our plans and programs.
    USAID has realigned our staffing pattern to accommodate 16 new 
positions in the field and Washington that support the implementation 
of the U.S. Strategy. We are also unifying all of our procurement 
planning throughout the region, so that staff can be mobilized to work 
on the highest priority procurements. These changes give us the 
management capacity needed to more effectively implement the increased 
funding for Central America.
    USAID is committed to accountability, transparency, and oversight 
of the programs through which we are implementing the U.S. Strategy. We 
rely on a full range of monitoring and evaluation tools, including 
survey data collection, performance indicator monitoring, analysis, 
studies, and external evaluations. Our Missions in the Northern 
Triangle are also guided by five-year strategic plans, and their 
individual monitoring, evaluation, and learning plans. These tools and 
plans not only allow us to establish baselines and track the status of 
our programming; they also help us to be more flexible in our approach 
by demonstrating what is not working and providing the data needed to 
help us adapt our programs and allocate resources accordingly.
    For example, last year we expanded our community-based crime and 
violence prevention programs in Central America after an independent 
and rigorous impact evaluation statistically demonstrated that crime 
victimization is dramatically lower and public perception of security 
higher, in USAID's treatment communities.
    In addition, we recently created a Central America Learning Agenda 
to build regional evidence and data collection for each of the three 
pillars of the U.S. Strategy. This Learning Agenda allows our team to 
compile evidence from ongoing regional assessments and evaluations, and 
to plan and carry out performance and impact evaluations for new or 
expanded programs.
              encouraging cooperation and accountability: 
              the el salvador partnership for growth model
    USAID remains resolutely focused on helping the governments of 
Guatemala, El Salvador, and Honduras become more responsive and 
transparent to their citizens. We coordinate our support with other 
United States Government agencies, and have made our assistance 
dependent on significant reform. The U.S. Strategy for Engagement in 
Central America reinforces the Alliance for Prosperity, which commits 
the countries to monitor and evaluate their own efforts and empowers 
civil society organizations to assume an oversight role as well. 
Adopting a collaborative approach that encourages not only 
partnerships, but also ownership by governments and civil society 
requires intensive work, but, importantly, increases buy-in and 
commitment.
    To accomplish our goals, USAID intends to support the core 
operating principles of the Administration's Partnership for Growth 
(PFG) model in Guatemala and Honduras, encouraging mutual 
accountability, coordination, rigorous measurement, and transparency 
with the public. The PFG model, founded on principles of country 
ownership and partnership; high-level mutual accountability and 
transparency; rigorous, evidence-based analyses to focus and prioritize 
resources; and a whole-of-government approach, was first used in El 
Salvador, where our efforts ensure that aid follows reform. For 
example, USAID leveraged the Millennium Challenge Corporation's 
existing efforts to promote key reforms on public-private partnerships 
and money laundering--important legislation that was needed to ensure 
sustainability for our efforts and was agreed to by the Government of 
El Salvador when PFG was launched in 2011. Though Guatemala and 
Honduras are not PFG countries, we intend to use lessons learned from 
the implementation of PFG in El Salvador to promote reform, 
transparency and local ownership of development progress.
                               conclusion
    With renewed commitment from Northern Triangle countries to advance 
their own development goals, and our government's support, USAID is 
well placed for success. Our programs are strategically designed to 
confront current challenges while also enabling countries to better 
address emerging threats. As we have seen with the Zika outbreak and 
the prolonged drought, preparation and coordination are crucial to 
mitigating the effects of, and developing a response to, the crises and 
natural disasters that the region regularly faces. Political will, in 
combination with improved local capacity, leveraged resources and new 
partnerships, will allow us to help Central American governments create 
a more peaceful, prosperous, and integrated region.
    On behalf of the Agency, I would like to thank Chairman Corker, 
Ranking Member Cardin and this committee for your support and 
leadership on U.S. engagement in the Northern Triangle. We look forward 
to collaborating with you to address long-standing challenges and new 
opportunities for reform in the region. Thank you for your time; I look 
forward to your questions.


    The Chairman. Thank you.
    As a courtesy to the other members, I am going to reserve 
my time for interjections. And thank you both for the sort of 
higher level testimony.
    I do hope that, over the course of questioning, we will 
understand how this is going to work with the Alliance for 
Property, how these two are going to tie together. I think 
there are a number of questions about that.
    But with that, Senator Cardin?
    Senator Cardin. Thank you both for what you are doing.
    There is a general belief that if you are in the Northern 
Triangle, you have a better chance to be a member of a family 
that has been a victim of a crime than a perpetrator of a crime 
being held accountable for their crimes. The impunity rates are 
just unbelievably high.
    So I am going to ask a couple questions related to what we 
are doing to deal with the issues of corruption and the issues 
of independent judiciaries and law enforcement.
    But let me start first with the brazen murder of Honduran 
human rights activist Berta Caceres. In Colombia, we supported 
$10 million for dealing with protecting mechanisms for human 
rights defenders. What are we doing in regard to protecting 
civil societies in the Northern Triangle as part of our plan?
    Mr. Palmieri. Senator, thank you for that question.
    Across-the-board, the strategy for engagement in Central 
America is making investments in better governance, and part of 
those investments in the governance area is designed to help 
governments better protect their citizens, lower those impunity 
rates.
    But with respect to assistance directly to civil society 
activists, we insist on the highest human rights standards. Our 
training of the police forces incorporates human rights 
training elements. And in these governments where they have put 
in place new legislation to better introduce protective 
measures, we are trying to facilitate and accelerate the 
implementation of that legislation.
    Senator Cardin. Can you put a dollar amount on what we are 
investing on trying to protect civil societies operating in the 
Northern Triangle?
    Mr. Palmieri. I do not have the specific figure, but we 
will get that for you, sir.
    Senator Cardin. I appreciate that.
    I want to follow up on democracy funding, as to what we are 
doing in supporting democracy funding. If you could provide us 
a look at Plan Colombia, what we spent in that country 
successfully. We are not finished yet. Governance was 
critically important there, and I think there are lessons to be 
learned.
    As I look at what we are doing in the Northern Triangle, a 
lot of money is being invested in security, which is necessary. 
I do not disagree with that. But I do not see the same 
commitment as it relates to governance.
    Ms. Hogan. Thank you for that very important observation, 
and let me assure you that democracy and governance is equal to 
the resources and the programs that we are funding under the 
other two pillars of prosperity and security. That is the 
design of the strategy.
    Although the request level for democracy and governance 
programs might look smaller to you compared to those other two 
pillars, in fact, we are supplementing that with resources from 
our Central America Regional Security Initiative, or CARSI 
program, which is also doing governance work at the local 
level, particularly through municipal services--as well as 
improving the transparency of those municipal governments. Our 
CARSI program is also supporting human rights, particularly in 
the area of gender-based violence programs.
    So that is one way that we complement the work that we are 
doing in the democracy sector.
    Also, under the prosperity pillar, we are using resources 
to help provide support to the oversight bodies within 
governments, like the supreme audit association, to the 
financial management systems under the ministries of finance, 
to the overhaul of tax regimes, where in El Salvador, for 
example, we have recently helped them put online an e-
procurement system.
    Senator Cardin. Let me ask you this, how confident are you 
that they have set up the proper mechanism to evaluate their 
anticorruption activities? In Guatemala, they have used the 
U.N.-backed international commission. That was too 
controversial for the other two countries. They wanted to have 
more propriety as to the mechanism that was set up, to be more 
local.
    What is our confidence that they will adhere to 
international standards to fight corruption?
    Mr. Palmieri. To begin, it is a critical component of the 
appropriation, and it is a criteria that we will be certifying 
the countries on.
    Second, in Honduras, they have reached an agreement with 
the OAS on this organization MACCIH that will have independence 
and an ability to investigate corruption cases within the 
country.
    In El Salvador, we are working through the PFG and other 
mechanisms to ensure that citizen groups also have a voice in 
pressing their governments for greater accountability as well.
    Senator Cardin. Look, there is a lot of pressure on 
certifications, and I strongly support what is being done on 
the appropriations side to make sure that there is 
accountability for the release of funds, and they work very 
closely with this committee as we work together to put that 
into the appropriation process.
    But we also know that you have governments that desperately 
need funds, and at times we can say, look, we have to be a 
partner.
    How committed are you on these certifications to make sure 
that we demand and accomplish achievable results in fighting 
corruption?
    Mr. Palmieri. I think it is absolutely essential for the 
success of both the Alliance for Prosperity and for our own 
strategy for engagement and the congressional support to this 
that the governments themselves are involving actively citizen 
groups and civil society in the oversight of the Alliance for 
Prosperity and our programs.
    Senator Cardin. I agree with that.
    Mr. Palmieri. We are committed to ensuring that there is a 
real process.
    Senator Cardin. I agree with that, but it is more than just 
involving the civil societies and having more transparency. It 
is also reducing the impunity rate so that those who commit 
these crimes are held accountable under an independent judicial 
system.
    Let me just ask one other question quickly, if I might, and 
that is the status of those who want to come to America 
legally. We have refugee status issues. We have victims of 
trafficking that are entitled to relief. We have the Central 
American minors program.
    It seems like these programs are overly complicated for 
those that are victimized to be able to establish a legal path 
to come to the United States.
    I was there. I was in the community. I have met with young 
people. There is a common desire to come to America. I 
understand that. The neighborhood I visited, it was very clear 
to me in talking to the U.S. people that were there that a 
large number of these children will not survive in their 
community because of the gang activities.
    So what are we doing to facilitate the legal process for 
those who are entitled to come to America?
    The Chairman. Do so briefly, because we are going to try to 
finish by 11:55, okay?
    Mr. Palmieri. Yes, sir.
    The Central America minors program last year received 7,600 
applications, and it has begun to process and get more of those 
children who need this protection through the screening process 
and into the United States under its protective element.
    We always knew when we stood up that program it would take 
some time to gain widespread knowledge of it. We expect, in the 
year to come, that we will see more and more parents and 
children taking advantage of the program, sir.
    Senator Cardin. Will you make available to the committee 
the numbers that have actually gone through the process, how 
long it took, how many have actually been allowed to come to 
the United States? Would you get that specific information to 
us?
    Mr. Palmieri. Yes, sir.
    Senator Cardin. Thank you.
    The Chairman. Thank you. Thank you very much.
    Senator Gardner?
    Senator Gardner. Thank you, Mr. Chairman. Thanks for 
holding this hearing today.
    Thank you to the witnesses for your service and your time 
today.
    Mr. Palmieri, just a question for you, on the Mexico border 
with these northern countries, what is the situation on the 
border itself? You may have talked about this earlier in your 
testimony, but I was late. I just wanted to get your taste for 
what you think is happening there.
    Mr. Palmieri. On the Mexico-Guatemala border, Mexico has 
really stepped up its cooperation with the Guatemalan 
Government in controlling that border. We have also provided 
additional assistance to Mexico in the form of embedded CBP 
advisers, biometric equipment. Mexico is doing a much better 
job on its southern border on preventing that flow. In fact, in 
calendar year 2015, they stopped over 18,000 unaccompanied 
children, compared to around 10,000 the year before.
    There is a cross-border task force between the two 
governments. I think we have a lot of good cooperation from 
Mexico.
    But more importantly, we are building that same type of 
cooperation between El Salvador and Guatemala, and Honduras and 
Guatemala, and all three of the Northern Triangle countries, so 
that they also are better controlling their borders.
    Senator Gardner. So as a result then, we have seen a 
decrease in human trafficking as a result of these changes?
    Mr. Palmieri. There is a lot of human trafficking and alien 
smuggling going on in Central America. We think we have a much 
more effective process now that our Department of Homeland 
Security elements in our embassies are working on coordinated 
investigations. There was a highly successful investigation 
that involved Mexico, Guatemala, and El Salvador last fall that 
broke up an alien-smuggling ring.
    Part of the critical component of our program in Central 
America is to strengthen border controls and the ability to 
disrupt these networks.
    Senator Gardner. So would you characterize that as a 
decrease in human trafficking though?
    Mr. Palmieri. I believe we are having success in disrupting 
those networks, but the flows remain high. And other conditions 
in the region, the longer term underlying conditions continue 
to exist, and that is why our investment in this region is so 
important, because with 6 million young people looking for 
jobs, we not only have to provide security, but we have to help 
catalyze greater economic investment and job creation.
    Senator Gardner. Just so I understand, you are making these 
changes, making these investments, and they have done this, but 
we are not ready to commit ourselves to saying that we have 
actually seen a decrease in human trafficking then?
    Mr. Palmieri. Sir, I do believe there has been a decline in 
alien smuggling and human trafficking. The numbers are down 
from 2014.
    Senator Gardner. Thank you. And what about drug 
trafficking?
    Mr. Palmieri. Drug trafficking continues to be a very 
serious concern throughout the region. It is the primary 
transit zone from drugs coming from South America. All three 
countries are cooperating with us and working to help interdict 
that flow. But we know that coca cultivation rates are up in 
South America, and it will be a challenge to continue 
interdicting that drug flow.
    Senator Gardner. General Kelly, the former command at 
SOUTHCOM, talked about how, in his estimation, we have eyes on 
roughly 90 percent of the narcotic traffic coming out of 
Central and South America.
    Do you agree with that assessment? You may or may not have 
that information.
    Mr. Palmieri. I do not have the specific information that 
General Kelly has, but I do think we have good partners. We do 
have an effective system in the joint task force in Key West. 
We are tracking a lot of it. And we probably do need more 
assets in the region, both from our partners and our own assets 
there to help interdict.
    Senator Gardner. The conversation he had is he talked about 
how we had significant ability to watch to know what was being 
trafficked, but very little ability to stop, the resources 
needed to intercept or interfere with that transfer.
    If we have eyes on it, what do we need to do to actually 
stop it?
    Mr. Palmieri. That is why the strategy for Central America, 
and the appropriation that looks at building the capabilities 
of our partners in the region on the security front, is so 
important. Those investments that help these governments 
themselves become more effective partners to the United States 
will help us impede that flow.
    Senator Gardner. When I was in Mexico this past winter, I 
had a conversation about drug trafficking issues. One of the 
concerns that was brought up was about some of the policies in 
the United States as it relates to certain efforts to legalize 
marijuana and other drugs in the United States, and how they 
felt that the U.S. was sending a mixed message in terms of 
narcotic trafficking and stopping the flow of drugs from Mexico 
to the United States.
    Are you seeing policies within the United States, domestic 
policies, State-driven policies, having an effect on our 
conversations in Central America?
    Mr. Palmieri. Senator, there you are beginning to get a 
little bit out of my area of expertise. I know that all the 
countries in the region are concerned that the demand in the 
United States spurs the supply in the region. I think it is an 
important element of the administration's effort to reduce 
demand in the United States. In some respects, we have had 
success in that area. But the countries, they do express 
concern about it.
    Senator Gardner. Ms. Hogan, what do you think, in terms of 
the challenges that we are facing in these nations, what is the 
most challenging issue?
    Ms. Hogan. Certainly, security is the greatest challenge, I 
think, that these governments face right now. In fact, the 
homicide rates in El Salvador are at the highest levels since 
the civil war in the 1980s.
    When we testified before a House committee just two months 
ago, we noted that the homicide rate in El Salvador was at a 
historic high, at 103 per 100,000 persons. It has gone even 
higher than that in the past month, now surpassing 120 
homicides per 100,000. Compared to Costa Rica, which has eight 
homicides per 100,000, you can get a sense of the problem. So 
this is a very urgent issue for El Salvador and Honduras, 
although there have been gains in Honduras.
    I would say that, for Guatemala, the issue is a little bit 
different. Although security is of great concern in Guatemala, 
there I think it has been decades of noninclusive growth that 
have left the indigenous population, which makes up 60 percent 
of the population of Guatemala, in desperate poverty. It is 
also the driver of migration from the Western Highlands into 
the United States.
    So our programs in Guatemala are focused specifically in 
that region to try to help increase incomes and provide people 
an alternative to migrating to the United States.
    Senator Gardner. Thank you, Mr. Chairman.
    The Chairman. Thank you. Thank you very much.
    Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair. I want to express my 
thanks to you and Senator Cardin for calling this hearing. It 
is a very, very important one, and I want to thank the 
witnesses for the good work that you do.
    There is reason to be hopeful that, if we make these 
investments the right way and we monitor them the right way, we 
can see progress. Certainly, the experience that we have had in 
working on Plan Colombia over the years suggests you can take a 
situation that looks just completely bleak and, with 
persistence, lead to significant progress. In Mexico, the fact 
that we are now at net migration being even from Mexico is also 
a tremendous improvement over the situation many years ago.
    Both Colombia and Mexico have still major challenges, but 
we have seen progress in some key areas that cause us trouble. 
So if we get these investments right, we can be hopeful.
    I was with Senator Cornyn in February last year, and we 
were in Honduras back where I had worked many years ago. Our 
U.S. Ambassador took us to a neighborhood and said, ``I am now 
taking you to the most dangerous neighborhood in the most 
dangerous city in the most country in the world,'' the 
Chamelecon neighborhood in San Pedro Sula. The homicide rate 
has come down, but right in the middle of that horrible 
neighborhood, there is USAID-run community centers that have 
really been part of, and the Honduran Government would say 
this, have been part of that one-third reduction in the 
homicide rate.
    So big, big challenge, will not be quick, but we need not 
despair about the ability to move the needle the right way if 
we invest the right way.
    I want to talk a little bit about the investments.
    And the other thing, Mr. Chair, I thank you. I do not do 
this enough. The Congressional Research Service report that was 
prepared at your request for this hearing is very, very good.
    The Chairman. It is very good.
    Senator Kaine. And the CRS does a lot of good work every 
day, but they did a very good job of laying out how the 
investments that we passed last year and those proposed by the 
President this year are allocated per account, per country, 
what were some of the metrics that would be examined.
    So I want to get into the question of metrics, metrics of 
success and what we are looking at.
    On the security side, it is a little bit easier. I mean, 
sadly, instances of violence are one of the easiest things to 
measure. So homicide rates per 100,000, you talked about it, 
and we are already seeing some progress in Honduras.
    There is also a security measure that is important to get 
at questions that were raised by Senator Cardin on the 
impunity, the number of convictions and prosecutions or whether 
people are going scot-free. Those are relatively easy to 
measure, not necessarily easy to achieve the measurement you 
want, but you can track them.
    What measures do you use on the other half of the 
investment? So it is security, it is prosperity, it is 
democracy, democratization, transparency? What are you looking 
at as the measureable signs of progress, kind of the metrics 
that you want to see from the three Northern Triangle countries 
on the economic and democratization side of these investments?
    Ms. Hogan. Thank you for the question.
    On the economic side, we want to see inclusive growth. We 
want to see increased jobs, particularly for marginalized 
groups such as youth, women, LGBTI, and others who have been 
subject of harassment or lack of opportunity. So that is 
certainly one measure that we will use.
    On the democracy front, we want to see a reduction in the 
number of cases that are thrown out for a lack of evidence. And 
I can say that USAID has invested in Guatemala in 24-hour 
courts. That is a model for efficiency in the justice system, 
whereby it is open 24 hours 7 days a week and we have co-
located judges, prosecutors, investigators, and medical 
professionals, forensic scientists, et cetera.
    As a result, what we have seen in these 24-hour courts is 
that the cases that had been thrown out for lack of evidence 
were 75 percent before these courts were established, and they 
have now reduced to 15 percent of cases that are thrown out for 
lack of evidence. So what we see is that, rather than relying 
simply on witness testimony, now we have the kind of hard 
forensic science and data we need to be sure that these trials 
go forward, and we can reduce impunity by putting together the 
kinds of cases that will put perpetrators in jail.
    Senator Kaine. Can I ask, on the transparency side, 
Honduras, as you described in your opening testimony, has 
embraced a transparency initiative first with the NGO 
Transparency International, but now with an OAS independent 
agency to try to promote transparency and accountability, 
anticorruption in government. Guatemala has done the same.
    Remind me about El Salvador? What is going on in El 
Salvador with respect to transparency and anticorruption 
activities?
    Mr. Palmieri. So in El Salvador, they have passed national 
legislation that requires more effective public declaration by 
public officials. They have created a probity commission. They 
are doing it nationally. They have an arrangement with a U.N. 
development organization to strengthen some of the 
institutional capability, but they have not gone as far as 
Guatemala or Honduras and accepted an external entity with an 
ability to independently pursue some of these transparency 
initiatives.
    Senator Kaine. So that might be an area for the committee, 
to the extent that we are interacting with El Salvadoran 
officials, to hold up Guatemala and Honduras. They have 
embraced external, more independent transparency arrangements 
or organizations, and that would be the kind of thing we might 
encourage in El Salvador as well.
    Mr. Palmieri. I think the record of success of the U.N. 
agency CICIG in Guatemala demonstrates that you can improve 
national efforts with a good external partner that has the 
independence to help your institution target those emblematic 
cases and make progress on them.
    Senator Kaine. Let me ask you a question, and I would love 
you to be as candid as you can on this. Some of the success of 
what we are doing, which dovetails fairly nicely with the 
Alliance for Prosperity among the three nations, does depend on 
the degree to which they cooperate with each other, and there 
has been some historical enmities between some of these nations 
in the past, and they are in different places in their 
government, whether there is a new President or a more senior 
President. What is the level of cooperation among the three 
nations on these efforts?
    Mr. Palmieri. I think that is the really historic part of 
the Alliance for Prosperity, that with the assistance of the 
Inter-American Development Bank, the three countries came 
together. As you know, there are some historical enmities 
between them. But they agreed on a common approach that is 
designed to improve the productive sector, build human capital, 
strengthen access to justice, and improve transparency.
    They are working on a common approach to the issue, and I 
think that is significant and a statement of the kind of 
political will that all three countries are putting to the 
effort, Senator.
    Senator Kaine. All right.
    Thank you, Mr. Chair.
    The Chairman. I do hope somehow we get, maybe we will have 
to do it with written questions, but a little more of an 
understanding of how the actual dollars align with what the 
Alliance for Prosperity is doing.
    With that, Senator Rubio?
    Senator Rubio. Thank you.
    One of the new complications many of these countries in 
Central America are facing now is a surge in Cuban migrants who 
have figured out you can take an airplane to Central America. 
And now some of these countries are basically demanding that 
they be allowed to continue their transit here. The argument 
they are making is these people do not really want to live 
here. They are just coming through here to get to the United 
States from Cuba.
    Can you describe, first of all, the strains that this is 
placing on these countries beyond just the Northern Triangle 
countries, the strains that this is placing on Central America? 
Is this not a very serious and growing problem that shows no 
sign of abatement?
    Mr. Palmieri. Yes, sir.
    Senator, I think it is a very serious problem. It is most 
acutely felt in Costa Rica and Panama. And in addition to 
people flying directly, people are flying to Ecuador and making 
their way north through Colombia into Panama and Cuba. It is 
putting a significant stress on the migration officials in 
these countries.
    Our concern is that this has to be done in a safe, legal, 
and orderly way, and we are working with the region's partners 
to develop those goals.
    Senator Rubio. But many of their goal is just to hopscotch 
through the countries in Central America until they got to the 
southern border. They would just cross. And as soon as a Cuban 
crosses the border, they just turn themselves in and they are 
legally here.
    Mr. Palmieri. That is exactly right, Senator.
    Senator Rubio. And this is a growing problem. I mean, we 
have seen this grow over the last year and a half, and this 
route is becoming a well-developed one. I would imagine for 
these countries, especially the ones we are talking about today 
that are already facing significant challenges internally, this 
additional strain is not helpful, to say the least.
    Mr. Palmieri. It is putting a strain, as I said, more 
acutely in Costa Rica and Panama, where the backup is occurring 
because Nicaragua has closed its border somewhat more 
effectively to some of that hopscotch that has been taking 
place.
    Senator Rubio. Okay. Now, switching back to this particular 
topic, there has been a lot of comparison done between what we 
are trying to do here and Plan Colombia. It was nearly a failed 
state when the United States got involved, but I would argue 
that there are some very significant differences between Plan 
Colombia and the challenges that we are facing here now.
    When Plan Colombia came about, it was successful because it 
had the full support of the entire political spectrum in that 
nation. They knew absolutely that it needed to be done. 
Unfortunately, we do not have that yet in the Northern Triangle 
or in Mexico for that matter.
    Plan Colombia also started out with security. It was the 
number one obligation there. They knew that they needed to deal 
with security first. Without security, none of these other 
things would matter, if you did not have a secure environment 
first.
    So you had two things, strong leadership from President 
Uribe and others, combined with this emphasis on security 
first. And only after the security happened were the economic 
developments and some of the other things that needed to be 
done possible.
    So when you look at the violence levels that increasingly 
grow and are incredibly high, you have tens of thousands of 
people being killed, what exactly does this deal do to help 
improve the security? And is it being prioritized on security 
first?
    Mr. Palmieri. Senator, thank you for those observations.
    It is true that security is a critical component of our 
approach to Central America. From 2011 to 2014-2015, we 
invested a significant amount of money in security efforts.
    Senator Rubio. Invested in what, for example? What are the 
security efforts?
    Mr. Palmieri. In community policing models, in 
professionalization of police authorities, in improving their 
ability to interdict drug flows through the region.
    But what we found is, and why we have pivoted is, that we 
needed to balance these investments and to put some more money 
into prosperity and into governance. Together we think a more 
balanced approach, that maintains the security investments but 
then brings along these additional investments in governance 
and in economic prosperity, we think this will give us a better 
chance of success over the longer term in helping these 
countries pursue their own plan, which is the Alliance for 
Prosperity.
    And, sir, I believe that that is a historic change in the 
region, that the leaders of these countries realize that they 
cannot go this alone, that they have to work together on a 
common set of principles in how to address the challenges their 
countries are facing.
    Senator Rubio. I understand the balanced approach. My only 
question is whether enough emphasis is still on the security 
aspect of it, because the truth of the matter is--I understand 
that there is a prosperity crisis in that region and that needs 
to be addressed. But my argument is you are not really going to 
be able to address it as long as you have the amount of money 
being spent and invested by these criminal organizations, which 
in many cases are much better funded, better paid, better 
equipped, better armed than the police agencies we are trying 
to empower.
    When you talk about security, are you saying we are only 
working with police departments? Have there been investments 
made in the military, because these countries do not have the 
luxury of picking or choosing which agencies are going to 
involved in confronting? In the case of Colombia, their 
military played a significant role in taking on these 
trafficking rings. In fact, some of the most effective antidrug 
initiatives, anticriminality initiatives in Mexico were being 
conducted, for example, by the Mexican navy even inland.
    So where are we investing the security funds? Are we 
prohibited from investing funds in their military apparatus?
    Mr. Palmieri. Our security investments help both police and 
the militaries in the region. Helping professionalize the 
militaries to deal with the external drug trafficking routes 
that go through their countries, but also helping 
professionalize and improve civilian police components.
    Senator Rubio. What about, for example, the court systems? 
Have we invested in improving their criminal justice systems, 
their courts, their ability to prosecute and bring people to 
justice?
    Ms. Hogan. We have, indeed. And in fact, the very public 
corruption cases that took place last year that brought down 
the President, the Vice President, and half of his cabinet, 
were done because of the investments that we have been making 
over years into the prosecutor's office, into the forensics 
lab, into the justice sector, the high impact court, for 
example, that is going to hear these trials.
    So I think we do see signs of success as it relates to 
justice sector strengthening. Clearly, much more needs to be 
done, but I think that we can share some of the credit in the 
successful outcome.
    Senator Rubio. One more question, and this is probably for 
the State Department. What about extradition? What is the state 
of affairs with the ability to extradite kingpins and large 
figures in organized crime?
    Mr. Palmieri. I particularly want to single out Honduras, 
which has made significant progress over the last few years. 
They have extradited a number of kingpins. I think the number 
is now between eight and 13 high-level people that they have 
helped us detain and then extradite to the United States.
    Senator Rubio. Okay. Last question, is this money we are 
spending, is this budget assistance? Are we basically using it 
to help them fund their existing budget? Or are we only 
spending money on new programs for specific purposes?
    Ms. Hogan. It is the latter. We do not do budget support in 
Central America. So our funding goes through implementing 
partners. Although we co-design with our partners in 
government, they do not manage the money on the U.S. 
Government's behalf.
    The Chairman. Thank you.
    Before turning to Senator Menendez, my first interjection, 
I noticed in the Alliance for Prosperity, and CRS did do a good 
job laying this out, just a little over 10 percent of the money 
is being spent on security, just to follow up on that line of 
questioning.
    With our budget, what percentage of it is being allocated 
for security?
    Mr. Palmieri. Of the $750 million appropriation, it is 
roughly 40 percent in economic prosperity, which we had not 
been doing a lot of.
    The Chairman. How much on security? That is all I am 
asking.
    Mr. Palmieri. Right, about 30 percent of the total, sir.
    The Chairman. So 30 percent of our dollars are going toward 
security?
    Mr. Palmieri. Yes, sir.
    The Chairman. One thing to point out is, in Colombia, they 
had President Uribe, who cared about this issue and was most 
dynamic. What is your sense about the leaders of these three 
countries and their commitment to security?
    Mr. Palmieri. I think all three countries understand, as 
Senator Rubio pointed out, you have to have security first.
    In Honduras, President Hernandez has really made lowering 
the homicide rate a top priority that has had success.
    In El Salvador, President Sanchez Ceren has developed this 
plan, Safe El Salvador plan, which targets the most violent 
communities.
    And in Guatemala, where the violence rates are not quite as 
high there, President Morales has reiterated his intention to 
continue combatting crime there.
    The Chairman. I would just reiterate what was already said, 
and that it is very difficult to have much economic growth when 
you have tremendous violence taking place. It just cannot 
happen.
    Do you want to say something, Ms. Hogan?
    Ms. Hogan. Yes. I totally agree with that observation. I 
just wanted to point out that, in El Salvador, as an example, 
we had statistics presented to us from the national police that 
showed that between 2014 and 2015 in the 76 communities where 
USAID had security programs through CARSI, we saw a 66 percent 
decline in the homicide rates in those communities. So this is 
even all the more remarkable, given the fact that over that 
same period of time, there was a 70 percent increase in 
homicides nationwide.
    So we know that we are onto a model that works, and we are 
very happy to see that the Government of El Salvador has taken 
that model and is going to scale it up, and we will help them 
scale it up in the 10 most violent municipalities nationwide.
    The Chairman. To Senator Menendez, who has been certainly a 
leader in focusing on these efforts.
    Senator Menendez. Thank you, Mr. Chairman. And I want to 
applaud you for calling this important hearing.
    For years, I have been saying, going back to President 
Reagan when we spent millions and millions of dollars to 
promote democracy in Central America and largely achieved our 
goals except that we walked away, which is a history lesson not 
only there but in many other places, that we spend millions to 
ultimately win the war and then we walk away and do not achieve 
a lasting peace and prosperity. And that is in part what we saw 
in Central America.
    Then during the Merida Initiative, which I was a huge 
supporter of in the House of Representatives, as the Western 
Hemisphere chair, I must say that I constantly raised the alarm 
bells that as we were helping Mexico institutionally and with 
its security, we would ultimately create pressure that would 
flow, that when we succeeded in Mexico, we would create 
pressure that would flow to Central America. Unfortunately, we 
did not pay attention to that.
    So we have what we have today in part, yes, by the lack of 
good governance and institutions that are capable of meeting 
the challenge, but also from our own policy perspective I think 
we have been shortsighted for some time.
    My view of this is that a long-term solution to the 
region's challenges is social. It is economic development. And 
for too long, the region has remained an afterthought to 
various administrations.
    This issue is as much a domestic issue as it is a foreign 
policy issue. I say that because we hear about the pull factors 
that bring people to America, and there are certainly some of 
those, having elements of our economy that only, it seems, 
others who are willing to work hard at these elements are 
willing to come and do those jobs.
    But there are clearly, particularly in this case in Central 
America, push factors, the violence that is taking place. I 
either stay and die, or I take my chance and flee to the north. 
So those push people, and so that has a consequence when we 
face the challenge of unaccompanied minors and others coming to 
our southern border.
    Then lastly, it is a national security question for us, 
because while it is creating tremendous havoc for the Central 
American countries, it is also creating the breeding grounds 
for transnational crime, with the gangs, with narcotrafficking 
and human smuggling, which I know the chairman is incredibly 
concerned about and is one of his passions.
    So all of this is mixed up with the Central American 
question, which is why this hearing is so important, and I hope 
our continuing attention to it as well.
    The Chairman. If I could, I know you stepped out to go to 
the Finance Committee for a moment, but while you were gone, I 
mentioned we are having this hearing because both you and 
Senator Kaine had pressed for this type of oversight, and that 
is why we are having this today. So I thank you.
    Senator Menendez. I very much appreciate the chairman's 
willingness to do that.
    So let me ask you a couple of questions here.
    One is, the administration has actually promoted in-country 
processing, which is an extraordinary undertaking. But I hope 
we recognize it as a reality that the fact that we are seeking 
in-processing efforts for those who are fleeing because they 
have a reasonable fear of the loss of their lives or freedom is 
a recognition that a good percentage of those who came before 
there was in-processing registration possible, and an 
opportunity to pursue that, were actually fleeing because of 
violence.
    Is that a fair statement to make?
    Mr. Palmieri. Violence is definitely one of the factors and 
conditions in the region.
    Senator Menendez. So the question for me is, between that 
and Secretary Kerry announcing that the U.S. refugee admissions 
program would be expanded with the UNHCR, what is the latest 
progress on the issue? Why the delay in announcing details? How 
many people have benefited from the program?
    Mr. Palmieri. Thank you, Senator.
    The Central American minors in-country processing program 
is rapidly expanding the number of applicants it is taking and 
processing. And we knew, in its initial year, it would have a 
slower ramp-up period, but we think now it is more widely known 
and more people are taking advantage of it.
    With regard to the expansion of in-country processing in 
Central America, we have been working with the UNHCR. We have 
been working with NGO communities and with different 
governments in the region to figure out where and how best to 
establish that program. And we hope to come up in the next 
weeks to give you a more detailed briefing.
    Senator Menendez. Well, I will tell you this. This is not a 
new issue. We had notice. We have had experience. And we are, 
in my perspective, lagging way behind.
    So when the next surge comes, and inevitably it will come, 
despite all of our best efforts, I do not know how we are going 
to look at that and say that we are going to turn back people 
who clearly are at the risk of their lives. When a when a 
mother puts a child on that beast of the train and prays to God 
that that child will make it, it talks about the extraordinary 
circumstances they face.
    So this in-processing process, if it is going to work, we 
have to get it accelerated and the details have to be clearly 
defined, because otherwise we will see another surge, and we 
will hear a chorus of voices, and we will spend more money than 
what we are spending on this program to detain people at the 
southern border and to ultimately send them back.
    So I hope that the State Department will accelerate their 
process here, because it seems that, to some degree, this is an 
aftermath of the thought.
    Let me ask you this. Did State and AID spend all of the 
fiscal year 2016 money for these purposes, for the larger 
purposes?
    Ms. Hogan. We have yet to receive our 2016 money.
    Senator Menendez. You have yet to receive your 2016 money.
    Ms. Hogan. Correct.
    Senator Menendez. So in your estimation, is the level of 
buy-in by the U.S. to bring about meaningful and material 
change in the Northern Triangle countries sufficient? And do 
you have the bandwidth to deal with what is necessary here?
    Ms. Hogan. We believe we do. In fact, in September of 2014, 
having seen the uptick in unaccompanied child migration into 
the United States, knowing that the President was going to 
request additional resources for a new Central America 
strategy, we began then to begin to ramp up our program design. 
We realigned staff by increasing our footprint in the Northern 
Triangle. We have probably $490 million worth of procurement in 
the pipeline for this year.
    So we are ready, and we are moving. And we are moving out 
now in anticipation of these additional resources coming to us 
in 2016, and we will be able to absorb them.
    Senator Menendez. All right.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Shaheen?
    Senator Shaheen. Thank you, Mr. Chairman.
    And thank you both for being here today and for your work 
every day to address the challenges in Central America.
    I want to follow up on Senator Menendez's questioning about 
what we are doing to address the number of unaccompanied minors 
and people coming across, because as you all have pointed out 
and as we see, the numbers have decreased over the last couple 
of years. They are still at historically higher levels, but 
they have decreased. And we have talked about the minors' 
program and the in-country processing and about the efforts 
that Mexico has taken to address this.
    Are there other factors that you would attribute the 
declining numbers to? Let me stop with that and ask you that.
    Mr. Palmieri. I think the administration's response in 2014 
to the surge, working with Mexico, working with the countries 
in the region, developing this assistance initiative, has 
helped give hope to the region that there will be greater 
economic opportunity, greater security, and better governance. 
And I think that has helped.
    I do also have to report, though, that in this fiscal year, 
since October, we have begun to see an uptick in arrivals once 
again.
    We also know that there is a historic drought in Central 
America that has increased the number of people who are at food 
security risk this year from about 300,000 last year to maybe 
over 3 million that will suffer food security risk this year. 
We expect that that will also lead in the months ahead to an 
uptick in arrivals.
    But all of this, I think, underscores why this approach and 
this investment, trying to work on some of the short-term 
conditions, strengthening border controls, working with the 
governments for more effective repatriation, but also trying to 
get at the longer term conditions of job creation, of better 
security, is the best way to address this over time for U.S. 
interests.
    Senator Shaheen. I certainly would agree with that. There 
has, however, been some suggestion that the deportation efforts 
that have occurred in this country have been a way to try and 
send a message to people in Central America and Guatemala, 
Honduras, and El Salvador, that they do not want to come to the 
U.S. because they are going to be sent back.
    Is there any evidence that you all have seen that that is 
the case, that those deportations have an impact on people 
trying to come into the country?
    Mr. Palmieri. There is some polling in the region that 
indicates that people are more aware that the United States has 
returned unaccompanied children who have exhausted all of their 
legal remedies, and that it is harder to stay in the United 
States.
    Senator Shaheen. Okay, thank you.
    I want to switch now to the counterdrug efforts. I am sure 
you are all very aware of the challenges that we face 
throughout the country with respect to the heroin and opioid 
epidemic. In New Hampshire, we have a higher percentage of 
overdose deaths than the rest of the country for our 
population.
    Obviously, having visited the southern border last year and 
meeting with some CBP folks, watching them as they were doing 
some drug interdiction efforts, one of the things they talked 
about is the drugs come across the border from Mexico and then 
they go up the interstates, up 35, up 95, and that is how they 
get to New England.
    So can you talk about how we are coordinating our law 
enforcement and counternarcotics efforts with the economic and 
development assistance that we are providing to these 
countries?
    Mr. Palmieri. Yes, Senator. I think it is a critical 
priority for our counternarcotics effort to improve the 
capabilities of the countries in Central America, but also in 
Mexico the ability to interdict and prevent drugs from reaching 
our border. We do know that where we can make investments in 
security and economic investments in those communities most 
afflicted by this violence that we see lower rates of 
migration.
    At the same time, we continue to make the security 
investments working with the Mexican Government and the Mexican 
military and police forces, and police forces in the region, to 
ensure that they are working in a more coordinated fashion and 
that they are more able to interdict drugs as they move up from 
South America.
    With respect to poppy cultivation, Mexico is a big producer 
country, and so we are working with the Mexican Government on 
that particular problem as well. And we have seen some progress 
in Panama and Costa Rica, which are producing higher levels of 
drug interdictions coming out of South America.
    Senator Shaheen. And have we seen any progress in Mexico 
with the effort to reduce their growing of poppies?
    Mr. Palmieri. The most recent poppy cultivation figures 
that were released show that there has been a significant 
increase in poppy cultivation in Mexico.
    Senator Shaheen. So they are not working very well?
    Mr. Palmieri. The eradication effort in Mexico is not 
having as much success as I think the Mexican Government would 
like it to have, and we are working with them to address that 
issue. But it is going to require a more sustained effort.
    Senator Shaheen. Thank you.
    I only have a little bit of time left, but I wanted to ask 
about the countries' public health systems, because with the 
threat of the Zika virus and all of the implications that that 
has, how prepared are the countries of Central America to deal 
with the Zika outbreak?
    Ms. Hogan. Thank you for the question.
    As you may be aware, the President has put forward a CN to 
ask for reprogramming of some of our Ebola money to do health 
system strengthening in the region, particularly as it relates 
to Zika. So we are pre-deployed, if you will, to increase 
health specialists in the field that can consult with these 
governments, do diagnostics in terms of what is needed. We are 
prepared to invest in public education campaigns, in vector 
control, and personal protections. We are also prepared to 
provide assistance in research and development for vaccines and 
diagnostic tools, as well as provide care to pregnant women and 
to affected infants.
    Senator Shaheen. I am out of time, but what evidence do we 
have that the potential for the Zika virus to spread is 
significant in these countries? Is it something that we are 
worried about at USAID?
    Ms. Hogan. We are very concerned about it, yes.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Before going to Senator Markey, I just want 
to emphasize that we have an entire committee I think that 
cares deeply about Central America. We have three individuals 
that happen to be especially knowledgeable, and Senator Rubio, 
Senator Menendez, Senator Kaine spent a lot of time there 
through the years. But listening to Senator Shaheen's comments, 
I mean the fact is what happens in Central America is very 
important to the United States also.
    I think that there has been a lot of effort put forth in 
other parts of the world and not enough in our own hemisphere. 
That is why I think we are all, on one hand, very excited about 
the efforts that are under way, but on the other hand, wanting 
to ensure there are going to be results and that it is going to 
be successful because we are certainly seeing the 
interdependence that exists here.
    So I appreciate that line of questioning. And again, I hope 
the committee as a whole will continue to show the kind of 
interest in this effort as it is today.
    Senator Markey?
    Senator Markey. Thank you, Mr. Chairman, very much.
    And in this issue of Zika, without question, because of the 
underfunded health care systems in these countries that are 
very near our border, it just makes the case once again for 
full funding for the President's request, so that we can put 
this preventative program in place in the countries that are 
going to be the conduit for Zika to come into our country. I 
think that the sooner we actually begin to look at that $1.8 
billion to $1.9 billion, and just decide we are going to fund 
it, is the less likely we are going to have catastrophic 
consequences, because these are very weak health care systems 
in those three countries, and others like it which also need 
the kind of reinforcement which we gave to Liberia and other 
countries for the Ebola virus. And as a result, no one died in 
the United States.
    If we take that same preventative attitude, I think we 
would be in far better shape.
    But you do not question my premise that they are very weak 
health care systems in these countries?
    Ms. Hogan. I think it varies depending upon the country, 
but, clearly, the countries that we are talking about today in 
Central America will require that type of assistance, yes.
    Senator Markey. Thank you.
    On the human rights front, the Consolidated Appropriations 
Act of 2016 placed various conditions on aid for Central 
America, including withholding 50 percent of the funds until 
the Secretary of State certifies that they are taking effective 
steps to address 12 concerns, amongst them human rights.
    Last week, it came to light that high echelons of the 
police department in Honduras were paid by drug cartels to 
order and carry out assassinations of antidrug officials.
    Last month, Berta Caceres, a human rights and environmental 
activist from Honduras, was murdered by gunmen who entered her 
home in the middle of the night and shot her. This was 1 week 
after she received death threats because of her opposition to a 
hydroelectric project in Honduras. It may be a good project or 
not, but you should not be killed for expressing your views.
    I am sorry to say that this type of violence is not 
restricted to Honduras. The most recent human rights report 
cites significant human rights problems in Honduras but also 
Guatemala and El Salvador, countries which suffer from corrupt 
and weak justice systems.
    So my first question is, in an environment where officials 
conspire with criminals to commit murder, what are your 
perspectives on how difficult it will be for the Secretary to 
certify that the countries of Central America are taking 
effective measures with respect to the protection of human 
rights?
    Mr. Palmieri. Senator, thank you for that question, and it 
is a very important issue.
    If I could just share a personal story, I served in El 
Salvador in our Embassy from 2001 to 2005. I knew Julian 
Aristides Gonzalez Irias. I knew Alfredo Landaverde. They were 
great friends to the United States. They worked hard to fight 
drug trafficking in their country. And this revelation that 
they were killed by police officers is a very, very serious 
issue that is definitely going----
    Senator Markey. So how will this complicate the ability of 
the Secretary, of you, to be able to certify that human rights 
violations are declining and not increasing?
    Mr. Palmieri. We are taking a very hard look at the 
certification requirements, and this is an area where the 
Honduran Government is going to have to address improving 
civilian policing, addressing human rights violations, ending--
--
    Senator Markey. Will a partial cut in our aid to Honduras 
help the effort, in your opinion? Do we have sufficient 
flexibility in that area, that is, in reducing aid, that will 
help them to respond?
    Mr. Palmieri. I think, first, we have to make an assessment 
under the 12 different conditions that we are going to withhold 
50 percent of the aid. And once we make a fundamental decision 
about whether or not they meet those conditions, then we will 
have to address the question of the impact----
    Senator Markey. Ms. Hogan, would a reduction in assistance 
help to focus the attention of the Honduran Government and 
these other governments?
    Ms. Hogan. Actually, I would say that it is all the more 
reason that we need to support these governments to provide a 
human rights protection mechanism that will allow for citizens 
and human rights defenders to be----
    Senator Markey. But these are last week and last month, 
that is the Honduran environmentalist is assassinated, the 
antidrug officials were assassinated. So they are not 
listening.
    Ms. Hogan. One of the things that we are going to be able 
to do, given the increased resources that we have under the 
Central America strategy is invest $25 million to help these 
governments in all three countries develop protection 
mechanisms for early warning systems, for rapid response, to 
support victims, and to create regional networks of human 
rights defenders that can do peer-to-peer learning and benefit 
from each other's protection mechanisms that they have devised.
    Senator Markey. I want to move along this environmental 
front a little bit as well. Mexico, 3 weeks ago, had an auction 
for renewable electricity, and the winning bid came back for 
1,700 megawatts of electricity at $0.04 a kilowatt hour, which 
is at the bottom of the price for electricity for the whole 
world.
    Now, again, you are going to have to be taking on those 
interests in Mexico, in the Central American countries, in 
order to have this capturing of solar energy, but I would urge 
you to accelerate any programs, a pace at which we have a 
Central American electricity program that matches off with 
Electrify Africa, this is a tremendous opportunity.
    And one final question, which is on MS-13, Mara 
Salvatrucha, because these gangs, Salvadoran-based, are massive 
up in Massachusetts. So what are we doing to interdict this 
relationship as it comes through Mexico and then haunts the 
cities of the Northeast but all across America?
    Mr. Palmieri. The request includes funding for the FBI's 
anti-gang task force in all three countries. Working with the 
FBI and local authorities, we have begun to gather greater 
understanding and information about these gangs. I think we 
have good programs that both prevent the gangs from recruiting 
new members and also are enabling U.S. law enforcement to have 
greater insight and information about gang activities as to how 
they relate to their criminal activity in the United States.
    Senator Markey. So these governments just have to know how 
important this issue is to us, because it is killing thousands 
of people across the United States on a yearly basis.
    Thank you, Mr. Chairman.
    The Chairman. No, thank you so much.
    We are trying to close out the second panel by 11:55, if we 
can. I know there is a lot of interest, which I deeply 
appreciate.
    Senator Coons?
    Senator Coons. Thank you, Mr. Chairman. I will be brief 
then, if I can.
    I am interested in what you view as the drivers of gang 
violence and, in particular, recruitment. We have real 
challenges in other parts of the world with being effective in 
countering violent extremism, and one of the questions is a 
better understanding what it is that makes young men and some 
young women, but overwhelmingly young men, dedicate their lives 
to violence and extremism.
    What do you think are our most effective interventions that 
can slow or reduce the rate of uptick for the violent gangs 
that Senator Markey was just talking about?
    Then second, in terms of the investments you are talking 
about our making, some of which are short term and some of 
which are long term, what do you view as the most important 
long-term investments? And how valuable do you think it is for 
us to commit to them from one administration to the next, one 
Congress to the next, in the same way Plan Colombia did?
    I have been very impressed with Vice President Biden's 
persistent, engaged, effective leadership on the issues in the 
Northern Triangle, and it is my hope that that will be 
sustained into the next administration and by members of this 
committee as well. But I would be interested in your views on 
what matters most in terms of long term.
    Ms. Hogan. Thank you very much for the question.
    People join gangs for a variety of reasons, of course, but 
predominantly it is because they have no other choice for legal 
employment, and so they turn to illegal opportunities.
    We have benefited greatly from the experience of United 
States cities such as Los Angeles, Chicago, and Boston that 
have had great success in reducing gang violence. And we are 
using some of those same strategies as we apply them in Central 
America.
    One of the tools that we use is to focus on who are the 
youth specifically that are going to be most prone to violent 
behavior and joining gangs, so we call that secondary and even 
tertiary prevention programming.
    What we have learned is that 0.5 percent of people commit 
up to 75 percent of violent crime, so we have to get at those 
people. We have diagnostic tools that help us identify who they 
are. They tend to have family members or friends who are 
already in gangs. They may come from broken homes. They have 
homes where violence--particularly domestic violence--is seen 
on a daily basis, and then they act out violently outside of 
the home.
    So we are using those tools to identify youth that are at 
most at-risk for joining gangs and creating violent behavior 
themselves, and we are designing programs to focus on those 
individuals.
    I had mentioned earlier that we have seen tremendous 
results in terms of the reduction in homicide and violent crime 
in the communities where we have employed those research tools.
    Mr. Palmieri. Just a quick word about Vice President Biden. 
He has been a great champion for both a short-term and long-
term approach to the region and helping work with the Congress 
to get these funds. But I also want you all to know he is the 
greatest champion within the administration for ensuring that 
we have accountability for how we use these funds in the 
region.
    He met with the three Central American Presidents in 
February. They developed a specific action plan for each of the 
countries in fiscal year 2016. And he and his staff are keeping 
all of our eyes on the ball in terms of making sure there is 
accountability for how this money is being used.
    Senator Coons. Thank you. Thank you both.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    First of all, we thank you for your service. You have been 
good witnesses. Obviously, you are energetically enthusiastic 
about what you are doing. But at the same time, we want to make 
sure the monies are spent wisely and we have the appropriate 
leadership to make that happen.
    So we thank you again for being here, and if you could, we 
will take questions until the close of business on Thursday 
and, hopefully, you will respond fairly promptly to those.
    But again, thank you for your service, and we are going to 
move on to the second panel. I feel badly for the second panel, 
as they are coming up. A lot of times we have some of the best 
testimony at the second panels and, obviously, we sometimes 
lose interest here on the committee because of other 
commitments. But if you all could be making your way forward, 
we would appreciate it.
    Again, thank you both for your public service.
    In order to hustle it up a little bit here, our panel of 
private witnesses brings us testimony from Jose Cardenas, who 
served as Acting Assistant Administrator for Latin America and 
the Caribbean at USAID during the Bush administration. He is 
joined by Jim Swigert, who is the director for Latin America 
and the Caribbean at the National Democratic Institute for 
International Affairs.
    Again, we thank you both for sharing your tremendous 
knowledge and background with us here today.
    I think you have been through this many times. If you all 
could summarize in about 5 minutes, without objection, your 
written testimony will be entered into the record. If you could 
testify in the order you were introduced, we would appreciate 
it. Again, thank you for coming to our committee today.

