Central America: Heads of State, WB President Zoellick agree on action plan to boost integration and development

Press release No. 2011/031/LAC

San Salvador - Heads of State and top officials from the Central American Integration System (SICA) and World Bank Group (WBG) President, Robert B. Zoellick, agreed today to join efforts towards regional cooperation and integration and adopted a comprehensive agenda that includes an action plan with more than 20 specific measures.

The Action Plan includes initiatives in five pillars: economic; social inclusion; security; climate change and natural disasters; and, support for institution building and the rule of law. The objective behind the reinvigorated integration agenda adopted by the Heads of State is to address Central America's challenges in an increasingly globalized economy, sustain its social gains after the crisis, deal with crime and violence, and adopt risk management strategies to confront emerging risks, such as natural disasters, climate change and health epidemics.

Today, integration in Central America is vital to expanding economic opportunity and generating prosperity through deeper ties among countries in the region and increasing links to the global economy, said Zoellick. Integration can help support Central American democracies, as well as its institutions: whether they be national, intergovernmental or private. Together Central America can resist the threats that might overwhelm a single government.

Presidents and high level officials from Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Panama met in an extraordinary Summit, hosted by the Government of El Salvador and sponsored by the World Bank Group (WBG).

Zoellick noted El Salvadoran President Mauricio Funes - leadership in re-launching regional integration, and thanked him and the people of El Salvador for their hospitality in hosting the summit. Additionally, the summit agenda recognized the need to strengthen civil society  by providing the private sector, business, and non-governmental organizations the opportunity to participate. The integration agenda action plan includes common goals in the areas of health, education, basic coverage of social services and living conditions in
general, within and among Central American countries; and details specific measures such as:

• The commitment to conclude the integration of Panama to the subsystem of economic integration (Secretariat of Economic Integration for Central America, SIECA).
• A commitment to strengthen the institutions responsible for regional integration.
• A call to continue promoting the customs union based on the progress made by El Salvador Guatemala and Honduras.

Regional trade flows in Central America have expanded over the past years. Today 20 percent of the region's exports go to other Central American countries. The progress towards achieving a Central American Common Market has also been substantial. It has unified most of the external tariffs and made significant progress in eliminating duties on most products traded between Central American countries.

The World Bank Group will further support Central American regional integration through a package of initiatives. " It will finance technical and advisory services through a $1.3 million two-year trade facilitation window. " It will also support a wide range of trade facilitation efforts that deepen integration (single-window merchandise clearing processes; standardization of quality and phyto-sanitary controls; and improvements in the trading capacity of small market participants). These initiatives can help the region seize opportunities for CAFTA-DR and the new European Union Association Agreement.

As part of its commitment to boost the regional integration process, the World Bank Group will support a training program managed by INCAE Business School that will strengthen the capacity of the Central American civil servants in the area of public administration. Some of the world's leading practitioners -- drawn from the fields of economics, law, international political economy, and
business administration -- will lead the program.

The WBG will also support regional trade promotion efforts through a technical assistance facility that will strengthen SIECA's capacity to implement an integration agenda. The grant will include the elaboration of an assessment of SIECA's structure and preparation of a strategic regional integration plan. Recognizing the critical importance of judicial transparency and accountability
to the region, the World Bank Institute has partnered with the Latin American Judicial Summit, the Legal Department, to design an Action-Learning Program and is coordinating a program of support.

The World Bank Group has about $5 billion of committed funds to the region, including almost $1 billion from the International Finance Corporation (IFC), its private sector arm. Commitments for fiscal year 2010 reached $1.74 billion ($1.22 billion from the World Bank and $520 million from IFC).

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For more information about the World Bank's work in the region, please visit: www.worldbank.org/lac