Foreign Assistance

GAO provided information on economic aid to Panama, focusing on cash grant programs implemented pursuant to the Dire Emergency Supplemental Appropriation Act. GAO found that: (1) the Agency for International Development (AID) has not justified the size and composition of Panama’s economic aid package with sufficient documentation; (2) although AID believes that the economic assistance program has been a success, the Panamanian economy began recovery before U.S. economic assistance was introduced; (3) AID could not determine the impact of private- and public-sector programs on the Panamanian economy, standard of living, debt, and unemployment due to unspecified target areas, delays in program implementation, and the lack of implementation guidelines; (4) Panama’s economy began to recover once political and economic burdens were removed; (5) Panama’s gross domestic product was restored to nearly pre-1987 levels and grew by about 9.3 percent in 1991 despite delays in cash grant program implementation; (6) AID needed to thoroughly analyze targeted countries’ economies, set economic reform conditions, and withhold funds until conditions were met before providing assistance; and (7) AID assistance could have been effective if private-sector reactivation funds were disbursed after economic reforms were implemented.