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NSIAD-85-82 1 (1985-07-03)

handle is hein.gao/gaobabfeb0001 and id is 1 raw text is: REPORT BY T1 f0l1/i A / Comptroller General OF THE UNITED STATES RELEASED Providing Effective Economic Assistance To El Salvador And Honduras: A Formidable Task Substantial increases in funding of Agency for International Deve- lopment (AI D) programs raised economic assistance totals for 1984 and 1985 to $636 million for El Salvador and $305 million for Honduras. The effectiveness of this assistance will depend largely on fundamental economic policy reforms. AID and the Department of State planned to use U.S. balance-of- payments assistance to influence policy changes necessary for econ- omic stability, but the governments of El Salvador and Honduras have been reluctant to implement key policy reforms. Because of U.S. security and political objectives, the United States has not required that reforms be made before providing continued assistance. There is a divergence of views among federal agencies as to the priority of economic reforms. GAO believes it would be advantageous for federal agencies to seek more agreement on the degree to which economic assistance should be used to influence economic reforms in El Salvador and Honduras. GAO also believes, because of uncertainties as to congressional support for macroeconomic reform efforts, that the Congress should provide an explicit statement of the importance it attaches to improved economic policies in these countries. GAO found that constraints commonly associated with AID project implementation exist in El Salvador and Honduras which could ad- versely affect host-country ability to sustain AID efforts. AID is using delivery techniques which lessen these difficulties in the short-term, thereby permitting timely provision of assistance. Mn U j 3 GAOJNSIAD-S-82 JULY 3. 1985

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