Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
CENTRAL AMERICAN REGIONAL PROGRAMS
FY 1997 FY 1998 FY 1999 Actuals Estimate Request Development Assistance.............. $6,044,000 $9,625,000 $8,400,000 Child Survival and Disease.......... $4,700,000 $3,900,000 $3,000,000
Introduction
Key areas of U.S. interest in the Central American region include: expanding economic integration; opening markets; improving labor conditions; promoting sustainable development by stemming regional resource degradation and loss of biodiversity; and containing the spread of communicable diseases, especially HIV/AIDS. Central American imports from the U.S. doubled over the last five years to nearly $8 billion and trade links with the United States continue to expand. The Conjunta Central America-USA (CONCAUSA) agreement to increase trade and promote sustainable development, signed by the Presidents of Central America and the United States at the December 1994 Summit of the Americas, provides the shared framework for the trade and environmental objectives of USAID's regional program for Central America. The May 1997 U.S.-Central American Presidents' Summit in San Jose, Costa Rica reconfirmed the commitments under CONCAUSA and the common objectives shared by the U.S. with its closest neighbors.
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 some 64% live below the poverty line. The 1997 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 and the continuing loss of biodiversity and environmental degradation.
To combat poverty and promote sustainable development in Central America, higher economic growth rates are required. That growth must occur in an equitable manner that does not lead to the depletion of the natural resource base and must also 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 worker's rights and 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.
Central Americans, recognizing these and other common development challenges, established the "Alliance for Sustainable Development" in 1994, which provides a shared blueprint to transform the region into a peaceful, prosperous, and democratic area. The United States supports the Alliance through the CONCAUSA Agreement. USAID's Central American regional program works with regional institutions that are part of the Central American Integration system and in partnership with nongovernmental organizations (NGOs) to implement the Summit and CONCAUSA commitments in the areas of hemispheric free trade and environmentally sound natural resource management. The regional program also includes a special strategic objective aimed at enhancing Central American capacity to respond to the threat of HIV/AIDS.
A key feature and success of the Central American program is the continuing, direct involvement of Central American Ministers of Trade, Environment and Labor in supporting regional programs. Despite some residual protectionist sentiments in the region, the Central American Ministers of Trade have achieved interim tariff reductions targets as they move toward a common, lower external tariff by 1999. USAID regional program support to modernize El Salvador's electricity sector regulatory law resulted in US private sector investment in the now privatized electricity distribution companies. Recognizing Central America's commitment and leadership in sustainable development and the environment, President Clinton recently selected the region as a priority area for U.S. Global Climate Change assistance. USAID support to the Central American Commission for Environment and Development (CCAD) in drafting environmental legislation on key pollutants is showing results as air contamination laws were passed in Nicaragua, Panama, El Salvador and Guatemala, and waste water laws in Nicaragua and Honduras. USAID has also helped establish a working group of the Ministers of Labor which is supporting efforts to modernize labor markets.
Other Donors
Data on official assistance flows to the region taken as a whole are not readily available. Besides USAID, other major donors providing support on a regional basis to Central America are the United Nations agencies, the Pan American Health Organization (PAHO), Canada, the European Union (EU), the Nordic countries, and the Inter-American Development Bank (IDB).
FY 1999 Program
The regional program will help increase Central America's readiness to participate in global markets through support for improved trade and investment policies, improved protection of worker rights, productivity-enhancing labor market policies, and increased private investment in energy and telecommunications services. In the environment, the program will support activities with regional economies of scale and cross-border impacts to consolidate a Central American system of protected areas and to harmonize national environmental policies. The regional special strategic objective will help local Central American organizations deliver HIV/AIDS awareness and prevention services for a disease which respects no borders. The $11.4 million in Development Assistance resources will enable the United States to achieve its priority objectives in the region.
