While recent U.S. efforts with Colombia and Mexico have bolstered security and institutions in those nations, U.S. influence in Central America has been comparatively weak. NAFTA has fostered impressive geopolitical interconnection between Mexico and the U.S.; the analogous and little recognized CAFTA-DR (Dominican Republic-Central America-United States) Free Trade Agreement has not led to much mutual political growth. At about $39 billion in two-way trade, the CAFTA-DR bloc is the U.S.’ 12th largest goods trading partner, comprising Costa Rica, El Salvador, Gautemala, Honduras, Nicaragua and the Dominican Republic. While the treaty has served niche industries, such as Central American knit apparel, its prospects for broader progress look limited.
Honduras and Nicaragua remain in economic morass, with poverty rates of 69% and 62%. Nearly half of Guatemala’s children suffer from chronic malnourishment. Additionally, what society does not provide in youth, it does not provide in wiser years – less than a third of Central Americans are enrolled in any sort of government social security program. Many youths lack schooling and employment, and they become fodder for the maras, Central America’s famous drug gangs. According to data from the United Nations Office on Drugs and Crime, Honduras’s homicide rate per 100,000 people grew from 45.6 in 2007 to 91.6 in 2011, making it the murder capital of the world. El Salvador is at 69.2 and Guatemala at 38.5; the U.S. is around 4.
Internal and cultural differences exist here – Costa Rica and Panama are much lower. However, security and development go hand-in-hand, and it is regrettable that the U.S. has not beefed up Central American security forces in the way that it has with Colombia. In fact, U.S. support for right-wing factions in the Salvadoran, Guatemalan, and Nicaraguan civil wars has a legacy of bitter class divide in local politics and strong distrust of the norteamericanos. Economic perception has not helped either – during the 2009 recession, 4 of the 6 CAFTA-DR economies contracted, and the other two (the D.R. and Guatemala) saw rapidly decelerating growth, according to the IMF.
The biggest threat to Central American security may be that it is Central America, as pointed out by The Economist. Cocaine produced in Colombia, Peru, and Bolivia needs to reach Mexico’s Pacific Coast as a staging ground for the U.S. market. Further data from The Economist estimates that 250-350 tons of cocaine transit Guatemala each year. As a result, Mexico’s drug cartels are fighting it out in a relatively small area, and Guatemala and El Salvador experience violence on par with their civil wars.
Last year former army general Otto Pérez Molina won Guatemala’s presidential election on a mano dura (“strong hand”) anti-crime platform, openly saying that he would consider military assistance from the U.S. Molina has since found himself treading water in office, and has even proposed legalizing drugs. At the World Economic Forum on Latin America in Mexico earlier this year, Molina presented his argument by saying that many more people die in the production of drugs (Guatemalans and their neighbors) than in the consumption of drugs (Americans). Decriminalization would reduce the violence in Central America, and move debate toward treatment and prevention. As a counter to Molina, I can’t see why legalization would discourage drug gangs from shooting at one another or the police. 
The U.S. continues intransigence when it comes to combating drug demand and security aid, ignoring a central political problem of Molina and his neighbors. The World Bank projects that security spending costs Central America 8% of GDP, and that reducing murders by 1% could grow personal earnings by 1% each year. Security costs consume 4% of privately earned revenue. Guatemala’s former President Alvaro Colom quantified the problem by saying he needed 10,000 more soldiers and 15,000 more police. Former Costa Rican Interior Minister José María Tijerino complained that his police are “badly trained, badly armed and equipped and badly housed.”
So, what then does the U.S. government do? I have written before about the merits of the Plan Colombia, which the U.S. government signed with Colombia to strengthen military and human rights institutions. A Plan Central America focusing on policing, coastguard equipment, and judicial training may need to accompany the CAFTA-DR. Directing foreign aid toward infrastructure spending would help as well – it is cheaper to ship some goods to the U.S. from China than from Central America. Bottlenecks and holdups mean that the 540-mile trip from San José to Guatemala City can take 5 days of driving. Faulty building standards are also a challenge in this natural-disaster prone area – last year Guatemala absorbed $1.5 billion in damage.
The U.S. should also facilitate development of judicial institutions, as it has done through aid to Mexico, and financial security technology. Ofelia Taitelbaum, Ombudsman of Costa Rica’s Government, says “Tax evasion is the national sport,” a statement that reminds me of Greece. Improved security and infrastructure come at a cost, and the U.S. can help fund elements through aiding local tax collection rather than direct investment.
Tax cheats need to know the courts will get to them. The State Department could follow the example set by the International Commission against Impunity in Guatemala (CICIG), a UN-sponsored criminal investigation authority staffed by international experts but operating within Guatemalan courts. Its former head, Carlos Castresana, is responsible for determining that Rodrigo Rosenberg arranged his own death. Rosenberg is the Guatemalan lawyer who died in 2009 after creating a videotape saying that if he died, former President Alvaro Colom would be responsible.
Finally, the U.S. needs to spend diplomatic time and effort in the region. Imagine where Central America stands on our priority list versus East Asia or the Middle East. President Obama visited El Salvador in an early 2011 trip overshadowed by the Arab Spring, and is unlikely to lead to any long-term upgrade in relations. Critics roundly call out leaders in the region for weakening democracy – targets include Daniel Ortega, who recently started an unconstitutional third term as President of Nicaragua, and the new leftist government in El Salvador. Honduras expelled President Manuel Zelaya in 2009 due to his associations with Hugo Chavez, only to see him sneak back in and cause an uproar. Remember, we have a free trade agreement with these nations, and yet have not exerted any democratic leverage.
Please See Also:
 The Economist. “The Legislation Debate Broadens.” Americas View. April 19, 2012.
 The Economist. “Central America: The Tormented Isthmus.” April 2011.
 The Economist. “Crime in Nicaragua: A Surprising Safe Haven.” January 2012.