Four years after President Reagan unveiled his master plan for prosperity in the Caribbean region -- what he called his "unprecedented" and "farsighted" Caribbean Basin Initiative -- things have not worked out quite as the White House hoped.
A Jamaican farmer begins growing pumpkins, only to have U.S. Customs bar their import because of a pumpkin disease the farmer never heard of. Under pressure from U.S. sugar growers, Congress reduces the amount of sugar Caribbean nations may ship to the United States. In the name of tax reform, the U.S. Treasury proposes abolishing a tax break that has been instrumental in encouraging investment in Puerto Rico.
In the two years the CBI has been in effect, the value of U.S. imports from CBI countries declined by 23 percent, while imports from the rest of the world increased by 36 percent, according to Commerce Department figures. Many nations in the region are worse off than when Reagan presented his plan, a paean to private enterprise that remains his preeminent overture to the developing world.
Reagan gave a rosier view of his initiative on the eve of his trip today to the Caribbean island of Grenada. "The climate has become brighter for American business in that region," Reagan told a group of business executives at the White House. "It's encouraging to witness what can happen in an environment where free enterprise is allowed to flourish."
Even CBI critics agree that the initiative has been valuable as a demonstration of U.S. interest in the region, and most agree that its success or failure cannot be judged after two years.
"It probably hasn't achieved what some of the more optimistic people thought," one State Department official said. "But it has a reasonable record of progress, and it's early, and we have a long way to go."
Even in Grenada, though, where Washington has concentrated efforts since the 1983 U.S. invasion, attempts to promote private investment met with "little success" initially, according to a State Department situation report last fall. The report notes hopefully that "investment activity is starting to pick up with the construction of a Ramada hotel" and the formation of Grenada Airways.
But senior administration officials briefing reporters on the Grenada trip yesterday estimated unemployment on the island at 25 percent, with youth unemployment twice as high.
Reagan's 18-hour venture to the south provides a reminder of how undeveloped the tiny island of Grenada remains. The president's advance team wanted to schedule an overnight journey, but could not find any Grenada hotel it considered suitable for the presidential party and news corps.
The sluggish start in Grenada has been repeated throughout the region, leaving some Caribbean officials frustrated and disillusioned. Last fall, though, Vice President Bush scolded the Caribbean nations for slow progress of the initiative.
"Let me be completely blunt about this," Bush told an audience of Caribbean leaders and business executives in Miami. "For CBI to succeed as fully as it can, the CBI countries have got to do more than they are doing."
Craig VanGrasstek, a trade policy expert who analyzed CBI for the Overseas Development Council last year, said its results were "disappointing."
"The picture that I painted in 1984," he said this week, "deteriorated in 1985."
Underlying the debate over CBI is a fundamental disagreement about how best to spur development in the Caribbean islands, where relatively well-educated populations have found themselves increasingly impoverished as world prices for sugar, bauxite and other commodities plummet.
Boosters say that CBI's appeal to private industry offers the region's only long-term hope. Critics say that, even if it were successful on its own terms, the initiative would benefit multinational corporations while making the nations less self-sufficient and more vulnerable to the vagaries of the world economy.
"The backbone of these economies are essentially small farmers who produce most of the food," said Steve Hellinger, codirector of the Development Group for Alternative Policies. "The CBI exacerbates a trend toward export production [of agricultural products], and these small farmers just get hit even harder."
Reagan presented CBI as a novel development effort that would stimulate "creativity and private entrepreneurship and self-help," rather than a traditional program of direct aid funneled through governments. Aid would increase, he said, but the heart of CBI would be free trade with the Caribbean, tax incentives for U.S. businesses to create jobs in the region and training for local entrepreneurs.
From the beginning, though, U.S. farmers and industries felt threatened and began picking at the plan. Reagan exempted textiles, clothing and petroleum products from the free-trade provision. And during two years of tortuous consideration, Congress nixed the tax credit and further whittled the free-trade clause to exclude canned tuna fish, footwear, handbags, gloves, luggage and leather apparel.
As a result, increased aid to the region emerged as the chief accomplishment of CBI, notwithstanding administration hopes to the contrary. Moreover, much of the aid was channeled to Central American countries -- including El Salvador, which has no Caribbean coastline -- provoking complaints from smaller nations in the eastern Caribbean.
Without the tax credit, the administration tried to spur investment through conventions and tours that introduced U.S. executives to Caribbean officials. Gordon Hunt, an official of Caribbean/Central American Action, said that attention has paid off.
"The public relations value is inestimable. That's been worth it even if nothing else happened," said Hunt, whose corporation-funded organization promotes trade ties with the region. "Businesses all over the world are now looking at it as an area for investment."
Administration officials said yesterday that the CBI has spurred the creation of at least 35,000 jobs. But VanGrasstek noted in a report last summer that the new jobs, even if attributed to CBI, may not compensate for sizeable withdrawl of investment in the region: United Brands Co. abandoning banana plantations in Costa Rica, Reynolds Aluminium closing bauxite plants in Jamacia, Exxon shutting refineries in the Netherlands Antilles.
"Given the size of these investments, it will be difficult for new projects to keep pace with plant closings in the immediate future," he said.
Hunt said Caribbean officials who have expressed impatience with CBI had unrealistic expectations.
"It's become very fashionable to say it hasn't worked, it was all a boondoggle," he said. "That's understandable, because they're politicians, they need quick results.
"The business people never believed it was going to solve their problems overnight."