CENTRAL AMERICAN REGIONAL PROGRAMS FY 1999 PROGRAM SUMMARY
($000s)
USAID
Strategic and Special
ObjectivesEconomic Growth and Agriculture Population and Health Environ-ment Democracy Human Capacity Develop-ment Human-itarian Assistance
TotalS.O. 1
Increased Participation in Global Markets
- DA
2,900
2,900
S.O. 2
Effective Stewardship of the Environ-ment and Key Natural Resources
- DA
5,500
5,500
Sp.O. 1
Enhanced Central American Capacity to Respond to the HIV Crisis
- CSD
3,000
3,000
Totals
- DA
- CSD
2,900
3,000
5,500
8,400
3,000
USAID Mission Director: William S. Rhodes
ACTIVITY DATA SHEET
PROGRAM: Central America Regional
TITLE AND NUMBER: Increased Central American Participation in Global Markets, 596-S001
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999 $2,900,000 DA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2001
Purpose: To increase the Central American region's readiness to join and honor commitments made under free trade agreements, such as the Free Trade Area of the Americas (FTAA) and the North America Free Trade Association (NAFTA), and to accelerate regional integration into hemispheric and global markets.
USAID Role and Achievements to Date: Through its program supporting Central American Participation in the Free Trade Area of the Americas (PROALCA), USAID has provided technical assistance, training and research to support Central American efforts to reform its trade regime. This has contributed to the adoption of a more outward-oriented regional integration model characterized by lower tariffs, faster implementation of World Trade Organization (WTO) commitments, and fewer non-tariff trade barriers. Central American countries have increased their participation in the FTAA process and now chair three of the 11 hemispheric working groups laying the basis for FTAA negotiations. Reflecting an improved policy framework, Central America's trade performance continues to improve. Over the last five years imports from the U.S. have nearly doubled to almost $8 billion which supports 160,000 U.S. jobs. USAID also promotes private sector participation in the electricity and telecommunications sectors. Recent successes in these areas included passage in Guatemala and in El Salvador in 1996 of regulating laws considered among the most advanced and liberal in the world. These have already resulted in strong expressions of interest by U.S. investors.
Description: USAID directly supports Central American efforts to expand trade to hemispheric and global markets in the following areas:
(1) Further trade openness. USAID is supporting Central American measures to further liberalize both intra- and extra-regional trade. Activities focus on critical non-tariff barriers and emphasize making regional legislation consistent with WTO standards. While fully supportive of San Jose Summit and Summit of the Americas' objectives, Central America's ability to participate in FTAA is severely limited by its shortage of technical expertise to implement existing trade agreements and commitments, dismantle trade barriers, and enhance the region's competitiveness. PROALCA provides training and technical assistance to close these gaps.
(2) Intellectual Property Rights (IPR). USAID supports Central American efforts to strengthen IPR policies and enhance enforcement capabilities through: (a) development of model regional conventions for trademark, patent and copyright protection; (b) increasing public awareness on the importance of adequate IPR protection for investment, technology transfer, and sustainable development; (c) support for regional and national consensus on required IPR policy changes; and (d) technical training for patent, trademark, and copyright registry officials. Through USAID support and encouragement, the Permanent Secretariat for Central American Economic Integration (SIECA) negotiated a Memorandum of Understanding with the U.S. Patent and Trademark Office to cooperate toward strengthening IPR protection. This program also supports implementation of Central American commitments made in bilateral IPR agreements with the United States.
(3) Better investment policies. USAID supports regional efforts to improve dispute resolution procedures, eliminate policy constraints to regional and foreign investment, afford national or most-favored-nation treatment to all investors, and establish international standards for expropriation which
provide for prompt, adequate and effective compensation. USAID's support will facilitate implementation of commitments made by Central American countries in bilateral investment treaties with the United States.
(4) Energy and telecommunications regulatory frameworks. USAID is aiding Central American governments in the design and development of more open and competitive telecommunication and energy regimes which encourage private sector participation. The support provided includes technical assistance on drafting new laws and regulations as well as training in the most relevant aspects for the implementation of the new legislation.
(5) Better functioning labor markets. USAID, along with the IDB, has initiated design of an innovative joint program to build consensus on the steps required to modernize labor markets consistent with the region's social, economic and integration objectives. The new program will also support modernization of the region's labor ministries in areas supporting integration. The program will reinforce USAID's current activities contributing to improved labor-management relations and stronger protection of core labor standards through both improving and simplifying labor legislation and upgrading enforcement. USAID-financed regional workshops and national seminars stress the link between increased trade and better wages, models of labor-management cooperation that contribute to increased productivity and higher wages, the need for greater productivity and improved competitiveness to succeed in hemispheric markets, and workers rights and their relationship to trade preferences.
