Trends in U.S. foreign assistance to Latin America generally reflect the trends and rationalesfor U.S. foreign aid programs globally. U.S. assistance spiked in the 1960s during PresidentKennedy's Alliance for Progress, reflecting an interest in preventing the spread of Soviet and Cubaninfluence in the region, and recognizing poverty as one possible root cause of popular discord. Inthe 1980s, the U.S. focus shifted to the Central American isthmus where leftist insurgencies werechallenging friendly governments, and where a leftist movement in Nicaragua had taken control ofgovernment through armed combat. Substantial amounts of U.S. assistance were provided to supportCentral American governments and the U.S.-backed Contras seeking to overthrow the Sandinistagovernment in Nicaragua. In the aftermath of the 1989 U.S. military intervention in Panama, and the 1990 electoraldefeat of the Sandinista government in Nicaragua, U.S. assistance to these two countries increasedsubstantially. Central America resolved many of its political problems since the 1980s, although itis still one of the least developed areas in the hemisphere. With the dissolution of the Soviet Unionin 1991, U.S. concerns about spreading communist influence lessened, and so too did levels of U.S.assistance. Since 2000, U.S. assistance has focused on support for counter-narcotics activities,largely in the Andean region. Figure 1 indicates trends in U.S. assistance since 1960 in 2007 constant U.S. dollars. U.S.assistance has not reached levels attained during the Alliance for Progress. The annual average since1990 is approximately half of what it was in the 1960s. The amounts requested for FY2007represent the lowest level in more than four decades. Some countries are benefitting from two newPresidential foreign aid initiatives. Haiti and Guyana -- identified as focus countries by thePresident's Emergency Plan for AIDS Relief (PEPFAR) -- have received increased assistance forHIV/AIDS programs. Nicaragua and Honduras have signed Millennium Challenge Compacts. U.S. support for development is identified by President Bush as one of the three pillars, withdefense and diplomacy, of the National Security Strategy, developed after the terrorist attacks ofSeptember 11, 2001. The U.S. Agency for International Development (USAID) identifies fivechallenges to which U.S. assistance programs are designed to respond: promoting transformationaldevelopment; (1) strengthening fragile states; providing humanitarian relief; supporting U.S. geostrategic interests; andmitigating global and transnational ills. USAID identifies the main security threats to the UnitedStates as the confluence of terrorism and the proliferation of weapons of mass destruction, and globalcriminal networks. The focus has shifted to strengthening the institutions of weak states, rather thanon just economic growth, because weak states are seen as permissive environments for terrorist andcriminal activities. Figure 1. U.S. Foreign Assistance to Latin America and Caribbean AnnualAverage, 1960 to 2007 Source: U.S. Agency for International Development, U.S. Overseas Loans andGrants (Greenbook), Latin America and the Caribbean, U.S. Department of State,Congressional Budget Justification, Summary Tables, FY2006 and FY2007. With regard to Latin America and the Caribbean, U.S. assistance levels requested for FY2007 show a marked decrease compared to the annual average from FY2000 to FY2006, although itrepresents just a 3% decrease from FY2006 appropriated levels. The largest decrease occurs in theDevelopment Assistance account, which sustains a 28% reduction. The largest increase is forEconomic Support Funds (up 26%) and the Global HIV/AIDS Initiative (up 35%). The ChildSurvival and Health account would be cut by 9%. When compared to other regions of the world,Latin America has received between 9.5% and nearly 12% annually since FY2002. In addition totraditional economic and military assistance, two countries -- Nicaragua and Honduras -- have signedcompacts with the Millennium Challenge Corporation (MCC) worth $175 million and $215 millionrespectively over five years. These two countries would also see the largest cuts in DevelopmentAssistance in the FY2007 budget request. Table 1. U.S. Foreign Assistance, Western Hemisphere: MajorAssistance Accounts, FY2004-FY2007 (Millions of Current U.S. Dollars) Source: Congressional Budget Justification, Foreign Operations, Summary Tables, Fiscal Years2004-2007. The table does not include all assistance; it excludes Peace Corps, P.L. 480 food aid,and some disaster assistance. In Congress, the annual Foreign Operations Appropriations bills have been the vehicles by which Congress provides funding