Order Code RL32160
CRS Report for Congress
Received through the CRS Web
Caribbean Region:
Issues in U.S. Relations
Updated April 26, 2006
Mark P. Sullivan
Specialist in Latin American Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

Caribbean Region: Issues in U.S. Relations
Summary
With some 34 million people and 16 independent nations sharing an African
ethnic heritage, the Caribbean is a diverse region that includes some of the
hemisphere’s richest and poorest nations. The region consists of 13 island nations,
from the Bahamas in the north to Trinidad and Tobago in the south; Belize, which
is geographically located in Central America; and the two nations of Guyana and
Suriname, located on the north central coast of South America. With the exception
of Cuba and Haiti, Caribbean governments have generally respected the human rights
of their citizens. Regular elections are the norm, and for the most part have been free
and fair. Nevertheless, while many Caribbean nations have long democratic
traditions, they are not immune to threats to their political stability, including
terrorism. Many nations in the region experienced economic decline in 2001-2002
due to downturns in the tourism and agriculture sectors. With the exception of Haiti,
most Caribbean economies have rebounded since 2003, although the extensive
damage resulting from several storms in 2004 caused economic difficulties for
several Caribbean nations.
U.S. interests in the Caribbean are diverse, and include economic, political, and
security concerns. The Bush Administration describes the Caribbean as America’s
“third border,” with events in the region having a direct impact on the homeland
security of the United States. It maintains that Caribbean nations are “vital partners
on security, trade, health, the environment, education, regional democracy, and other
hemispheric issues.”
The U.S.-Caribbean relationship is characterized by extensive economic
linkages, cooperation on counter-narcotics efforts and security, and a sizeable U.S.
foreign assistance program. U.S. aid supports a variety of projects to strengthen
democracy, promote economic growth and development, alleviate poverty, and
combat the AIDS epidemic in the region. Despite close U.S. relations with most
Caribbean nations, there has been tension at times in the relationship. For example,
relations between Caribbean Community (CARICOM) nations and the United States
became strained in the aftermath of the departure of Haitian President Jean Bertrand
Aristide from power in February 2004. In the aftermath of several devastating storms
in 2004, Congress approved $100 million in emergency supplemental funding (P.L.
108-324) to support humanitarian efforts and reconstruction in Haiti, Grenada, and
Jamaica.
In the second session of the 109th Congress, congressional interest in the
Caribbean will likely include continued anti-drug trafficking and anti-money
laundering cooperation, support to combat the HIV/AIDS epidemic in the region,
post-hurricane reconstruction efforts, and security concerns such as port security and
border security efforts. This report deals with broader issues in U.S. relations with
the Caribbean and does not include an extensive discussion of Haiti and Cuba. U.S.
policy toward these Caribbean nations is covered in two CRS products: CRS Report
RL32294, Haiti: Developments and U.S. Policy Since 1991 and Current
Congressional Concerns
, by Maureen Taft-Morales; and CRS Report RL32730,
Cuba: Issues for the 109th Congress, by Mark P. Sullivan.

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Conditions in the Region
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Overview of U.S.-Caribbean Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
U.S. Foreign Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Drug Trafficking and Money Laundering Issues . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trade Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Movement Toward Free Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Third Border Initiative and Security Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Crime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Caribbean Energy Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
HIV/AIDS in the Caribbean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Hurricane Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Legislative Initiatives in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Port Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
HIV/AIDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Tsunami Detection and Warning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Cuba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Guyana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Haiti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Montserrat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
List of Figures
Figure 1. Caribbean Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
List of Tables
Table 1. Caribbean Countries: Basic Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 2. Caribbean Leaders and Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Table 3. U.S. Imports from Caribbean Countries . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 4. U.S. Exports to Caribbean Countries . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Table 5. U.S. Foreign Assistance to the Caribbean, FY2002-FY2006 . . . . . . . . 27
Table 6. U.S. Foreign Assistance to the Caribbean FY2006 Estimates and
FY2007 Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28


Caribbean Region:
Issues in U.S. Relations
Most Recent Developments
On April 22, 2006, Guyana’s Agriculture minister, along with his two siblings
and a security guard, were shot and killed in an apparent robbery. A week earlier,
the Guyana Elections Commission decided to postpone national elections until after
the constitutional deadline of August 4, 2006, in order to provide more time to
improve the accuracy of the electoral register. Some observers have expressed
concern that political tensions in Guyana could escalate into violence in the lead-up
to the elections.
On April 12, 2006, U.S. and CARICOM (Caribbean Community) trade officials
meeting in Washington began preliminary exploration of a potential free trade
agreement. The officials also agreed to revitalize a dormant U.S.-CARICOM Trade
and Investment Council that had originally been established in the early 1990s.
On March 30, 2006, Portia Simpson Miller was sworn in as Jamaica’s first
female Prime Minister. She replaced outgoing Prime Minister P.J. Patterson as the
leader of the ruling People’s National Party who had governed since 1992.
On March 22, 2006, Secretary of State Condoleezza Rice met with CARICOM
foreign ministers in Nassau, Bahamas. She maintained that the United States wants
to deepen its relations with the region and called for support for the new
democratically elected government in Haiti. (CARICOM leaders are expected to
reinstate Haiti’s full membership in the organization when they meet at their July
2006 summit in St. Kitts and Nevis; Haiti’s participation in CARICOM was
suspended after the departure of President Jean Bertrand Aristide from power in
February 2004.)
On February 14, 2006, the Senate approved H.Con.Res. 71 (Lee), by unanimous
consent, expressing the sense of Congress that there should be established a
Caribbean-American Heritage Month. The House had approved the resolution on
June 27, 2005.

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Conditions in the Region
The Caribbean, encompassing 16 independent nations, is a diverse region of
some 34 million people that includes some of the hemisphere’s richest and poorest
nations (see Table 1). The region consists of 13 island nations, from the Bahamas
in the north to Trinidad and Tobago in the south; Belize, which is geographically
located in Central America; and the two nations of Guyana and Suriname, located on
the north central coast of South America. Many countries in the region share a
common African ethnic and British colonial heritage, while Cuba and the Dominican
Republic were Spanish colonies, Haiti was French, and Suriname was Dutch. The
dates of independence of these countries range from Haiti in 1804 to St. Kitts and
Nevis in 1983. The largest nations in terms of land area are Guyana and Suriname,
while those with the largest populations are Cuba, the Dominican Republic, and
Haiti. The island nations of the Eastern Caribbean are among the smallest countries
in the world. Politically, all Caribbean nations, with the exception of communist
Cuba, have elected democratic governments. Most of the former British colonies
have parliamentary forms of government, with the exception of Guyana, the
Dominican Republic, Haiti, and Suriname, which are republics headed by presidents.
In terms of regional integration, 14 of the region’s independent nations belong
to the Caribbean Community (CARICOM), with the exception of the Dominican
Republic (which has observer status) and Cuba. CARICOM was formed in 1973 to
spur regional economic integration. Some critics argue that it has been slow to
promote integration, compared to other regional economic groupings, but progress
has been made in moving toward a single economic market and in establishing a
Caribbean Court of Justice. In addition to CARICOM, six Eastern Caribbean nations
are members of the Organization of Eastern Caribbean States (OECS), the
subregional organization designed to stimulate economic integration and foreign
policy harmonization. The six OECS nations also share a common currency, the
Eastern Caribbean dollar, with monetary policy managed by the Eastern Caribbean
Central Bank. The Caribbean Development Bank (CDB), headquartered in Barbados,
promotes economic development and regional integration.
With the exception of Cuba and Haiti, Caribbean governments generally respect
the human rights of their citizens. Regular elections are the norm, and for the most
part have been free and fair. Last year, Dominica and Suriname held elections in
May, and St. Vincent and the Grenadines held elections in December. Haiti was
expected to hold elections in 2005, but significant problems and political instability
resulted in those elections being postponed several times, until they were ultimately
held on February 7, 2006. Haiti held a second round of legislative elections on April
21, 2006, and the Dominican Republic is scheduled to hold legislative elections on
May 16. Guyana was scheduled to have presidential and legislative elections before
the constitutional deadline of August 4, 2006, but the Guyana Elections Commission
decided in mid-April 2006 to postpone the elections until after the deadline, in order
to provide more time to improve the accuracy of the electoral register. No election
date has been set yet; some observers have expressed concern that political tensions
in Guyana could escalate into violence in the lead-up to the elections. Also in 2006,
St. Lucia is due to hold parliamentary elections by December 2. (See Table 2 for a
listing of leaders and elections for head of government.)