Host Country and Other Donors: USAID coordinates closely with IDB activities strengthening regional trade institutions and supporting better trade policies. USAID is concentrating on IPR and investment protection, areas where the IDB does not plan major investments. USAID and the IDB are designing a joint activity to help modernize labor markets. USAID maintains close contact with the United Nations Economic Commission for Latin America (ECLA)-Central American Office, which provides research and technical analysis on Central American economic integration issues.
Beneficiaries: Greater Central American integration to hemispheric and global markets will contribute to higher levels of production and increased employment. Beneficiaries will include those enjoying increased employment opportunities and higher incomes throughout the economy but primarily in the export sector. Small producers who depend for their subsistence exclusively on nontraditional agricultural exports directly benefit both from trade liberalization measures leading to more fair exporting conditions, and from a decrease of production costs.
Principal Contractors, Grantees, or Agencies: USAID coordinates with USTR, the U.S. Patent and Trademark Office of the Department of Commerce, the U.S. Department of Labor, the U.S. Customs Service, and the Economic/Commercial Sections of U.S. Embassies in the region. The Permanent Secretariat for Central American Economic Integration is a grantee, as are several governments. Contracts and grants with U.S. and local firms and nongovernmental organizations are planned.
Major Results Indicators: Baseline Target (2000) Trade Openness (total merchandise trade as a percent of GDP) 45% (1994) 50% Readiness to enter hemispheric FTAs (composite index with maximum of 5) 2.7 (1992) 3.5
ACTIVITY DATA SHEET
PROGRAM: Central American Regional
TITLE AND NUMBER: Effective Regional Stewardship of the Environment and Key Natural Resources, 596-S002
STATUS: Continuing
PROPOSED OBLIGATIONS AND FUNDING SOURCE: FY 1999 $5,500,000 DA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: 2000
Purpose: To develop and consolidate a Central American system of protected areas by providing appropriate management models for terrestrial and coastal protected areas, and to promote a strengthened regional regulatory and enforcement framework for environmental management.
USAID's Role and Achievements to Date: USAID's regional environmental program contributes to the achievement of the goals of both the Summit of the Americas Action Plan, and the CONCAUSA agreement signed by the United States and the Central American (CA) countries. USAID supports biodiversity conservation and environmental legislation initiatives in the Central American region through consensus building among key stakeholders, targeted public awareness campaigns, grants to local organizations, and by providing technical and advisory services to help build national and regional capabilities in managing protected areas and in reducing environmental degradation.
In support of conservation of biodiversity and protected areas, over 40 small grants averaging $60,000, have been made to Central American NGOs to develop effective models for addressing specific natural resource issues and to foster CA leadership and organizational strengthening. With USAID assistance, some 39,400 additional hectares are now under improved management, and the concept of the "Mesoamerican Biological Corridor" and its usefulness as a foundation for site specific work has been accepted throughout the region by national governments. The "Corridor" is envisioned as a network of key ecosystems connected through corridors of plant and animal life, both terrestial and marine, extending throughout the istmus. USAID, with cofinancing from the international development banks, established the Mesoamerican-Caribbean Reef Program in collaboration with Mexico and Belize; a sea turtle protection program in Panama and Costa Rica; and a program to provide interim enforcement and surveillance of illegal fishing and manatee hunting, being implemented by local residents in the tri-national Gulf of Honduras.
With USAID support, Central American countries have developed and strengthened environmental legislation and regulations, primarily in water quality, solid waste, and pesticides. Environmental networks of legal and technical specialists have been established, significantly increasing public access to information and level of informed debate. The program has completed a CA-wide comparative diagnostic of lessons learned on forest certification, strengthened the convention on international trade in endangered species (CITES) in the region by support for the development of a regional agreement to improve the control of illegal traffic of flora and fauna, and provided for "rapid response" technical assistance in addressing emergency pollution and contamination problems such as disposal of pesticides and toxic chemicals. Training to judges, controllers, legal advocates, and environmental auditors has strengthened law enforcement initiatives.
