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CENTRAL AMERICAN REGIONAL
>> Regional Overview >> Central American Program Overview Introduction
The regional Central American Program (CAP) is designed to strengthen Central American institutions and to promote the integration of the five Central American Common Market countries of Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica as well as participation by Belize and Panama on regional economic, environmental and health (HIV/AIDS) issues.
The 1994 Central American leaders created the Alliance for Sustainable Development (ALIDES) to increase trade and improve management of the region's rich biodiversity. President Clinton signed the Central America-USA Agreement (CONCAUSA) promising U.S. technical support for the implementation of the Alliance's Action Plan later that year. In May 1997, the U.S. and Central American President's met in San Jose, Costa Rica to reconfirm their commitments under CONCAUSA and the common objectives shared by the U.S. with it closest neighbors. In March 1999, the leaders met in Guatemala and again in May in Stockholm during a special Consultative Group meeting to discuss donor coordination in response to the devastation brought on by Hurricane Mitch. To all involved, reconstruction represents both a challenge and an opportunity for the countries to reinforce their shared regional commitments to economic integration, sound environmental management, sustainable development, and now disaster preparedness and mitigation.
Key U.S. goals and interests in the Central American region include: (1) expanding economic growth and prosperity through greater economic integration and open markets; (2) promoting trade and investment; (3) improving labor conditions; (4) increasing sustainable development and sound environmental practices by stemming regional resource degradation and loss of biodiversity; and (5) reducing the incidence of communicable diseases, especially HIV/AIDS.
The Development Challenge
The Central American region encompasses seven small countries: Belize, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. The region's current population of over 34 million will reach 37 million by the year 2000 at the current 2.6% annual growth rate. Approximately half of all Central Americans live in rural areas and two-thirds live below the poverty line. The 1999 United Nations Human Development Index ranks Nicaragua, Guatemala, El Salvador and Honduras among the lowest countries falling into the "medium" human development category. Beyond the challenges of poverty reduction, the Central American countries also remain ill equipped to face the cross-border spread of HIV/AIDS and other contagious diseases, frequent natural disasters, and the continuing loss of biodiversity due to environmental degradation.
To combat poverty and promote sustainable development in Central America, higher economic growth rates are required. Thus, growth must occur in an equitable manner that avoids the depletion of natural resources and must be accompanied by adequate investment in the human resources of the region, in order to be broadly based and sustainable. The region's ability to achieve more open markets, better protection of workers rights, increased labor productivity, and improved regional environmental management are limited by intra-regional trade barriers, sparse technical capacity, weak and inconsistent legal frameworks, and rapid depletion of key natural resources in cross-border areas.
A key feature and success of the Central American program continues to be the direct involvement of Central American Ministers of Trade, Environment and Labor in supporting regional programs to overcome these limitations. The Central American Ministers of Trade are on track in implementing interim tariff reductions as they move toward a common, lower external tariff by 2000. USAID regional program support to modernize energy and telecommunications sector regulatory frameworks in Guatemala and El Salvador contributed to over $3.6 billion in private investments in the past three years. Additionally, USAID provides assistance to support the development and implementation of bilateral intellectual property rights (IPR) agreements. In June 1998, Nicaragua signed a bilateral IPR agreement with the United States. USAID has also helped establish a working group of the Ministers of Labor that is supporting efforts to modernize labor markets and initiate a program to combat child labor. Recognizing Central America's commitment to and leadership in sustainable development and the environment, the Administration selected the region in 1997 as a priority area for U.S. Global Climate Change assistance. The regional devastation in 1998 from tropical forest fires and Hurricane Mitch underscores the region's need to better manage its natural resource base and cope with future extreme climatic events. USAID support to the Central American Commission for Environment and Development (CCAD) is critical in coordinating national level resource management efforts at the regional level involving cross-border watershed/protected areas and cost-effective natural resource information analysis and use such as the recent information-sharing agreement between NASA and the CCAD.
USAID's Central American program is providing critical support to ensure that national efforts mesh, where appropriate, with regional integration and cross-border activities, especially in the areas of trade and environment. Under the Central American and the Caribbean Emergency Disaster Recovery Fund (CACEDRF), the Regional Program is implementing a targeted two-year effort to assist the region's Mitch affected countries to improve their collective capacity to manage transnational watersheds, improve standards for roads, and improve education in Costa Rica in areas affected by Mitch-related migration. The program will continue support for economic integration, opening of markets, energy and telecommunications privatization, and improved labor conditions to spur economic recovery and wider participation in economic growth.
Other Donors
Besides USAID, major donors providing support on a regional basis to Central America are the United Nations agencies, the Pan American Health Organization, Canada, the European Union, the Nordic countries, and the Inter-American Development Bank (IDB).
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Last Updated on: December 12, 2000 |
