President Ronald Reagan announces a new program of economic and military assistance to nations of the Caribbean designed to "prevent the overthrow of the governments in the region" by the "brutal and totalitarian" forces of communism. The Caribbean Basin Initiative (CBI) was part of the Reagan administration's effort to curb what it perceived to be the dangerous rise in communist activity in Central America and the Caribbean.
In the course of an address to the Organization of American States, Reagan argued that a massive new aid program to the Caribbean region was vitally necessary. "If we do not act promptly and decisively in defense of freedom, new Cubas will arise from the ruins of today's conflicts. We will face more totalitarian regimes tied militarily to the Soviet Union, more regimes exporting subversion, more regimes so incompetent yet so totalitarian that their citizens' only hope becomes that of one day migrating to other American nations as in recent years they have come to the United States." Specifically, the President called for increases of $350 million in economic aid and $60 million in military assistance to the Caribbean. He also pledged U.S. assistance in increasing Caribbean trade with the United States and encouraging private investment in the Caribbean.
Reagan's proposal was in response to what he and his advisors believed to be an increasing Soviet presence in the Caribbean and Central America. In Nicaragua, the leftist Sandinista regime had come to power in 1979. El Salvador was involved in a bloody and brutal conflict between government forces supported by the United States and leftist rebels. And on the island nation of Grenada, the government of Maurice Bishop was establishing close ties to Cuba and Fidel Castro.
The CBI, however, had little impact on improving the economic situation of the nations it was trying to aid. Eventually the entire concept was allowed to simply fade away, and the Reagan administration chose to employ more forceful anti-communist measures in the region. These included support of the anti-Sandinista Contras, massive military aid to the Salvadoran government, and, in 1983, the invasion of Grenada to remove its leftist government.