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Although many Caribbean nations have maintained long democratic traditions,
they are not immune from terrorist and other threats to their political stability. In
1993, stability on St. Kitts was threatened following violent protests after disputed
elections; order was restored with the assistance of security forces from neighboring
states. In 1990, the government of Trinidad and Tobago was endangered by a coup
attempt by a radical Muslim sect. Earlier in the 1980s, the government of Eugenia
Charles in Dominica was threatened by a bizarre coup plot involving foreign
mercenaries. And of course, Grenada, under the socialist-oriented government of
Maurice Bishop, experienced a break from the democratic norm after it assumed
power in a nearly bloodless coup in 1979 and installed a people’s revolutionary
government. After the violent overthrow and murder of Bishop in 1983, the United
States intervened to restore order and end the Cuban presence on the island.
Many Caribbean nations experienced an economic slump in 2001-2002 due to
downturns in the tourism and agriculture sectors, although most Caribbean
economies, with the exception of Haiti, have rebounded since 2003. Countries that
depend on tourism were hurt by the aftermath of the September 2001 terrorist attacks
in the United States and the subsequent U.S. economic recession and sluggish
recovery. The banana and sugar sectors in the Eastern Caribbean were damaged by
a tropical storm in 2002 and a drought in 2003. Both sectors face uncertain futures
in light of the European Union’s plan to phase out preferred market access from
former Caribbean colonies for bananas by 2006 and for sugar by 2009. The Haitian
economy has been in decline since 2001, with political instability exacerbating
already difficult economic conditions in the hemisphere’s poorest nation. The
strongest performing economies in recent years have been those of the Dominican
Republic, fueled by the apparel sector, and Trinidad and Tobago, with substantial
energy resources. In 2003, however, the Dominican economy experienced a decline
in economic growth due to the financial strains caused by the collapse of one of the
largest domestic banks.
In 2004, the region’s strongest economic performers were Suriname, Trinidad
and Tobago, and St. Kitts, with growth rates over 6%, and St. Lucia and Antigua and
Barbuda with growth rates over 5%. Those countries not faring well economically
included Haiti, with an estimated 3.8% decline in gross domestic product (GDP), and
Grenada, with a GDP decline of 2.8% because of the devastation caused by
Hurricane Ivan.
Preliminary estimates for 2005 show continued economic growth in the region,
with the Dominican Republic, St. Lucia, and Trinidad and Tobago registering growth
rates of 7% or more. Those countries faring poorly are Guyana, with an estimated
GDP decline of 2.9%, and Haiti and Jamaica, registering only modest growth rates
of 1.5% and 1.4% respectively.1 Concern that rising oil prices could cause an
economic setback for some countries has been alleviated to some extent by
Venezuela’s new subsidized oil program for Caribbean countries known as
PetroCaribe. Some observers have also been concerned about the region’s high level
1 U.N. Economic Commission for Latin America and the Caribbean (ECLAC), “Balance
Preliminar de las Economías de América Latina y el Caribe, 2005,” December 2005.

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of public debt, with several Caribbean nations having debt levels that exceed 100%
of their GDP.2
Overview of U.S.-Caribbean Relations
U.S. interests in the Caribbean are diverse, and include economic, political, and
security concerns. During the Cold War, security concerns tended to eclipse other
policy interests. In the aftermath of the Cold War, other U.S. policy interests
emerged from the shadow of the East-West conflict in the Caribbean that focused on
concerns about the Soviet and Cuban threat. U.S. policy priorities shifted from one
emphasizing security concerns to a new focus on strengthened economic relations
through trade and investment. Today, in the aftermath of the September 2001
terrorist attacks in the United States, security concerns have re-emerged as a major
U.S. interest in the Caribbean. The Administration describes the Caribbean as
America’s “third border,” with events in the region having a direct impact on the
homeland security of the United States. It describes Caribbean nations as “vital
partners on security, trade, health, the environment, education, regional democracy,
and other hemispheric issues.”3
The United States has close relations with most Caribbean nations, with the
exception of Cuba under Fidel Castro. The U.S.-Caribbean relationship is
characterized by extensive economic linkages, cooperation on counter-narcotics
efforts and security, and a sizeable U.S. foreign assistance program supporting a
variety of projects to strengthen democracy, promote economic growth and
development, alleviate poverty, and combat the AIDS epidemic in the region. The
region has had preferential treatment of its exports to the U.S. market since the early
1980s, and U.S. efforts are now focused on helping the region prepare for
hemispheric free trade.
Despite close U.S. relations with most Caribbean nations, there has been tension
at times in the relationship. For example, relations between Caribbean Community
(CARICOM) nations and the United States became strained in the aftermath of the
departure of President Jean Bertrand Aristide from power in February 2004.
CARICOM nations called for an investigation into the circumstances surrounding
Aristide’s departure. Haiti’s participation in CARICOM remains suspended., but
CARICOM leaders are expected to reinstate Haiti to full membership when they
meet at their July 2006 summit in St. Kitts and Nevis.
Caribbean nations such as Jamaica that depend on tourism expressed concerns
to the Bush Administration about a proposed State Department initiative that would
have required a passport, beginning December 31, 2005, for those traveling to and
from the Caribbean to enter or re-enter the United States. The countries feared that
2 “Organization of Eastern Caribbean States, Country Report,” Economist Intelligence Unit,
September 2005.
3 U.S. Department of State, Congressional Budget Justification, Foreign Operations,
FY2006, “Third Border Initiative,” p. 548.

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tourism from the United States would be negatively affected because Americans do
not presently need a passport to travel to several Caribbean islands. For example, in
2005, some 50% of Americans traveling to Jamaica did not have a passport.4 The
State Department subsequently revised the Caribbean deadline to December 31,
2006, the same passport deadline for air and sea travel from Canada, Mexico, and
Central and South America.
U.S. relations with Haiti were strained under the government of Jean Bertrand
Aristide because of concerns over corruption and human rights, but there has been
renewed cooperation under the interim Haitian government that took office in
February 2004. A U.S.-led Multilateral Interim Force was superceded with a United
Nations Stabilization Mission in Haiti (MINUSTAH) in June 2004, with the goal of
ensuring a secure and stable environment for free and fair elections. After being
postponed several times because of political instability and technical problems, new
elections were ultimately held February 7, 2006. Former president Rene Preval was
declared the winner after several days of protests by his supporters when it appeared
that a run-off election would be necessary. Preval is not expected to take office until
May 14, 2006. Migrant interdiction has been a key component of U.S. policy toward
Haitian migrants. (For further on U.S. policy toward Haiti, see CRS Report RL32294,
Haiti: Developments and U.S. Policy Since 1991 and Current Congressional
Concerns
; CRS Report RL33156, Haiti: International Assistance Strategy for the
Interim Government and Congressional Concerns
, both by Maureen Taft-Morales;
and CRS Report RS21349, U.S. Immigration Policy on Haitian Migrants, by Ruth
Ellen Wasem.)
Since the early 1960s, U.S. policy toward Cuba has consisted largely of isolating
the island nation through economic sanctions, including a trade embargo. The Bush
Administration has essentially continued this policy, although it has further tightened
economic sanctions, especially on travel. Another component of U.S. policy consists
of support measures for the Cuban people, including private humanitarian donations,
U.S.-sponsored radio and television broadcasting to Cuba, and U.S. funding to
support democracy and human rights. U.S. immigration policy toward Cuban
migrants has been described as a “wet foot/dry foot policy,” with the U.S. Coast
Guard interdicting Cuban migrants at sea and returning them to Cuba, while those
Cubans who reach shore are generally allowed to apply for permanent resident status.
(For further information on policy toward Cuba, see CRS Report RL32730, Cuba:
Issues for the 109th Congress
; CRS Report RL31139, Cuba: U.S. Restrictions on
Travel and Remittances
, both by Mark P. Sullivan; and CRS Report RS20468,
Cuban Migration Policy and Issues, by Ruth Ellen Wasem.)
4 “OECS, Country Report,” Economist Intelligence Unit, December 2005, p. 33.

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U.S. Foreign Assistance
The United States has provided considerable amounts of foreign assistance to
the Caribbean over the past 25 years. U.S. assistance to the region in the 1980s
amounted to about $3.2 billion, with most concentrated in Jamaica, the Dominican
Republic, and Haiti. An aid program for the Eastern Caribbean also provided
considerable assistance, especially in the aftermath of the 1983 U.S.-led military
intervention in Grenada. In the 1990s, U.S. assistance to Caribbean nations declined
to about $2 billion, or an annual average of $205 million. Haiti was the largest
recipient of assistance during this period, receiving about $1.1 billion in assistance
or 54% of the total. Jamaica was the second largest U.S. aid recipient in the 1990s,
receiving about $507 million, almost 25% of the total, while the Dominican Republic
received about $352 million, about 17% of the total. Eastern Caribbean nations
received about $178 million in assistance, almost 9% of the total. The bulk of U.S.
assistance was economic assistance, including Development Assistance, Economic
Support Funds, and P.L. 480 food aid. Military assistance to the region amounted to
less than $60 million during the 1990s.
Since FY2000, U.S. aid to the Caribbean region (including FY2006 aid
estimates) has amounted to almost $1.6 billion, because of increased HIV/AIDS
assistance to the region (especially to Guyana and Haiti), disaster and reconstruction
assistance in the aftermath of several hurricanes and tropical storms in 2004, and
increased support for the interim government in Haiti following the departure of
President Jean-Bertrand Aristide from power. Haiti accounted for some 51% of
assistance to the Caribbean region during this period. As in the 1990s, the bulk of
assistance to the region consisted of economic assistance. With regard to hurricane
disaster assistance, Congress appropriated $100 million in October 2004 in
emergency assistance for Caribbean nations (P.L. 108-324), with $42 million for
Grenada, $38 million for Haiti, $18 million for Jamaica, and $2 million for other
countries affected by the storms. Overall assistance to the Caribbean amounted to
$393 million in FY2005 and an estimated $306 million in FY2006 (see Table 5).
For FY2007, the Administration has requested about $322 million in assistance
for the Caribbean, with about $198 million or almost 62% of the total for Haiti, $35
million for the Dominican Republic, $31 million for Guyana, and almost $17 million
for Jamaica. Assistance to the small nations of the Eastern Caribbean (Antigua and
Barbuda, Barbados Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St.
Vincent and the Grenadines) is provided through USAID’s Caribbean Regional
program, which also funds some region-wide projects; for FY2007, the
Administration requested $11.6 million for the program. The Eastern Caribbean
would also receive about $1.5 million in military assistance and $3.2 million to
support a Peace Corps presence. The request of $3 million for the “Third Border
Initiative” (TBI) would fund regional projects for the 14-nation Caribbean
Community (CARICOM) plus the Dominican Republic that focus on improving
travel and border security in the region, disaster preparedness, and greater business
competitiveness. A request of $4 million for Operation Enduring Friendship, a
military assistance program, would support efforts to increase maritime security in
the Dominican Republic, Honduras, Panama, the Bahamas, and Jamaica. (See Tables
5 and 6
).

