WASHINGTON, D.C. — Assistant U.S. Treasury Secretary Marisa Lago, accompanied by Deputy Assistant Secretary for Terrorist Financing Jennifer Fowler and Deputy Assistant Secretary for the Western Hemisphere Michael Kaplan, traveled to Guatemala, Honduras and El Salvador in September to discuss the region’s growth and development.
Central America — in particular, the “Northern Triangle” of El Salvador, Honduras and Guatemala — is closely integrated with the United States, according to a September 30 recap of the visit on the Treasury Department’s website. The economies in this region are closely linked to the U.S. economy as a destination for exports, and the region is a large recipient of American investment and exports. Remittances from the diaspora living in the United States play an important role in supporting domestic investment and consumption. However, the Northern Triangle is currently experiencing low growth, while combating significant crime and high levels of emigration.
The U.S. officials met with government representatives, nongovernmental organizations, local entrepreneurs, representatives from the World Bank and the Inter-American Development Bank (IDB) and private sector representatives. The government officials with whom they met described plans to work more closely with their neighbors to spur growth and greater economic opportunities; combat crime, narcotics trafficking and associated illicit financial flows; and to address the root causes of migration pressures.
“Guatemala, Honduras and El Salvador have an opportunity to work with the United States and other partners to build stronger and more transparent economies, combat poverty and develop more vibrant private sectors,” Lago said.ADDRESSING CAUSES OF MIGRATION
“Stronger investment-led growth will provide the employment opportunities that will help address the root causes of migration to the United States,” Lago said. “As governments in this region undertake the hard work needed to grow their economies and provide employment to their residents, the United States will partner with them to support their efforts.”
Lago had the chance to discuss ways to strengthen macroeconomic policies and to increase the role of the private sector to unlock job-creating investment and growth. She met with local and international private banks that work in the region, as well as finance ministry, central bank, financial supervisory and other government officials. In particular, access to finance remains a key challenge for many low-income residents of these countries.
In Guatemala, Lago visited Tigo Money, an innovative provider of mobile financial services. She spoke with employees to learn about the firm’s efforts to expand access to formal financial services among the unbanked through the use of mobile money technologies, as well as how mobile transfers can be used to provide assistance to families in remote and disaster-struck regions.STRENGTHENING FINANCIAL SYSTEMS
Deputy Assistant Secretary Fowler praised Honduras’ recent success seizing the assets of drug trafficking organizations and discussed proposed legislative reforms to strengthen the supervision of the financial system and other sectors vulnerable to exploitation by criminals. In El Salvador, the government reiterated its commitment to necessary reforms, such as the criminalization of bulk cash smuggling and the supervision of the money remittance sector, to strengthen its national anti-money laundering and combating financing of terrorism framework.
Fowler noted that strengthening controls against money laundering could help bolster confidence in the countries’ economies and increase the attractiveness of the two countries for foreign investment.IMPROVING LIFE FOR THE POOR
The trip also provided an opportunity to discuss how to better coordinate efforts to improve the lives of the poor in the three countries. Lago was joined in Honduras and El Salvador by Julie Katzman, the executive vice president of the Inter-American Development Bank. In Honduras, they visited the poor urban neighborhoods of Villa Franca and Villa Cristina, where the IDB is implementing a community-driven project to address urban poverty, marginalization and gang-related violence by improving access to basic services, bolstering work skills and strengthening community participation.
In El Salvador, they visited the Ciudad Mujer women’s center, another IDB-supported project that provides integrated health, financial and educational services for disadvantaged women, including treatment and programs to combat and prevent violence against women.