KEY TAKEAWAYS
KEY TAKEAWAYS
The three northernmost countries of Central America — Guatemala, El Salvador and Honduras — are among the smallest and poorest in the Western Hemisphere. Though often overlooked, their location at the nexus of North and South America makes them dangerous to ignore. Political and economic turmoil in this strategically located region can reverberate throughout the Americas.
Geography makes the region vulnerable: it lies along transnational routes used not only by the traffickers of South American drugs destined for U.S. consumers but also by an increasingly globalized flow of migrants hoping to find freedom and economic opportunity across the U.S. border.
Proximity to the United States also makes the region tempting to competitors eager to challenge U.S. influence. Over the past decade, China has persuaded the governments of both Honduras and El Salvador to break relations with Taiwan by promising increased trade and investment, especially in infrastructure. Guatemala and neighboring Belize are now the only holdouts in Central America, along with Paraguay in South America plus Haiti and three small Caribbean island-states.
But northern Central America has also shown remarkable resilience. Despite persistent poverty and violence, a region that endured civil war and military rule only three decades ago has made significant progress, albeit unevenly. Northern Central Americans have grown more prosperous overall, even as rural areas languish and the number of people living in crime-ridden urban settlements explodes. Democratic governance has also survived, though Freedom House labels El Salvador, Honduras and Guatemala as only “partly free.”
And unlike the wealthier countries of South America, where China is now the predominant trading partner and a major source of foreign investment, the United States remains the region’s lodestar economically, politically and culturally.
With U.S. Secretary of State Marco Rubio vowing to prioritize “our own neighborhood,” policymakers should build on one of the United States’ greatest strengths in the region: The multivarious connections, mutual interests and shared values that bind Central American and U.S. society together. Strong U.S.-Central American partnerships — not just with government officials but with a variety of actors, including businesses, independent media, human rights defenders, religious leader and local activists — can become force multipliers, strengthening governance by delivering services, piloting new approaches and uncovering fraud, making the entire region (including the U.S.) stronger, safer and more prosperous.
U.S. engagement with northern Central America has often revolved around efforts to improve security by stopping the flow of illicit drugs and curbing the violence that undermines development and drives migration. Congress has appropriated more than $3.7 billion for the region since 2016 under various programs, including the Central American Security Initiative (CARSI) — an inter-agency strategy designed to support narcotics interdiction, disrupt criminal networks, prevent gang violence and strengthen local police by providing equipment, technical assistance and training.
The bulk of security funding went to the three so-called Northern Triangle countries, though the other four countries in Central America (Belize, Nicaragua, Costa Rica and Panama) also received assistance.
Has CARSI worked? Yes and no. Since peaking in the early 2010s, criminal violence in the region has fallen significantly due to a combination of factors. But better policing combined with violence prevention programs can have an impact according to one of the few meta reviews of assistance to the region, especially when the latter are well-resourced and targeted to at-risk communities.
Security forces that are overwhelmed by street crime cannot counter the region’s greatest threat: transnational criminal groups.
But insecurity continues to undermine development, depriving Central Americans of hope for safe, productive lives at home. Security forces that are overwhelmed by street crime cannot counter the region’s greatest threat: transnational criminal groups that use the region for a variety of illicit activities, including drug trafficking, co-opting local officials in the process.
The United States must constantly re-evaluate its engagement in northern Central America to keep up with ever-changing threats. It needs to work at both the national and community level to leverage gains made and foster partnerships that will make U.S. involvement less necessary in the future.
In recent years China has courted Central American governments, offering high-profile construction projects such as highways and stadiums to encourage them to break with Taiwan. But many Chinese promises have failed to come to fruition, leaving the region with growing trade deficits and rising foreign debt.
In 2023, Honduras became the latest Central American nation to recognize the People’s Republic of China; El Salvador had already done so in 2018. Only Guatemala still recognizes Taiwan despite Chinese retaliation, including a 2024 ban on the importation of Guatemalan coffee.
Chinese cultural, economic and political influence remains minimal, however. The U.S, which has an $8 billion surplus with the Central American-Dominican Republic Free Trade Association (CAFTA-DR), is still the region’s largest trading partner by far. The United States is also home to some 3.3 million people born in the region (1.4 million from El Salvador, 1.1 million from Guatemala and 770,000 from Honduras). Although most Central American immigrants in the U.S. have less education than the overall immigrant population or U.S.-born citizens, they have higher rates of labor force participation, especially in key sectors such as construction, agriculture and food services.
Central Americans send much of what they earn back to their countries of origin. Remittances represent about a quarter of GDP in Honduras and El Salvador and about a fifth in Guatemala. Economists warn that cutting back this inflow, rather than formalizing and mobilizing it for productive investment, could push millions even deeper into poverty.
These close economic and social ties have made Central Americans among the most pro-American people in this hemisphere. While nationalism may color views of the United States in Mexico and South America, Central American attitudes toward the United States are overwhelmingly positive: More than 80 percent of those surveyed in Guatemala, El Salvador and Honduras view the United States favorably, according to the 2024 Latinobarómetro poll. In contrast, only about 50 percent hold favorable or highly favorable views of China. But the United States needs to nurture these favorable relations carefully.
Northern Central America remains fragile both politically and economically. The region was among the last in the Americas to emerge from military-dominated rule. Honduras suffered a military coup in 2009 that continues to polarize the country’s politics. Guatemala and Honduras emerged from brutal armed conflicts in the 1990s that left an estimated 150,000 Guatemalans dead or disappeared as well as 75,000 Salvadorans. Peace accords negotiated with the help of the United Nations and the United States brought a measure of political peace, but neither security nor prosperity.
