The Kissinger Commission: Recommendations for Stabilization of Central America

Included among emergency recommendations: * Provide, for subject to conditions, ''significantly increased'' military aid to El Salvador as quickly as possible.

* $400 million supplemental in fiscal year '84 over and above the $477 million now in the budget for the seven countries. There is urgent need to stabilize economies now going downhill very quickly.

* Establish a program to provide US Government guarantees for short-term trade credits. External credit has dried up. Without it economies cannot be reactivated.

* Provide an emergency loan to the Central American Common Market to permit the reactivation of this vital organization. Lack of resources in the Market to settle trade accounts among the countries has stalled it.

* US Government should take an active role in the efforts to resolve the external debt problems of Central America and should encourage the countries that have not done so to seek multilateral rescheduling.

* Also encourage commercial banks to renegotiate at the lowest possible interest rates.

Among Medium and Long-Term Recommendations:

* Commission estimates $24 billion in net external exchange inflows needed to 1990 to foster a growth rate of 3 percent per capita, returning these countries to pre-recession levels of per capita wealth. About half - $12 billion - is expected to come from international institutions, other donor countries and loans and investments from private sector sources.

* The US Government will have to provide as much as $12 billion if these financing needs are to be met.

* We propose in this context a program of $8 billion over next five fiscal years (1985-89) in US government assistance. This would be divided very roughly into about $6 billion in appropriated funds and about $2 billion in contingent liabilities covering guarantees, insurance and the like.

* Compared with current projections for fiscal year 1985-89, these contributions would constitute an increase of about $2.8 billion in appropriated funds and $.7 billion in contingent liabilities over the five year period.

* Urge that Congress authorize multi-year funding of this program. The Commission believes firm, long-term commitment is essential.

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