The Mineral Industry Of Central American Countries

Mineral output and trade in the Central American countries were directly or indirectly affected by the sometimes violent civil unrest and recessionary economic developments that have pervaded the region for several years. Central American countries found their foreign exchange export earnings and traditional market areas shrinking while essential import costs were rising. Restricted spending measures were adopted by governments and private industries. Domestic investment funds for mineral development and exploration projects were among the first casualties of these austere budgetary measures, especially since weak demand and depressed mineral prices diminished the probability of a favorable cost-benefit ratio. The lack of physical security and political stability also discouraged private foreign investment. The United States Congress enacted the Caribbean Basin Economic Recovery Act of 1983 (19 U.S.C. 2702), more popularly known as the Caribbean Basin Initiative (CBI). This legislation was designed to stimulate economic recovery and promote economic development by increasing private investment and trade in the Caribbean Basin countries. The act provided for the elimination of U.S. duties on most trade items imported directly from eligible Caribbean countries, provided at least 35% of the product value originated in the region. The financial assistance components of the CBI were to be supportive of the basin's private sector as well as assist general economic stabilization programs.