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US boosts funds to fight Central American drug crime

But even with more money, Central American countries still face an uphill battle in fighting inefficiency and corruption that hinder their anticrime efforts.

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But if Central American presidents aren’t able to provide the leadership to find political consensus at home for much-needed reforms, it may not matter how much aid is offered. The struggle to raise taxes is a clear example of the constraints faced by cash-strapped governments like Guatemala, El Salvador, and Nicaragua.

El Salvadoran President Mauricio Funes is fighting to implement a wealth tax to finance security spending, a concept modeled off a tax implemented by Colombia’s popular former President Álvaro Uribe.

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In Costa Rica, President Laura Chinchilla is confronting resistance to a proposed casino tax, and in Guatemala, the government has struggled to boost revenue beyond 11.8 percent of gross domestic product, far below the Latin American average of 25 percent. Honduran lawmakers gave reason for optimism yesterday when they approved a temporary security tax on withdrawals from large accounts.

Even Clinton acknowledged in her speech that “businesses and the rich” would have to pay their fair share to resolve the region’s security crisis. Convincing elites to contribute in one of the most unequal parts of the world may be the biggest challenge for leaders.

The wealthy “don’t get any services from the state,” said Mr. Casas-Zamora, who was Costa Rica’s planning and economic policy minister from 2006 to 2007. “They don’t get healthcare from the state, they don’t get education from the state, they don’t get security from the state, and therefore are not willing to pay taxes.”

Part of their reluctance to pay may also stem from the widespread perception that higher taxes would only finance more corruption and waste.

“Guatemala is one of the least transparent countries in Central America,” said Pedro Trujillo, director of the Institute for Political Studies and International Affairs at the Universidad Francisco Marroquin in Guatemala City. “We don’t know very well how much the government spends. I don’t think your starting point can be that more money is needed until you’ve seen that spending has been efficient, and that funds are short.”

Even as leaders emphasized their willingness to work together, tensions were clear.

Guatemalan President Álvaro Colom said he understood the need to raise taxes, and countered that the region would benefit from strengthened US efforts to cut drug consumption and weapons trafficking.

Largely absent from the discussion was whether the US should begin to consider legalization as an alternative. After decades of fighting a bloody war on drugs, leaders including former Mexican President Vicente Fox are pressing to include it on the agenda, though it’s unlikely to gain much traction in the US, said Sylvia Longmire, author of the forthcoming book "Cartel: The Coming Invasion of Mexico's Drug Wars."

“For so long, the US has looked at itself as Latin America’s savior,” she said. “Sometimes we can help, and sometimes we can’t.”

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