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Looking ahead to future years, several Caribbean nations are potential recipients
for Millennium Challenge Account (MCA) assistance, an initiative to target foreign
assistance to countries with strong records of performance in the areas of governance,
economic policy, and investment in people. While Haiti and Guyana were potentially
eligible for MCA funds in FY2004 (because their per capita income was below
$1,415) neither country was approved to participate. Guyana was designated an
MCA threshold country for FY2005 and FY2006 and could be approved in future
years for MCA funding, but Haiti would likely have difficulty meeting MCA criteria.
In FY2006, the per capita income level for MCA-eligibility increased to $3,255 or
below, and as a result, three additional Caribbean countries — the Dominican
Republic, Jamaica, and Suriname — could become eligible for MCA funding.
One obstacle in the provision of U.S. military assistance to the Caribbean is that
several Caribbean nations that are parties to the International Criminal Court (ICC)
have not signed agreements to exempt Americans from ICC prosecution, so-called
“Article 98 agreements.” Pursuant to the American Servicemembers’ Protection Act
(P.L. 107-206, title II), the Administration terminated military assistance to these
nations on July 1, 2003: Antigua and Barbuda, Barbados, Belize, Dominica, St.
Vincent and the Grenadines, and Trinidad and Tobago. Subsequently, Antigua and
Barbuda signed an Article 98 agreement in September 2003; Belize signed one in
December 2003; and Dominica signed one in May 2004. Trinidad and Tobago,
which played a leading role in the establishment of the ICC, has strongly resisted
signing an agreement, as has Barbados. (For additional information see CRS Report
RL33337, Article 98 Agreements and Sanctions on U.S. Foreign Aid to Latin
America
, by Clare M. Ribando.)
Drug Trafficking and Money Laundering Issues
Because of their geographic location, many Caribbean nations are transit
countries for cocaine and heroin from South America destined for the U.S. and
European markets. In addition, two Caribbean nations — Jamaica and St. Vincent
and the Grenadines — are large producers and exporters of marijuana. Of the 16
countries in the Caribbean region, President Bush in September 2005 designated four
of them as major drug-producing or drug-transit countries pursuant to annual
legislative drug certification requirements: the Bahamas, the Dominican Republic,
Haiti, and Jamaica. The President maintained that Haiti has made efforts to improve
its performance, but he expressed concerns about the government’s inability to
effectively organize law enforcement resources.5
All four designated Caribbean countries are major transit countries for illicit
drugs to the U.S. market, and Jamaica is the largest marijuana producer and exporter
in the Caribbean. The Bahamas cooperates extensively with the United States on
counternarcotics measures, including interdiction efforts through Operation Bahamas
and Turks and Caicos (OPBAT), a multinational interdiction effort, and efforts that
5 White House, Press Release, “Memorandum for the Secretary of State: Presidential
Determination on Major Drug Transit or Major Illicit Producing Countries for Fiscal Year
2006,” September 15, 2005.

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target Bahamian drug trafficking organizations. The Dominican Republic, a major
transit country for both cocaine and heroin, cooperates closely with the United States,
although the State Department’s March 2006 International Narcotics Control
Strategy Report
notes that “corruption and weak governmental institutions remained
an impediment to controlling the flow of illegal narcotics” through the country.
Jamaican cooperation with U.S. law enforcement agencies on counternarcotics efforts
is described by the State Department report as excellent in most cases, although it
maintains that the government needs to further intensify its law enforcement efforts
and enhance international cooperation. In Haiti, anti-drug efforts have been
hampered over the years by weak institutions, poor economic conditions, and
political instability. Under the interim government of President Boniface Alexandre,
the country’s continued economic and political crises have resulted in little attention
to counternarcotics efforts, according to the State Department, but a new Director
General of the Haitian National Police reportedly has worked to combat drug-related
crime and police corruption.
Many other Caribbean nations, while not designated major transit countries, are
still vulnerable to drug trafficking and associated crimes because of their geographic
location. In particular, the State Department’s March 2006 report maintains that such
crimes have the potential to threaten the stability of the small states of the Eastern
Caribbean, and to varying degrees, have damaged civil society in some of these
countries. Given the poor outlook for the banana industry in the Caribbean, some
observers believe that it will be difficult to contain marijuana production unless there
is adequate support to diversify these economies away from banana production. St.
Vincent and the Grenadines is the largest marijuana producer in the Eastern
Caribbean.
Efforts to crack down on money laundering also constitute a major component
of U.S. anti-drug strategy, and became increasingly important as a counter-terrorist
strategy in the aftermath of the September 2001 terrorist attacks in the United States.
The State Department’s list of major money laundering countries (also categorized
as “jurisdictions of primary concern”) includes six Caribbean countries — Antigua
and Barbuda, the Bahamas, Belize, the Dominican Republic, Haiti, and St. Kitts and
Nevis — and one British Caribbean dependency, the Cayman Islands. The
Department of State maintains that although Antigua and Barbuda has
comprehensive legislation to regulate its financial sector, the country remains
vulnerable to money laundering because the sector is loosely regulated and because
of its Internet gaming industry. The Bahamas has enacted strong anti-money
laundering laws that has made it difficult for drug traffickers to deposit large amounts
of cash; as a result, traffickers have begun storing large quantities of cash in safe
houses, purchasing real estate, vehicles, and jewelry, and processing money through
legitimate businesses and shell companies. In Belize, money laundering is believed
to occur primarily in the country’s growing offshore financial center. Money
laundering in both the Dominican Republic and Haiti stem from their roles as major
drug transhipment points. In the Dominican Republic, financial institutions engage
in transactions with money derived from illegal drug sales in the United States, with
courier and wire transfers the primary methods for moving the funds. St. Kitts and
Nevis, according to the State Department, is at major risk for corruption and money
laundering because of the high volume of narcotics being trafficked through the
country and because of the presence of known traffickers on the islands.

CRS-9
The Financial Action Task Force on Money Laundering (FATF), an
inter-governmental body with the objective of combating money laundering and
terrorist financing, has published a list of non-cooperative countries and territories
in the fight against money laundering since 2000. The FATF evaluative process has
been a major factor in Caribbean countries improving their anti-money laundering
regimes. Four Caribbean nations and one dependent territory were on the first FATF
non-cooperative list issued in 2000: the Bahamas, the Cayman Islands, Dominica,
St. Kitts and Nevis, and St. Vincent and the Grenadines. Grenada was added to the
list in September 2001. Subsequent actions by all these nations to improve their anti-
money laundering regimes resulted in all of them being removed from the list by June
2003. The Bahamas and the Cayman Islands were removed from the list in June
2001; St. Kitts and Nevis in June 2002; Dominica in October 2002; Grenada in
February 2003; and St. Vincent in June 2003. Once a nation is removed from the list,
the FATF continues to monitor developments in the country to ensure compliance.
Some Caribbean officials and others have complained that pressure to
strengthen and enforce anti-money laundering regimes in the region will have a
detrimental effect on its offshore financial sectors. They maintain that the anti-
money laundering measures required have been indiscriminate and constitute an
attack on legitimate business conducted in the small financial sectors of the region.
In particular, after the U.S. congressional passage of new anti-money laundering
provisions in the USA PATRIOT Act (P.L. 107-56, Title III), approved in the
aftermath of the September 11 terrorist attacks, some feared that the stricter scrutiny
of transactions between U.S. and Caribbean financial institutions would threaten the
offshore financial industry in the Caribbean.6 The act’s anti-money laundering
provisions include a prohibition on U.S. correspondent accounts with shell banks
(banks that have no physical presence in the chartering country) and tighter bank
record keeping requirements.
Some observers maintain that the strengthening of anti-money laundering
regimes in the Caribbean will have the end result of increasing the attractiveness of
the region’s offshore financial sectors for legitimate business transactions.
According to this view, such efforts as the FATF evaluative process and the newer
anti-money laundering measures under the PATRIOT Act will help change the
reputation of the Caribbean as being a haven for money launderers and tax evaders.
6 For example, see “Barbados — Weighed Down by Money Laundering Controls —
Bankers and Government Officials Are Worried that Hasty Decisions in the War Against
Money Laundering Could Threaten the Financial Services Industry in Small Jurisdictions
Like Barbados,” The Banker, July 1, 2003; “U.S. Lawmaker: Antiterror Laws May Hurt
Offshore Banking,” Dow Jones International News, January 5, 2003.