  STATEMENT OF JOSE CARDENAS, FORMER USAID ACTING, ASSISTANT 
   ADMINISTRATOR FOR LATIN AMERICA AND THE CARIBBEAN, FORMER 
      NATIONAL SECURITY COUNCIL OFFICIAL, WASHINGTON, D.C.

    Mr. Cardenas. Thank you, Mr. Chairman, Ranking Member 
Cardin, and distinguished members of the committee. It is an 
honor and a privilege to be here before you today to discuss 
the critical issue of U.S. assistance to Central America.
    Central America finds itself once again in the midst of a 
profound security crisis that directly impacts U.S. national 
security. Today, in contrast to the 1980s, the challenges have 
less to do with ideology than about escalating criminality, 
corruption, and violence that are threatening countries' 
sovereignty by undermining democratic institutions, rule of 
law, and public security, burdened as these countries already 
are with weak public institutions, pervasive corruption and 
lack of resources.
    Clearly, the United States has a strategic interest in 
Central America, a stable, democratic, and prosperous Central 
America. Understandably, however, many of you are wary and 
should be wary of new assistance programs to Central America 
for the reasons I mentioned.
    Needless to say, Congress must demand strict accountability 
with our assistance, transparency, and set benchmarks to 
achieve demonstrable results.
    To that end, Mr. Chairman, in my submitted testimony, you 
will find a number of specific recommendations that I believe 
should guide and condition U.S. assistance to Central America. 
But for now, please allow me to outline several key 
assumptions, lapidary assumptions, if you will, that must serve 
as the foundation of any U.S. approach.
    Number one, there is no way this will be neat and tidy. 
Taking down drug networks and gangs is a messy business. We 
have to remain focused and committed.
    Number two, there are no silver bullets. There is not a 
question of hard side of assistance or soft side of assistance. 
It is going to take all sides, a holistic approach.
    Number three, we cannot want it more than they do, Mr. 
Chairman. We can only help them if they are truly committed to 
helping themselves. They must demonstrate the political will to 
get the difficult job done.
    Four, we must be clear on sequencing. This is something 
that Senator Rubio just mentioned, and I agree 100 percent. 
Security doesn't follow from resolving social and economic 
problems. Rather, it is only by first creating effective 
security that social and economic problems can be addressed.
    Five, a strong commitment to human rights is not a 
hindrance. It is essential. It creates legitimacy and trust 
among the very people we are trying to help.
    And there is another assumption that I wanted to make in 
the context of listening to the first panel, and that is 
building performance incentives into the programs that the 
technical folks at AID and State Department are developing, 
incentives that can be rewarded when reached, and perhaps we 
can speak a little bit more about that.
    But beyond these broad truths, Mr. Chairman, the core 
priority of any U.S. assistance has to be addressing the lack 
of strong institutions to provide for public security, not only 
vetting, training, and equipping police forces, but tackling 
the twin evils of corruption and impunity.
    That means improving the effectiveness of the judicial 
systems. It means targeting corruption by improving government 
transparency and sanctioning the wrongdoers. It means improving 
penal systems. Prisons in Central America aid and abet crime; 
they do not deter it. And it means cutting off criminal 
organizations at the knees by dismantling financial networks.
    Mr. Chairman, only with a dedicated program of institution-
building and reforms to strengthen rule of law can we diminish 
the opportunities for transnational criminal organizations and 
gangs to thrive and to allow democratically elected authorities 
to govern.
    In the short term, the imperative is establishing order, 
and that means reducing the capacity and incentives of criminal 
actors to confront and subvert the state.
    Lastly, Mr. Chairman, there is no substitute for U.S. 
leadership in ensuring a more secure, stable, and prosperous 
Central America. And there is no substitute for local 
leadership in making the difficult choices ahead. The same 
criminal networks operating with impunity today in Central 
America can move just about anything through their smuggling 
pipelines right up until the U.S. border.
    Right now, our friends in Central America are confronting a 
crisis every bit as dangerous as the threats in the early 
1980s. The difference then was a government that was willing to 
step up to the plate. There is still time to make a real 
difference today, but we must do it for their sake and ours.
    Thank you very much, Mr. Chairman.
    [Mr. Cardenas's prepared statement follows:]


  Prepared Statement Jose R. Cardenas, Former USAID Acting Assistant 
           Administrator for Latin America and the Caribbean

    Mr. Chairman, Ranking Member Cardin, distinguished members of the 
committee, it is an honor and privilege to appear before you today to 
discuss the critical issue U.S. assistance to Central America.\1\
---------------------------------------------------------------------------
    \1\ My testimony draws in part from a report by the Western 
Hemisphere Working Group of the John Hay Initiative, a network of 
foreign policy and national security experts who advise policymakers 
from a conservative internationalist tradition, of which I am a member.
---------------------------------------------------------------------------
    Thirty years after the guns of revolution fell silent in Central 
America, the region finds itself once again in the midst of a profound 
security crisis that directly impacts U.S. national security. Today, 
the challenges have less to do with ideology than about escalating 
criminality, corruption, and violence that are threatening countries' 
sovereignty by undermining democratic institutions, rule of law, and 
public security--burdened as they already are with weak public 
institutions, pervasive corruption, and lack of resources.
    Clearly, the United States has a strategic interest in a stable, 
democratic, and prosperous Central America, and principally the 
Northern Triangle countries of El Salvador, Guatemala, and Honduras. 
The United States has invested much over the past several decades to 
promote democracy and economic prosperity in the Americas because a 
peaceful, stable, and secure neighborhood benefits us all.
    And, not to put too fine a point on it, it also bears mentioning 
that until we can make some progress in helping our neighbors in 
Central America deal with the current problems we have had a hand in 
creating--through our insatiable demand for illicit drugs--then the 
notion of securing our southwest border from transnational criminal 
organizations, terrorist groups, or migration surges will remain a pipe 
dream.
    Indeed, we have to recognize that the summer 2014 crisis that saw 
an unprecedented wave of migrants--including thousands of unaccompanied 
children--pour across the U.S. southern border was the culmination of 
long-festering problems that includes in part regional governments' 
inability to combat increased criminality and gang activity. It is a 
vicious circle: declining security conditions depress economic 
activity, which contributes to pushing people to leave their homelands 
for the dangerous journeys north.
                               statistics
    The statistics are indeed grim. Due primarily to the drug trade, 
Central America is now considered the most violent non-war zone in the 
world. According to a United Nations report, the global average 
homicide rate stands at 6.2 per 100,000 population; Central America has 
a rate more than four times that, making it a sub-region with one of 
the highest homicide rates on record. For example, El Salvador's 
homicide rate this year is the highest in the world for a country not 
at war, with more than a 70 percent spike from the year before. Indices 
of crime in all its aspects--extortion, kidnappings, human 
trafficking--are all up; robberies in the region overall have tripled 
in the past 25 years, affecting one in five people. This explains why 
poll after regional poll invariably finds the greatest concern among 
the local populations is personal security.
    The crime and violence has also exacted a heavy economic cost, 
unsurprisingly. Another U.N. report puts the financial costs of 
violence at over a 10 percent loss of gross domestic product in 
Honduras. With the International Monetary Fund projecting another 
lackluster year of Latin American economic growth, the loss of domestic 
and foreign investment due to security concerns will resonate even more 
drastically. Productivity will also be further impacted by the number 
of citizens who will seek refuge in other countries, including the 
United States. Driven by economic pressures and rising criminal 
violence, the number of Hondurans, Guatemalans, and Salvadorans 
attempting to cross the U.S. Southwest border increased 60 percent in 
2013.
                       new routes and new players
    The primary driver of this increasing regional insecurity has to do 
with the idiosyncrasies of the drug trade. Up until recently, Central 
America served mostly as a refueling stop for vessels moving cocaine 
northwards. But the region's misfortune is not only that the U.S. has 
largely impeded maritime routes from South America, but also that 
Colombia and Mexico have made huge strides in pressuring domestic 
cartels. As it became more hazardous for traffickers to ship the drug 
directly to Mexico, they began seeking more hospitable environments 
elsewhere, and that has meant exploiting more aggressively overland 
routes through the Central American isthmus. In the counter-narcotics 
trade, it's known as the balloon effect: push tough counter-narcotics 
one place and the drug traffickers relocate their operations elsewhere.
    This, in turn, has translated into a perfect storm of criminal 
convergence between modern, sophisticated trans-criminal organizations 
(TCOs) and local gangs in a region already challenged by weak 
institutions. This has led to ever shifting alliances, competitions, 
and turf wars among these criminal elements that have overwhelmed local 
security forces and turned neighborhoods into war zones.
    The unprecedented expansion of these criminal networks and violent 
gangs in the Americas is having a corrosive effect on the integrity of 
democratic institutions and the stability of several of our partner 
nations. TCOs threaten citizen security, undermine basic human rights, 
cripple rule of law through corruption, erode good governance, and 
hinder economic development. Speaking of these criminal groups that 
have invaded Central America, General John Kelly, the recently retired 
commander of Southcom, not long ago described them to Congress as, 
``These networks conduct assassinations, executions, and massacres, and 
with their enormous revenues and advanced weaponry, they can outspend 
and outgun many governments. Some groups have similar and in some 
cases, superior training to regional law enforcement units. Through 
intimidation and sheer force, these criminal organizations virtually 
control some areas.''
    Indeed, awash in cash, these criminal organizations can pay off or 
suborn anyone and everyone they come in contact with in pursuing their 
illicit activity--from border agents to judges, police officers, the 
military, politicians, and government officials--allowing them to 
create permissive environments, safe havens for free mobility; to meet 
and seal deals with other criminal groups; allowing them to expand into 
legitimate and other illegitimate businesses; and facilitating money 
laundering.
    Ultimately distressing is when the activities of organized crime 
cross the line into politics and governance. We are increasingly seeing 
some of these groups and gangs undermining democracy by replacing 
functions of the state and wielding more control over civilian life, 
especially in areas where central government presence and oversight is 
limited. This constitutes the most profound threat to the integrity and 
effectiveness of Central American democracy today.
                        alliance for prosperity
    In response to this untenable situation and the outflow of 
migrants, the three governments of the Northern Triangle, with the 
assistance of the Inter-American Development Bank, developed a ``road 
map'' titled the Plan for the Alliance for Prosperity in the Northern 
Triangle. This strategy is mostly an economic development plan, and it 
contains a fairly honest assessment of the challenges confronting the 
three countries as well as a number of broad categories requiring 
improvement. Overall, the plan is a good step in the right direction. 
However, there are some serious flaws that require attention: it lacks 
a sustained focus on addressing the dangerous security situation, 
rampant corruption, and widespread impunity, and it falls short on 
dealing with weaknesses in local governance and on demonstrating a 
robust political commitment.
                     the role of the united states
    To help our neighbors confront the situation, the omnibus budget 
deal recently reached by Congress and approved by the president 
included $750 million in assistance for these Central American 
countries, which represents a step in the right direction. 
Understandably, however, many lawmakers will be wary new assistance 
programs to Central America due to justified concerns about 
institutional weakness, corruption, and political will. With drug 
syndicates and gangs working to undermine, infiltrate, and suborn 
governments, especially in the judicial and law enforcement sectors, 
there will be significant questions about with whom exactly we are 
working and what we are truly capable of achieving with our investment. 
Needless to say, Congress must demand strict accountability, 
transparency, and set benchmarks to achieve demonstrable results.
    Before proceeding to a series of specific recommendations that 
should guide and condition U.S. assistance to Central America, I would 
like to step back for a moment to outline several lapidary assumptions 
that must, must, serve as the foundation of any U.S. approach:


 1. There is no way this will be nice and tidy. Taking down drug 
        networks and gangs is messy business and not for the faint of 
        heart. As the Daniel Day-Lewis movie put it: ``There will be 
        blood.'' We cannot be intimidated by this. There will be 
        successes and there will be setbacks. We have to remain focused 
        on our goals.

 2. There are no silver bullets. It is not a question of the hard side 
        or the soft side; for example, Blackhawk helicopters versus 
        economic development. It's going to take all sides; a holistic 
        package that increases security, promotes the rule of law, 
        targets corruption, and improves governance in each of these 
        countries.

 3. We cannot want it more than they do. In other words, there is no 
        substitute for political will on the part of our partners. We 
        must ensure their total commitment to doing what is required to 
        resolve this situation. And not just central governments, but 
        local governments and private sector elites as well, who must 
        all be willing to make the sacrifices necessary to rescue their 
        own countries. We are not the Lone Ranger. We can only help 
        them if they are committed to helping themselves.

 4. We must be clear on sequencing: security doesn't follow from 
        solving social and economic problems. It is only by first 
        creating effective security that the conditions are then 
        created by which social and economic problems can be addressed.

 5. A strong commitment to human rights is not a hindrance, it is 
        essential. It creates legitimacy and support among the people 
        you are trying to help, improving not only your capacity for 
        action, but your chances for success. If the people fear 
        security forces as much as they do gang members and other 
        criminals, then that is simply a recipe for failure.

                          current u.s. policy
    Clearly, it is not accurate to say that the Obama administration is 
not doing anything about the mounting problems in Central America. They 
are doing something. It's just that they are not doing enough and it 
lacks prioritization.
    The signature program in this regard is the Central America 
Regional Security Initiative (or CARSI), although that was originally 
created in FY 2008 under the Bush administration as part of the Merida 
Initiative, the Mexico-focused counter-drug and anticrime assistance 
package--before it was broken off as a separate effort.
    Based on lessons learned--in many ways, Plan Colombia--CARSI takes 
a comprehensive, multi-dimensional approach to promoting security. In 
addition to providing equipment, training, and technical assistance to 
support immediate law enforcement and interdiction operations, 
according to the State Department, CARSI seeks to strengthen the 
capacities of governmental institutions to address security challenges 
and the underlying conditions that contribute to them. Since FY 2008, 
Congress has appropriated an estimated $1 billion for Central America 
through Merida/CARSI.
    Launched in March 2011, the Central American Citizen Security 
Partnership encompasses all U.S. federal efforts to help combat drug 
trafficking, gangs, and organized crime in the sub-region. This 
includes: drug demand reduction programs and domestic anti-gang and 
counterdrug efforts, law enforcement and military cooperation with 
partner governments, bilateral and regional assistance provided through 
CARSI, and U.S. involvement in the Group of Friends of Central America 
donors group. Also formed in 2011, the Group of Friends is working with 
Central American governments and the Central American Integration 
System (SICA) to implement a Central American Security Strategy.
    But despite these efforts, the singular void has been the 
perception that the administration is merely checking the policy 
boxes--that its heart isn't really into the effort. There is very 
little ownership, as if people are reluctant to get their hands dirty 
dealing with drugs and thugs. As a result there is precious little 
public diplomacy and PA efforts making the argument--both here and 
there--that it is in everyone's interests to combat criminality, 
because expanding criminality means the steady loss of a country's 
sovereignty, in its political and economic system--and it warps the 
social structures of countries, corrupting youth and compromising 
theirs and their country's future.
                      a more high-profile response
    There is no substitute for U.S. leadership in ensuring a more 
secure, stable, and prosperous Central America. To that end, the Obama 
administration must make a more public, more concerted effort to re-
engage on Central America with a sense of mission and purpose. Beyond 
the security and economic challenges, among the core issues it must 
address is the lack of strong institutions to provide for public 
security. Certainly, the countries of Central America need better 
trained and equipped police forces, but they also need to tackle 
frontally the twin evils of corruption and impunity.


   That means improving the effectiveness of criminal justice 
        procedures and practices. Turning around the extremely low 
        conviction rates, through, for example, faster, fairer, more 
        efficient and independent courts, better investigatory skills, 
        improved prosecutorial capacity, and rooting out corrupt 
        judges.

   It means dismantling the financial networks of criminal 
        organizations. Targeting and confiscating their assets by 
        developing effective asset forfeiture laws. And then funding 
        and supporting security programs through the use of seized 
        property and assets. Strengthening financial investigation 
        units to uncover and put a stop to money laundering and illicit 
        campaign contributions.

   It means rooting out corruption by improving government 
        accountability, transparency, and citizen participation. Using 
        the electronic information revolution and new data mining 
        techniques to improve oversight of the use of public resources.

   It means improving penal systems, specifically prisons. The prison 
        systems in Central America are horror stories. Prisons must be 
        overhauled to stop crime and rehabilitate inmates, not to aid 
        and abet crime from virtual safe havens.

   It is also critical that we promote the use of extraditions as a 
        deterrent for crime and a means to reinforce national security.


    The most important contribution that can be made to cutting crime 
and violence and strengthening rule of law in Central America is 
precisely this kind of institution-building and reform. Again, there 
are no silver bullets. Only with a long-term program of state building 
and development can we diminish the opportunities for TCOs to thrive 
and to allow democratically elected authorities to govern. In the 
short-term, the imperative is establishing order, and that means 
reducing the capacity and incentives of criminal actors to confront and 
subvert the state.
                     an economic prosperity agenda
    Central American economies' dependence on and integration into the 
U.S. market means the region stands apart from the gloomy economic 
forecasts for the rest of Latin America over the next few years. Still, 
there is much to be done to maximize the opportunities moving forward.
    In terms of jump-starting renewed economic assistance to the 
region, I would single out several areas where U.S. policy can make a 
demonstrable difference.


 1. If President Obama can rally his Cabinet ministers and sub-cabinet 
        officials to fan out in support of his Cuba initiative, he 
        ought to be able to do the same for struggling democratic 
        countries who actually have an affinity for the United States. 
        Specifically, the President could instruct the secretary of the 
        treasury to form a regional working group of finance ministers 
        to develop a prosperity agenda for aggregating and channeling 
        private capital and international lending to private-sector 
        entrepreneurs; setting benchmarks for liberalizing internal 
        markets, accommodating business creation, and modernizing 
        infrastructure; identifying best practices to maximize energy 
        production; and helping people from all walks of life benefit 
        from expanding international trade.

 2. Re-examine the Central America Free Trade Agreement to determine 
        how our partners can maximize even more the opportunities it 
        has brought them. That is to say, CAFTA has successfully 
        integrated them into the U.S. market, but what impact has it 
        had on trade relations within Central America? How can the 
        countries in Central America exploit their competitive 
        advantages as a bloc to improve efficiencies and opportunities.

 3. Rising oil and gas production in the United States present an 
        incredible opportunity to boost economic growth and U.S. 
        interests in the Western Hemisphere. With the ending of U.S. 
        restrictions on energy exports, including oil and liquefied 
        natural gas (LNG), we must find economically feasible ways to 
        help our neighbors in Central America who struggle with high 
        energy costs. The lack of easy access to U.S. oil and natural 
        gas makes it harder to meet the electricity demand that 
        accompanies growth in manufacturing and tourism.

 4. Among Central America's primary exports are agricultural goods such 
        as fruit, coffee and sugar. This is not a hindrance, but a 
        gateway to extraordinary opportunities. We should be engaging 
        through our assistance programs to reform these countries' 
        agricultural sectors, shifting from traditional crops like 
        maize and beans with minimum yields to more value-added crops 
        that appeal to the more refined American palette.


                   conditionality on u.s. assistance
    Moving past broad imperatives, there are also a number of specific 
proposals to condition U.S. assistance to ensure accountability and 
that our goals and objectives are achieved:


   Implement reporting requirements for State Department or USAID, 
        working with the three governments (reflecting broad societal 
        agreement) on priorities: providing performance benchmarks, 
        timelines, and metrics for determining impact, as well as 
        mechanisms for regular, substantive consultations with civil 
        society entities.

   This plan should include specific actions to strengthen civilian 
        police forces and judicial systems, including the prison 
        systems. A specific amount should be allocated to include 
        vetting and other anti-corruption efforts directed at law 
        enforcement and judicial authorities.

   Consultations shall be conducted regularly with national and 
        international civil society organizations, the private sector, 
        and labor and religious organizations about the development, 
        implementation, monitoring, and evaluation of the program.

   Any assistance through a central government entity must be subject 
        to transparency standards. No funds should be permitted for 
        budget support.

   Designate an amount to strengthen democratic governance, especially 
        municipal capacity, through U.S.- and regional-based non-profit 
        or civil society organizations to build and improve:


     municipal capacity for ``smart'' governance by exposing 
            local officials and citizens to best practices that promote 
            transparency, accountability, responsiveness and 
            efficiency, and where appropriate, through the use of 
            information communication technologies (ICTs);

     municipal capacity in the area of migrant re-insertion, 
            including democratic participation of returning migrants;

     community policing efforts by strengthening municipal or 
            community security commissions legitimized under 
            corresponding national legislation to be inclusive and 
            representative and to interact both with citizens and 
            public authorities, including police, to devise and 
            implement violence prevention strategies; and

     the capacity of independent media and independent 
            journalists to safely conduct investigative reporting and 
            reporting of corruption, including illicit campaign 
            finance, and to conduct reporting that is sensitive to and 
            inclusive of marginalized populations.


   Require each of the three Central American governments to 
        strengthen financial accountability,\2\ including publicizing 
        the entirety of their respective national budgets and matching 
        every U.S. dollar of assistance with at least three dollars 
        from state revenues through better tax collection and enactment 
        of a ``security tax.'' \3\
---------------------------------------------------------------------------
    \2\ While Honduras has already taken steps towards this end, this 
effort must be sustained. In each country, this local funding should be 
directed to the communities with the highest rates of out-migration to 
the United States.
    \3\ One of the principal reasons that Plan Colombia and the Merida 
Initiative with Mexico have been successful is the willingness of the 
governments and citizens to bear a larger degree of financial 
responsibility through the payment of taxes. In the case of Colombia, a 
specific tax was placed on the wealthiest, with their agreement, to 
help fund efforts against the guerrillas. In Mexico, the government 
matched each U.S. dollar with $5-8 dollars in state funding.

   Encourage the three countries to work with international financial 
        institutions (IFIs), especially the Inter-American Development 
---------------------------------------------------------------------------
        Bank and the World Bank, to improve tax collection.

   The U.S. executive directors in the IFIs should be directed to use 
        their ``voice and vote'' in support of municipal fiscal 
        strengthening.\4\
---------------------------------------------------------------------------
    \4\ This exception is made because, traditionally, loans from the 
World Bank and Inter-American Development Bank are arranged with 
national authorities that may discriminate against municipalities for 
political motives.

   Require a specific funding amount from the U.S. assistance package 
        for the completion of homicide investigations and successful 
---------------------------------------------------------------------------
        prosecution of criminal offenders.

   Provide specific funding for the establishment of an independent, 
        investigative organization in each of the three countries, 
        similar to the International Commission against Impunity in 
        Guatemala (CICIG), to review professional competence, ensure 
        accountability, uphold the rule of law, implement anti-
        corruption measures, deliver judicial reforms to address 
        impunity, and participate in the preparation of legal cases 
        against corrupt actors.

   While the presumption should be in favor of civilian leadership and 
        institutions in terms of law enforcement, military forces 
        should not be excluded from receiving U.S. assistance for 
        selected missions. Until civilian law enforcement capacity, 
        performance, and vetting begin to achieve tangible results, our 
        Central American partners do not have the luxury of choosing 
        which government institutions to employ in stabilizing their 
        environments. The overriding imperative must be to establish 
        security to allow for economic opportunity and democratic 
        development. Respect for human rights, and vetting of military 
        units, should be a prerequisite to receive U.S. assistance.

   Require a semi-annual report, coordinated and submitted by the 
        Department of State and USAID, detailing the expenditure of 
        U.S. provided assistance, from all funding streams (e.g., 
        State, USAID, DoD, Inter-American Foundation, Millennium 
        Challenge Corporation, etc.), detailing the impact of the 
        assistance measured against the plan and benchmarks submitted 
        by the three Central American governments, and showing 
        ``tangible progress'' in:


     Strengthening the effectiveness of local governance and 
            delivery of necessary social services;

     Reducing corruption and impunity, including anti-
            corruption vetting of law enforcement and other security 
            forces;

     Increasing the completion of homicide investigations and 
            case resolution of criminal offenders;

     Reducing the flow of migration from these countries to 
            the United States;

     Reducing overall levels of violence and homicides in 
            these countries; and

     Reducing the flow of drugs to the U.S. from these 
            countries.


   Prohibit the use of U.S. assistance for budget support or as cash 
        transfers to the governments of El Salvador, Guatemala, or 
        Honduras.

   Ensure that U.S. embassies receive adequate funding to ensure 
        oversight of the provided assistance, including the ability to 
        report on expenditures, impact, and funding pipelines. The 
        State Department should compile and provide this reporting to 
        the U.S. Congress (to the authorizing and appropriations 
        committees) on a semi-annual basis.

   Require the three countries, separately, to sign agreements with 
        Transparency International.

   Create an interagency task force to work with Latin American 
        counterparts to target corrupt Latin American officials and 
        designate a single focal point for the express purpose of 
        assisting Latin American law enforcement agencies to combat 
        corruption.

   The United States must insist on tangible results in partner 
        countries' efforts to end impunity, hold corrupt officials 
        accountable, and prosecute human rights violations. The 
        Executive Branch can be supportive in these tasks by being more 
        active in using existing authorities to combat corruption and 
        criminality, such as the use of Treasury Department 
        designations and the withdrawing of U.S. visas under 
        Proclamation 7750 (2004). Employing these authorities will send 
        a strong signal that the United State is serious about the 
        issue and encourage partner governments to muster the political 
        will to act.

                               conclusion
    U.S. leadership, access, and interests in our very own 
neighborhood, where our past engagement has made a real and lasting 
difference, is very much at stake here. The same criminal networks 
operating with impunity today in Central America can move just about 
anything through their smuggling pipelines. And with many of these 
pipelines leading directly to our borders, they can be exploited by 
anyone looking to do us harm. This crime-terror convergence is a very 
real vulnerability we cannot afford to ignore. All it takes is one 
corrupt official who can be bribed to procure official documents such 
as visas or citizenship papers and facilitate travel of special 
interest aliens.
    Beyond that, our own neighborhoods are already being affected by 
these criminal networks. International drug traffickers have a presence 
in up to 1,200 American cities, as well as criminal enterprises like 
the violent transnational gang Mara Salvatrucha, or MS-13, that 
specialize in extortion and human trafficking.
    We must up our game in response, engaging through resources and 
transferring lessons learned from our own experiences, based on our 
successes and our failures. Strengthening governance and fostering 
accountable, transparent, and effective institutions throughout the 
Americas, while improving the security situation and contributing to 
economic growth must remain the core of U.S. policy. Right now, our 
friends in Central America are confronting a crisis every bit as 
dangerous to their stability as the threats in the early 1980s. The 
difference then was an administration that was willing to step to the 
plate. There is still time for the current administration to get more 
engaged. I sincerely hope it is not too late.


    The Chairman. Thank you very much.
    Mr. Swigert?

STATEMENT OF JIM SWIGERT, DIRECTOR, LATIN AMERICA AND CARIBBEAN 
   PROGRAMS NATIONAL DEMOCRATIC INSTITUTE FOR INTERNATIONAL 
                   AFFAIRS, WASHINGTON, D.C.

    Mr. Swigert. Mr. Chairman, Ranking Member Cardin, and 
distinguished members of the committee, I appreciate very much 
the opportunity to appear today, and I applaud the committee's 
initiative to focus much-needed attention on our close 
neighbors in the Northern Triangle of Central America.
    Strengthening governments in Central America's Northern 
Triangle serves the national interests of the United States. We 
have heard a lot about the bad news today. I would say the good 
news is that, in the Northern Triangle today, the countries are 
represented by increasingly pluralistic democracies. These 
democracies like democracies everywhere are imperfect. 
Shortcomings relate to the weakness or corruptions of state 
institutions. Others stem from too closed or opaque and 
noninclusive political systems.
    According to public opinion research, citizens in all three 
countries put crime and violence as their top concerns today. 
Indeed, many Central Americans have told me it is the triple 
menace of violence, impunity from the law, and corruption that 
they are most worried about.
    Four of the five countries in the world with the highest 
per capita rates of murder are in Central America, all three 
Northern Triangle countries.
    This violence poses the biggest challenge to stability and 
governance since the armed conflicts of more than 30 years ago. 
Its causes are complex. Part has to do with drug trafficking. 
Part has to do with gangs. The growth of gangs is aggravated by 
high domestic abuse and weak family structures, and violence 
against women has reached alarming levels.
    The ability to check this criminal violence is limited by 
impunity from crime. Weak law enforcement and judicial 
institutions are one reason for the impunity. Another is 
corruption.
    In Transparency International's 2015 Corruptions Perception 
Index, all three countries rank lower than average in the 
Americas region.
    Corruption scandals have implicated former and sitting 
Presidents. In 2015, these sparked street protests and civic 
pressures in El Salvador and Honduras for international help 
for criminal investigations, similar to Guatemala's CICIG.
    Citizens want more from their democracy than just regular 
elections. They want democracy to deliver on security and 
opportunity. And the tension between the public's belief in 
democracy in the Northern Triangle and acute disappointment 
with its performance adds an element of political volatility to 
the governance challenges.
    No doubt, individuals despair of solutions migrate to look 
for opportunities elsewhere. Nonetheless, I would like to flag 
a few hopeful signs.
    First, the opportunity offered by the Alliance for 
Prosperity. The alliance offers a practical approach for 
securing better regional cooperation. And from the perspective 
of NDI's democracy strengthening mission, most importantly, the 
alliance incorporates explicit governance issues, and the high-
level engagement of the U.S.
    Vice President Biden, in particular, has ensured high-level 
attention from Northern Triangle leaders. This alliance is a 
medium- for long-term process for success. It is important that 
the next U.S. President, whoever that may be, continues the 
high-level U.S. engagement.
    Second, the prospect of new resources is providing real 
incentive for governments to reform, and I would flag, in 
particular, the role of the Congress by setting conditions on 
aid for Central America in the 2016 Consolidated Appropriations 
Act, which has outlined steps for improved democratic 
governance, combatting corruption, and bolstering civil 
society.
    Third, steps are under way to strengthen prosecutors and 
judges. In Guatemala, Jimmy Morales, the President, has 
announced he would extend CICIG's mandate. El Salvador has 
appointed a new independent attorney general. In Honduras, the 
government has agreed to create with the OAS the Mission to 
Support the Fight Against Corruption and Impunity, MACCIH.
    MACCIH's mandate was strengthened in response to civil 
society criticism, but doubts about its future remain. Ensuring 
action against impunity in the murder of indigenous leader 
Berta Caceres will be a critical test of MACCIH's credibility 
and of the Honduran Government's political will.
    Finally, while the mass street protests of last year have 
subsided, citizen groups remain active. Governments and 
legislators have begun to engage more with the civic groups, 
including many NDI partners. Some long-sought reforms in 
Guatemala have moved forward, including some elements of 
anticorruption legislation and political reform.
    In conclusion, please let me flag just two areas to watch 
that are key for governance. First is the status of police 
security reform, and second, the need for reform of political 
institutions.
    On police, there are no easy or quick solutions, but by 
improving police vetting and oversight, and holding accountable 
security and police officials for abuse, we can begin to break 
the pernicious cycle of violence, impunity, and corruption.
    And lastly, sustainable economic development and security 
reform must be built on a bedrock of political institutions 
that today are weak and insufficiently transparent. Without 
action in coming years to bring together more transparency and 
accountability to political institutions, I fear other efforts 
to improve governance are likely to fall short.
    Thank you very much.
    [Mr. Swigert's prepared statement follows:]


    Prepared Statement of Jim Swigert, Director, Latin America and 
  Caribbean Programs, National Democratic Institute for International 
                        Affairs, Washington, DC

    Mr. Chairman, Ranking Member Cardin, and members of the committee, 
I appreciate the opportunity to appear before the Committee today and 
discuss with you the serious challenges our close neighbors are 
grappling with in Central America's Northern Triangle--El Salvador, 
Guatemala and Honduras--and consider ways that the United States can 
work cooperatively with the Northern Triangle's new Alliance for 
Prosperity, both with the governments and citizens of these countries, 
to address chronic problems such as criminal violence, corruption, and 
impunity. These challenges, together with the lack of economic 
opportunity, deep social inequality and the corrosive impact of 
unresponsive political institutions, help to fuel migration and 
undermine democracy. Strengthening democratic governance in Central 
America's Northern Triangle--in other words, helping to build healthy 
state institutions by increasing the effectiveness, responsiveness and 
transparency of all branches of governments and the political parties 
that stand behind them--serves the interests of these countries' young 
and diverse population and also the national interests of the United 
States.
    The organization I represent--the National Democratic Institute, or 
NDI--is dedicated to strengthening democratic governance, practices and 
institutions globally. NDI has worked on the ground in the Northern 
Triangle countries of Central America for nearly 15 years, supported by 
several international assistance organizations, including USAID, the 
National Endowment for Democracy, the State Department Bureau of 
Democracy, Human Rights and Labor, the Swedish International 
Development Assistance Agency, and the Norwegian Ministry of Foreign 
Affairs, who currently support our programs in the Northern Triangle. 
Today NDI has field offices in Guatemala and Honduras and regularly 
engages El Salvador through its regional programs on citizen security, 
transparency and political reform. NDI approaches security as a 
democratic governance issue, emphasizing citizen participation in 
policies aimed at improving the quality of life through prevention of 
crime and violence. Our work with civic groups, government officials, 
legislators, political parties from all political persuasions, at 
national and local levels, exposes us daily to diverse perspectives, 
spanning senior political leaders to grass roots activists, and informs 
the observations I will share today.
    Much in northern Central America has changed for the good since the 
authoritarian governments and the wars of the 1970s and 1980s, although 
important promises held out by the Central American peace agreements 
and subsequent democratic transitions remain unmet. On the positive 
side, increasingly pluralistic democracies have taken hold in all three 
countries of the Northern Triangle. These democracies--as is the case 
with democracies everywhere and especially in countries emerging from 
armed conflict--are imperfect. Some shortcomings relate to the weakness 
or corruption of state institutions such as the courts and police; 
others result from political systems that remain insufficiently 
transparent or inclusive, and are slow to adapt to the needs of a 
changing and young population. The 2009 coup in Honduras was a reminder 
that despite democratic gains, damaging reversals may still occur. 
Fortunately, now the three Northern Triangle countries have governments 
elected in what NDI can attest were vigorously contested and widely 
observed electoral processes. These democratically elected governments 
are today being held accountable not just by their political opponents 
but by an increasingly active citizenry. That is good news for 
democratic governance.
    At the same time, the problems of entrenched poverty and stagnant 
economies that have long characterized northern Central America endure. 
Of the three countries, the poverty rate as measured by the World Bank 
(2013/2014) is highest in Guatemala at 40.7 percent , followed by 
Honduras at 39.6 percent, although GDP per capita in Guatemala at 
$7,503 is considerably higher than Honduras' $4,729. El Salvador 
presents a different picture with only 12 percent poverty and $8,201 
GDP per capita, and scores much higher than the other Northern Triangle 
countries on scales measuring the quality of democracy, market economy, 
and political management (see the 2016 Bertlesmann Transformation 
Index). Economic growth has resumed since the great recession but at 
moderate levels that make reduction of poverty and unemployment a 
struggle. Natural disasters have done great damage in the past--I am 
old enough to recall Hurricane Mitch--and are a constant threat. A 
serious drought currently impacts important agricultural regions of the 
Northern Triangle. Viruses such as Zika and Chikungunya are adding 
further stress to stretched health care systems. Dependency on external 
remittances remains high: these represent a very significant percentage 
of GDP: 17.4 percent in Honduras, 16.8 percent in El Salvador, and 9.9 
percent in Guatemala. These figures also underscore the close ties 
between the Northern Triangle and our country, the source of much of 
these remittances.
    The economic development challenge is steep. It is compounded by 
daunting challenges impeding good governance in what some Central 
Americans have described as the triple menace of violence, impunity 
from the law, and corruption, all visible to varying degrees in each of 
the three countries.
    Alarmingly, northern Central America is afflicted by epidemic 
levels of criminal violence. Stories of extortion, drug trafficking and 
gang violence occasionally grab headlines in the U.S., but are the 
daily staple of life in El Salvador, Guatemala and Honduras and have 
been for years. Four of the five countries in the world with the 
highest per capita rates of murder are in Central America--including 
all three Northern Triangle countries. (The fourth is their small 
English-speaking neighbor, Belize.) According to official data, in 2015 
homicide rates per 100,000 people hit 103 in El Salvador, 57 in 
Honduras, 30 in Guatemala. Murder rates are only one metric--
calculating the extent of extortion or its cost to the economy is far 
more difficult. This violence poses the biggest challenge to stability 
and governance since the armed conflicts of 30 years ago. According to 
public opinion research, citizens in all three countries put crime and 
violence as their top concerns, well above unemployment and economic 
worries.
    There is a psychological toll to such high levels of criminality. 
The spring 2016 issue of Americas Quarterly quotes former Salvadoran 
guerrilla commander Joaquin Villalobos, who decades ago broke with the 
FMLN guerrilla movement that now is El Salvador's governing political 
party. Villalobos describes today's violence as the ``worst social 
tragedy of El Salvador's history . . . worse than during the war, 
because now there is less hope.''
    The causes for the violence in the Northern Triangle are complex.
    Part has to do with drug trafficking to be sure, and the movement 
of Mexican and Colombian cartels into the sub-region to develop new 
routes to the U.S. market in reaction to increased pressure brought 
about through Plan Colombia and the Merida Initiative, which Republican 
and Democratic Party-led U.S. Administrations have supported. But more 
is involved than patterns of narcotics trafficking, as a comprehensive 
Woodrow Wilson Center analysis published in December 2014 well 
documented.
    That study drew attention to common aspects to the violence in each 
of the three countries, as well as important differences. The 
penetration and number of youth gang members in Central America is 
highest in El Salvador, closely followed by Honduras and Guatemala. The 
growth of youth gangs is aggravated by high rates of domestic abuse, 
sexual violence and compounded by weak family and household structures. 
Violence against women, a result of gender inequality and unequal power 
relations between men and women, has reached alarming levels. According 
to the United Nations Entity for Gender Equality and the Empowerment of 
Women, El Salvador has the highest rate of femicides in the world, 
closely followed by Guatemala and not trailing far behind, Honduras. 
Migration has had its impact in both directions. As multiple analysts 
have pointed out, the U.S. policy of deporting large numbers of young 
Central Americans in the 1990s and 2000s, many gang members, helped to 
import the youth gang problem to Central America.
    Some causes of violence in Central America exist at the local level 
and can be best addressed through local action. However, the ability to 
check criminal violence through police action or violence prevention 
programs that put in place community-based disincentives is negatively 
impacted by the level of impunity from prosecution for crimes. Across 
the Northern Triangle impunity for crime is high--up to 95 per cent of 
crimes are not resolved.
    Weak law enforcement and judicial institutions are one reason why. 
Another is corruption. Guatemala, for example, has suffered for decades 
from the influence of clandestine criminal networks that use corruption 
and violence to undermine government institutions.  The brutal murder a 
month ago of the Honduran indigenous environmental and human rights 
activist, Berta Caceres, was emblematic of the risks human rights 
defenders and social leaders face daily throughout the region. The 
scant prospect that criminals will ever face prosecution or punishment, 
along with doubts regarding the capacity of authorities to prevent 
retribution--and uncertain police loyalties given the extent of 
corruption--means many crimes go unreported.
    Corruption has had a longstanding corrosive influence in government 
and on citizens' perceptions of democratic institutions in the Northern 
Triangle. In Transparency International's 2015 Corruptions Perceptions 
Index, El Salvador, Guatemala and Honduras rank 72, 123 and 112, 
respectively, out of 168 countries surveyed. All three countries rank 
lower than average in the Americas region.
    Last year, corruption scandals and investigations emerged in the 
three Northern Triangle countries which implicated former and sitting 
presidents, vice presidents and other high level officials. These 
sparked large-scale public protests in Guatemala and Honduras, new 
mobilization by civic leaders in El Salvador and increased pressures 
for transparency and accountability and for establishment of new 
mechanisms in Honduras and El Salvador, similar to the U.N.-sponsored 
International Commission Against Impunity in Guatemala, known as CICIG 
by its Spanish initials. CICIG has worked under the authority of 
Guatemala's independent Public Prosecutor, Attorney General Thelma 
Aldana, to investigate and bring to light high level corruption cases, 
which ultimately led to the indictment, resignation and arrest of 
former Guatemalan Vice President Roxana Baldetti and President Otto 
Perez Molina, among other senior officials. With these actions, 
Guatemalans sent a powerful message that no individual is above the 
law, at the same time reinforcing the country's democratic institutions 
by adhering strictly to constitutional processes until scheduled 
elections could be completed and a new president took office in January 
2016.
    Public opinion research in the Northern Triangle countries by 
Latinobarometro over the past decade has found that although strong 
majorities of their citizens--on average 60 percent of those polled--
are committed to democratic government, dissatisfaction with the 
performance of democratic governments has risen: in 2015 averaging 60 
percent . In recent years, however, Honduras has proved the exception 
to the negative trend, with a turnaround from a peak of 74 percent 
dissatisfied citizens in 2013, to a still high 56 percent dissatisfied 
in 2015, which analysts attribute to the success of President Juan 
Orlando Hernandez' government in reducing the murder rate. The tension 
between the public's belief in democracy and acute disappointment with 
its performance adds another dimension of political volatility to the 
Northern Triangle's challenging governance picture.
    Citizens want more from their democracies than just regular 
elections. They expect elected governments to deliver on basic state 
responsibilities of security and to work to advance economic 
opportunity and honest government. Looking at the daunting day-to-day 
challenges, it might be easy to get discouraged or to despair about 
finding solutions. No doubt many individuals do lose hope and migrate 
to look for opportunities elsewhere. Nonetheless, in the Northern 
Triangle there are hopeful signs and opportunities for building a 
better future, both on a regional and country level.
First, the opportunity afforded by the Alliance for Prosperity.
    Until the process of developing the Alliance for Prosperity by the 
Northern Triangle countries began in the fall of 2014, most analysts we 
talked to in the region characterized government-to-government 
cooperation in the Northern Triangle on citizen security issues as 
sporadic or limited to security agencies only and lacking a common 
focus on governance. The 2011 Central America Integration System (SICA) 
Summit in Guatemala made a promising start by bringing in the 
experiences of Mexico and Colombia in confronting criminal violence to 
share with their Central American neighbors and by helping generate 
more focused U.S. attention. The ambitious SICA agenda of priority 
regional citizen security reforms, including improved and standardized 
legislation to facilitate coordination among neighboring countries, for 
the most part was left unfulfilled and to many appears to have been 
abandoned. The Alliance for Prosperity process is still taking form and 
elements of it need to be strengthened, such as greater consultation 
with civic groups. Efforts by governments to reach out broadly to 
different sectors of society to get input and build consensus for 
government plans for the Alliance have been robust in El Salvador, but 
much less so in Guatemala and Honduras.
    Nonetheless, I see several reasons now to be cautiously optimistic 
about the potential impact of the Alliance.


   Limiting the geographic scope to the Northern Triangle makes a 
        coordinated regional approach more manageable and realistic 
        than continuing to rely on the broader SICA framework that also 
        includes Belize, Costa Rica, Nicaragua, Panama and the 
        Dominican Republic. The ``Northern Triangle'' grouping is 
        admittedly an artifice--a valid geographic construct of course, 
        but a grouping of three countries with common challenges but 
        individual issues and political systems each responsive to its 
        own political and electoral calendar. No practice of sub-
        regional cooperation existed previously outside of ad hoc 
        meetings. The Alliance is building greater communication among 
        governments that extends beyond foreign ministries or police 
        and if continued, should deepen into greater cooperation.

   Senior level U.S. engagement helps the Central American leaders 
        sustain their engagement. The Alliance fits well within the 
        framework of the U.S. Government Central America Strategy, and 
        Vice President Biden's active involvement has ensured continued 
        high level attention and leadership on all sides. Achieving the 
        promise of the Alliance is a medium to long term process. 
        Hopefully, the next U.S. Administration will continue active 
        support for the Alliance.

   From the perspective of NDI's democracy-strengthening mission, most 
        importantly, the Alliance incorporates explicit governance 
        issues among its four goals and lines of action, including 
        improved access to justice and strengthened institutions and 
        transparency.
The second hopeful sign is the increased U.S. funding for the region.
   This provides additional needed resources and equally critical, 
        real incentives for Northern Triangle governments to follow 
        through on much needed reforms.

   In that regard, Congress' role in ensuring oversight and monitoring 
        for effective use of the resources--with hearings such as 
        this--has been critical. In addition, the specific conditions 
        placed on aid for Central America in the 2016 Consolidated 
        Appropriation Act establish important steps toward improved 
        democratic governance, combatting cooperation and bolstering 
        civil society.

   This U.S. leadership and expanded commitment has helped enlist 
        support by others. The Inter-American-Development Bank provides 
        essential technical expertise to the Alliance grounding it in 
        an effective regional institution. Colombia, Chile, Mexico, 
        Panama and Peru have also offered support. Colombian President 
        Santos traveled to the Northern Triangle countries earlier this 
        month. When members of NDI's Board of Directors met with 
        President Santos in Bogota last year, they discussed the 
        governance challenges in the Northern Triangle and President 
        Santos underlined Colombia's commitment to further police 
        training and other assistance.
Third, there is increased interest in international assistance to 
        buttress national investigative and prosecutorial capacity in 
        order to reinforce state institutions.
   In Guatemala, President Jimmy Morales announced he would extend 
        until 2019 the mandate of CICIG, the U.N.-sponsored 
        International Commission against Impunity in Guatemala. This 
        has increased public confidence that the ground-breaking steps 
        taken in 2015 against impunity and corruption by senior 
        officials will continue and steps taken to curb clandestine 
        criminal networks that have weakened and co-opted Guatemalan 
        institutions.

   CICIG provides a proven effective model, and operates with full 
        respect for national sovereignty in support of Guatemalan 
        justice institutions. Civic groups in Honduras and El Salvador 
        have advocated for establishing similar mechanisms in their 
        countries--a ``CICIH'' or ``CICIES.'' However, the other 
        Northern Triangle governments have chosen to chart their own 
        path for strengthening national investigative and justice 
        institutions.

   In January 2016, El Salvador appointed a new independent Attorney 
        General after the incumbent withdrew his candidacy for 
        reappointment following severe criticism from civil society 
        groups. In March, U.S. State Department and the United Nations 
        Office on Drugs and Crime signed a joint agreement with a broad 
        set of Salvadoran institutions designed to strengthen the 
        prevention, investigation and prosecution of corruption.

   In Honduras, the government similarly has resisted civic pressures 
        to establish a U.N.-backed CICIH. Instead, the Honduran 
        government reached agreement with the OAS to create a different 
        international support mechanism, the Mission to Support the 
        Fight against Corruption and Impunity in Honduras (known by its 
        Spanish initials MACCIH), which started working in Honduras on 
        April 14. MACCIH will target graft and organized crime through 
        an international corps of judges and prosecutors who will work 
        in concert with Honduran counterparts. Although MACCIH's 
        original proposed mandate was modified and strengthened 
        somewhat in response to criticism from civil society 
        organizations, many doubts remain among civil society leaders 
        about how the MACCIH will function and whether the OAS mission 
        and Honduran prosecutors will be prepared to take action 
        against corrupt criminal networks involving the country's 
        powerful political and business elites. A positive sign: the 
        Honduran Supreme Court announced the creation of anti-
        corruption and extortion tribunals within the next month, as 
        recommended by the MACCIH. MACCIH's actions to ensure a serious 
        investigation and prosecution concerning the murder of 
        environmental activist and indigenous leader Berta Caceres will 
        be a critical test of MACCIH's credibility and of the political 
        will of the Honduran government to end impunity.
Finally, while the mass street protests of 2015 have subsided, citizen 
        groups are continuing to press for action for government 
        transparency and accountability and improved security.
    During 2015, unprecedented mass protests against corruption took 
place on a regular basis in Honduras and Guatemala, mobilizing hundreds 
sometimes thousands of people in peaceful demonstrations. Civic groups 
have shifted from strategies of protest to proposals for reform. Many 
NDI civic partners are active in proposing concrete reforms and closely 
monitoring government actions, such as the Alliance for Peace and 
Justice in Honduras, and the Pro-Justice Movement and Human Rights 
Convergence civic society groups in Guatemala, together with social 
movements and new civic activists active in the mass street protests of 
the past year. Last week, NDI helped convene a forum in El Salvador to 
examine the implications of the wave of civic protests across the 
region for strengthening democracy and state institutions.
    In some cases, governments and legislatures have reached out 
actively to civic groups for input. These include many NDI partners. 
Civic activists have expressed fears that government outreach could be 
just window-dressing. However, in a few cases, following extensive 
interaction through informal mechanisms bringing together civil society 
leaders, legislators, government and political party leaders, long-
sought reforms have moved forward. For example, in Guatemala, key 
elements of anti-corruption legislation and stalled political reform 
were approved over the last month. These include limitations on the 
power of the president to dismiss the independent Public Prosecutor, 
improved regulation for public procurements, and restrictions on future 
party-swapping by legislators--a practice closely identified with 
corruption. Guatemala's experience over the past year suggest that 
sustained public pressure is key for advancing reform
    To conclude, let me suggest two areas to watch that will be 
influential in determining prospects for meeting the governance 
challenges in northern Central America through the Alliance and other 
initiatives.
Police, Security Reform and Human Rights
    Over recent years, the Northern Triangle governments have sought to 
improve the effectiveness of policing in multiple ways. In El Salvador 
and Guatemala, military forces at times have been mobilized to support 
police actions against youth gangs and patrol streets. In Honduras, a 
new militarized police force was formed directly responsible to the 
president's office. All three countries have sought to weed out corrupt 
elements. For instance, following Honduran media reports of high level 
police being involved in the killing of the antidrug czar in 2009 and 
his top advisor Landaverde two years later, Honduran President 
Hernandez recently announced a presidential decree which was approved 
unanimously by Honduran Congress allowing him to purge the police 
force. MACCIH will have a role in police purging. This is the fifth 
Honduran attempt in the last 20 years to purge the police--the most 
recent took place in 2012. Human rights groups throughout the Northern 
Triangle have expressed concerns about the militarization of police 
functions and denounced abuses. In El Salvador, press investigation of 
police vigilantism and targeted killings of youth gang members have 
stoked fears of new death squads. Poorly-paid police daily face extreme 
dangers, including real threats against their families. The continuing 
escalation of violence in El Salvador has led the National Assembly to 
authorize extraordinary penal measures. Some figures close to the 
government have even discussed the possibility of organizing armed 
citizen groups to defend communities against criminal gangs, which 
could lead to greater violence and further weaken security forces.
    There are no easy or quick solutions. Improving police vetting and 
holding accountable police and security officials who abuse positions 
of authority, however difficult, is essential to breaking the 
pernicious cycle of violence, impunity and corruption.
Reform of Political Institutions
    Sustainable economic development and security reform is built on 
bedrock of political institutions. The capacity of legislatures to 
exercise oversight over the executive needs strengthening, along with 
continued international support for building effective independent 
judicial institutions. Political finance regulations in the Northern 
Triangle are well below norms in place elsewhere in Latin America, and 
those laws and regulations that exist are not uniformly enforced. Those 
reforms in final stages of approval by the Guatemalan Congress need to 
be finalized and then implemented. The Honduran government has proposed 
a modest political reform package, focused on campaign finance reform 
in response to the arrival of MACCIH, before the 2017 elections which 
unfortunately, leaves out the key demands of civic groups. El 
Salvador's two strong dominant political parties have helped anchor the 
country's stable politics since the peace agreement but both the 
governing FMLN and the opposition ARENA have joined in rebuffing civil 
society proposals for reform, which in turn has put more stress on the 
country's judicial system.
    In all three countries, NDI's partners and other civil society 
groups have advocated for political and electoral reforms and as 
mentioned earlier, in some cases, secured political backing for 
government and legislative action. Regional exchanges are taking place 
on a regular basis not just among governments, but among political and 
civic leaders to share lessons learned and shape common agendas. 
Reform-minded legislators have sought to improve democratic governance 
and do more to engage citizens on public priorities. Much more needs to 
be done to support all of these efforts. Without action in coming years 
to bring greater transparency and accountability to political 
institutions other efforts to improve governance are likely to fall 
short.
    Thank you.I look forward to your questions.


