One of a series of booklets on world issues, this document summarizes some of the salient aspects of Central America with special attention given to Nicaragua and El Salvador. The booklet identifies the interests, policies, and choices of the major actors in the drama that engulfs the region and, increasingly, much of the world. Chapter one briefly outlines the historical background of Central America characterized as a friction point where European nations and the United States have clashed with each other and with local populations over control of the region and its international transportation routes. Chapter two focuses on Nicaragua and El Salvador as centers of controversy. Recent history, economic involvements, and political and social development are explored. Chapter three presents four possible scenarios for Central America in the years between 1985-1990: (1) Nicaragua isolated; (2) Central America divided; (3) return to the center; and (4) regional war. Three economic strategies for the 1980's are explored: (1) the new export orientation; (2) the continuance of the strategy of the 1970s; and (3) the reduction of dependence. Chapter four investigates Central America's relationship with the rest of the world. Chapter five discusses U.S. policies toward Central America including U.S. interests and U.S. policy options. The "Talking It Over" section offers questions for students and discussion groups. (RSL)