CRS-10
Trade Issues
The United States has offered a one way duty-free preferential trade
arrangement for a wide range of products from Caribbean Basin nations since the
early 1980s as an incentive for increased investment and export production in the
region. In 1983, Congress enacted the Caribbean Basin Economic Recovery Act
(CBERA) (P.L. 98-67), the centerpiece of a broader U.S. foreign policy initiative
known as the Caribbean Basin Initiative (CBI) linking Central America and
Caribbean nations together under one preferential trade program. The CBERA
allowed duty-free importation of many categories of products with certain
exceptions. Most apparel and textile goods were ineligible under the CBERA, but
in the late 1980s imports of apparel from CBERA countries that were assembled
from U.S. components were eligible for reduced duties. These production-sharing
arrangements boosted the apparel sectors of several Caribbean Basin countries,
including most significantly the Dominican Republic. In 1990, Congress enacted so-
called CBI II legislation, the Caribbean Basin Economic Recovery Expansion Act of
1990 (P.L. 101-382, Title II), that enhanced the benefits of CBERA and made its
provisions permanent.
Congress approved the Caribbean Basin Trade Partnership Act (CBTPA) (P.L.
106-200, Title II) in 2000, which expanded preferential tariff treatment for Caribbean
Basin nations, providing them with NAFTA-like tariff treatment. This includes
preferential treatment for qualifying textile and apparel products. The CBTPA
benefits are scheduled to expire in September 2008, or upon entry into force of the
Free Trade Area of the Americas, whichever comes first. Of the 15 independent
Caribbean countries eligible for CBTPA benefits (Cuba is not eligible), only 8 have
been designated to participate in the program because they fully meet the eligibility
criteria7 set forth in the CBTPA. Belize, the Dominican Republic, Haiti, and Jamaica
were designated in October 2000; Guyana was designated in November 2000;
Trinidad and Tobago was designated in February 2001; and Barbados and St. Lucia
were designated in June 2001. The remaining Caribbean countries continue to
benefit from the CBERA program, with the exception of Cuba, which is not eligible,
and Suriname, a former Dutch colony which has never elected to participate in the
CBI trade program. (For further information, see CRS Issue Brief IB95050,
Caribbean Basin Interim Trade Program: CBI/NAFTA Parity, Vladimir N. Pregelj.)
Since the United States first implemented a preferential trade program for
Caribbean Basin imports in 1984, the overall performance of exports has been mixed
(see Table 3). The Dominican Republic has been the Caribbean country that has
benefitted most from the program, and its apparel sector expanded significantly
because of production-sharing arrangements. Overall U.S. imports from the
Caribbean (not including Central America) amounted to about $4.7 billion in 1984
and to about $14.5 billion in 2005, an increase of about $9.8 billion. The Dominican
Republic accounted for $3.6 billion of the increase. Trinidad and Tobago, an oil and
gas exporter, increased its exports destined for the United States, from $1.4 billion
7 The criteria cover a wide spectrum of issues, including WTO obligations; intellectual
property rights; worker rights; child labor; and counter-narcotics, anti-corruption, and
transparency efforts.

CRS-11
in 1984 to about $7.9 billion in 2004. For other Caribbean nations, however, such
as Haiti and the Bahamas, overall exports to the United States have declined or been
stagnant since the early 1980s. Bahamian exports to the United States fell when the
country’s oil refinery closed in 1985; the country’s economy remains based on
tourism and financial services.
U.S. exports to the region rose from $8.9 billion in 2001 to $11.9 billion in 2005
(see Table 4). Four Caribbean countries — Dominican Republic, Trinidad and
Tobago, Jamaica, and the Bahamas — are the destination for the lion’s share of U.S.
exports to the region. In 2004, U.S. exports to these four countries accounted for
81% of total U.S. exports to the Caribbean. The United States ran a trade deficit of
$2.6 billion with the Caribbean in 2004, largely because of the increase in the value
of oil and gas imports from Trinidad and Tobago. For most other Caribbean nations,
the United States ran a trade surplus.
Movement Toward Free Trade
All Caribbean nations with the exception of Cuba are participating in the
negotiations for a Free Trade Area of the Americas (FTAA), although negotiations
for that agreement have been stalled since 2004.8 Within CARICOM, while some
governments, like Trinidad and Tobago, are enthusiastic about the FTAA, other
Caribbean governments, especially the smaller countries of the region, have
reservations about the FTAA and its impact on the region. While participating in the
FTAA negotiations, Caribbean nations argue for special and differential treatment for
small economies, including longer phase-in periods. CARICOM has also called for
a Regional Integration Fund to be established that would help the smaller economies
meet their needs for human resources, technology, and infrastructure.
In the meantime, CARICOM, which often has been criticized for acting too
slowly, is trying to prepare itself for hemispheric integration by moving ahead with
its own regional integration. In April 2005, CARICOM members established the
Caribbean Court of Justice, headquartered in Port-of-Spain in Trinidad and Tobago,
that will serve as region’s final court of appeal and replace the Privy Council based
in London. The Court will play an important role in the region’s economic
integration by ruling on trade disputes in the forthcoming CARICOM Single Market
and Economy (CSME). Barbados, Jamaica, and Trinidad led the way in moving
ahead with the implementation of the CSME, which became operational in January
2006.
On April 12, 2006, U.S. and CARICOM trade officials meeting in Washington
began exploring the possibility of a free trade agreement, although Caribbean
ministers reportedly maintained that they would only negotiate such an agreement if
it included extensive transition periods for Caribbean nations.9 The officials also
8 For background and status of the FTAA negotiations, see CRS Report RS20864, A Free
Trade Areas of the Americas: Major Policy Issues and Status of Negotiations
, by J.F.
Hornbeck.
9 “CARICOM Members Seek Special Treatment in FTA Talks with U.S.,” Inside U.S.
(continued...)

CRS-12
agree to revitalize a dormant Trade and Investment Council that had originally been
established in the early 1990s. The council would be the mechanism used to
continue exploratory talks on an FTA as well as other trade and investment issues.
The Dominican Republic and the United States completed negotiations for a
Free Trade Agreement on March 15, 2004, that was ultimately integrated with a free
trade agreement negotiated with Central American countries. Ultimately, Congress
approved legislation (P.L. 109-53) in July 2005 implementing the U.S.-Dominican
Republic-Central America Free Trade Agreement (DR-CAFTA). The agreement had
faced political uncertainty in Congress because of divergent U.S. views on relaxing
trade rules for sensitive agricultural and textile imports and on labor provisions. The
Dominican Republic views the agreement as a means of ensuring the continuation
of U.S. preferential treatment for textiles and apparel and a means to attract U.S.
investment. The Bush Administration views the agreement as a way for the region
to help create jobs, attract foreign investment, and advance good governance. (For
further information, see CRS Report RL31870, The Dominican Republic-Central
America-United States Free Trade Agreement (CAFTA-DR)
, by J.F. Hornbeck; and
CRS Report RL32322, Central America and the Dominican Republic in the Context
of the Free Trade Agreement (DR-CAFTA) with the United States
, by K. Larry Storrs,
et al.)
In the 109th Congress, two identical bills referred to as the Caribbean Basin
Trade Enhancement Act of 2005 — H.R. 1213 (Hyde), introduced March 10, 2005,
and S. 704 (Martinez), introduced April 5, 2005 — would authorize up to $10
million in FY2006 for the Organization of American States (OAS) to establish a
Center for Caribbean Basin Trade and up to $10 million for the OAS to establish a
skills-training program for Caribbean Basin countries.
Third Border Initiative and Security Issues
As first announced by President Bush at the April 2001 Summit of the
Americas, the “Third Border Initiative” (TBI) had the goals of deepening cooperation
in fighting the spread of HIV/AIDS, responding to natural disasters, and making sure
the benefits of globalization are felt in even the smallest economies. The Caribbean
was described as an often overlooked “third border,” where illegal drug trafficking,
migrant smuggling, and financial crime threaten U.S. and regional security interests.
The initiative consisted of a package of programs to enhance diplomatic, economic,
health, education, and law enforcement cooperation and collaboration. Most
significantly, the initiative included increased funding to combat HIV/AIDS in the
region.10
9 (...continued)
Trade, April 14, 2006.
10 U.S. Department of State, International Information Programs, Washington File, “Fact
Sheet: Caribbean Third Border Initiative,” April 21, 2001.

