"We Are All Americans"

By WALTER ISAACSON

Reagan offers aid and arms to struggling Southern neighbors

On one level, it was a generous and good-neighborly offer to promote prosperity among the almost two dozen diverse countries of the Caribbean Basin. On a more strategic plane, it was designed as a political instrument to deter domestic turmoil in a region ripe for left-wing revolutions. And on its most basic level, Ronald Reagan's Caribbean Basin Initiative, announced amid much fanfare to the Organization of American States last week, is the logical outgrowth of an agonizing yearlong struggle to support the beleaguered current government of El Salvador and draw the line against further expansion of Soviet and Cuban influence. There was a grim urgency in the President's plea: "If we do not act promptly and decisively in defense of freedom, new Cubas will arise from the ruins of today's conflicts."

After a year of lurching from one crisis to another, Reagan finally seemed to be on track with a sensible and well-rounded foreign policy initiative. His speech did contain a section of vituperation about the spread of "Marxist-Leninist dictatorships," but it did not stress the projection of military might. Rather, it emphasized the need for economic partnership and common goals among the U.S. and its Caribbean neighbors. "For over 400 years our peoples have shared the dangers and dreams of building a new world," Reagan said. "In this profound sense, we are all Americans."

The plan to keep the Caribbean Basin out of Cuba's orbit by pulling on its economic bootstraps is rooted in what the President likes to call the "magic of the marketplace." Said he: "It is an integrated program that helps our neighbors help themselves, under which creativity and private entrepreneurship and self-help can flourish." The "centerpiece" is a twelve-year exemption from tariffs on exports to the U.S., the first such trading advantage to be given to any region. Although 87% of U.S. imports from the basin are already duty-free, Reagan hopes that extending free trade will spawn new industries not currently covered by preferences.

The President also proposed tax incentives for businessmen who invest in the Caribbean. Mindful that it will be years before the impact is felt, Reagan asked for $350 million in additional direct economic aid to the region this year. Explained Trade Representative William Brock: "We need one hard shot now because a lot of these countries are simply out of cash." El Salvador will get about $100 million more, as will economically ailing Costa Rica. The rest will be split among Jamaica, Honduras and the Dominican Republic. The package will raise economic aid to the region to $824 million, up 96% from last year.

Some of Reagan's aides wanted him to focus his speech solely on the economic development plan, talking of plowshares rather than swords. Their aim was to tone down his hawkish image, especially concerning Cuba and Nicaragua, and to keep him personally insulated from the trying situation in El Salvador. Secretary of State Alexander Haig, however, argued that the President must include firm warnings about Communist expansion. He insisted that it would be misleading to be silent about the pressing security problems of the troubled area.

So the speech became two speeches, containing the type of vague and veiled warning favored by Haig that raises more questions than it answers. Said Reagan: "We will do whatever is prudent and necessary to ensure the peace and security of the Caribbean area." But at the same time, he pledged that the U.S. would "not follow Cuba's lead in attempting to resolve human problems by brute force."

The generally moderate tone of his speech gave way when he discussed the ''true nature" of the Salvadoran struggle. Said he: "Guerrillas, armed and supported by and through Cuba, are attempting to impose a Marxist-Leninist dictatorship on the people of El Salvador as part of a larger imperialistic plan." That somewhat simplistic view of El Salvador is what first caused the Administration to make it a focus of foreign policy. Domestic unrest in Latin America was seen solely in terms of the East-West superpower struggle, and a year ago Haig sternly pledged to "draw the line" in El Salvador against Soviet-sponsored subversion. It appeared then to be a good choice for a make-or-break battleground, because the centrist government of Jose Napoleon Duarte seemed on the verge of defeating the guerrillas there. But the rebels honed their terrorist tactics, and the military became increasingly demoralized and ineffective. Instead of finding itself with a swift symbolic victory over Communism, the U.S. became bogged down in a commitment that--at least in the public's mind--became scarily reminiscent of the no-win situation of Viet Nam.

American protectiveness toward its Southern neighbors dates from 1823, when President James Monroe declared that the Western Hemisphere would no longer be ground for European intervention. In the early part of this century, Washington sent troops into the Dominican Republic, Haiti, Nicaragua and Cuba. More recently, the U.S. backed the coup that deposed the reformist government of Guatemala in 1954, supported the aborted Bay of Pigs invasion that tried to topple Cuban Leader Fidel Castro in 1961, and helped destabilize the government of Salvador Allende Gossens in Chile between 1970 and 1973. Interspersed with these interventions were plans for economic partnership, such as Franklin Roosevelt's Good Neighbor Policy and John Kennedy's Alliance for Progress.