Description: The Regional Environmental Program implements these main activities: Central American Protected Areas System (CAPAS), Coastal Zone Management (CZM), and Environmental Protection. The underlying vision for these activities is the establishment of a Central American "biological corridor." Consistent with the CONCAUSA agreement, USAID supports the consolidation of a Central American System of Protected Areas and the gradual ecological restoration and sustainable use of areas surrounding them. CAPAS is envisioned as a network of key ecosystems which are interconnected through "corridors" of biological material, both terrestrial and marine. USAID also supports the Central American Commission for Environment and Development (CCAD), a regional treaty organization supported by all seven Central American countries to specifically address environmental
and natural resource management issues.
In general, poor governance and policies related to coastal zone management hinder the protection and sustainable use of the few existing designated protected areas. Legislation and regulations either do not exist, are inadequate, or are poorly implemented and enforced. USAID programs address these issues while working in priority coastal areas where effective models for protection of core areas are demonstrated and then adapted for application at the national and regional levels. These priority areas have been chosen based on their biological importance and the regional nature of the problems to be confronted. The Coastal Zone Management activities are implemented primarily through grants to local NGOs working with local communities at selected sites within the targeted priority coastal areas to demonstrate replicable solutions to coral reef and coastal zone management.
The Environmental Protection activity is designed to support sustainability and help control contamination threatening priority areas through upward harmonization of environmental laws and regulation throughout the region within the context of the CONCAUSA agreement, and in anticipation of sub-regional free trade agreements. Specific activities underway include: compilation and synthesis of existing environmental legislation in Central America to identify critical areas where additional legislative and regulatory strengthening are required at the national and regional levels; completion of a management risk assessment to evaluate each country's capacity to address the priority environmental contamination risks, implement current laws and design a viable environmental protection program; and harmonized legal frameworks and environmental standards to serve as the foundation for ensuring adequate levels of environmental protection and enforcement of environmental laws and regulations.
In 1999 USAID will incorporate new initiatives in support of Global Climate Change and develop linkages between trade and environment, such as ecotourism, natural forest management and product development, and organic production.
Host Country and Other Donors: USAID works with several donors including: GTZ (Germany), the Nordic countries, Canada, Japan, Switzerland, European Economic Community, the Global Environmental Facility (GEF), World Bank, UNDP, International Union for the Conservation of Nature (IUCN), FAO, IDB, and the Ford and MacArthur Foundations. The estimated other donor contribution to environmental initiatives is over $17 million a year. The Central American Commission for Environment and Development will provide an estimated $540,000 to the program.
Beneficiaries: Program beneficiaries include poor rural families living in, and adjacent to, selected sites receiving sustainable income generation opportunities, and urban poor families receiving expanded services and health-threatening pollution abatement. Regional environmental organizations (e.g., CCAD), and local NGO grant recipients, benefit through greater effectiveness and program sustainability. In 1997 750 Central American judges, prosecutors, public attorneys, legal advisors, nongovernmental organizations (NGOs) and business associations received training in environmental law, regulations and enforcement issues that impact on water.
Principal Grantees, Contractors or Agencies: USAID's grantees and contractors include the Central American Commission for Environment and Development, The Nature Conservancy (TNC), World Wildlife Fund, University of Rhode Island, Cooperative Housing Foundation, International Resources Group, and Winrock International, with support from the U.S. Environmental Protection Agency.
Major Results Indicators: Baseline (1995) Target (2000) Regional Policy frameworks endorsed by CCAD 0 24 Cumulative Number of international and national agreements ratified by all seven Central Americancountries](e.g. Río Biodiversity,
C.A. Biodiversity, C.A. Climate Change, C.A. Forest
Protection, C.A. Sustainable Development, and the
Regional Biodiversity Strategy)1 7 No. of assisted transboundary sites where
local threats to key natural resources and the
environment have been reduced0 10
ACTIVITY DATA SHEET
PROGRAM: Central American Regional
TITLE AND NUMBER: Enhanced Central American Capacity to Respond to the HIV Crisis, 596-SPO1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999 $3,000,000 CSD
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2003
Purpose: To strengthen the capabilities of local Central American organizations to deliver HIV/AIDS prevention services.
