NSSD 2-85 Economic Development for Central America

UNCLASSIRED SYSTEM II 91299 THE WHITE HOUSE SECRET WASHINGTON NATIONAL SECURITY STUDY DIRECTIVE NUMBER 2-85 January 9, 1985 ECONOMIC DEVELOPMENT FOR CENTRAL AMERICA (U) Introduction The purpose of this NSSD is to provide an analytical framework for building a successful U.S. policy toward economic develop- ment in Central America in support of U.S, national security policies. +5 U.S. Central American policy as defined by NSDD-124 has four objectives: (1) Support for the advancement of democracy and implementation of a free and open electoral process in all countries of Central America; (2) Support for economic devel- opment, including significantly increased economic and human- itarian assistance to raise standards of living; (3) Resolu- tion of regional disputes and conflicts through dialogue and the achievement of political settlements with verifiable agreements through negotiation; (4) Sufficient security assistance to ensure that democratic institutions, social reforms and economic improvements are not threatened by communist subversion and guerrilla warfare. 15) The troubled situation in Central America has no single cause, but poor income distribution despite rapid growth in the 1960's has been a major factor. The subsequent sharp economic contraction in the 1970's, which has continued into the 1980's, has exacerbated the problem. let The key to economic performance in the future will be imple- mentation of a domestic policy framework which relies on free market principles as the basis for economic development. In addition successful strategies for handling outstanding debt problems, development of an indigenous energy and mineral base and establishment of a stable and democratic political en- vironment will be important. Objectives of the Study The study directed by this NSSD will 1) review economic prospects for Central America; 2) determine priority areas for U.S. assistance in order to achieve the reinforcing goals of economic development and the preservation and enhancement of U.S. national security and economic interests; and 3) estab- lish a monitoring system to evaluate the progress of assis- tance programs in meeting overall U.S. objectives as defined by the Kissinger Commission and Jackson Plan legislation which UNCLASSIFIED 14--11