A bill to encourage economic development in Central America, and to increase the sugar import quota.

Authorizes the President, during FY 1988 and 1989, to issue new U.S. guarantees of eligible debt obligations made or issued by the Governments of Costa Rica, El Salvador, Guatemala, or Honduras in exchange for existing debt obligations owed by such countries to private financial institutions.

Requires that the United States guarantee certain debt obligations which Costa Rica and Guatemala issue in exchange for no more than 40 percent, and which El Salvador and Honduras issue in exchange for no more than 100 percent, of the existing debt obligations owed by such countries to private financial institutions.

Directs specified U.S. Government lending institutions with loans outstanding to any such country to take steps to reduce the interest rate applicable to such loans to the prevailing rate minus four percentage points. Directs the Department of the Treasury and the Department of State to take steps to implement such reductions and encourage other creditor countries to such countries to make similar reductions.

Increases the import quota on sugars, syrups, and molasses. Allocates additional amounts for such products of: (1) Guatemala, Honduras, El Salvador, and Costa Rica; and (2) Nicaragua, if the Nicaraguan Reconciliation Commission reaches conclusions satisfactory to all participants.

Amends the Food Security Act of 1985 to extend the sugar price support program indefinitely. (Currently such program applies through the 1990 crops of sugarcane and sugar beets).