    The Chairman. Thank you.
    Senator Cardin?
    Senator Cardin. First, I thank both of you for your 
testimony. I found it very helpful.
    I agree completely with the points that, yes, you have to 
have security. There is no question. You cannot function 
without security. But you also have to deal with the human 
rights issues and particularly the good governance and 
anticorruption issues.
    So, Mr. Swigert, let me ask you first, if I might, you have 
indicated that there is a need for more funds for democracy and 
governance. Could you give specifically where additional U.S. 
support could make a difference in the Northern Triangle, if 
more funds were available for democracy and governance?
    Mr. Swigert. Thank you, Senator Cardin, for the question. I 
think U.S. funds are being dedicated to very important areas, 
as we heard this morning.
    It is critical to get at the question of impunity through 
greater support for external mechanisms like the MACCIH, like 
the CICIG in Guatemala, and by strengthening judicial 
institutions and oversight mechanisms. Police need support as 
well. And I think it is critically important that civil society 
movements and organizations across the Northern Triangle be 
strengthened.
    I think there has been insufficient attention to support 
for political institutions. It was not so long ago that there 
was an enormous setback in democratic governance in Central 
America, the coup in Honduras in 2009. I think that clearly 
left a vacuum, which was filled, unfortunately, by organized 
crime and gangs and drug traffickers as the Honduran state was 
greatly weakened.
    So there needs to be a continued focus on strengthening the 
political institutions in the region. By that, I mean also the 
democratic legislatures in the region who have an important 
role of oversight of the executive that they need to perform 
better than has been done to date.
    And lastly, I think though there are resources that are 
going to civil society, and civil society has been playing an 
increasingly important role in giving oversight of issues such 
as police vetting in Honduras, we heard this morning about the 
terrible assassination that took place of the drug czar in 
Honduras and the new information that has come to light linking 
that with senior police officials. In response, the President 
of Honduras has adopted a new measure of vetting police and 
civil society as being engaged in that. More resources to 
support these efforts I think would strengthen governance in 
the region.
    Senator Cardin. Thank you.
    Mr. Cardenas, I just really want to underscore the point 
that you made.
    Security is absolutely essential, but if you do not treat 
your people fairly, there is going to be a void that is going 
to cause instability. We see that very visibly in the Middle 
East, where we have not been able to get governments that 
represent all the people, leading to a huge challenge on 
security.
    So I just really wanted to compliment you on the manner in 
which have connected the dots.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, sir.
    Senator Rubio?
    Senator Rubio. Thank you.
    You were both here and you heard the testimony. I think the 
number was at about 30 percent of the funds are being spent on 
security and another 40 percent on prosperity. I by no means 
want to diminish the importance of creating economic growth and 
stability for purposes of turning the corner. My argument is 
and has been that when you look at other places where these 
sorts of activities have been effective, such as in Colombia, 
it involved at the beginning especially a significant 
investment on the front end in the security aspect of this, 
that until you were able to confront the causes of insecurity--
in this case, these criminal organizations which are highly 
organized. This is not just street-level crime. We are talking 
about highly organized drug trafficking organizations. Until 
you are able to confront and defeat that, the way the cartels 
were defeated in Colombia, the other aspects, including 
prosperity, become more difficult.
    So I would ask you both to comment, when you look at the 
current levels of funding and how the program is currently 
structured, is it doing enough on the security end to lead us 
into where we want to be with regards to these countries?
    Mr. Cardenas. I share your concern, Senator Rubio, that 
perhaps we may be putting the cart before the horse. It is not 
that the entire particular country that we are talking about 
has to be pacified before we can begin with economic growth 
projects. It can be done piecemeal, perhaps sector by sector, a 
geographic sector in a country. But I do believe that there are 
important lessons to learn from Plan Colombia. The situations 
are not analogous, but there are important truths that we 
should take advantage of.
    One of those is that what President Uribe did in terms of 
the central element of pacifying communities was government 
presence. So once you have government presence, which by 
implication means a security presence, legitimacy of the state, 
then you can begin instilling confidence in people to venture 
out taking economic risk to start a small business or whatever.
    But I do believe that we are only treading water, if we are 
trying to combine the two at the same time in a given location.
    Mr. Swigert. Senator Rubio, I have no doubt that additional 
assistance on the security side could be helpful. I think that 
it is important that the way that that is done also include a 
focus on ensuring accountability by police.
    There have been concerns expressed by a number of civic 
organizations in El Salvador, in Honduras, in Guatemala about 
the militarization of police forces, and concerns about abuses 
that such practices could entail in deploying the army to 
patrol streets, for instance.
    I think that it is important that we continue to work in 
partnership on these citizen security issues in the ways we 
found to involve more the citizens in those countries in the 
design of security responses, so that the communities 
themselves take on responsibility for dealing with these 
difficult problems of violence.
    Senator Rubio. Again, I know they are not perfectly 
analogous, but when you look at the success in Colombia, one of 
the things that was present there was a widespread and deep 
commitment on the part of its government leaders to confront 
this and turn the corner.
    In your opinion, and it is hard to ask State Department 
officials who, of course, operate in the diplomatic realm, but 
in your opinion, having observed this situation, is it your 
opinion that the governments, and I know we are addressing 
three separate governments, how would you characterize the 
level of commitment from leaders in Guatemala, El Salvador, and 
Honduras, in terms of confronting this at the same level of 
seriousness as what we saw in Colombia?
    Mr. Cardenas. Political will is indispensable, and we saw 
that with President Uribe. A leader like that only comes around 
once in a generation, and in the context of Central America, we 
would need three Uribes for three countries. I believe that the 
current leaders of these countries want the very best. They 
understand the future of their countries relies on drawing 
foreign investment and integrating into the world economy.
    This is where I believe the United States can play a very 
key role in supporting the current presidents of Central 
America. That is using the authorities that we have to sanction 
wrongdoers, corrupt officials, drug traffickers in their 
countries.
    What President Uribe did was he necessarily had to break a 
lot of furniture to transform that country from a near failed 
state into the thriving country that it is today.
    Many times in Central America you are not really sure who 
the bad guys are. They could be ``respectable businessmen,'' as 
we saw in Honduras the Rosenthal family that was recently 
indicted. And I commend the administration for pushing that 
through.
    By either Treasury Department designations of corrupt 
officials or drug traffickers or withdrawing U.S. visas, the 
State Department has the authority to do that, we can back up 
the presidents of these countries to show that the United 
States has their back. President Uribe knew the United States 
had his back in what he was trying to accomplish in Colombia. 
If we join with the presidents of Central America in upsetting 
entrenched interests in those countries, I think we can instill 
a sense of confidence to keep moving forward in upsetting the 
current status quo in these countries.
    Mr. Swigert. I would say it is a very different situation 
than in Colombia, in the sense that we are talking about much 
weaker countries. It is three different countries in what is an 
alliance in formation. Each one of those countries has its own 
challenges and political dynamics and even different political 
calendars.
    But I would say that this question of political will is 
absolutely key, and I agree that it is extremely important that 
the United States use its influence to encourage the 
development of stronger political will to confront these 
challenges, because some of these challenges are deeply 
embedded in the political system in those countries.
    The extent of corruption, the way in which political 
finance operates, which is another key question where I think 
there needs to be progress in coming years, because the lack of 
transparency that exists across-the-board makes it very 
difficult to know who is sitting across the table from you.
    The Chairman. Thank you both.
    I just want to follow up on that. Mr. Swigert, we have 
invested a lot of money for a long time in judicial reform and 
in training police and prosecutors. Is it that political will, 
is that the issue that has kept us from being successful for 
many, many years? Us, really them being successful, but our 
assistance from being successful?
    Mr. Swigert. Senator, I think that is an element of it. I 
also think that we have made some progress, and I do think that 
the external support mechanisms, which many in the region are 
clamoring for strengthening, have also made a big difference.
    The situation varies by country. In some places, you will 
find that there is really a great deal of support at the top of 
the judicial system, that there is a belief in the integrity of 
the judicial system at the very top level, and I would refer to 
El Salvador in that instance. In other places, that doesn't 
exist.
    In the case of our strategy, I think the strategy that 
repeated administrations have followed of working to improve 
the capacity of the judiciary is part of the solution. But 
another part has to do with bringing to bear some independent 
support for investigations and prosecutions.
    CICIG has made a huge difference in Guatemala. We will see 
whether the MACCIH, the OAS-supported new mechanism in 
Honduras, which set up shop last week, is able to do the same. 
In El Salvador, they are on a different approach, but I think 
that there also is a need for increased cooperation within 
international judicial mechanisms for making progress. But the 
key issue is political will.
    The Chairman. Mr. Cardin, go ahead. Yes, sir.
    Senator Cardin. Thank you, Mr. Chairman.
    I just wanted to pick up on a point that Mr. Swigert made, 
and he is absolutely right.
    We are at a time and a place in Central America right now 
where there is growing popular mobilization against official 
corruption in these countries, and that is an important dynamic 
that we can take advantage of. And making common cause with 
this popular groundswell of opposition, and as Jim mentioned, 
these external entities that have been helping these countries 
along, is something that deserves our full support, because we 
have had a lot of very disappointing experiences over the years 
of these countries attempting to heal themselves, and to the 
extent that there is outside support locked in with this public 
sentiment that we see today, I think we can make some 
significant advances that we have not been able to in the past.
    The Chairman. That leads me into the next question I have, 
and I know you have been involved on the administration side in 
the past, and we have invested significant monies in these 
countries for a long, long time.
    Can you point to successes, return on investment, progress 
that has been made with the significant amount of money that 
has been invested in these three countries?
    Mr. Cardenas. I think when you look at CAFTA, I think that 
the CAFTA has made significant progress in integrating these 
countries' markets with the United States. So even though that 
was not an economic assistance program, it is an example, I 
believe, of a program that has incentivized local actors into 
productive activity, if you will.
    I think that the U.S. assistance programs over the years 
that have strengthened democratic institutions, IRI, NDI, NED, 
I think that there is a long process.
    There is probably not a five-star program out there that 
probably would resonate with all of us, but I think it has been 
slow, steady progress with the U.S. institutions like the NED 
family that have been crucial.
    It may not be sexy work, but it has been effective when you 
look at where we were and where we are today. It is the 
unfortunate confluence of these adverse effects of U.S. 
counternarcotics policies in support of Colombia and Mexico 
that have squeezed Central America and put this layover of 
criminality into what was very steady progress out of the 1980s 
that has complicated the issue today.
    The Chairman. Do you want to follow up on that, Mr. 
Swigert?
    Mr. Swigert. I would agree with what Mr. Cardenas has said. 
I would just add that I do think in recent time looking at 
CICIG and what happened over the course of the last year is 
another example of good investment by the United States, which 
has been one of the largest international supporters of the 
U.N.-backed CICIG mechanism.
    Guatemala went through an incredibly wrenching experience. 
The sitting Vice President and the sitting President both were 
indicted, impeached, and removed from office and sit in jail. 
And yet Guatemala remains on a democratic path today. It stuck 
with its constitutional mechanisms, and I think that is thanks 
to the support that the United States has made to Guatemala and 
others over the years.
    The Chairman. Well, we want to thank you for your 
testimony. I think it has been a great committee hearing.
    I want to thank the ranking member in helping make this 
happen the way that it has.
    We had two government witnesses that obviously are highly 
optimistic about what they are carrying out. We have had two 
private witnesses who had a lot of experience that provided a 
dose of reality and other observations.
    We thank both panels for being here. The record will remain 
open until the close of business Thursday. If you could respond 
fairly promptly to questions that I am sure you will receive 
from the committee, we would appreciate it.
    The Chairman. Again, one of the great privileges that 
Senator Cardin and I have is the constant ability to talk to 
people like you that have the kind of experiences that you 
have. It is very helpful to us in carrying out public policy. 
We thank you for being here today.
    I do not know if you want to say anything else or not?
    Senator Cardin. I agree with the chairman. Both panels, I 
think, complemented each other.
    This is an incredibly important moment for U.S. foreign 
policy, and I think you helped us deal with it. Thank you.
    The Chairman. With that, the committee is adjourned. Thank 
you.
    [Whereupon, at 11:54 a.m., the hearing was adjourned.]


                              ----------                              


              Additional Material Submitted for the Record

Responses to Questions for the Record Submitted by Senator David Perdue 
  to Francisco Palmieri, Principal Deputy Assistant Secretary for the 
                  Bureau of Western Hemisphere Affairs

    Question 1. As the Principal Deputy Assistant Secretary for the 
Bureau of Western Hemisphere Affairs, I would like to take this 
opportunity to inquire about the State Department's efforts regarding 
Haiti's stalled federal elections. As you may know, the second round of 
Haiti's presidential elections was postponed due to allegations of 
fraud and subsequent threats of violent protests, leaving Haiti without 
a duly elected president or a complete federal government in place. 
Those familiar with the situation believe a small group of candidates 
who were unsuccessful in the first election round are responsible for 
inciting these allegations of fraud and sparking civil unrest in order 
to trigger a ``do over'' election, even stooping to the level of paying 
citizens to take the to the streets. I was discouraged to see the news 
last week that yet again the second round of elections have been 
postponed. I'm concerned that very little progress has been made as 
Haiti's interim president Jocelerme Privert, a former member of the 
Haitian parliament, seems more concerned with installing his allies in 
key government positions than with completing the election cycle.


   What is the State Department doing to help get Haiti's election 
        cycle back on track by the agreed upon date?

   What is being done to identify and call out election disruptors? 
        Aside from public rhetoric and private talks, is State willing 
        to use other diplomatic tools of persuasion, including travel 
        restrictions and/or visa bans, for these disruptors and their 
        families, who view U.S. travel ability as a status symbol?


    Answer. The Department of State is maintaining vocal and consistent 
pressure on the Haitian government to promptly complete the 2015 
electoral process and seat a democratically elected government, 
emphasizing that anti-democratic ``political solutions'' are not an 
acceptable outcome. We are supporting Haitian efforts aimed at finding 
consensual and constructive solutions that will see the February 5 
political accord implemented and a conclusion to the electoral process 
as soon as possible. We are urging the verification commission to 
expeditiously complete its evaluation and the Provisional Electoral 
Council (CEP) to quickly implement the commission's legal and 
constitutional recommendations.
    We will continue to call both publicly and through diplomatic 
channels for the completion of the electoral process. We are 
considering appropriate U.S. responses to continued delays, and 
identifying the triggers for those responses. At close to $42 million, 
the U.S. government is the largest bilateral contributor to Haiti's 
electoral process, giving us important leverage. We are working toward 
preparing an array of unilateral and multilateral responses, including 
UN Security Council action, withdrawal of funding for elections, and 
pressure on individual decision-makers.
    We have consulted closely with other donors to ensure a consistent 
response to possible continued electoral delays. To date, the 
international donor community has generally spoken with one voice, 
urging political actors to stick with the previously-agreed timetable. 
In some cases, international financial institutions' programs may be 
affected if there is a prolonged absence of a democratically elected 
government in Haiti.
    We are also assessing possible additional U.S. responses for those 
who deliberately disrupt the electoral process to pursue their own 
interests. We will consult internally with Department of State consular 
and legal experts, regarding the eligibility of certain individuals for 
visa revocation (for which there is a high legal threshold). We are 
prepared to back public statements and diplomatic pressures with 
concrete consequences, as needed.


    Question 2a. I appreciate that Secretary Kerry has been unambiguous 
in his support for prompt democratic elections in Haiti. As mentioned 
above, some self-interested groups in Haiti sow instability because 
their narrow commercial interests benefit from political uncertainty 
and the lack of the rule of law. These same groups are campaigning 
relentlessly today to strangle the Port Lafito project, a new port and 
industrial zone (involving the U.S.-based Seaboard Corporation), that 
represents competition with the existing antiquated port in the capital 
city. A cartel of port and cargo firms that enjoys sweetheart deals and 
no-bid contracts with the government is using its influence with 
Haitian authorities--including the courts and the National Port 
Authority--to disadvantage the Port Lafito project. The U.S. Ambassador 
and his team have been attentive to this issue. But unless we take 
decisive action against corrupt individuals involved, Haiti will never 
attract the investment it needs to progress.


   What specific measures will the U.S. government take to push back 
        decisively against corrupt practices?


    Answer. The U.S. government continues to advocate for fair and 
equitable treatment for U.S. investors in Haiti and has called on all 
actors involved in the commercial dispute affecting the Port Lafito 
project to abide by the rule of law and to maintain a high standard of 
transparency. We are also working with the Government of Haiti to 
combat official corruption and are exploring what options are available 
to impose consequences on individuals participating in corrupt 
practices. For example, we will consult internally with Department of 
State consular and legal experts, regarding the eligibility of certain 
individuals for visa revocation (for which there is a high legal 
threshold).
    On March 12, 2014, the Government of Haiti passed the Law on the 
Prevention and Repression of Corruption which imposes prison sentences 
of 3-15 years for a host of newly codified crimes including bribery, 
embezzlement of public property, illegal procurements, and laundering 
of proceeds of crime. On December 10, Haiti successfully prosecuted its 
first case of corruption under the law for embezzlement. The United 
States provided training to the judge in the case. We will continue to 
support Haitian efforts to bolster the capacity of judges and 
prosecutors to investigate, prosecute and adjudicate specialized 
crimes.


    Question 2b. What information do we have about a bribe allegedly 
paid to former President Martelly by Unibank?

    Answer. The State Department is aware of the allegations. We have 
no further information at this time.


    Question 2c. What can the U.S. government do to support the ongoing 
investigation by the Haitian Parliament of a no-bid contract issued to 
Caribbean Port Services?

    Answer. Parliament has not requested support from the U.S. 
government to investigate the alleged contract with Caribbean Port 
Services, and we have no involvement at this time. We continue to press 
the Government of Haiti to uphold fair and transparent procurement 
practices.


    Question 2d. Why is the director of the National Port Authority 
(APN), Alix Celestin, allowed to operate with impunity and in defiance 
of the government board of directors by levying inequitable fees on 
private ports?

    Answer. A statement published on August 3, 2015, by APN Director 
Alix Celestin notified all private port operators that the APN would be 
changing how it allocates its wharfage fee of $310 for every 20 foot 
equivalent (TEU) container. Previously, private operators were only 
required to give $155 of the wharfage fee to APN. In the fall of 2015, 
APN asserted that it was entitled to all $310/TEU, altering a wharfage 
sharing framework in effect since September 2000.
    Mr. Celestin has asserted APN's authority as a port regulator, 
established under a 1985 decree, to make these decisions, although the 
decree does not directly address the question of wharfage. Most 
recently, in a case brought by a private port operator, a Summary 
Reference Judge determined that the reinstatement of wharfage fees by 
APN was an administrative action that falls outside of the jurisdiction 
of the lower courts.
    The State Department, through the Office of the Haiti Special 
Coordinator and our Embassy in Port-au-Prince, has engaged with all 
parties involved and is closely following developments on the ground. 
We are also working with the Government of Haiti to advocate for the 
rationalization of wharfage fees, linking them to actual port 
operational costs which could result in a significant reduction in 
fees.


    Question 2e. Have international donors asked for an accounting of 
APN operating funds?

    Answer. The U.S. Embassy in Port-au-Prince is not aware of any 
formal accounting of APN operating funds; however, the U.S. government 
is working closely with the Government of Haiti to combat corruption 
within the public sector and improve transparency of financial 
management. With support from the U.S. Agency for International 
Development (USAID), the Government of Haiti is building back the 
operability of its Integrated Financial Management System after most of 
its physical infrastructure was destroyed in the earthquake. The 
Government of Haiti is installing an interface to allow connectivity 
between the Government of Haiti revenue collections and the 
expenditures management systems. The new program is in line with the 
roadmap developed by the Ministry of Economy and Finance (MEF) to guide 
all future investments in the area of information technology to ensure 
uniformity and avoid duplication. The U.S. Treasury Department is also 
working with the Government of Haiti to Implement a Treasury Single 
Account (TSA), which will improve the quality of fiscal information and 
create transparency within the expenditure and revenue stream for all 
ministries within the government.


    Question 3a. From FY 2014 to FY 2016, the State Department and 
USAID-managed assistance budget for Central America has more than 
doubled, going from $338.1 million in FY 2014 to $748 million estimated 
for FY 2016. Yet, the President has now requested $771.6 million for FY 
2017--$35 million more than last year.


   Can you explain this budget growth for Central America?


    Answer. The increase in foreign assistance requested for Central 
America reflects the comprehensive approach of the U.S. Strategy for 
Engagement in Central America (the Strategy). Consistent with the 
Strategy, increased resources will support new assistance for 
prosperity and governance programs and expand existing, successful 
security investments. The Department of State and USAID's FY 2017 
request of $750 million in bilateral and regional assistance for 
Central America--a part of the Administration's $1 billion request to 
support the Strategy--builds on the FY 2016 appropriation by seeking 
the resources necessary to increase economic opportunity, reduce 
extreme violence, strengthen the effectiveness of state institutions, 
and address challenges that have resulted in an increase in Central 
American migration to the United States. By investing U.S assistance in 
these areas, we can advance a prosperous, economically integrated 
Central America with effective and accountable institutions where 
citizens choose to remain and thrive. Doing so, we promote U.S. 
national security and expand economic opportunity for the United States 
and our partners throughout the region.


    Question 3b. Having more than doubled our aid investment in the 
last 3 years, what improvements have been made in the region?

    Answer. The increase in foreign assistance reflects the 
comprehensive approach of the U.S. Strategy for Engagement in Central 
America. The U.S. Strategy focuses on three pillars: security, 
governance, and prosperity. A few examples highlight the progress that 
has been made:Guatemala continues to fight corruption. The Department 
provides critical support through the State Department's Bureau of 
International Narcotics and Law Enforcement Affairs to fund the UN's 
International Commission Against Impunity in Guatemala (CICIG) to root 
out corruption at all levels of government. Recent successes include 
the February arrests of tax authority personnel accused of providing 
illegal tax refunds. On April 18, President Jimmy Morales requested 
CICIG's extension through 2019, reaffirming his promise to institute a 
``zero tolerance for corruption.''
    Honduras, with the support of USAID's Feed the Future (FTF) 
program, has shown significant results in reducing extreme poverty. 
Between 2011 and 2015, incomes increased by nearly 55 percent for more 
than 180,000 of the poorest individuals. Within the last fiscal year, 
the number of FTF families whose incomes rose beyond the extreme 
poverty line increased by 30 percent (8,719 in FY 2015 as compared to 
6,626 in FY 2014).
    El Salvador has demonstrated political will to improve public 
security. With the Department and USAID's support, crime prevention 
activities are helping reduce homicides in targeted communities. While 
national homicide rates are truly alarming--over 100 murders per 
100,000 people in 2015--homicide rates are projected to drop by about 
two-thirds in the 76 communities where USAID has focused its programs.


    Question 3c. From FY 2014 to FY 2016, the State Department and 
USAID-managed assistance budget for Central America has more than 
doubled, going from $338.1 million in FY 2014 to $748 million estimated 
for FY 2016. Yet, the President has now requested $771.6 million for FY 
2017--$35 million more than last year.


   The Alliance for Prosperity is a five-year plan, of which we are 
        only in the first year of implementation. Can Congress expect 
        to see increasing funding requests from the next Administration 
        for Central America in each of the remaining years of the plan?


    Answer. The Department of State and USAID will request funds on an 
annual basis commensurate with the challenges facing Central America.
    Insecurity, a lack of economic growth and jobs, poor educational 
opportunities, poverty, and weak institutional capacity are systemic 
challenges in Central America. The summer 2014 surge in migration of 
unaccompanied children and families from Central America to the U.S. 
southern border was just one symptom of these challenges. Although 
prior U.S. assistance yielded successful outcomes, overcoming the 
serious and persistent challenges Central America faces requires a 
comprehensive approach.
    Many of the U.S. Strategy for Central America's lines of action 
require sustained U.S. engagement and include assistance to build long-
term Central American capacity. Some FY 2016 and prior-year assistance 
will have an immediate impact, including addressing region-wide 
challenges such as coffee rust and protracted drought. Assistance will 
also improve Central American capacity to serve its citizens in the 
mid-term, but some goals will require sustained assistance and Central 
American political will.


    Question 3d. Is five years a sufficient period of time to implement 
the Alliance for Prosperity?

    Answer. The U.S. Strategy for Engagement in Central America is 
envisioned as a multi-year effort. The systemic changes needed in 
Central America will not come overnight, nor will the migration flows 
immediately cease. The necessary political will in Central America 
exists, but increased U.S. resources to address security, governance, 
and prosperity are a key component to catalyze more rapid progress in 
Central America. As we have learned from our experiences in Colombia 
and Mexico, consistent U.S. engagement and assistance can produce 
progress and changes that are sustainable and irreversible. To address 
the underlying conditions of poverty, weak governance, and insecurity 
in Central America, sustained U.S. involvement can make a positive 
difference. We will continually assess progress to ensure foreign 
assistance requests accurately reflect developments in the region and 
are linked to specific opportunities where they can make a positive 
impact.


    Question 4. Likewise, the Central America Regional Security 
Initiative (CARSI) budget has also more than doubled since FY 2014. 
Could you detail for me CARSI's accomplishments thus far?

