Summary: Pursuant to a congressional request, GAO reviewed the Caribbean Basin Initiative's (CBI) impact on selected countries, focusing on: (1) its contributions toward alleviating debt-servicing problems, creating lasting employment opportunities, and fostering broadly based economic growth; (2) executive branch or congressional actions which worked against CBI; and (3) the Agency for International Development's (AID) promotion of CBI.
GAO found that: (1) CBI fostered some trade and investment opportunities, but not to the extent of generating broadly based economic growth, alleviating debt-servicing problems, or creating lasting employment; (2) a congressionally mandated sugar import quota negatively affected some CBI countries; (3) although increased citrus production and tourism both have potential for helping CBI countries, AID has discouraged missions from providing assistance and funding in these areas; (4) AID CBI-related projects involved skilled employment training, medium- and long-term credit availability, export and investment promotion services, and policy reforms; and (5) factors constraining the effectiveness of AID efforts included a lack of infrastructure, political instability, limited labor and resource bases, and underdeveloped private sectors.
