We recognize that when your house is on fire you don't want to talk just about medium and long-term projects, but about something to put out the fire," a senior U.S. official told representatives from five Central American nations and Panama earlier this week.
The house afire referred to by U.S. Deputy Assistant Secretary of State Stephen Bosworth is all of Central America. It is beset by the flames of outright war in El Salvador and Guatemala, and by the smoldering deterioration of the economy in every country of the region. Despite a Washington-led initiative and the Reagan administration's expressions of understanding it is far from certain that anybody can or will put it out.
Central America and Panama urgently need a minimum of $20 billion over the next eight years, according to an analysis by the United Nations Economic Commission for Latin America. Some international financial experts privately estimate that at least $300 million of that is desperately needed right now.
Only the United States has the resources for that kind of help, but Washington's current economic problems and fiscal policy make it more and more unlikely.
Early this year the Reagan administration began talking up a multilateral Caribbean Basin development plan to help the faltering economies of Central America and the island nations of the Caribbean. Washington hoped that a relatively small amount of aid, a lot of private investment and trade concessions would prove an effective tool for combatting the social unrest that helps foster leftist revolutionary movements.
But the initial idea was slow in taking shape. The first significant step was a July 16 meeting in Nassau of Secretary of State Alexander M. Haig Jr. and the foreign ministers of Canada, Mexico and Venezuela, all of which have substantial aid programs in the region.
The four countries agreed that any overall program would be strictly economic and have no security or military aspects. Each of the four donors could decide independently which nations in the area to aid, but no nation would be automatically excluded. Mexico insisted on this last point so as not to offend Cuba and to keep the door open for aid to leftist Nicaragua and Grenada, which Washington at first seemed intent on isolating.
The proposal came out with considerable fanfare but few specifics, and not until this week in San Jose was there any serious large-scale consultation with the potential recipients. A similar meeting with representatives of the Caribbean countries will be held shortly.
Here at the Monday and Tuesday conference between representatives of the "Nassau Four" and the vice economic ministers of the Central American isthmus most formal discussion was of technical and administrative matters. But among the Central Americans there was also a clear undercurrent of desperation and a hope that some new commitment would be made right away.
"Each day is more urgent," Costa Rican President Rodrigo Carazo told the delegates as the meeting opened.
Surprising themselves and their potential benefactors, the Central Americans put up a strongly unified front. In earlier meetings, for instance, conservative Guatemalans were reluctant to deal alongside leftist Nicaraguans. But as the growth and relative prosperity the area enjoyed in the 1960s and 1970s rapidly turns to ashes in the wake of rising oil prices and the plunging value of such primary exports as coffee, they are now pulling together on the basic question of economic survival.
As one U.S. diplomat put it, quoting English savant Samuel Johnson, "Nothing concentrates the mind like the sight of a hangman."
Even so, no solid new commitments were made. On the contrary Mexican, Venezuelan and Canadian representatives said privately that they probably would not significantly increase their aid in the region.
Oil-producing Mexico and Venezuela already are contributing the equivalent of $700 million a year to regional economies through generous financing arrangements for the purchase of their petroleum, according to officials here.
Some American analysts wonder if, given the current world economic situation, Mexico and Venezuela will be able even to sustain their current level of aid.
Canada, whose regional interests lie mainly in the English-speaking Caribbean, doubled its aid to that area even before the Nassau meeting and its representatives here said that additional substantial increases are unlikely.
State Department officials nevertheless remain relatively optimistic about funding for the medium- and long-term development of the Caribbean basin. They hope to attract investment to the area not only from the four Nassau countries, but from Japan and Europe. As they envision the program, the need for direct aid eventually will diminish as private investment finds a newly favorable environment and grows. But prospects for the immediate and dangerous future are much more uncertain.
U.S. representatives here said that Washington's aid to the region for the moment would be given independently of the Nassau framework on a more or less ad hoc bilateral basis. Yet U.S. officials said that the fight to get large new sums of direct aid to the area right away is very uncertain given the current budget-cutting fervor in Washington.