Why $4.2 billion in private investments won’t save Central America

Private funding from U.S. companies is a key component of a Biden White House effort to reduce migration from Central America. Last week, Vice President Kamala Harris announced new commitments in the region that bring that total to $4.2 billion.

This initiative to reduce migration by targeting economic development is laudable, but it also has limitations. The governments of Guatemala and El Salvador are not on friendly terms with Washington, and those countries along with Honduras have a history of corruption, authoritarianism and high crime rates that can repel investors.

The new private commitments include investments from companies such as Columbia Sportswear and Target. The latter will increase its spending by $300 million in Guatemala, Honduras and El Salvador by 2033. Columbia’s $200 million investment promises to create 6,900 jobs over five years.

Another component of the effort is Central America Forward, a program that focuses on economic development, corruption and labor rights launched last week. This initiative comes more than two years into the Biden administration — evidence that Harris, who was tapped two years ago to lead efforts to reduce migration, has moved at a slow pace. Besides this initiative, she has little to show in terms of policy successes, and she has rightly been the focus of criticism as record numbers of migrants crossed the border last year.

Back in March 2021, most migrants were coming from Central America. But arrivals from this region have steadily declined since then. Guatemalans, Hondurans and Salvadorans cannot seek asylum under the ongoing pandemic-era policy known as Title 42, and along with Mexicans, they are leading the number of deportees by nationality in 2023.

This is why creating jobs in the region is important. Harris is right when she says that “people, in general, do not want to leave home.” But job creation can be meaningless if gang activity continues to threaten the livelihoods of Central Americans and authoritarian governments insist on eroding human rights.

Corruption is of particular concern in Guatemala, where even several investigations backed by international bodies have been obstructed by government officials.

And in El Salvador, where violent crime is on the decline after President Nayib Bukele declared a “state of emergency” almost a year ago to tackle gang violence, there has been a steep price to pay in civil rights. Dozens of prisoners have died in custody, and the country has seen hundreds of documented human rights abuses, as reported by The Associated Press.

Focusing on economic development is a sound strategy, but the big picture is much more complex. Without rule of law and strong democratic institutions, the good intentions behind this effort may be diluted. Yes, people migrate for economic reasons, but also because they want to live.

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