San José, Costa Rica, since 1956

Leaders Encouraged by Obama

MANAGUA, Nicaragua – The lack of consensus on the final declaration at last weekend’s fifth Summit of the Americas in Trinidad and Tobago did not dampen the spirits of Central American leaders who had an exclusive sit-down meeting with U.S. President Barack Obama at the conclusion of the main event.

Topping the Central American agenda was the issue of immigration reform. With an estimated 5 million Central Americans living in the United States – many illegally – there is serious concern that a surge of deportations from the U.S. during a time of economic hardship could put an explosive economic strain on Central America.

The leaders of the Central American Integration System (SICA) also asked the Obama administration for help recapitalizing the Inter-American Development Bank and the Central American Bank of Economic Integration, as well as for support for North American businesses operating in Central America under the Central American Free- Trade Agreement with the United States (CAFTA). The Central American leaders also asked the U.S. president for his support in helping to get the U.S. Free-Trade Agreement with Panama ratified as quickly as possible.

President Obama was reportedly receptive to the proposals related to immigration, but the other issues might be trickier, according to analysts.

Kevin Casas, senior fellow in foreign policy for the Brookings Institution, a Washington, D.C. think tank, said the request for help recapitalizing regional development banks, while “crucial to the region,” already received a “chilly response” from U.S. Vice President Joe Biden during his recent visit to Costa Rica. And the issue of promoting a free-trade agreement with Panama is a “tricky issue with Obama.”

Still, the U.S. president did reportedly agree to study a series of stopgap immigration measures as well as comprehensive immigration reform, according to wire reports. The U.S. government reportedly agreed to form a mixed commission with its Central American counterparts to further study the immigration proposals.

New Openness

Despite the lack of concrete achievements, the new openness and spirit of dialogue that prevailed during Obama’s meeting with the presidents of Central America are already being celebrated as a success in the region.

“There was a commitment to support an integral immigration reform. We didn’t talk about details, but there was support for the process,” said Guatemalan President Alvaro Colom, following the hour-long, closeddoor meeting between Central American leaders and Obama. “The environment was very good, cordial and sincere.”

Costa Rican President Oscar Arias hailed the meeting as “a new dawn” in U.S.-Central American relations.

“Now there is a different president in Washington, one who listens and wants to learn,” Arias said in a press release.

He added that Central America now feels like it has a voice in Washington, D.C., and that the age of U.S. impositions will be replaced by a new era of “respectful dialogue.”

“Without a doubt we have great expectations that U.S. relations with Latin America, and in particular Central America, will be strengthened,” Arias said.

The region’s left-leaning leaders were also impressed by Obama. Honduras’ selfstyled “cowboy” president and member of the socialist Bolivarian Alternative for the Americas (ALBA), Manuel Zelaya, gushed that Obama “won over” Latin America.

“People expected there to be confrontation, but what there was was analysis,” Zelaya said, adding that both Latin America and the United States left the summit with their heads held high.

Even Nicaraguan President Daniel Ortega, who referred to Obama as the “president of the empire” and the head of the “same political imperialist structure he inherited from President (George W.) Bush,” came away from the closed-door meeting saying “positive steps” had been taken.

“The conclusions of the summit are positive, because we are talking about establishing a new dialogue between Latin America, the Caribbean and the U.S.,” Ortega said. “These relations will be put to test later on.”

Casas, a former Costa Rican vice president under Arias who resigned in 2007, said the meeting was also important for Obama to determine on a personal level who he feels are his “responsible partnersin each region.

“I think that Obama was just judging who he can call in the remote case that he feels the need to do so,” Casas said, adding that he thinks Arias will probably be Obama’s go-to man in Central America, if the need arises.

Immigration and Remittances

The first – and ultimately most important – test of new U.S.-Latin American relations will be the issue of immigration.

More than 300,000 Central Americans live in the U.S. under Temporary Protected Status (TPS), a temporary immigration status given to people who are unable to safely return to their home countries.

Following the devastation in Honduras and Nicaragua wrought by Hurricane Mitch in 1998 and the magnitude 7.6 earthquake in El Salvador in 2001, 230,000 Salvadorans, 70,000 Hondurans and 5,000 Nicaraguans have been given TPS status in the United States. However, that status is set to expire next year, raising questions about what will happen to the hundreds of thousands of Central Americans who will suddenly be living in the U.S. illegally.

In addition to asking the U.S. to extend TPS status to three qualifying countries, the Central American presidents asked the Obama administration to “expand (TPS) to other countries that ask for it as a measures to confront the effects of the global financial crisis.”

The Obama administration reportedly agreed to include the issue of TPS in its review of immigration policies.

But the TPS beneficiaries are only a fraction of the millions of Central American immigrants living in the United States who send home billions in remittances each year, helping keep the economies of their native countries afloat.

Some 2.5 million Salvadorans living in the United States – both legally and illegally – send home approximately $3.78 billion a year in remittances, accounting for 17 percent of the country’s GDP, according to El Salvador’s Central Bank. In Guatemala, remittances account for $4.3 billion while in Honduras some $2.5 billion is sent home each year from Hondurans emigrants living mostly in the United States.

In Nicaragua, where the economy is much smaller, remittances account for between $800 million and $1 billion annually, about half the government’s annual budget.

With a downturn in the U.S. economy, remittances are already dropping as Central American immigrants are laid off and can’t find work. Outgoing Salvadoran President Tony Saca said during a recent SICA meeting in Managua that remittances to his country are already down 8 percent this year.

The U.S. economic downturn is also affecting Central American exports and production in free-trade zones that service the U.S. market. In Honduras alone, some 20,000 jobs have already been lost in the free-trade zones, and authorities worry that an influx of deportees or migrants returning home would only putted an additional strain on an already volatile situation.

To help alleviate the situation, the leaders of SICA asked the Obama administration to “cease massive deportations” of Central Americans and to coordinate with U.S. agribusinesses to “establish a mechanism of quotas for hiring agricultural workers from SICA countries.”

In the long term, however, the best medicine for Central America’s economies is for the U.S. economy to improve, regional leaders say.

“Sometimes I pray more for the U.S. economy than our own,” said Honduran President Zelaya during the recent SICA summit in Nicaragua.


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