for, and exercises oversight of foreign assistance programs. Congress has not enacted a comprehensive foreign assistance authorization bill since 1985. ForFY2006, Congress provided $20.9 billion out of the President's $22.8 billion international affairsrequest in the FY2006 Foreign Operations Appropriations Act ( P.L. 109-102 ). Increases in theFY2006 budget request were due mainly to the new Millennium Challenge Account (MCA) and theGlobal HIV/AIDS Initiative. The MCA, that was unveiled in 2002 and became operational in 2004,links U.S. assistance with good governance and measures of performance of recipient nations. TheMCA program, if fully funded, represents one of the few marked increases in U.S. foreign assistancesince the Marshall Plan after World War II, and the Alliance for Progress in Latin America duringthe 1960s. For FY2006, U.S. assistance to Latin America and the Caribbean is estimated at about $1.68billion, including Peace Corps and P.L. 480 food aid. The total does not include two MillenniumChallenge Compacts with Honduras and Nicaragua that were signed in 2005. The largest portion,$919 million, is allocated to the Andean countries of Bolivia, Colombia, Peru, Ecuador, andVenezuela, and represents 55% of regional assistance. Another $292 million, or 17%, is allocatedto Mexico and Central America, while the Caribbean would receive $307 million, or 18%. Braziland the Southern Cone of South America would receive an estimated $36 million, or 2%. TheUnited States also maintains aid programs of a regional nature, such as trade capacity building, andmigration and refugee assistance, that total an estimated $133 million, or 8%, in FY2006. Figure 2. U.S. Assistance to Latin America by Subregion,FY2006 For FY2007, the President's budget request totals $1.63 billion for the region. This includes$927 million for the Andean region; $278 million for Mexico and Central America; $321 millionfor the Caribbean; $35 million for Brazil and the Southern Cone; and $95 million for regionalprograms. According to the FY2007 budget request, the Andes would receive 56% of the regionaltotal. The largest decreases occur in Development Assistance and Child Survival and Health forCentral America, but the isthmus would benefit from increased Economic Support Funds, largelyfor trade support for CAFTA countries, and Trade Capacity Building programs. The largest recipients of U.S. foreign assistance in South America are the Andean nationsof Colombia, Bolivia, and Peru, where most of the world's cocaine originates. These nations receivefunding from the Andean Counterdrug Initiative (ACI), military assistance such as Foreign MilitaryFinancing (FMF) and International Military Education and Training (IMET), as well as bilateraleconomic assistance in the form of Development Assistance, Child Survival and Health, andEconomic Support Funds. The Andean countries of Venezuela and Ecuador, and the non-Andeannations of Brazil and Panama also receive ACI funds but to a smaller degree than Colombia, Boliviaand Peru. U.S. assistance to Argentina, Brazil, Chile, Uruguay, and Paraguay amounts to $36million in FY2006; the FY2007 request is $35 million. (2) By contrast, U.S. assistance to the Andean region totals $919million in FY2006, and $927 million requested for FY2007. The Andean Region. The area is generally knownfor its rugged terrain, from Peru's Pacific coastline to the Andes mountain range that traverses Peru,Bolivia, Colombia and Ecuador, to Amazonian basin regions marked by tropical rainforests. Theregion has large indigenous communities, high levels of poverty, and a history of political unrest.U.S. assistance to the Andean region has focused on narcotics trafficking since 2000, when Congressapproved $1.3 billion in support of PlanColombia. The United States had supported counternarcoticsissues in the Andes prior to 2000, but the levels of funding were far less. Funding for the Andean Counterdrug Initiative (ACI) amounted to $727.2 million in FY2006. The FY2007 request is $721.5 million. The region also receives economic assistance funds. Boliviaand Peru are major recipients of Development Assistance, Child Survival and Health Funds, andfood aid. Ecuador and Peru receive sizeable amounts of Economic Support Funds. The Peace Corpsmaintains programs in Bolivia, Ecuador, Panama, and Peru. Although Colombia is a major recipientof ACI funds, it does not receive any economic assistance, although portions of ACI funds aretransferred to USAID for alternative development and institution-building programs. Figure 3. The Andean Region Andean Counterdrug Initiative. The AndeanCounterdrug Initiative (ACI) is the centerpiece of U.S. policy toward Colombia and the Andeanregion.