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Office of the Press Secretary

For Immediate Release February 16, 1999



President Clinton today proposed $956 million in funding for disaster assistance in the wake of Hurricane Mitch and Hurricane Georges, which hit the Central American nations of Honduras, Nicaragua, El Salvador, and Guatemala, along with Haiti, the Dominican Republic, and other Caribbean nations, in the fall of 1998. The additonal funding, announced today by First Lady Hillary Rodham Clinton at the White House, brings total United States assistance to these countries to more than $1.2 billion.

In his letter of transmittal to Congress, the President said, "In light of the close consultation we have had, and the bipartisan recognition that the needs for reconstruction are pressing, I urge the Congress to act quickly to restore hope to this region and help our neighbors return to the path of democracy and economic growth."

Central America's full recovery from the storms are clearly in the U.S. national interest. Over the past decade, the region has made tremendous strides toward settling conflicts, strengthening democracy, promoting human rights, opening economies, and allieviating poverty. The economic destruction and dislocation caused by the hurricanes threatens to undermine these acheivements. Disaster assistance to our Central American partners will ensure that their transformation continues.

Hurricane Mitch was the worst natural disaster ever to strike the Western Hemisphere. It caused the deaths of more than 9,000 people, left millions homeless, and resulted in more than $8.5 billion in damages to homes, hospitals, schools, roads, farms and businesses throughout the region. Even today, hundreds of thousands of Central Americans cannot return to their homes while the economy, largely dependent on agriculture, has been severely damaged.

To date, the United States government has provided more than $300 million in humanitarian relief aid to provide food, medicine, emergency shelter, and agricultural assistance through civilian relief workers and US military personnel, while also helping to clear roads and install bridges. Responding immediately to the disasters, the Agency for International Development (USAID), the Department of Agriculture and the Department of Defense were responsible for delivering urgently needed relief supplies to millions of people.

More than 5,000 U.S. military personnel have been working side by side with our Central American neighbors to help rebuild these nations and restore hope to the region.

The President's proposal will provide funding for reconstruction and restoration of local economies, prevention efforts to avoid future losses through environmental management and disaster mitigation, and debt relief. It will repay USAID and the Department of Defense for funds already spent in immediate response to the hurricanes. This proposal also will provide $80 million to the Department of Justice's Immigration and Naturalization Service to support policies to delay deportation to these countries and for other costs related to these disasters.

This proposal also allocates $10 million to Colombia to help address needs arising from its recent earthquake, focusing assistance on health, housing and schools.

Central American Nations

More than a dozen Cabinet agencies will be involved in the relief efforts for Central America. For example, the Department of Health and Human Services will continue to take active measures to advance public health, and the Department of Agriculture will assist with farming recovery and land use planning. Funds in this package for the Central American nations hit by Hurricane Mitch will provide assistance as follows:

Reconstruction Assistance ($ 613 million):

. Restore clean water and sanitation systems and preserve public

     health, including:
     < Repairing over 700 damaged health clinics to serve at least 4
       million people;
     < Providing clean water and sanitation services for more than 7
       million people;
     < Stemming the spread of contagious diseases through health
       surveillance and prevention for more than 17 million people.

. Help rebuild housing, schools, and roads, including:

     < Providing temporary shelter for 20,000 people;
     < Building 6,400 new housing units;
     < Establishing 6,000 temporary "open-air" schools and repair 
       more than 1700 schools.

. Restore agriculture, rebuild economies and create jobs, including:

     < Restoring agricultural production through technical assistance
       and delivery of seeds, fertilizer, and tools to small farmers;
     < Providing over 70,000 micro-enterprise loans;
     < Providing credit subsidy to the U.S. Export-Import Bank for short
        and medium term trade credits for imports of essential goods 
        from the US
     < Rebuilding roads and bridges;
     < Funding business outreach for overseas private investment through
       Overseas Private Investment Corporation.

     Help local governments to manage the crisis with advice ans
     assistance in reconstruction and in the management of funding to
     ensure that assistance is used efficiently and serves its intended 

          Debt Relief: In order to enable Central American nations to
     concentrate on rebuilding their economies, this proposal would
     provide for debt relief with:

     A deferral by the U.S. of all bilateral debt service requirements
     for the next two years ($54 million);

     An increase in forgiveness of $19 million of Nicaragua's bilateral
     debt (for a total of 90%, or $75 million) and of $26 million of
     Honduras' (for a total of two-thirds, or $103 million) through
     agreement with other nations in The Paris Club; and

     A contribution by the U.S. of $25 million to a multi-nation fund to
     cover debt service obligations of Nicaragua and Honduras to
     international financial institutions during the deferral period.
     This fund, the Central America Emergency Trust Fund, will be
     sponsored by the World Bank.

Caribbean Nations

     Included in this reconstruction funding is the assistance of $50
     million to the Dominican Republic, Haiti, and the Eastern 
     Caribbean, which collectively suffered more than $1.5 billion in 
     damage from Hurricane Georges. This assistance will be concentrated
     in the areas of housing, health, and economic revitalization.

Environmental Management and Disaster Mitigation ($64 million):

     Assist farmers to use methods that are less likely to result in
     soil erosion, which would reduce the damage from future hurricanes,
     and will encourage farmers to shift to more productive crops.

     Help local governments establish land use planning systems to
     mitigate effects of future hurricanes and protect key ecosystems.

Crisis Corps

Financing will also be provided for the expanded effort by the U.S. National Guard and Reserve to rebuild schools and clinics in the four Central American countries and the Dominican Republic and to deploy 220 Peace Corps volunteers drawn primarily from the new "Crisis Corps" of those who formerly served in the Peace Crops and who now are pitching in to provide short-term assistance.