    Answer. The Central America Regional Security Initiative is the 
primary funding stream for U.S. Strategy for Engagement in Central 
America security programming. In partnership with Central American 
governments, the Department of State and the United States Agency for 
International Development have established successful programming 
models that make short- to medium-term sustainable impacts to reduce 
levels of crime and violence, build the capacity of law enforcement and 
rule of law institutions, and support prevention programs for youth and 
in communities at risk of crime and violence.
    The Department and USAID began jointly implementing a Place Based 
Strategy (PBS) to reduce violent crime in some of the region's most 
dangerous neighborhoods. In Honduras, we have already seen a 
significant reduction in homicide rates. For example, in the Chamelecon 
and Rivera Hernandez neighborhoods in Honduras, the homicide rate 
dropped 17 percent and 47 percent respectively from 2014 to 2015. These 
reductions occurred in the concentrated areas where the Department and 
USAID jointly implement their programs. Nationally, the homicide rate 
dropped 12 percent from 2014 to 2015. The evidence shows that our 
programs, in conjunction with host government efforts, contributed to a 
reduction in homicides and an increase in safety and security.
    Justice sector reform programs also delivered benefits. In El 
Salvador, prosecutors mentored via CARSI obtained 424 convictions in 
2015, and achieved an impressive 93.4 percent conviction rate. In 
Honduras, CARSI-supported units executed a high-profile operation 
against the Banegas Band, one of the most notorious criminal 
organization responsible for at least nine murders and multiple 
attempts at extortion throughout Honduras, arresting 18 suspects and 
its leader.
    USAID, with the support of Vanderbilt University, concluded a 
rigorous three-year impact evaluation of its CARSI-funded community-
based crime and violence prevention programs in 120 high-crime urban 
treatment and control communities in El Salvador, Guatemala, Honduras, 
and Panama. Final results demonstrated crime victimization is 
significantly lower and public perception of security higher in 
communities USAID's CARSI programs.
    Question 5. Funding for ``Other Regional Programs'' has actually 
tripled since FY 2014. Can you describe what ``other'' programs are 
involved in this grouping, and why these programs collectively have 
required a three-fold increase?

    Answer. The FY 2017 request includes $10 million for Foreign 
Military Finance (FMF) in ``Other Regional Programs'' to support the 
U.S. Strategy for Engagement in Central America (the Strategy). 
Consistent with the Strategy, increased resources will expand existing, 
successful security investments. Regional security assistance, through 
FMF, will build the capacity of Central American partner nation 
security forces to disrupt maritime smuggling of drugs destined to the 
United States and enhance border security to prevent undocumented 
migration and illicit trafficking in areas at risk of exploitation by 
criminal organizations. These investments will enhance U.S. national 
security.The FY 2017 request for ``Other Regional Programs'' also 
includes $2.07 million in Nonproliferation, Antiterrorism, Demining and 
Related Programs (NADR) with $1.5 million for antiterrorism assistance 
and $570,000 in export control and related border security assistance. 
Antiterrorism assistance supports targeted training and equipment to 
improve law enforcement, while export control assistance funds the 
creation of strategic trade controls to counter proliferation threats.


    Question 6. The Northern Triangle governments have budgeted $145 
million for improving public safety under the Alliance for Prosperity 
in 2016. This amount is almost double the $78 million budgeted for El 
Salvador and almost triple the $49 million budgeted for Guatemala. This 
allocation seems inconsistent with the level of violence occurring in 
these three nations, especially El Salvador, which, with 104 homicides 
for every 100,000 citizens, recently earned the title of ``the 
hemisphere's murder capital'' this year.


   Can you shed any light on why the government of El Salvador decided 
        to allocate less funding to improving public safety than other 
        Alliance for Prosperity nations?

   How is funding from the U.S. and international donor community 
        being used to address the issue of public safety in El 
        Salvador?


    Answer. The government of El Salvador is committed to addressing 
its crippling security situation. El Salvador's budget allocations for 
public safety spending in 2016 to support the Alliance for Prosperity 
only represent a portion of its total security expenditures. In 2015, 
the government of El Salvador, with the support of the international 
community, developed a comprehensive security plan, Plan Safe El 
Salvador. The Government of El Salvador committed to finance this 
ambitious plan, with costs over a five-year period estimated to reach 
$2.1 billion, roughly 8.7 percent of Salvadoran GDP. In October 2015, 
the Salvadoran legislature approved two special taxes to help finance 
Plan Safe El Salvador, demonstrating political will to improve public 
safety. In the short time since the new taxes went into force, the 
government has already raised over $11 million in additional revenue to 
back the plan.
    As one example of international donor engagement, the Central 
American Bank for Economic Integration issued a $71 million loan to El 
Salvador to support prison construction and is negotiating an 
additional $100 million loan to improve public safety.
    The Department of State and the United States Agency for 
International Development focus assistance efforts in the same priority 
municipalities identified by the Government of El Salvador in Plan Safe 
El Salvador. Assistance strategically implements a balanced and 
integrated set of four interventions: primary violence prevention 
activities directed at the community at large; secondary violence 
prevention activities tailored to individuals considered at risk of 
engaging in crime; tertiary violence prevention activities targeted at 
individuals already engaged in criminal behavior who are seeking 
alternatives; and justice sector activities that provide the community 
access to formal criminal justice services and increase trust between 
citizens and law enforcement.


    Question 7. Please describe the relationship between USAID's 
Central America Regional program and the State Department's Western 
Hemisphere Regional program.


   How do State and USAID work together toward improving the 
        conditions in Central America?

   What challenges do you face? Are there opportunities for better 
        cooperation and coordination?


    Answer. USAID's Central America Regional program coordinates 
closely with the State Department's Western Hemisphere Regional 
program, as well as all USAID Missions in the region. Through regular 
communication and consultation with the State Department at all levels, 
both in Washington and in the field, we seek to avoid duplication of 
programming and ensure complementarity. For example, USAID and the 
State Department have co-organized several successful and ongoing 
workshops around the Central America Regional Security Initiative 
(CARSI) both in Washington and in the field to ensure agreement on 
geographic priorities, co-participation in reviewing proposals, and 
monitoring and evaluation plans. In addition, frequent policy meetings, 
convened by the National Security Council, facilitate full whole-of-
government coordination.
    USAID and the State Department began jointly implementing a place-
based strategy under CARSI in 2015 to reduce violent crime in some of 
the region's most dangerous neighborhoods. In Honduras, we have already 
seen a significant reduction in homicide rates; in the Chamelecon and 
Rivera Hernandez neighborhoods in Honduras, the homicide rate dropped 
17 percent and 47 percent, respectively, from 2014 to 2015. These 
reductions occurred in the concentrated areas where USAID and the State 
Department jointly implement their programs. Nationally, the homicide 
rate dropped 12 percent from 2014 to 2015. USAID and the State 
Department, in conjunction with host government efforts, are working 
together to contribute to a reduction in homicides and an increase in 
safety and security.
    The U.S. Strategy for Engagement in Central America calls for 
increased U.S. investment in the region. To date, we have not faced 
significant challenges in coordinating U.S. efforts. As we move further 
into implementation of the Strategy throughout the region, we will 
continue to promote robust coordination across the U.S. interagency.


    Question . I understand that the objectives and efforts of the U.S. 
Strategy for Engagement in Central America are generally consistent 
with the priorities established in the regionally-led Alliance for 
Prosperity. But while U.S. efforts are also relatively closely aligned 
on the country-to-country level with those of the Salvadoran and 
Guatemalan governments, there is apparently less alignment in Honduras 
as a result of the Honduran government's emphasis on infrastructure 
construction, which is not a focus of U.S. assistance under the Central 
America Strategy.


   Why is this the case?

   In your opinion, should the U.S. be more supportive of 
        infrastructure construction in Honduras?


    Answer. The U.S. Strategy for Engagement in Central America and the 
Alliance for Prosperity (A4P) are complementary in their objective of 
addressing the region's development and security challenges. We closely 
coordinated with the Northern Triangle governments to ensure our 
efforts align and to identify any potential gaps.
    Our assistance to Central America differs from A4P in its emphasis 
on training and technical assistance to build capacity and 
sustainability, as opposed to financial assistance for large-scale 
infrastructure. We remain supportive of the many necessary 
infrastructure investment initiatives throughout Central America, 
including those in Honduras, and work closely with international 
financial institutions like the Inter-American Development Bank, 
Central American Bank of Economic Integration, World Bank, and other 
financial institutions that are providing access to financing for such 
projects. Given the large financing needs, the private sector will also 
play a key role, and we are working with the countries to improve their 
investment climates.


    Question 9. For FY 2016, Congress appropriated $30 million to train 
and equip Central American militaries. What will these training efforts 
entail? Where will the training of Central American militaries take 
place?

    Answer. In FY 2016, Congress appropriated $25.665 in Foreign 
Military Financing (FMF) and $3.15 million in International Military 
and Education Training (IMET) funds for Central America. IMET supports 
the professionalization of Central American partner militaries and 
Expanded IMET (E-IMET) courses, which re-enforce respect for civil-
military relations, rule of law, and human rights. With FY 2016 
funding, IMET will support technical and operational training, such as 
aircraft or maritime maintenance courses that primarily take place in 
U.S. military training facilities. FMF will also support technical and 
operational courses, such as maritime maintenance and support, but we 
do not have a confirmed location for these courses at this time.


    Question 10a. As one of the conditions placed on FY 2016 aid to 
Central America, Congress required that the Secretary of State provide 
the respective Appropriations Committees with a multi-year spending 
plan that specifies objectives, indicators to measure progress, and an 
implementation timeline. Congress also required that 25 percent of the 
funds for the ``central governments of El Salvador, Guatemala, and 
Honduras'' be withheld until the Secretary of State certifies that the 
governments are taking ``effective steps'' to inform citizens of the 
dangers of irregular migration.


   What progress has been made on Secretary Kerry's certification of 
        ``effective steps'' taken by the Northern Triangle governments 
        to educate citizens on migration?


    Answer. The Department of State, Foreign Operations, and Related 
Programs Appropriations Act, 2016, required the Secretary of State to 
make certain certifications prior to the obligation of 25 percent of 
certain assistance allocated for the central governments of the 
Northern Triangle, to include that each government is taking effective 
steps to ``inform its citizens of dangers of the journey to the 
southwest border of the United States.'' On March 14, 2016, the State 
Department reported to Congress that:


   The government of El Salvador has implemented public 
        awareness campaigns and high-ranking officials have made 
        numerous public statements on the dangers of irregular 
        migration and the lack of U.S. immigration benefits for 
        individuals who arrive in the United States without prior 
        authorization. The Salvadoran government supported U.S. 
        messaging campaigns on the dangers of the journey through 
        statements in print media, television, and radio.

   El Salvador's Ministry of Foreign Affairs continues to lead 
        an intragovernmental effort to disseminate information about 
        the dangers of the journey and immigration laws and policies. 
        Senior Salvadoran government officials continue to participate 
        in national and regional fora and events on migration, give 
        press interviews, and disseminate radio spots and web videos 
        warning of the dangers of irregular migration.

   Salvadoran Foreign Minister Hugo Martinez continues to make 
        public statements on the dangers of unaccompanied minor travel 
        to the United States. The Ministry of Foreign Affairs broadcast 
        video and radio spots from a ``No Pongan en Riesgo Sus Vidas'' 
        (Do Not Put Your Lives at Risk) campaign on national TV and 
        radio. The Mayor's Office of San Salvador, the Municipal 
        Institute for Youth, and NGO Democratic Vision launched a 
        campaign to prevent unaccompanied child migration called 
        ``Sueno vs. Pesadilla'' (Dream vs. Nightmare) in July 2014, 
        including social media and direct volunteer outreach.

   The Government of Guatemala implemented public awareness 
        campaigns, and high-ranking officials made numerous public 
        statements, on the dangers of irregular migration and the lack 
        of U.S. immigration benefits for undocumented migrants who 
        arrive in the United States. Both former President Alejandro 
        Maldonado and current President Jimmy Morales made public 
        remarks urging people not to make the dangerous journey to the 
        United States and to remain in Guatemala to build 
        opportunities.

   In July 2014, Guatemala's first lady launched a campaign to 
        dissuade unaccompanied child migration called ``Quedate'' 
        (Stay) in regions with the source of the highest number of 
        child migrants. The Guatemalan national police developed a 
        circular on the dangers associated with unaccompanied children 
        migrating to the United States and incorporated the messaging 
        in all of its crime prevention activities, many of which target 
        at-risk youth. In partnership with UNICEF, the Guatemalan 
        Foreign Ministry launched a messaging campaign to educate 
        children about their rights.

   The Guatemalan government continued messaging to counter 
        irregular migration in 2015 by emphasizing the importance of 
        keeping Guatemalan children in Guatemala via radio and 
        television advertisements, as well as text messaging. It 
        supported the U.S. government's ``Dangers of the Journey'' and 
        ``Know the Facts'' messaging campaigns. The Guatemalan Ministry 
        of Foreign Affairs amplified the messages on social media and 
        on its website.

   Since mid-2014, the Honduran government has run continuous 
        public awareness campaigns, and high-ranking officials have 
        made numerous public statements on the dangers of irregular 
        migration and the lack of U.S. immigration benefits for 
        children and adults who arrive undocumented in the United 
        States. Honduras began its first nationwide media campaign in 
        June 2014, using U.S. Department of Homeland Security Customs 
        and Border Protection (DHS/CBP)-provided materials on the 
        dangers of land-based migration. Honduras also complemented 
        U.S. messaging campaigns on the dangers of the journey in print 
        media, television, and radio. Through public service 
        announcements, Honduras continues to share stories of the 
        dangers migrants face during their journey to the United States 
        and is encouraging all sectors of Honduran society to work 
        together to discourage undocumented migration. The Honduran 
        government also continues to collaborate with non-governmental 
        organizations on these campaigns.
      Since Honduras' creation of the Child Migrant Task Force in 2014, 
        the Honduran first lady has regularly released press statements 
        calling on Honduran parents not to endanger the lives of their 
        children, emphasizing that irregular migrants would not be 
        allowed to stay in the United States. The Task Force is 
        planning more public service campaigns to drive home public 
        awareness on the dangers undocumented migrants face during 
        their journey to the United States.


    Since this report, the Northern Triangle governments have continued 
to educate their citizens about the dangers of the journey and to 
dispel misinformation on U.S. immigration policy. The State Department 
continues to work with them to achieve this goal.


    Question 10b. What percentage of FY 2016 aid falls under the 
umbrella of ``assistance for the central governments of El Salvador, 
Guatemala, and Honduras'' that is subject to 25-50 percent withholding 
requirements?

    Answer. The FY 2016 Appropriations bill directs that up to $750 
million may be made available for assistance for countries in Central 
America to implement the U.S. Strategy for Engagement in Central 
America. While FY 2016 funding allocations have not been finalized, the 
Department and USAID at this time assess that $269 million, or about 
one-third, of a total possible allocation of $750 million for the 
Central America Strategy will directly assist Northern Triangle central 
governments. This amount includes both regional and bilateral programs. 
These figures will continue to adjust slightly as FY 2016 allocations 
move forward, funds are obligated, and regional programming is 
executed.


    Question 11. The State Department's Bureau of Western Hemisphere 
Affairs is coordinating the U.S. Strategy for Engagement in Central 
America. However, each implementing agency is in charge of monitoring 
and evaluating its own programs.


   Does the State Department have a comprehensive data collection and 
        monitoring process in place that will allow all the data 
        compiled from each different agency's programs to be evaluated 
        together as a part of a larger overview of the U.S. Strategy 
        for Engagement in Central America as a whole? Please be as 
        specific as possible.


   Does the State Department need additional resources to be able to 
        analyze the aggregated data for Central America? If so, what 
        resources?


    Answer. The State Department and USAID are committed to improving 
our monitoring and evaluation of these programs. We are finalizing an 
overarching architecture that tracks the desired outcomes in the U.S. 
Strategy for Engagement in Central America (the Strategy). The 
strategic goals under each of the three pillars--prosperity, 
governance, and security--are linked to a limited set of high-level 
indicators described in the Strategy, which define what the U.S. 
government, in partnership with Northern Triangle governments, civil 
society, and the private sector, aims to achieve in Central America.
    U.S. agencies' indicators, assessments, and evaluations will 
supplement these strategic level indicators. For example, USAID has 
already developed a set of program indicators and a series of planned 
assessments, surveys, and evaluations to inform design and assess 
impact of programs. The data collected from U.S. agencies will be 
compiled and edited annually.
    An additional employee within the Bureau of Western Hemisphere 
Affairs, supported with FY 2015 ESF, will assist in tracking the 
effectiveness of program implementation funded by assistance supporting 
the Strategy. The employee will compile and analyze interagency and 
third-party data that assesses the performance of Central American 
governments and U.S. assistance implementers in support of the 
Strategy.


                               __________

Responses to Questions for the Record Submitted by Senator David Perdue 
 to Elizabeth Hogan, Acting Assistant Administrator for Latin America 
                           and the Caribbean

    Question 1. I would like to take this opportunity to inquire about 
the State Department's efforts regarding Haiti's stalled federal 
elections. As you may know, the second round of Haiti's presidential 
elections was postponed due to allegations of fraud and subsequent 
threats of violent protests, leaving Haiti without a duly elected 
president or a complete federal government in place. Those familiar 
with the situation believe a small group of candidates who were 
unsuccessful in the first election round are responsible for inciting 
these allegations of fraud and sparking civil unrest in order to 
trigger a ``do over'' election, even stooping to the level of paying 
citizens to take the to the streets. I was further discouraged to hear 
the news last Friday that Haiti's second round of presidential 
elections has been postponed yet again. I'm concerned that very little 
progress has been made as Haiti's interim president Jocelerme Privert, 
a former member of the Haitian parliament, seems more concerned with 
installing his allies in key government positions than with completing 
the election cycle.


   What effect is this political unrest having on Haiti's 
        reconstruction efforts?

   Have these events affected USAID's ability to effectively 
        administer aid to the Haitian people? If so, how?

   Have these events affected any local USAID projects? If so, how? 
        Please be specific.

   Has USAID had to provide additional aid as a result of the delayed 
        elections?


    Answer. Haiti has historically been a challenging environment in 
which to work, with chronic weaknesses of governance and recurring 
periods of political uncertainty. The overall success of the U.S. 
Government strategy in Haiti is predicated on a credible, legitimate 
counterpart in the Government of Haiti (GOH). USAID works to support 
effective and representative institutions that are essential to improve 
the quality of governance in Haiti, thereby bolstering stability and 
government legitimacy. Although in many instances the GOH is not 
directly involved in assistance projects, not having a legitimately-
elected government as a U.S. development partner can diminish the 
economic multiplier effects of the assistance. In addition, the 
prolonged absence of a democratically elected government in Haiti could 
have an adverse effect on long-standing support for non-humanitarian 
programs by the United States and other international partners of 
Haiti.
    While the urgent priority of the U.S. government is for Haiti to 
conclude the electoral process and seat a representational 
democratically-elected government as soon as possible, the country is 
also facing a deteriorating economy, rising food insecurity, drought 
and public health concerns. Continued U.S. foreign assistance is 
essential, as the basic needs of the people of Haiti are likely to 
increase in times of political turmoil. While we have not noted direct 
substantive negative impacts on our programs, in our extensive 
monitoring and evaluation, USAID will continue to assess the 
performance of the Agency's programs, and make course corrections when 
necessary to assure the best use of and maximum results from invested 
U.S. resources. Many of USAID's programs (for example, in job creation, 
basic education, and our planned new program in water and sanitation), 
however, are not immediately dependent on Haitian government policy 
decisions.
    Despite these continuing challenges, USAID activities have produced 
good results in some sectors, such as health, job creation, and 
agriculture. For example, our support for small and medium-sized 
enterprises has created over 9,000 jobs, and U.S. agricultural projects 
have doubled the income of 60,000 farmers by increasing crop yields and 
introducing new technology.
    Haiti is important to us as a nation, and the U.S. government's 
long-term goal is clear: to help the people and government build a more 
stable, prosperous future. In support of this long-term goal, the U.S. 
government is supporting credible electoral processes. These activities 
aim to strengthen Haiti's Provisional Electoral Council (CEP), 
political party, and civil society capacity to organize and monitor 
regular and inclusive elections that meet international standards for 
transparency and fairness. To date, USAID does not anticipate providing 
additional foreign assistance on top of that already provided to the 
CEP as a result of the delayed elections, although continued delays may 
well necessitate increased funding from the Government of Haiti and its 
international partners. Going forward, the U.S. government and USAID's 
technical partners stand by to assist efforts by civil society, the 
GOH, and the CEP to meet demands for increased fairness, credibility 
and transparency of the ongoing electoral process. However, each step 
will require sustained commitment and political will from the GOH and 
the CEP.


    Question 2. Please describe the relationship between USAID's 
Central America Regional program and the State Department's Western 
Hemisphere Regional program. How do State and USAID work together 
toward improving the conditions in Central America?


   What oversight procedures does USAID have in place to prevent 
        duplication of efforts?

   What challenges do you face in this coordination? Are there areas 
        in which coordination for planning and implementation of 
        assistance could be improved?


    Answer. USAID's Central America Regional program coordinates 
closely with the State Department's Western Hemisphere Regional 
program, as well as all USAID Missions in the region. Through regular 
communication and consultation with the State Department at all levels, 
both in Washington and in the field, we seek to avoid duplication of 
programming and ensure complementarity. For example, USAID and the 
State Department have co-organized several successful and ongoing 
workshops around the Central America Regional Security Initiative 
(CARSI) both in Washington and in the field to ensure agreement on 
geographic priorities, co-participation in reviewing proposals, and 
monitoring and evaluation plans. In addition, frequent policy meetings, 
convened by the National Security Council, facilitate full whole-of-
government coordination.
    USAID and the State Department began jointly implementing a place-
based strategy under CARSI in 2015 to reduce violent crime in some of 
the region's most dangerous neighborhoods. In Honduras, we have already 
seen a significant reduction in homicide rates; in the Chamelecon and 
Rivera Hernandez neighborhoods in Honduras, the homicide rate dropped 
17 percent and 47 percent, respectively, from 2014 to 2015. These 
reductions occurred in the concentrated areas where USAID and the State 
Department jointly implement their programs. Nationally, the homicide 
rate dropped 12 percent from 2014 to 2015. USAID and the State 
Department, in conjunction with host government efforts, are working 
together to contribute to a reduction in homicides and an increase in 
safety and security.
    The U.S. Strategy for Engagement in Central America calls for 
increased U.S. investment in the region. To date, we have not faced 
significant challenges in coordinating U.S. efforts. As we move further 
into implementation of the Strategy throughout the region, we will 
continue to promote robust coordination across the U.S. interagency.


    Question 3a. I understand that the President's FY 2017 request 
includes $28 million in global food security funds for Central America.


   How will these global food security funds be primarily 
        concentrated?


    Answer. The $28 million requested in the President's FY 2017 Budget 
is for the Climate Smart Food Security initiative being led by the 
Department of State's Office of Global Food Security. The initiative 
will target its efforts on: increasing the resilience of major 
agricultural sectors (crops, livestock, forests, and fisheries) to 
climate change; mitigating the negative impact of food production 
systems on the climate; reducing poverty and hunger; promoting economic 
growth while building stronger trading partners; strengthening country-
led commitments to food security; and improving strategic coordination, 
and leveraging the inputs of multilateral partners. As part of these 
efforts, the U.S. Government will continue to partner with other 
governments and the private sector to determine how to integrate 
climate smart agriculture into diplomatic dialogues and where public 
and private investments can be made to have the greatest potential for 
impact. The assistance will be channeled through regional development 
agencies to benefit from their expertise in loans, loan guarantees, and 
other blended financing mechanisms. To date, the geographical focus of 
the initiative has been Central America. The focus may expand to other 
regions in the future if additional funding is identified beyond the 
resources requested in the Central America budget.


    Question 3b. In your opinion, is this funding level adequate to 
support the goals of USAID's Central America Regional program?

    Answer. The President's FY 2017 budget request for the Department 
of State and USAID of $750 million for the Strategy for U.S. Engagement 
in Central America will help to support and sustain the three 
interrelated pillars of prosperity, governance and security. In 
addition to the $28 million in global food security funds, ongoing 
activities that are part of the Global Climate Change and Feed the 
Future Initiatives will continue to be implemented in FY 2017, 
contributing to climate change and food security development goals in 
the Central America region. Further, there are ongoing discussions with 
other donors including the Canadian and Mexican governments to identify 
complementary support for the initiative. Considering these 
complementary resources to reach our objectives, the global food 
security funding levels requested in the President's FY 2017 Budget for 
both Central America and the Climate Smart Food Security Initiative are 
adequate.


    Question 4. I understand that the objectives and efforts of the 
U.S. Strategy for Engagement in Central America are generally 
consistent with the priorities established in the regionally-led 
Alliance for Prosperity. But while U.S. efforts are also relatively 
closely aligned on the country-to-country level with those of the 
Salvadoran and Guatemalan governments, there is apparently less 
alignment in Honduras as a result of the Honduran government's emphasis 
on infrastructure construction, which is not a focus of U.S. assistance 
under the Central America Strategy.


   Why is this the case?

   In your opinion, should the U.S. be more supportive of the 
        construction of infrastructure in Honduras? If so, why are we 
        not?

    Answer. The U.S. Strategy for Engagement in Central America and the 
Alliance for Prosperity (A4P) are complementary in their objective of 
addressing the region's development and security challenges. We closely 
coordinated with the Northern Triangle governments to ensure our 
efforts align and to identify any potential gaps.
    Our assistance under the U.S. Strategy for Engagement in Central 
America differs from A4P in the U.S. Strategy's emphasis on training 
and technical assistance to build capacity and sustainability, as 
opposed to financial assistance for large-scale infrastructure. We 
remain supportive of the many necessary infrastructure investment 
initiatives throughout Central America, including those in Honduras, 
and work closely with international financial institutions like the 
Inter-American Development Bank, Central American Bank of Economic 
Integration, World Bank, and other financial institutions that are 
providing access to financing for such projects. Given the large 
financing needs, the private sector will also play a key role, and we 
are working with the countries to improve their investment climates.
    While we do not have any plans to use foreign assistance to finance 
large-scale infrastructure projects, the United States has supported 
technical assistance and capacity building programs in the region, 
specifically related to infrastructure financing, and we look to 
continue these efforts.


    Question 5. Please describe the major initiatives within USAID that 
fall under the Central America Regional Security Initiative (CARSI) 
umbrella.

    Answer. A multi-year, multifaceted security assistance package, the 
Central America Regional Security Initiative (CARSI) is the main 
funding vehicle for the security pillar of the U.S. Strategy for 
Engagement in Central America.
    Under CARSI, USAID supports an integrated ``three-tiered approach'' 
to crime and violence prevention revolving around smart targeting: 
geographic, demographic and behavior-based. This targeting allows USAID 
to focus on the geographic locations where violence occurs, the 
individuals and groups at the highest risk of perpetrating or being 
victimized by violence, and the behaviors most likely to trigger 
violence. This approach blends population-based programs to build high-
risk communities' resilience to crime and violence (e.g., youth 
outreach centers, workforce development, small infrastructure projects, 
violence prevention committees and community policing) with targeted 
interventions to support the highest-risk youth (e.g., psychosocial 
counseling, mentoring, restorative justice, and pathways to 
reintegration into communities).
    USAID, with the support of Vanderbilt University, concluded a 
rigorous impact evaluation of its CARSI-funded community-based crime 
and violence prevention programs in 120 high-crime urban treatment and 
control communities in El Salvador, Guatemala, Honduras, and Panama. At 
the three-year mark, the final results showed a 51% decline in reported 
murders and extortion, a 25% reduction in reported illegal drug sales, 
and a 19% decline in reported burglaries in neighborhoods benefiting 
from USAID-supported programs as compared to the control group of 
similar communities.
    USAID programs have created over 200 youth outreach centers in 
high-violence communities across Central America that provide youth 
with a refuge where they can study, obtain vocational training, and 
receive job placement assistance. These have been so well received that 
the Government of Honduras has pledged $3 million from its security tax 
to co-finance 30 additional youth outreach centers in more communities.
    USAID has harnessed the resources, technology and training capacity 
of more than 100 private entities, including Chevron, Hanes Brands, 
Cisco, Intel, and Microsoft, to expand educational and economic 
opportunities for Central America's youth. For example, mobile phone 
providers Claro and Tigo deliver free internet access to USAID's 
outreach centers in El Salvador and Honduras. In El Salvador, Microsoft 
has trained over 10,000 youth in USAID's more than 120 youth outreach 
centers on software and information technology via their 
``YouthSparkInitiative'' Program. Additionally, the regional wholesale 
chain PriceSmart recently supported the launch of Honduras' largest 
youth outreach center to date.
    Under CARSI, USAID and the Department of State's Bureau for 
International Narcotics and Law Enforcement Affairs (State/INL) have 
begun coordinating assistance in select sites in Guatemala, Honduras 
and El Salvador under a ``place-based'' strategy. Based on a proven 
model that has been successful in cities, including Los Angeles, Ciudad 
Juarez, and Medellin, this effort integrates prevention efforts and law 
enforcement, targeting the most dangerous communities and high-risk 
youth.
    These micro-level interventions are complemented by macro-level 
security and justice sector reform efforts to strengthen the 
institutions charged with enforcing and administering justice to keep 
people safe and reduce impunity. In addition, USAID's efforts continue 
to advance national reform agendas, particularly in solidifying 
paradigm shifts towards a more integrated violence reduction approach, 
driven by data and grounded in evidence.


    Question 6a. As a part of the President's FY 2017 request of $772 
million, the Administration has requested $135 million through other 
U.S. agencies besides USAID and the State Department to support its 
whole-of-government strategy in Central America, including the 
Departments of Defense, Agriculture, Treasury, and Homeland Security, 
among others.


   What processes, if any, does USAID have in place to prevent overlap 
        and duplicative programming among all these separate agencies?


    Question 6b. To avoid duplicative programming, USAID participates 
in interagency consultations on our current activities and coordinates 
closely with the State Department. Coordination on current programs is 
complemented by meetings with individual agencies both in Washington 
and in the field. For example, for agencies receiving Strategy funds 
through foreign assistance, both USAID and the State Department expect 
to review proposed interagency programming to ensure it supports the 
Strategy and is consistent with the purposes for which funds were 
appropriated In addition, there is further coordination at the 
technical level, as USAID has ongoing interagency partnerships.


   What processes does USAID have in place to monitor and evaluate the 
        effectiveness of programs through each of these agencies, as 
        well as an overall, comprehensive data analysis process for the 
        Central America initiative?


    Answer. U.S. agencies with activities funded under the U.S. 
Strategy for Engagement in Central America (the Strategy) are expected 
to report results that link to the Strategy's goals. These agencies 
also will be asked to provide detail on monitoring and evaluation that 
links to Strategy objectives.
    The State Department and USAID are coordinating to conclude an 
overarching architecture that links to the desired outcomes described 
in the Strategy. The goals under each of the prosperity, governance, 
and security pillars link to high-level indicators described in the 
Strategy, which detail what the U.S. government, in partnership with 
the Northern Triangle governments, civil society, and the private 
sector aim to achieve in Central America. These include:


   Help Central American governments reduce violence so that 
        no country in the region is ranked among the top 10 countries 
        in homicide rates;

   Reduce the youth unemployment rates in Honduras, El 
        Salvador, and Guatemala by half; and

   Reduce poverty rates in these countries to below 40 percent 
        over the next decade, in part through steady economic growth.


    Question 6c. Does USAID need additional resources to ensure that 
comprehensive data monitoring and evaluation takes place for the 
Central America imitative?

    Answer. The President's request includes funding to ensure that we 
continue to strengthen monitoring and evaluation under the CEN 
Strategy. Agencies implementing activities in support of the Strategy 
will supplement these high-level indicators with program indicators, 
assessments, and evaluations to measure program-level results, as 
described above. For example, through our Central America ``Learning 
Agenda,'' USAID has developed a set of program indicators and has 
ongoing and planned assessments, surveys, and evaluations to inform 
design and assess programs outcomes and impact. We are working with our 
field offices to collect data on a regular basis, analyze trends, and 
report on results. In addition, in FY 2016 we expect to complete 18 
evaluations of programs in Central America, with more to come in 
subsequent fiscal years.


    Question 7a. Some USAID programs in Central America have been able 
to multiply aid funds by leveraging U.S. funding to raise support from 
the private sector.


   What are some of the most successful examples of private sector 
        support for USAID development projects in Central America?


    Answer. Since 2012, USAID has leveraged approximately $146 million 
in private sector and non-USG resources for Central America. This means 
that for every USAID dollar spent since 2012, the private sector has 
contributed approximately 1.6 times the amount through USAID's Global 
Development Alliances (GDA), Development Credit Authority (DCA) 
guarantees, and other public-private partnerships.
    USAID engages companies such as PriceSmart, Tigo, Claro, Cisco and 
Microsoft to provide educational, training, and economic opportunities 
for at-risk youth across Central America. USAID reaches approximately 
85,000 at-risk youth through 200 outreach centers in some of the 
toughest neighborhoods in the region. Some of our most successful 
partnerships with the private sector have focused on this crime and 
violence prevention work targeted at the community level in Central 
America.
    Engaging the local private sector has increasingly become an 
important factor to ensuring community buy-in and sustainability of 
USAID development projects in Central America. In El Salvador, USAID 
partners with five Salvadoran foundations to combat citizen insecurity 
and strengthen municipal responses to crime and violence in 50 
dangerous communities. This activity works closely with mayors, 
municipal councils and local residents on designing prevention plans 
tailored to the needs of each community. Activities include training 
youth and families in conflict prevention, youth leadership programs, 
and job training and entrepreneurship. School-based prevention 
activities provide training to teachers in violence prevention, support 
to parent-teacher associations and psychological counseling in schools 
traumatized by violence. At $42 million in combined resources, El 
Salvador has established the largest USAID public-private partnership 
with local private sector in Latin America and the Caribbean.
    In El Salvador, Microsoft has trained over 10,000 youth in USAID's 
outreach centers on software and information technology. Microsoft's 
ultimate goal is to reach 25,000 at-risk youth through USAID's outreach 
centers in El Salvador. Along with local private sector, USAID and 
Microsoft also partner to support Superate (Get Ahead!) centers, which 
train underprivileged youth in English, computer proficiency, and life 
skills to become the next leaders of El Salvador. The Superate centers 
continue to receive free Microsoft software, preparing youth to move on 
more effectively to secondary education and the workforce. Given the 
success of this partnership, other companies in El Salvador established 
centers and the model has been replicated in Panama and Nicaragua.
    In Honduras, USAID continues to expand our partnership with the 
telecommunications company, Tigo, which provides free internet coverage 
for over 5,000 at-risk youth. As a result, youth benefit from computer 
and vocational training classes, reducing their vulnerability to gang 
recruitment. Between 2012 and 2015 alone, USAID doubled the number of 
youth outreach centers to 46 with Tigo's expansion of free internet 
coverage in Honduras. Also in Honduras, PriceSmart, an American company 
and the largest membership wholesale chain in Central America, recently 
sponsored the establishment of one of USAID's largest youth outreach 
centers located outside of San Pedro Sula, Honduras.
    To improve food security, connect farmers to market, and move 
150,000 rural Hondurans out of poverty, USAID partners with Walmart and 
various local and multinational companies. USAID has developed over 41 
public-private partnerships (PPP) with companies to provide training 
and technical assistance to small-scale farmers, improve the efficiency 
of key value chains, and increase incomes. These PPPs have been a 
critical component in increasing incomes of more than 24,000 people by 
267 percent in 2014.
    In Guatemala, USAID mobilized $26 million in matching funds from 
the private sector, non-governmental organizations, and municipalities 
to support our violence prevention interventions between 2010 and 2014. 
For example, by working with a local bank, USAID pooled some of these 
resources to improve working conditions and services of five police 
stations.
    USAID also partners with the private sector at a regional level to 
increase access to finance across Central America. In response to the 
worst outbreak of coffee rust in 30 years, USAID partnered with Root 
Capital and Keurig Green Mountain Coffee to leverage $15 million in 
financing for the region's coffee value chain and agriculture 
cooperatives in Honduras, Guatemala, El Salvador, and Nicaragua, among 
other countries.


    Question 7b. What methods do you feel have proven most effective in 
garnering private support in Central America?

    Answer. USAID employs a range of approaches to best harness the 
private sector's resources, business expertise, technology and 
marketing channels. Two highly-effective models are:


 1. Co-funding and co-creation partnerships. USAID uses the Global 
        Development Alliance mechanism to engage the local and 
        international private sector in co-funding and co-designing 
        projects and partnerships to improve the communities in which 
        they operate, advance USAID's local development goals, and 
        expand services and opportunities available to local 
        communities. For instance, companies such as PriceSmart and 
        Lady Lee in Honduras, or Grupo Agrisal in El Salvador, are 
        companies deeply committed to improving local conditions and 
        contributing to efforts to combat crime and reduce violence in 
        the communities in which they operate.
      Often these partnerships are structured with the corporate social 
        responsibility outfits of large companies. For instance, 
        Microsoft developed the ``YouthSpark Initiative'' to train and 
        attract young talent across the globe. In partnership with 
        USAID in El Salvador, Microsoft is outfitting USAID-supported 
        youth outreach centers with computers and educational software, 
        as well as training via the YouthSparkInitiative model. In 
        Honduras, we are working with PriceSmart through its Aprender y 
        Crecer (Learn and Grow) Program, a program educating youth 
        across the region.
      In all efforts to garner private support in Central America, 
        USAID partners with the private sector when business interests 
        align with our development objectives outlined in each USAID 
        country strategy. For example, USAID works with several grocery 
        stores, consumer goods companies, and Walmart to link 
        agricultural value chains to smallholder producers in 
        Guatemala, El Salvador and Honduras. The Global Development 
        Alliance, a method to jointly design, fund, and implement a 
        project with USAID to advance our development objectives while 
        addressing the private sector's business interests, has been 
        useful to private sector partners to formalize a partnership 
        with USAID.


 2. Unlocking affordable credit/finance for investments in development. 
        Through USAID's Development Credit Authority, we are using 
        risk-sharing to get working capital to promising entrepreneurs 
        and financing to small farmers.
      In the Root Capital example mentioned above in part (a), USAID 
        leveraged $15 million for coffee rust. In Guatemala, through 
        our Development Credit Authority, we leveraged $12 million in 
        financing from Guatemalan bank Banrural to support community-
        based forestry concessions, associations, and micro, small and 
        medium enterprises within certified value chains in the Maya 
        Biosphere Reserve of Guatemala.
      Evidence from USAID's partnerships globally demonstrates that 
        alliances work best and have the greatest development impact 
        when they are premised on the notions of shared interests, 
        shared value, and shared risks and rewards. USAID seeks to 
        partner with companies that are committed to shared value; such 
        companies recognize there is a competitive advantage to 
        creating business innovations that address society's needs and 
        challenges. By forming strategic partnerships with USAID, 
        companies can share the risks of investing in key emerging 
        markets like Central America, while contributing to improved 
        social and economic outcomes in the communities where they 
        operate.


    Question 7c. Does USAID coordinate at all with the Overseas Private 
Investment Corporation (OPIC) and its efforts to leverage government 
funds to stimulate private investment?

    Answer. USAID coordinates with the Overseas Private Investment 
Corporation (OPIC) to help stimulate private investment in Central 
America. Improving access to clean, reliable energy is one of the key 
elements of the Alliance for Prosperity. In 2015, USAID signed a 
Memorandum of Understanding with OPIC to support the Clean Energy 
Finance Facility for the Caribbean and Central America (CEFF-CCA). 
CEFF-CCA will provide targeted assistance to help promising but 
undercapitalized renewable energy and energy efficiency projects answer 
core technical, business/financing model strategy and structuring, and 
other feasibility questions in order to enable them to reach financial 
close. OPIC loans and guarantees will be available to eligible projects 
and by involving OPIC in this facility, USAID will leverage OPIC's 
broad experience with project assessment and promotion.
    USAID conducts quarterly reviews with OPIC to share information on 
the development of prospective transactions, ensure coordination, and 
eliminate any possible duplicative U.S. government efforts. These 
efforts support USAID and OPIC's shared objective to stimulate private 
investment in Central America and other countries in which both 
entities work. To date, the quarterly reviews have enabled USAID and 
OPIC investment officers to identify areas of overlap as well as share 
positive impacts in priority countries.


    Question 8. According to USAID Administrator Smith, ``country 
ownership'' is a goal at the heart of every USAID project. Can you 
describe how USAID's ``place-based'' strategy plays into the goal of 
country ownership for USAID?


   How does the place-based strategy work at the municipal level?

   When do you plan to publish the place-based strategy metrics that 
        have been developed jointly by INL and USAID?

   Do you foresee the place-based strategy leading to more evidence-
        based decision-making on where U.S. aid funds should be 
        concentrated?


    Answer. Local ownership is essential for the successful 
implementation of the ``place-based'' strategy. This includes not only 
national and municipal authorities, but also private sector partners, 
civil society organizations and other community stakeholders.
    For example, in El Salvador the ``place-based'' strategy is 
carefully aligned in support of the Government of El Salvador's Plan El 
Salvador Seguro--a comprehensive, locally-owned, multi-stakeholder-
developed plan that prioritizes 50 of the country's most violent 
municipalities. To help catalyze the Plan's implementation, USAID, the 
Department of State's Bureau for International Narcotics and Law 
Enforcement Affairs (State/INL) and other interagency partners have 
focused ``place-based'' efforts in key communities in the Government of 
El Salvador's initial roll-out municipalities of Ciudad Delgado and 
Zacatecoluca.
    Even though the ``place-based'' strategy is executed at the 
community level--geographically comparable to a neighborhood or police 
precinct, usually with somewhere between 5,000 and 50,000 residents--
municipal authorities are critical partners, in many cases being the 
level of government closest to the people, responsible for day-to-day 
service delivery to improve quality of life and living environments, 
and entrusted with community development.
    In all three Northern Triangle countries, USAID continues to 
support municipal crime prevention committees, comprised of local 
municipal officials, private sector representatives, civil society 
actors and police, who are empowered to develop crime and violence 
prevention plans. In all cases where the ``place-based'' strategy is 
implemented, these plans serve as blueprints for USAID's community-
level investments.
    The overarching metric for the ``place-based'' strategy is a 
sustained decrease in homicides. Site-specific operational plans that 
define ancillary indicators and benchmarks are currently in 
development. Once these plans are developed, USAID and State/INL will 
establish a timeline to publish metrics.
    As the violence plaguing the Northern Triangle has reached epidemic 
levels, evidence shows it is highly concentrated in specific 
neighborhoods and perpetrated by a small number of high-risk 
individuals. These empirical findings underpin the ``place-based'' 
strategy's place-based, people-focused approach. Evaluating the results 
of its jointly executed place-based strategy feeds into USAID's broader 
goal of increasing the evidence base on what works in crime and 
violence prevention. This strategy includes the evaluation of current 
crime and violence prevention programming, funding diagnostics and 
studies to better understand the scope of the problem in the region, 
and collaborating with academics and policy makers to promote what 
works in the field.
    This effort sends a clear signal to the region that both prevention 
and law enforcement are crucial--together, at the same time, in the 
same places, and working towards the same objectives--to improve the 
security situation.


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