USAID Role and Achievements to Date: The future political, economic and social development of Central America is threatened by the HIV/AIDS epidemic. The areas most likely to be affected by HIV/AIDS include work productivity, medical care costs, and the size of the labor force. To maintain economic, political and social stability in Central America, HIV/AIDS prevention activities consider the specific sub-regional commonalities and cross-border transmission. At least three major policy changes have been enacted (blood bank legislation, a sanitary code, and national norms in Guatemala) with a number of other important legislative initiatives under way. A massive regional information gathering process has been completed and dissemination activities are ongoing. There has been a large increase in positive media coverage of the problem. The activity has also reached agreement on an important memorandum of understanding with the United Nations Joint Program on AIDS (UNAIDS) that will support them in implementing an intersectoral approach to HIV prevention throughout Central America. The four point integrated NGO support plan (training, technical assistance, small grants, and information dissemination) has been validated, the first round of small grants (peer education) awarded, and the second round (national documentation/information dissemination centers) is being evaluated. There are two new national NGO networks (Panama and El Salvador) and the electronic NGO database has been widely disseminated and in use. The project's brand of condoms has been developed and launched in one country, with five other countries to follow in the first quarter of 1998.
Description: USAID will support activities on three different levels. On the broadest level, the activities are designed to improve the policy environment for the promotion of HIV programs. On an intermediate level, USAID supports an improved institutional capacity of NGOs and local institutions to deliver HIV prevention programs and to conduct research. Lastly, the activities will promote individual behavioral changes that are required to prevent the spread of HIV/AIDS.
The Central American HIV/AIDS program has three components. The Policy and Public Awareness Component is the vehicle through which USAID will provide assistance in support of interventions that enhance the perceived urgency for and the commitment to HIV prevention programs at the local, national, and regional levels. The three major activities that will be carried out under this component are: regional policy research; leadership training; and policy development and public awareness. Through the NGO Strengthening Component, USAID will assist local NGOs to improve their capacity to deliver HIV prevention programs. This component delivers an integrated package of technical assistance, training, networking and information exchanges, and small grants. The Condom Social Marketing Component will establish a sustainable marketing program to provide affordable condoms to the population at risk of contracting a sexually transmitted infection.
Host Countries and Other Donors: National governments are budgeting insufficient resources to slow the epidemic, and the donor response has been mixed. The Pan-American Health Organization (PAHO) assisted and provided essential budget support for the establishment of a National AIDS Control Program (NACP) in each country. However, the NACPs still have insufficient high level support and/or financial and human resources to be effective. Other donors in the region include the European Union, Japan, Holland, GTZ (Germany), Spain, the IDB, and the Nordic countries. The World Health
Organization Global Program on AIDS, through which PAHO received the bulk of its resources that it channeled to the countries, terminated in 1995 and was superseded by the multiagency UNAIDS. However, this program is still in its development stages and has almost no programmatic support funds available, and it is still unclear what the role of the various member agencies will be. The World Bank has begun a regional project (SIDALAC). However, they are contributing only $1 million of their own funds for all the Americas. The USAID activity is actively engaging these and other potential donors in dialogue to increase the level of response and to improve overall donor coordination.
Beneficiaries: The Central American HIV/AIDS program will strengthen the capacity of 91 nongovernmental organizations and leaders from various sectors (private enterprise, congressional deputies, and the health sector) to deal with the HIV/AIDS crisis in the region. The ultimate beneficiaries of the program are those groups and individuals who are at risk of contracting HIV/AIDS.
Principal Contractors, Grantees or Agencies: USAID is implementing activities through a consortium of U.S. firms (Academy for Educational Development, International Planned Parenthood Federation/Western Hemisphere Region, and The Futures Group) and a cooperative agreement with a U.S. NGO (Population Services International).
Major Result Indicators: Baseline Target AIDS Policy Environment Score (PES)* 43.8 (1996) 48.8 (2000) Percentage of NGOs that score two or higher on the Systematic Approach Scale (SAS)* 71.4% (1996) 86.0% (2000) Number of condoms sold under the project's brand name (cumulative total) .1 million (1997) 97 million (2003)
* The Policy Environment Score is derived from a sample survey of HIV/AIDS experts and reflects the level of support for HIV/AIDS prevention programs. The Systematic Approach Scale is derived from an assessment which measures the capacity of local NGOs to respond with systematic approaches to HIV/AIDS project design, audience needs assessment, and monitoring and evaluation.
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