The Economic Power of Central America Without the Division into Five Countries

Historical Context

• Federal Republic of Central America: Existed for about 15 years two centuries ago.
• Composed of Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica.
• Panama followed a different path as part of Gran Colombia.
• Declared its absolute independence from Mexico and Spain in 1823.
• Francisco Morazán: Honduran leader, face of unionism in the region.

Hypothetical Situation

• If it existed today, it would be a nation with 46 million inhabitants and a territory of 423,000 km².
• It would be the seventh largest economy in Latin America with a GDP of approximately US$200 billion.
• In union with Panama, the economic power would be greater.
• It is a major exporter of pineapples, cardamom, bananas, and coffee.

Division and Conflicts

• Internal Conflicts: Tensions between liberals, conservatives, centralists, and federalists.
• Disagreements over provincial interests and limited resources.
• External Conflicts: Tensions with Mexico, Colombia, and England (over Belize).
• The United Kingdom never officially recognized the Republic.

Consequences of Independence

• Independence has not guaranteed better living conditions in the region.
• Example of Costa Rica: Has created opportunities by managing its own destiny.

Current Economic Integration

• Central American Common Market (CACM): Free trade area with a common external tariff since 1960.
• Little effectiveness in economic integration, the customs union is distant.

Need for Integration

• Central American Integration System (SICA): Also includes Panama, Belize, and the Dominican Republic.
• Integration necessary due to being small and intertwined countries.
• Challenges such as natural disasters and drug trafficking require joint coordination.

Advances and Challenges

• Joint procurement of medicines has saved US$90 million (2011-2019).
• Integration faces dispersion of actions, inadequate funding, and dependence on international cooperation.
• Political Challenges: Strengthening democracy and political stability is crucial.
• Violence and territorial control are persistent problems.

Reflection

• Robust institutions are essential to improve social, economic, and environmental aspects in the region.