Officials in Central American countries generally welcomed Reagan's Caribbean Basin Initiative, but it did not serve to isolate the Cuban-backed Sandinista government in Nicaragua, as some of the President's advisers had hoped. Both Mexican President Jose Lopez Portillo and Nicaraguan Leader Daniel Ortega Saavedra proposed plans last week for easing tensions between Nicaragua and Washington. But the Reagan Administration stonily responded that it will not deal with Nicaragua until that country ends its reported aid to the Salvadoran rebels. Reagan is also seriously considering new sanctions on travel and shipping business with Cuba, which may be announced this week.

The most enthusiastic reaction to Reagan's initiative came from Jamaican Prime Minister Edward Seaga, who called it "bold, historic and far-reaching." But some leaders of the Caribbean islands, which share neither the social problems nor the cultural heritage of Central American nations, resented being lumped into Reagan's sweeping concept. Said one black Trinidadian in the wake of the island's Mardi Gras: "We must include a float in next year's carnival, with our new Caribbean brothers. We'll have a lot of little white men in green uniforms with lots of firecrackers."*

American businessmen likewise were guarded in their enthusiasm. The Council of the Americas, which represents more than 200 companies with interests in Latin America, worked closely with the Government during the past year to develop the program. But the organization's president, Samuel Hayden, does not view the proposal as a panacea. Says he: "The main problem in the Caribbean is the lack of an infrastructure of airports and transportation facilities to support new industries. And there is the question of security. Until that is resolved, I feel there will be little foreign investment in this region." In fact, wary businessmen are removing their capital and investments from Central America at an annual rate of $500 million, thus exacerbating a cycle where unstable conditions lead to still more destabilization.

One important function of the economic initiative is to quiet domestic criticism of the Administration's efforts to shore up the Duarte government with arms. Says Democratic Senator Patrick Leahy of Vermont: "It's been a long time since I've seen an issue that stirs people as much as this." For example, some 1,200 marchers descended on Fort Bragg, N.C., last weekend in rain and snow to protest the training of Salvadoran troops there.

Many critics feel that El Salvador should get no aid at all because of the serious abuse of human rights by the military there. But a U.S. official in San Salvador argues that it is "foolish" to make the President certify that rights abuses are being alleviated, or to base aid to El Salvador on the human rights record. Says he: "It forces the President to overstate things in order to get the aid that must be sent."

The Administration insists that increased U.S. military involvement is necessary and justified because of the "unprecedented rate" of arms shipments reaching the rebels from Cuba and Nicaragua. But it has been unwilling--or unable--to document this charge. When asked about this at a lunch last week, Reagan protested: "We cannot release information without compromising our sources. Believe me, we are sure of our facts." Rebel leaders say that their weapons, mostly American-made, are easily purchased on the thriving world arms market.

The new Caribbean Basin Initiative, however, has dispelled some of the congressional criticism of the Administration's policies.

From opposite ends of the political spectrum--House Speaker Tip O'Neill of Massachusetts and New Right Guardian Senator Jesse Helms of North Carolina--came the pronouncement that Reagan's economic initiative was on the "right track," although Helms later criticized Reagan's support for what he called the "leftwing socialist" Duarte government and its land reform policies. Said leading House Liberal Stephen Solarz of New York: "An ounce of prevention now is worth ten pounds of cure later on. If we had had programs like this before, we wouldn't be in trouble now."

Reagan's immediate problem is that the ounces of prevention proposed last week will do little to solve the weighty woes of El Salvador. The military situation is deteriorating. The March 28 elections, which the U.S. had hoped would strengthen the centrist Duarte government, are in danger of being disrupted by the left. The rebels have begun a new offensive. And the harsh militaristic leaders of the far right threaten to gain power in a situation that is becoming more polarized, leaving the U.S. with fewer and fewer options. The Administration's policy now is simply to wait and hope that the elections progress smoothly and produce a government with the power--and the desire--to pursue the social and economic reforms needed to stabilize the country.

As conditions in El Salvador worsen, this outcome seems ever less likely. Admits a top State Department official: "The Caribbean Basin Initiative can't save El Salvador. It can't save Guatemala either. But it can help avoid other El Salvadors." At this turbulent turn, even that would be a major victory. --By Walter Isaacson. Reported by Bernard Diederich/Miami and Johanna McGeary/Washington

*By Reagan's definition, the "Caribbean Basin" includes 19 countries with a population of 39 million, stretching from Dutch-speaking Surinam in South America, to the English-speaking Bahamas 2,000 miles away in the Atlantic and Spanish-speaking Guatemala 2,300 miles away in Central America.

With reporting by Bernard Diederich, Johanna McGeary

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