The failures of elected governments to ensure citizen safety or provide stable, decently paid employment — combined with judicial systems that have proven unable or unwilling to address deeply entrenched corruption — are not only fueling migration, but also undermining democratic norms and values. Today, nearly half of Hondurans (43 percent), a third of Guatemalans (33 percent) and about a quarter of Salvadorans (26 percent) believe it makes no difference whether a government is democratic or not, according to the Latinobarómetro survey.
But attitudes toward democracy are fluid. In Guatemala, preferences for democracy rose by seven points from 2023 to 2024 after Bernardo Arévalo won an upset victory in the 2024 presidential election.
Arévalo’s predecessor, President Alejandro Giammattei, had taken steps throughout his term to undermine the independence of the country’s judiciary and civil society, including the media. And during the electoral process, the outgoing government attempted to tilt the playing field by excluding candidates from both the left and the right.
Arévalo’s anti-corruption message resonated with Guatemalan voters. Civil society actors — led by Indigenous leaders — mobilized to defend the results, taking to the streets in nationwide protests. The U.S. government also weighed in, pulling the visas of hundreds of Guatemalan lawmakers for trying to prevent Arévalo from taking office.
In El Salvador, President Nayib Bukele cruised to an overwhelming electoral victory in 2024 based on his success in crushing the country’s powerful street gangs. El Salvador went from suffering some of the highest homicide rates in the world to one of the lowest, though some analysts question the El Salvador government’s statistics.
Bukele’s success has come at an enormous cost, however. His government suspended due process guarantees in March 2022 under a state of emergency that remains in effect nearly three years later. His government has arrested more than 80,000 suspects under the decree, most of whom remain in prison awaiting trial.
Even before imposing the state of emergency, the Bukele government had solidified its control of both the national legislature and the courts, purging the judicial system of independent prosecutors and judges. Critics charge that El Salvador has become a one-party state under a permanent state of emergency that restricts civil liberties and criminalizes dissent.
Bukele’s strong-arm rule has made him the most popular president — or “coolest dictator” — in all of Latin America. But his consolidation of power is part of a dangerous trend toward authoritarianism, using tools that are being wielded by leaders from both the right and the left.
Honduras faces general elections in November 2025 amid rising distrust and polarization. Honduras is the second-poorest country in Central America (after Nicaragua) and the least stable. Like its neighbors, the country’s future as a flawed but functioning democracy remains uncertain.
Though it never suffered the brutal armed conflicts that engulfed neighboring Guatemala and El Salvador during the late 20th century, Honduras endured decades of military-dominated government. The armed forces intervened again in 2009 to topple an elected government, ushering in 15 years of increasingly corrupt National Party governments. Former President Juan Orlando Hernández is now in a U.S. federal prison on drug trafficking charges.
Current President Xiomara Castro was elected in 2021 amid high hopes for democratic renewal. But her government has also faced allegations of high-level corruption and judicial interference. And instead of affirming electoral democracy, the Castro government has allied itself with the government of Nicolas Maduro in Venezuela, praising his sham election in 2024 as an “unquestionable triumph.”
Whether Honduras can hold credible elections will depend on the independence of the country’s courts and its electoral authorities. It will also depend on the willingness of international and domestic observers to monitor both the campaign and the vote count. Perhaps most importantly, it will depend on strong civil actors — from business associations to human rights groups to religious organizations — that are ready to defend their right to a democratic vote.
Just south of Honduras lies Nicaragua, another Central American country that is overwhelmingly dependent on U.S. trade and migrant remittances. Nicaragua is now a full-fledged dictatorship: Since taking office in 2006, President Daniel Ortega has undermined the independence of electoral authorities, packed the courts, and intimidated or closed news media — all while enriching his family and cementing the support of business cronies through corrupt dealmaking.
The repression accelerated after 2018, when security forces killed more than 300 demonstrators. Since then, Ortega has engineered his re-election in a sham vote after arresting his opponents, shut down thousands of non-profit organizations, detained and exiled Catholic Church authorities, and deported hundreds of dissidents after stripping them of citizenship. Nicaragua has aligned itself firmly with the region’s other two dictatorships — Cuba and Venezuela — and has even accepted Russian military equipment and training, including access to military aircraft and naval vessels.
Under Ortega’s rule, emigration has exploded, with an estimated 200,000 people leaving the country — the largest outflow in Nicaragua’s modern history, surpassing the numbers that fled during the armed conflicts of the 1970s and 80s.
The annihilation of Nicaraguan democracy is a cautionary tale for the region.
The annihilation of Nicaraguan democracy is a cautionary tale for the region. The three countries to Nicaragua’s north still hold elections, but democratic institutions and the rule of law remain fragile. Guatemala, El Salvador and Honduras have diverged politically in recent years, but each country faces challenges to civil liberties and democratic governance as leaders from across the political spectrum undermine judicial dependence, threaten political opponents and attack civil society groups.
It is no accident that Ortega, after capturing many business elites and much of his political opposition, set out to destroy civil society, including the Catholic Church. The United States needs to protect its partnerships in the three fragile countries to Nicaragua’s north to make sure that democracy not only survives but thrives.
Addressing political and economic turmoil in the small countries that lie at the critical juncture between North and South America requires a society-wide approach that enlists the support of Central American citizens in their own security, building on the strong social and economic ties that already unite U.S. citizens with their Central American neighbors.
The U.S. has the opportunity to build on its strengths to help the countries of northern Central America thrive economically and politically. It should bolster both government institutions and the non-governmental actors who hold those institutions to account. Respect, policy focus, constant attention, and increased investment can go a long way to achieving U.S. objectives.