CRS-13
In the aftermath of the September 2001 terrorist attacks in the United States, the
Third Border Initiative expanded to focus on issues affecting U.S. homeland security
in the fields of administration of justice and security. Economic Support Funds
(ESF) under the TBI have been used to help Caribbean airports modernize their
safety and security regulations and oversight, which is viewed an important measure
to improve the security of visiting Americans. TBI funds have also been used to
support border security such as the strengthening of immigration controls; to help
Caribbean economies move toward greater competitiveness; and to support an
improvement of environmental management.11 TBI funding amounted to $3 million
in FY2003, almost $5 million in FY2004, $8.9 million in FY2005, and an estimated
$2.97 million in FY2006. The FY2007 request for the TBI is for $3 million. (See
Tables 5 and 6 on U.S. assistance to the Caribbean at the end of this report.)
In addition to the TBI, the United States has also provided support to improve
port security in the Caribbean region, with the objective of helping ports comply with
the more stringent set of maritime regulations embodied in new International Ship
and Port Facility Security (ISPS) Code, which went into effect on July 1, 2004. The
ISPS is a set of maritime regulations for ships and port facilities with the objective
of preventing terrorist incidents. There has been concern among Caribbean nations
about the high cost of implementing these security regulations. Some of the larger,
richer countries in the Caribbean will be better equipped to afford these extra security
costs, while some of the smaller and poorer nations will have difficulty coming into
compliance.
The U.S. Coast Guard has responsibility for conducting foreign port security
assessments to see whether the ports are in compliance with the ISPS standards.
Trade sanctions are an option if the port is not in compliance. By November 2004,
all Caribbean nations had self-reported that they were in compliance with the more
stringent standards of the ISPS Code. The Coast Guard is currently involved in
visiting foreign ports worldwide to ensure that security practices are up to standards.
The United States has provided some support to help Caribbean nations come into
compliance with the ISPS Code: the U.S. Maritime Administration (MARAD) in the
Department of Transportation organizes, manages, and implements the Inter-
American Port Security Training Program (IAPSTP) for the Organization of
American States; the State Department’s Bureau for International Narcotics and Law
Enforcement Affairs funds a port security technical assistance program for Western
Hemisphere countries; and USAID has funded a project specifically for Eastern
Caribbean nations to help assess the status of each port’s security requirements and
its security plans.
In the 108th Congress, a legislative initiative called for additional foreign
assistance in order to improve foreign port security worldwide, but no final action
was completed before the end of the session. The Senate approved the Maritime
Transportation Security Act, S. 2279 (Hollings), in September 2004, which would
have provided for the Administrator of the Maritime Administration, in coordination
with the Secretary of State, to identify foreign assistance programs that could
11 U.S. Department of State. Congressional Budget Justification for Foreign Operations.
FY2003-FY2006.

CRS-14
facilitate implementation of port security antiterrorism measures in foreign countries.
The act also would have called for a report on the security of ports in the Caribbean
Basin, including an assessment of the effectiveness of the measures employed to
improved security at such ports and an assessment of the resources and program
changes needed to maximize security at Caribbean Basin ports.
In the 109th Congress, two bills would provide for foreign assistance programs
for Caribbean Basin ports. S. 744 (Nelson, Bill), introduced April 11, 2005, would
establish a Caribbean Basin Port Assistance Program. Under the legislative
initiative, the Administrator of MARAD in the Department of Transportation, in
coordination with the Secretary of State, would identify foreign assistance programs
that could facilitate implementation of port security antiterrorism measures at
Caribbean Basin ports. The Administrator and the Secretary would establish a
program for such assistance in consultation with the Organization of American
States. In addition, the Secretary of Homeland Security would be required to submit
a report to Congress on status of port security in Caribbean Basin countries. S. 1052
(Stevens), the Transportation Security Improvement Act of 2005, includes a
provision (Section 504) that would establish a program to facilitate implementation
of port security antiterrorism measures in foreign countries, with particular emphasis
on ports in the Caribbean Basin; this bill was introduced May 17, 2005, and reported
by the Senate Committee on Commerce, Science, and Transportation on November
17, 2005.
Crime
Rising crime is a major security challenge throughout the Caribbean. The
murder rate in Jamaica continues to soar, with 1,445 people killed in 2004 and more
than 1,600 people in 2005. With rate of 60 murders per 100,000 inhabitants in 2005,
Jamaica had the highest murder rate in the world.12 In late February 2006, Jamaicans
were shocked over the brutal killings of six family members, including four young
children in the western part of the country. High levels of violent crime, including
murder and kidnaping, also have plagued Trinidad and Tobago and Haiti. Even
smaller Caribbean nations like St. Lucia have experienced a surge in violent crime.
On April 22, 2006, Guyana’s Agriculture minister, along with his two siblings and
a security guard, were shot and killed in an apparent robbery.
Gangs involved in drug trafficking, extortion, and violence are responsible for
much of the crime. Some observers believe that criminals deported from the United
States have contributed to the region’s surge in violent crime in recent years,
although some maintain that there is no established link. Jamaica has advocated the
development of an international protocol regarding the deportation of criminals.13
12 “Jamaica Named Murder Capital of the World,” BBC Monitoring Americas, January 2,
2006.
13 “Jamaica Wants Protocol to Deal with Deportation of Criminals,” BBC Monitoring
Americas
, September 24, 2005.

CRS-15
Caribbean Energy Security
A major concern for Caribbean nations — the majority of which are net energy
importers — has been the rising price of oil and the potential effect of such rising
prices on economic growth and social stability. In the Caribbean region, only three
nations — Trinidad and Tobago, Cuba, and Barbados — have significant oil and gas
reserves. Of these, only Trinidad and Tobago is a major oil and gas producer,
accounting for 60% of proven oil reserves and 91% of natural gas reserves in the
region. The country is also the largest supplier of liquified natural gas (LNG) to the
United States, accounting for 75% of all U.S. LNG imports. Apart from Trinidad and
Tobago, Cuba also produces oil, but still imports a majority of its consumption
needs. Barbados also produces a small amount of oil, which is refined in Trinidad
and Tobago, but it imports 90% of its oil consumption needs.14
Venezuela is now offering oil to Caribbean nations on preferential terms in a
new program known as PetroCaribe, and there has been some U.S. concern that the
program could increase Venezuela’s influence in the Caribbean region. Since 1980,
Caribbean nations have benefitted from preferential oil imports from Venezuela (and
Mexico) under the San Jose Pact, and since 2001, Venezuela has provided additional
support for Caribbean oil imports under the Caracas Energy Accord. PetroCaribe,
however, would go further with the goal of putting in place a regional supply,
refining, and transportation and storage network, and establishing a development
fund for those countries participating in the program. Under the program, Venezuela
announced that it would supply 190,000 barrels per day of oil to the region, with
countries paying market prices for 50% of the oil within 90 days, and the balance
paid over 25 years at an annual rate of 2%. When the price of crude oil is over $50
a barrel, as it is now, the interest is cut to 1%.15 To date, eleven Caribbean nations
are signatories of PetroCaribe. Barbados, which already receives discounted
petroleum rates from Trinidad, has declined to sign the agreement, and Trinidad,
which has its own significant energy resources, has declined to sign.
HIV/AIDS in the Caribbean
The AIDS epidemic in the Caribbean, where infection rates are among the
highest outside of sub-Saharan Africa, has already begun to have negative
consequences for economic and social development in the region. In 2005, an
estimated 300,000 adults and children in the Caribbean were reported to be living
with HIV, with the epidemic claiming 24,000 lives during the year, making it the
leading cause of death among adults aged 15-44 years. The Caribbean countries with
the highest adult prevalence or infection rates were Haiti, with a rate over 3%; the
Bahamas, Guyana, and Trinidad and Tobago with rates over 2%; and Barbados,
14 “Caribbean Fact Sheet,” U.S. Department of Energy, Energy Information Administration,
July 2005.
15 “Venezuela: Caribbean Will Receive 190,000 bpd,” Latinnews Daily, September 8, 2005.

CRS-16
Belize, the Dominican Republic, Jamaica, and Suriname with rates over 1%.16 In
contrast to other parts of Latin America, the mode of transmission in several
Caribbean countries has been primarily through heterosexual contact, making the
disease difficult to contain, because it affects the general population.
Haiti and the Dominican Republic account for the majority of the region’s
infected population. The U.S. Agency for International Development (USAID) notes
that Haiti’s poverty, conflict, and unstable governance have contributed to the rapid
spread of AIDS; in some urban areas, HIV infection rates are almost 10%. In both
countries, however, there are indications that the epidemic could be reaching a
turning point because of prevention efforts.17
In Haiti, life expectancy is almost six years lower than it would be without the
epidemic, and in the Bahamas and Guyana, the number of deaths among 15-34 year
olds is two and one half times higher because of the epidemic.18 As the epidemic
continues, already-strained health systems will be further burdened with new cases
of AIDS. As a result of the epidemic, there are some 250,000 AIDS orphans in the
Caribbean, with 200,000 of those in Haiti.
Sex tourism is reportedly a factor contributing to rising HIV infection rates in
some Caribbean countries. Officials in Trinidad and Tobago have expressed concern
about the growth of sex tourism, the so-called “beach bum” phenomenon, and the
link to the spread of AIDS.19 In Jamaica, the resort town of Montego Bay has the
highest HIV infection rates in the country.20 In the Dominican Republic, AIDS
activists are concerned about child prostitution in resort areas and the spread of
HIV.21
According to the World Bank, continued increases in HIV prevalence in the
Caribbean will negatively affect economic growth. The epidemic, according to the
Bank, will have a negative impact on such economic sectors as agriculture, tourism,
lumber production, finance, and trade because of lost productivity of economically
active adults with the disease. In particular, the labor market in the region will be
dealt a shock because of deaths from AIDS. The Prime Minister of St. Kitts and
16 UNAIDS, “AIDS Epidemic Update,” December 2005, p. 53.
17 Ibid., pp. 54-56.
18 UNAIDS, Latin America and the Caribbean Fact Sheet, July 2002.
19 “Sex Tourism Cause of HIV Spread, Says T&T Minister,” The Weekly Gleaner (Jamaica),
February 19, 2003. The commercial sex industry linked to tourism reportedly is well
established in the Caribbean, with increasing male prostitution by so-called “beach boys.”
See “The Caribbean Regional Strategic Framework for HIV/AIDS,” Pan Caribbean
Partnership on HIV/AIDS and CARICOM, March 2002, p. 7. Also see Annan Boodram,
“The Beach Bum Phenomena,” Caribbean Voice, August 3, 2002, and Julie Bindel, “The
Price of a Holiday Fling,” Guardian (London), July 5, 2003.
20 “Rising Rate of AIDS in the Caribbean,” All Things Considered, National Public Radio,
July 2, 2003.
21 “AIDS Activists Worried Over Child Prostitution in Dominican Republic,” Boston
Haitian Reporter
, January 31, 2003.

CRS-17
Nevis, Denzil Douglas, maintains that the epidemic threatens to cripple the labor
force just as the region needs to become more competitive in world markets amid the
momentum toward hemispheric free trade.22 Looking ahead, the World Bank warned
in 2001 that “what happened in Africa in less than two decades could now happen
in the Caribbean if action is not taken while the epidemic is in the early stages.”23
The U.S. Agency for International Development (USAID) has been the lead
U.S. agency fighting the epidemic abroad since 1986. USAID’s funding for
HIV/AIDS in Central America and the Caribbean region rose from $11.2 million in
FY2000 to $33.8 million in FY2003. Because of the inclusion of Guyana and Haiti
as focus countries in the President’s Emergency Plan for AIDS Relief (PEPFAR),
funded largely through the Global HIV/AIDS Initiative (GHAI) account, U.S.
assistance to the Caribbean and Central America for HIV/AIDS increased to $47
million in FY2004, $82 million in FY2005, and an estimated $87.8 million in
FY2006. For FY2007, the Administration requested $88 million in GHAI funding
for Guyana ($25 million) and Haiti ($63 million). Further assistance is provided for
non-focus countries and programs in Central America and the Caribbean funded
through the Child Survival and Health account. In FY2006, assistance to these non-
focus countries in the Caribbean and Central America amounted to almost $23
million. It is possible that at least this much will be allocated in FY2007, which
could bring the total funding level for these countries to $111 million.
Some Members of Congress want to expand the list of Caribbean countries
beyond Guyana and Haiti that were cited in 2003 HIV/AIDS legislation, the United
States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (P.L.
108-25). In the 108th Congress, both the House-passed FY2004-FY2005 Foreign
Relations Authorization Act, H.R. 1950 (Section 1818), and the Senate Foreign
Relations Committee’s reported FY2005 Foreign Relations Authorization Act, S.
2144 (Section 2518), had provisions that would have added 14 Caribbean countries
to those listed in the 2003 legislation, but no final action was taken on these
measures. In the 109th Congress, S. 600, the Foreign Affairs Authorization Act,
FY2006 and FY2007, contains a provision (Section 2516) that would add 14
Caribbean countries to the list of focus countries targeted for increased HIV/AIDS
assistance.
Other legislative initiatives in the 109th Congress include the following: P.L.
109-95 (H.R. 1409, Lee), approved by both houses in October 2005, and signed into
law November 8, 2005, amends the Foreign Assistance Act of 1961 to provide
assistance for orphans and other vulnerable children in developing countries,
including in the Caribbean; H.R. 164 (Millender-McDonald), introduced January 4,
2005, would amend the Foreign Assistance Act of 1961 to provide for the
establishment of pediatric centers in certain developing countries, including Guyana,
to provide treatment and care for children with HIV/AIDS; and S. 350 (Lugar) and
H.R. 945 (Lee), both introduced in February 2005, would provide assistance to
22 “Caribbean Leaders Call AIDS ‘Single Biggest Threat’ to Development, Announce Push
for Low-Cost Antiretrovirals,” Kaiser Daily HIV/AIDS Report, July 8, 2003.
23 World Bank, HIV/AIDS in the Caribbean: Issues and Options, March 2001, p. xii.

CRS-18
combat infectious diseases in Haiti, including HIV/AIDS, and to establish a
comprehensive health infrastructure.
For further information, see CRS Report RL32001, AIDS in the Caribbean and
Central America, by Mark P. Sullivan; and CRS Report RS21181, HIV/AIDS
International Programs: Appropriations, FY2003-FY2006
, by Tiaji Salaam-Blyther.
Hurricane Disaster Assistance
Several Caribbean nations, especially Haiti, Grenada, Jamaica, and the
Bahamas, were hard hit by devastating hurricanes in 2004. Hurricane Charley struck
western Cuba in mid-August 2004 causing damage to over 70,000 homes and
thousands of hectares of crops. Hurricane Frances struck the Bahamas in September
2004, causing widespread damage throughout the country’s islands. Hurricane Ivan
caused severe damage across the Caribbean in September 2004: it devastated
Grenada with some 80%-90% of the nation’s buildings destroyed; it passed over
Jamaica causing damage in the western part of the island and in southern coastal
towns; it struck the British dependency of the Cayman Islands causing damage to
50% of homes on the island of Grand Cayman; and it affected western Cuba,
damaging houses and crops. Tropical Storm Jeanne caused devastating mudslides
and floods in northern Haiti in September 2004 that killed some 3,000 people, with
over 2,800 of those in the city of Gonaives. In 2005, Hurricane Dennis heavily
damaged Cuba and Grenada.
The United States provided humanitarian assistance to several Caribbean
nations in the aftermath of these storms and floods. USAID set up a Disaster
Assistance Response Team (DART) to respond to the disasters, with team members
located in the various islands. In addition, the 108th Congress appropriated $100
million in emergency assistance (P.L. 108-324) in late October 2004 for Caribbean
nations afflicted by the storms. The State Department announced that the $100
million would be targeted as follows: $42 million for Grenada, $38 million for Haiti,
$18 million for Jamaica, and $2 million for other countries affected by the storms,
such as the Bahamas. In the aftermath of the 2004 hurricane season, Congress
approved funding for the National Oceanic and Atmospheric Administration to
deploy new hurricane buoys to enhance monitoring in the Caribbean. In addition, for
several years, USAID has provided support for disaster preparedness and mitigation
in the Latin America and Caribbean region.
Some observers and Members of Congress had criticized current U.S. assistance
efforts for the Caribbean as too small in light of the devastation caused by the storms.
At the time, the Congressional Black Caucus called for $500 million in assistance to
Caribbean nations affected by the storms.24 Former President Jimmy Carter urged
the United States and other international lenders to forgive part of Grenada’s foreign
debt. In addition to assistance, some called on the Bush Administration to provide
24 Congressional Record, October 4, 2004, p. H7999.

