US ECONOMICS

CUBA

U.S. Department of State. 02/24/2020. An Open Letter to the Foreign Minister of the Republic of Cuba

His Excellency
Bruno Eduardo Rodriguez Parrilla
Minister of Foreign Affairs
Of the Republic of Cuba
Havana

Minister Rodriguez:

Cuban human rights defender Jose Daniel Ferrer has endured more than 100 days of unjust imprisonment and repeatedly has been dragged, chained, beaten, and burned at the hands of the regime, which you represent.  The United States government joins a chorus of international voices demanding Ferrer’s immediate release.  The European Parliament, the United Nations, the Organization of American States, Amnesty International, and journalists and human rights organizations from countries across the globe have condemned your regime’s treatment of Ferrer and other human rights defenders like him.

This is not the first time your regime has targeted Ferrer.  He was imprisoned from 2003 until 2011 for advocating for democracy and respect for human rights in Cuba.

The current spurious charges against Ferrer follow a familiar pattern of harassment, violence, and arbitrary arrests against Cubans who seek only to advocate for democracy and the political and economic freedoms that would enable the Cuban people to create prosperity in Cuba.  It cannot be a crime to criticize policies that have set Cuba’s development tumbling backwards for the past 61 years.

The United States will never forget the brave Cubans who put their lives on the line for the sake of a free Cuba.  Until there is democracy and respect for human rights in Cuba and all political prisoners are freed, the United States will continue to hold the regime accountable for its abuses.  For the sake of the Cuban people and for the betterment of your nation, we urge you to free Jose Daniel Ferrer immediately and take the first step toward a better future for Cuba.

Signed,

Michael R. Pompeo

TRADE PROMOTION

U.S. Department of State. 02/24/2020. Interagency Launch of DC Central Deal Team Takes Economic Statecraft to the Next Level

State Department Under Secretary Keith Krach and Commerce Acting Under Secretary Joe Semsar launched the first DC Central Deal Team meeting on February 18 at the State Department.  The Departments announced an integrated approach to strategically support U.S. businesses abroad.

The DC Central Deal Team is a new proactive multi-agency U.S. government body.  It will advance U.S. strategic economic interests by:  facilitating and identifying new business opportunities for U.S. companies abroad; proactively supporting U.S. companies competing for contracts; developing a common methodology and sharing best practices for Embassy Deal Teams; assembling prepackaged solutions to support U.S. companies abroad; ensuring integration of the multiple programs at various U.S government agencies and financial entities.  DC Central and Embassy Deal Teams are an important part of establishing a level playing field for U.S. businesses and taking economic statecraft to the next level.

The DC Central Deal Team will track, promote, and marshal government support, to secure new business opportunities for U.S. companies in key economic sectors abroad.  While U.S. government agencies have unique mandates, Under Secretary Krach noted that the whole is greater than the sum of its parts and all of the agencies share the common goal of accelerating economic growth that is key to economic security.  DC Central Deal Team and Embassy Deal Teams are also a critical component in establishing a trusted Growth Network of like-minded nations, companies, and civil society.  Under Secretary Semsar highlighted that the private sector is one of America’s greatest assets and the Deal Teams initiative is a way for the government to catalyze support for U.S. exports and investments abroad.

This meeting also included senior officials from:  The Departments of Agriculture, Commerce, Energy, State, Transportation, and Treasury; the United States Agency for International Development (USAID), the U.S. Trade and Development Agency (USTDA), the Export-Import Bank of the United States (EXIM), the U.S. International Development Finance Corporation (DFC), and the Millennium Challenge Corporation (MCC); the National Economic Council (NEC), the National Security Council (NSC), and Prosper Africa.

FULL DOCUMENT: www.state.gov/deal-teams

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ORGANISMS

CENTRAL AMERICA

IMF. FEBRUARY 24, 2020. CHART OF THE WEEK. Higher Growth. Lower Crime?
By Dmitry Plotnikov

Central America remains one of the world’s most violent regions, where about 4.5 percent of the world’s homicides occur. The region has only about 0.5 percent of the world's population.

But thanks mainly to increased security efforts by the region’s governments, homicide rates are down since 2015. Per 100,000 inhabitants, 2019 homicide rates fell from 108.6 to 36 in El Salvador, from 29.7 to 21.5 in Guatemala, and from 63.8 to 41.5 in Honduras.

During this time, economic activity also increased in the “Northern Triangle” countries of El Salvador, Guatemala, and Honduras. This lends the question—can favorable economic conditions help to keep future crime at bay?

Our chart of the week from a recent IMF staff paper on the relationship between crime and output in the Northern Triangle shows that it does. As the chart depicts, in 2016 in Honduras, a 1 percent increase in observed GDP per capita, driven by higher labor productivity, would lower crime by about 0.5 percent.

In El Salvador, a 1 percent increase in output decreases crime by ⅔ percent, while in the case of Guatemala the effect is the same as in Honduras. Therefore, the chart suggests that the positive effects of better economic activity on crime are similar for a broad set of medium-crime levels.

Better jobs for better lives

By comparing the cost-benefit analysis for an individual’s choice of finding a lawful job versus a life of crime, we find that consistent improvement in the standard of living is key for sustaining crime reduction—especially when crime levels are manageable. The downside of this relationship is, of course, that economic instability or a growth slowdown are detrimental for the security situation.

Our analysis explains why a stronger economy helps to lower crime rates in Central America. First, as productivity and economic activity go up—helping to raise overall incomes—individuals are more incentivized to engage in legal activity, such as paid work in the manufacturing sector, or owning a small business.

This means that criminal activity becomes less attractive. And as more legal jobs become available, our analysis finds that current criminals are less likely to commit high-paying illegal activities, such as extortion, opting instead for job security and stable wages. This has a positive spillover effect as more productive workers and lower security costs increase firm profits, which in turn encourage more firms to enter the market or existing firms to expand—boosting vacancies and employment.

Curbing crime

Given widespread poverty and lack of economic opportunities, as well as perceived corruption, it is not surprising that criminal activity becomes a viable option for some, potentially explaining why crime is high in Northern Triangle countries.

While tough-on-crime policies, such as “Mano Dura” in El Salvador, tend to be popular, they often misfire. Instead, policies aimed at reintegration of convicts in the productive economy, such as in the manufacturing or services sectors, seems to be more beneficial.

More broadly, policies that promote more jobs and higher productivity—such as better infrastructure, lower barriers to entry for new firms, and more-efficient tax systems—are key to strengthening and sustaining growth in the region.

FULL DOCUMENT: https://blogs.imf.org/2020/02/24/higher-growth-lower-crime/?utm_medium=email&utm_source=govdelivery

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LGCJ.: