Big Business Backs Reagan's Caribbean Plan

A group of powerful U.S. and Caribbean business interests recently launched a new group, the "Caribbean Basin Initiative Coalition," to support President Reagan's $410 million aid-and-trade package for the region.

Although the coalition bills itself as "a group of private citizens concerned about the plight of our closest neighbors," it actually represents a well-orchestrated lobbying blitz conducted by a score of top-dollar corporations (see chart).

The multinational's coalition is co-chaired by David Rockefeller and Eastern Airlines president, Frank Borman.

Three business organizations founded the CBI Coalition: Caribbean Central American Action (see MM, November 1980), the Association of Chambers of Commerce for Latin America, and the Council of the Americas (see MM, June 1982).

Kicked off on July 13, as Reagan's CBI bill reached the House Foreign Affairs Committee, the multinational corporate coalition moved swiftly to exert pressure on Capitol Hill.

The coalition on July 21 sponsored "CBI Day," which featured a round of hard-sell visits to Capitol Hill by U.S. executives and Caribbean officials. "CBI Day" culminated in a $100-a-plate dinner at the Organization of American States. Ronald Reagan attended.

The business coalition, with a budget currently of $200,000, has organized a lobbying campaign carefully targeted to reach the most influential Congresspeople. The group also puts out a newsletter to businesses and other interested groups.

The content of Reagan's aid package, as well as the high-profile lobbying of multinational corporations, has raised doubts about the value of the initiative. Critics charge that the CBI may do little to alleviate poverty in the Caribbean and Central America, while proving a tax boon for the multinationals.

"Reagan's CBI is more of an aid program for multinationals than a development effort," one church observer says.

The CBI, which Reagan announced on February 24, includes a proposed $350 million in economic support for the region. The money is earmarked for large-scale private sector operations. The plan also calls for $60 million in military "aid" to countries in the region (mostly to El Salvador), but no direct assistance to the small farmer or the poor, which make up the majority of the population in the region.

Reagan's "aid" plan also would allow Caribbean products duty free entry into the U.S. For U.S. corporations that operate in the region, this means that their trade from the Caribbean back to the U.S. could be done more cheaply.

One feature of particular interest to U.S. companies is the proposed five-year, 10% tax credit for U.S. corporations investing there. This could end up costing the U.S. taxpayer as much as $500 million.

The church has been particularly outspoken in its opposition to the "aid" plan. The Vatican's apostolic delegate to the U.S., Pio Laghi, told senior State Department officers on March 19 that the Vatican was skeptical. "The Administration's proposal would be welcome," Laghi said, "if we saw some concern regarding human rights, human dignity."

The Interreligious Task Force on U.S. Food Policy was even harsher in its criticism of the CBI. "The CBI fails to face the fact that in many of the countries in the region, political and economic power is concentrated in a few hands, while the majority of the people remain desperately poor," argued Task Force spokesperson Larry Minear, in testimony before Congress this April.

"The history of Central America and the Caribbean is full of examples of corporate exploitation which have contributed significantly to today's political turmoil and anti-American sentiment in much of the region," Minear testified "The record suggests that corporations with sufficient money and power to bring down governments and subvert regional organizations should not be able to lay claim to new tax subsidies."

- Report by Cecilio Morales, a research fellow of the Council on Hemispheric Affairs.