CRS-19
Temporary Protected Status (TPS) or “deferred enforced departure” to nationals of
several of the affected countries, especially Haiti.25
Legislative Initiatives in the 109th Congress
General. H.Con.Res. 71 (Lee), introduced February 17, 2005, passed by the
House on June 27, 2005, and by the Senate on February 14, 2006, expresses the sense
of Congress that there should be established a Caribbean-American Heritage Month.
H.Con.Res. 175 (Rangel), introduced June 8, 2005, and passed by the House (382-6,
2 present), acknowledges African descendants of the transatlantic slave trade in all
of the Americas with an emphasis on descendants in Latin America and the
Caribbean, recognizes the injustices suffered by these African descendants, and
recommends that the United States and the international community work to improve
the situation of Afro-descendant communities in Latin America and the Caribbean.
H.R. 953 (Menendez), introduced February 17, 2005, and S. 682 (Dodd), introduced
March 17, 2005, would authorize the establishment of a Social Investment and
Economic Development Fund for the Americas to proved assistance to reduce
poverty and foster increased economic opportunity in Western Hemisphere countries,
including in the Caribbean. H.R. 1130 (Waters), introduced March 3, 2005, would
provide for the cancellation of debts owed to international financial institutions by
eligible poor countries, including the Caribbean nations of Guyana, Haiti, and
Jamaica.
Trade. P.L. 109-53 (H.R. 3045), the Dominican Republic-Central America-
United States Free Trade Agreement Implementation Act; both houses approved in
July 28, 2005, and the measure was signed into law August 2, 2005. Two identical
bills referred to as the Caribbean Basin Trade Enhancement Act of 2005 — H.R.
1213 (Hyde)
, introduced March 10, 2005, and S. 704 (Martinez), introduced April 5,
2005 — would authorize up to $10 million in FY2006 for the Organization of
American States (OAS) to establish a Center for Caribbean Basin Trade and up to
$10 million for the OAS to establish a skills-training program for Caribbean Basin
countries. H.R. 3176 (Menendez), introduced June 30, 2005, would amend the
Caribbean Basin Economic Recovery Act to provide for preferential treatment for
certain apparel articles that are both cut (or knit to shape) and sewn or otherwise
assembled in a beneficiary country under the act from fabrics or yarn not widely
available in commercial quantities.
Port Security. S. 1052 (Stevens), the Transportation Security Improvement
Act of 2005, introduced May 17, 2005, and reported by the Senate Committee on
Commerce, Science, and Transportation on November 17, 2005, includes a provision
(Section 504) that would establish a program to facilitate implementation of port
security antiterrorism measures in foreign countries, with particular emphasis on
25 Jacqueline Charles and Alfonso Chardy, “Immigration Advocates: Allow Migrants from
Storm Damaged Islands to Stay in the United States,” Miami Herald, September 22, 2004;
For further background on TPS, see CRS Report RS20844, Temporary Protected Status:
Current Immigration Policy and Issues
, by Ruth Ellen Wasem.

CRS-20
ports in the Caribbean Basin. S. 744 (Nelson, Bill), introduced April 11, 2005, would
establish a Caribbean Basin Port Assistance Program.
HIV/AIDS. P.L. 109-95 (H.R. 1409, Lee), introduced March 17, 2005,
approved by both houses in October 2005, and signed into law November 8, 2005,
amends the Foreign Assistance Act of 1961 to provide assistance for orphans and
other vulnerable children in developing countries, including in the Caribbean. H.R.
164 (Millender-McDonald)
, introduced January 4, 2005, would amend the Foreign
Assistance Act of 1961 to provide for the establishment of pediatric centers in certain
developing countries, including Guyana, to provide treatment and care for children
with HIV/AIDS. H.R. 945 (Lee), introduced February 17, 2005, would provide
assistance to combat infectious diseases in Haiti, including HIV/AIDS, and to
establish a comprehensive health infrastructure. S. 600 (Lugar), introduced March
10, 2005, the Foreign Affairs Authorization Act, FY2006 and FY2007, contains a
provision (Section 2516) that would add 14 Caribbean countries to the list of focus
countries targeted for increased HIV/AIDS assistance. The list already includes
Guyana and Haiti.
Tsunami Detection and Warning. P.L. 109-13 (H.R. 1268), Emergency
Supplemental for FY2005, signed into law May 11, 2005, provided $10.2 million for
buoys for the Pacific and Atlantic Oceans, Gulf of Mexico, and Caribbean Sea for
observing ocean conditions at depth. Several legislative initiatives have been
introduced in the 109th Congress regarding support for a U.S. tsunami detection and
warning system, including S. 50 (Inouye), passed by the Senate July 11, 2005; H.R.
1674 (Boehlert)
, ordered reported by the House Committee on Science May 4, 2005.
For analysis of these initiatives, and information on additional legislative initiatives,
see CRS Report RL32739, Tsunamis: Monitoring, Detection, and Early Warning
Systems
, by Wayne A. Morrissey.
Cuba. Numerous legislative initiatives have been introduced in the 109th
Congress regarding Cuba’s human rights situation, U.S. economic sanctions
(including the overall embargo, travel restrictions, and restrictions on financing for
U.S. agricultural exports to Cuba), and radio and television broadcasting. For a
listing of legislative initiatives and action, see CRS Report RL32730, Cuba: Issues
for the 109th Congress
, by Mark P. Sullivan.
Guyana. H.Con.Res. 74 (Meeks), introduced February 17, 2005, would express
the sense of Congress with respect to the urgency of providing adequate assistance
to Guyana, devastated by severe flooding. Also see H.R. 164 in the “HIV/AIDS”
section above; and H.R. 1130 in the “General” section above.
Haiti. Numerous legislative initiatives have been introduced in the 109th
Congress regarding Haiti, including on migration, reconstruction assistance, health
assistance, and on the establishment of an independent commission examining the
U.S. role in the 2004 “coup” in Haiti. For a listing of legislative initiatives and
action, see CRS Report RL32294, Haiti: Developments and U.S. Policy Since 1991
and Current Congressional Concerns
, by Maureen Taft-Morales.
Jamaica. H.Res. 727 (Waters), introduced March 14, 2006, would congratulate
Portia Simpson Miller for becoming the first female Prime Minister-designate of

CRS-21
Jamaica. H.Con.Res. 362 (Jackson-Lee), introduced March 16, 2006, would
congratulate Prime Minister Portia Simpson Miller for becoming the first
democratically elected female Prime Minister of Jamaica.
Montserrat. Two bills — H.R. 342 (Owens), introduced January 25, 2005, and
S. 297 (Schumer), introduced February 7, 2005, would provide for adjustment of
immigration status for certain aliens granted temporary protected status in the United
States because of conditions in Montserrat.
For Additional Reading
CRS Report RL30935, Agricultural Trade in the Free Trade Area of the Americas,
by Remy Jurenas.
CRS Report RL32001, AIDS in the Caribbean and Central America, by Mark P.
Sullivan.
CRS Report RL33337, Article 98 Agreements and Sanctions on U.S. Foreign Aid to
Latin America, by Clare M. Ribando.
CRS Issue Brief IB95050, Caribbean Basin Interim Trade Program: CBI/NAFTA
Parity, by Vladimir Pregelj.
CRS Report RL32322, Central America and the Dominican Republic in the Context
of the Free Trade Agreement (DR-CAFTA) with the United States, coordinated
by K. Larry Storrs.
CRS Report RL32730, Cuba: Issues for the 109th Congress, by Mark P. Sullivan.
CRS Report RS21718, Dominican Republic: Political and Economic Conditions and
U.S. Relations, by Clare Ribando.
CRS Report RL31870, The Dominican Republic-Central America-United States Free
Trade Agreement (DR-CAFTA), by J.F. Hornbeck.
CRS Report RS21930, Ethanol Imports and the Caribbean Basin Initiative, by Brent
D. Yacobucci.
CRS Report RS20864, A Free Trade Area of the Americas: Major Policy Issues and
Status of Negotiations, by J.F. Hornbeck.
CRS Report RL32294, Haiti: Developments and U.S. Policy Since 1991 and Current
Congressional Concerns, by Maureen Taft-Morales.
CRS Report RS22372, Jamaica: Political and Economic Conditions and U.S.
Relations, by Mark P. Sullivan

CRS-22
CRS Report 98-684, Latin America and the Caribbean: Fact Sheet on Leaders and
Elections, by Mark Sullivan and Barbara Salazar Torreon.
CRS Report RL32733, Latin America and the Caribbean: Issues for the 109th
Congress, coordinated by Mark P. Sullivan.
CRS Report RL33162, Trade Integration in the Americas, by M. Angeles Villarreal.
CRS Report RL33200, Trafficking in Persons in Latin America and the Caribbean,
by Clare M. Ribando.
CRS Report RL32739, Tsunamis: Monitoring, Detection, and Early Warning
Systems, by Wayne A. Morrissey.
CRS Report RL32487, U.S. Foreign Assistance to Latin America and the Caribbean,
coordinated by Connie Veillette.

CRS-23
Table 1. Caribbean Countries: Basic Facts
Adult Literacy
Population
Per Capita
Rate (%ages 15
Area
(2004,
Income (U.S. $, and above, 2003
Country
(sq. miles)
thousands)
2004 est.)
est.)
Antigua and
170
80
10,000
85.8
Barbuda
Bahamas
5,382
320
14,920
95.5
Barbados
166
272
9,270
99.7
Belize
8,867
283
3,940
76.9
Cuba
44,200
11,365
a
96.9
Dominica
290
71
3,650
88.0
Dominican
18,704
8,900
2,080
87.7
Republic
Grenada
133
106
3,760
96.0
Guyana
82,980
772
990
96.5
Haiti
10,714
8,600
390
51.9
Jamaica
4,244
2,700
2,900
87.6
St. Kitts and Nevis
101
47
`7,600
97.8
St. Lucia
238
164
4,310
90.1
St. Vincent
130
108
3,650
88.1
Suriname
63,037
443
2,250
88.0
Trinidad and
1,980
1,323
8,580
98.5
Tobago
Sources: Area statistics are drawn from the U.S. Department of State Background Notes for each
country; population and per capita income statistics are from the World Bank’s World Development
Report 2006
; adult literacy rates are from the United Nations’ Human Development Report 2005.
a. Estimated by the World Bank to be between $826-$3,255.

CRS-24
Table 2. Caribbean Leaders and Elections
Country
Head of Government
Last Election
Next Election
Antigua &
Spencer, Baldwin
Mar. 23, 2004
by Mar. 2009
Barbuda
Bahamas
Christie, Perry
May 2002
by May 2007
Barbados
Arthur, Owen
May 21, 2003
by May 2008
Belize
Musa, Said
Mar. 5, 2003
by Mar. 2008
Cuba
Castro, Fidel

a
a
Dominica
Skerritt, Roosevelt
May 5, 2005
by May 2010
Dominican
Fernandez, Leonel
May 16, 2004
May 2008
Republic
Grenada
Mitchell, Keith
Nov. 27, 2003
by Nov. 2008
Guyana
Bharrat, Jagdeo
Mar. 2001
by Aug. 4, 2006
Haiti
Alexandre, Bonifaceb
Feb. 7, 2006 b
2011
Jamaica
Simpson Miller, Portiac
Oct. 2002
by Oct. 2007
St. Kitts & Nevis Douglas, Denzil
Oct. 25, 2004
by Oct. 2009
St. Lucia
Anthony, Kenny
Dec. 2001
by Dec. 2, 2006
St. Vincent &
Gonsalves, Ralph
Dec. 7, 2005
by Mar. 7, 2010
the Grenadines
Suriname
Venetiaan, Ronald
May 25, 2005
May 2010
Trinidad &
Manning, Patrick
Oct. 7, 2002
by Oct. 2007
Tobago
a. Castro has served as head of government since the 1959 Cuban Revolution. Since that time, there have been
no elections for head of government.
b. Alexandre became interim president February 29, 2004, following the departure of President Jean Bertrand
Aristide. Réne Préval won the Feb. 7, 2006 presidential election and is expected to be inaugurated May 14, 2006,
after a new Parliament is in place.
c. Portia Simpson Miller was sworn in as Prime Minister in March 30, 2006, after replacing out going Prime
Minster P.J. Patterson as leader of the ruling People’s National Party.


CRS-25
Table 3. U.S. Imports from Caribbean Countries
(U.S. $ millions)
Country
1984
2001
2002
2003
2004
Antigua and
7.898
3.741
3.527
12.767
4.366
Barbuda
Bahamas
1,154.282
313.889
449.697
479.305
637.331
Barbados
252.598
39.546
34.438
43.428
36.872
Belize
42.843
97.401
77.668
101.443
107.103
Dominica
.086
5.268
4.670
5.252
2.883
Dom. Republic
994.427
4,183.435
4,168.881
4,455.230
4,528.420
Grenada
.766
24.117
6.886
7.602
5.101
Guyana
74.417
140.344
115.615
118.690
122.667
Haiti
377.413
263.108
255.007
332.340
370.666
Jamaica
396.949
460.559
396.317
422.749
320.304
St. Kitts and Nevis
23.135
41.096
48.627
44.588
41.701
St. Lucia
7.397
28.911
19.180
12.999
14.347
St. Vincent
2.958
22.493
16.475
4.142
4.130
Suriname*
104.636
142.918
132.722
140.064
140.804
Trinidad and
1,360.106
2,380.010
2,440.304
4,333.753
5,854.311
Tobago
Total
4,695.275
8,146.836
8,170.016
10,514.352
12,191.006
Source: 1984 statistics are from U.S. International Trade Commission, The Impact of the Caribbean
Basin Economic Recovery Act, Fifteenth Report
, 1999-2000, September 2001; 2000-2004 trade
statistics are from the Department of Commerce, as presented by World Trade Atlas.
* Suriname has not been a beneficiary of the Caribbean Basin Initiative preferential trade program.

CRS-26
Table 4. U.S. Exports to Caribbean Countries
(U.S. $ millions)
Country
2001
2002
2003
2004
Antigua and Barbuda
95.526
81.359
127.314
125.270
Bahamas
1,026.342
975.309
1,074.694
1,182.066
Barbados
286.613
267.646
300.095
347.579
Belize
173.167
137.667
198.808
151.675
Dominica
30.690
44.972
34.332
35.890
Dominican Republic
3,757.045
4,250.068
4,205.449
4,342.882
Grenada
59.873
56.406
68.420
69.910
Guyana
141.252
128.208
117.148
135.620
Haiti
550.383
573.185
639.441
663.001
Jamaica
1,405.522
1,420.187
1,469.545
1,431.596
St. Kitts and Nevis
46.338
49.461
58.768
60.417
St. Lucia
86.743
99.499
119.544
103.304
St. Vincent
38.836
40.449
46.216
45.396
Suriname
155.306
124.757
192.655
178.561
Trinidad and Tobago
1,087.143
1,020.211
1,063.297
1,207.194
Total
8,940.779
9,269.384
9,715.726
10,080.361
Source: Trade statistics are from the Department of Commerce, as presented by World Trade Atlas.

CRS-27
Table 5. U.S. Foreign Assistance to the Caribbean,
FY2002-FY2006
(U.S. $ millions)
FY2006
FY2007
Country
FY2003
FY2004
FY2005
(estimate)
(request)
Bahamas
1.336
1.264
1.294
2.512
0.805
Belize
2.046
2.082
2.799
2.251
2.289
Cuba
6.000
21.369
8.928
10.890
9.000
Dominican
28.099
33.968
28.652
27.108
35.007
Republic
Guyana
8.407
11.590
20.255
23.965
31.009
Haiti
71.887
132.324
182.717
194.384
198.039
Jamaica
22.337
24.186
22.459
19.472
16.617
Suriname
1.397
1.471
1.486
1.627
3.000
Trinidad and
0.540
0
0.049
1.028
2.894
Tobago
Caribbean
13.008
10.310
110.909
11.326
11.640
Regional
Eastern
Caribbeana
4.255
6.900
4.958
4.813
4.774
Third Border
3.000
4.976
8.928
2.970
3.000
OAS Special

4.971



Mission in Haiti
Operation
Enduring



3.960
4.000
Friendship
Total
162.312
255.411
393.434
316.233
Source: U.S. Department of State, FY2004-FY2007 Congressional Budget Justifications for Foreign
Operations.
a. The Eastern Caribbean category funds military assistance and Peace Corp programs for seven
countries. Antigua and Barbuda, Barbados, Dominica, Grenada, St. Kitts and Nevis, St. Lucia,
and St. Vincent and the Grenadines. Development assistance for these nations is funded under
U.S. AID’s Caribbean Regional program.

CRS-28
Table 6. U.S. Foreign Assistance to the Caribbean FY2006
Estimates and FY2007 Requests
(U.S. $ millions)
Country
DA
CSH GHAI
ESF
PL 480 IMET
INL
FMF Other
Total
Bahamas
FY2006





.39
.50
.10
1.53
2.52
FY2007 Req.





.23
.50
.08

0.81
Belize
FY2006





.20

.20
1.86
2.26
FY2007 Req.





.25

.18
1.87
2.30
Cuba
FY2006
1.98


8.91





10.89
FY2007 Req.



9.00





9.00
Dominican Republic
FY2006
7.07 12.72

1.98

1.29

.94
3.12
27.12
FY2007 Req.
6.01 11.34
— 12.00

1.09

.73
3.85
35.02
Guyana
FY2006
3.96
— 18.00


.30

.10
1.61
23.97
FY2007 Req.
4.00
— 25.00


.32

.08
1.61
31.01
Haiti
FY2006
29.70 19.80 47.30 49.50
31.48
.21
14.85
.99
.55
194.38
FY2007 Req.
23.14 15.81 63.00 50.00
34.50
.25
10.00
.78
.56
198.04
Jamaica
FY2006
9.58
4.47



.89
.99
.59
2.95
19.47
FY2007 Req.
7.39
2.81



.75
.90
.50
4.27
16.62
Suriname
FY2006





.15

.10
1.38
1.63
FY2007 Req.





.15

.08
1.47
1.70
Trinidad & Tobago
FY2006a





.05


.98
1.03
FY2007 Req.





.05


2.85
2.90
Third Border Initiative
FY2006



2.97





2.97
FY2007 Req.



3.00





3.00
Operation Enduring Friendship
FY2006







3.96

3.96
FY2007 Req.







4.00

4.00
Caribbean Region
FY2006
4.89
6.44







11.33
FY2007 Req.
6.00
5.64







11.64
Eastern Caribbean
FY2006





.76

.89
3.16
4.81
FY2007 Req.





.77

.78
3.23
4.78
Total - FY2006
57.18 43.43 65.30 63.36
31.48
4.24
16.34
8.76 17.14
307.23
Total - FY2007
46.54 35.60 88.00 74.00
34.50
3.86
11.40
7.21 19.71
320.82
Source: Figures are drawn from U.S. Department of State Congressional Budget Justification,
Summary Tables, Fiscal Year 2007. Table prepared by Connie Veillette, CRS, February 28, 2006.
Operation Enduring Friendship includes activities in Panama.


CRS-29
Figure 1. Caribbean Region