USAID CBJ FY 2002: Central American Regional

Summary: USAID will support Central American efforts to increase the region's trade competitiveness and readiness to participate in subregional, hemispheric, and global markets. Increasing the potential for expanded trade contributes to higher levels of employment and incomes and supports the region's sustainable development objectives. USAID's Central American regional trade project, the Program Supporting Central American Participation in the Free Trade Area of the Americas (PROALCA), focuses on growth by targeting the trade development aspect of the USAID regional development program. In this context, the strategy seeks to increase regional competitiveness through programs that facilitate regional involvement in trade regimes, i.e., the World Trade Organization (WTO) and Free Trade of the Americas Act (FTAA); seeks to enlarge the internal market of the region; and works to strengthen some of the elements of economic and trade infrastructure (energy, customs, roads). The program does not focus on macroeconomic policy or institutional restructuring, but rather works at the policy level of economic infrastructure. The strategy responds both to USAID's Agency-wide goal of broad-based economic growth and to Central America's pursuit of an outward-looking, export-led strategy as the best way to achieve rapid, sustainable, and equitable economic growth. PROALCA Phase I will be completed in 2001. Phase II activities will be initiated in FY 2002.

As evidence of positive achievements of USAID collaboration with Central American governments, the program results section of the Central American Regional strategy document hailed successes in areas such as trade openness (tariff reduction, regional and bilateral free Trade Agreements, levels of imports from the United States, and increases in intra-regional trade), expanded adoption of Intellectual Property Rights (IPR) laws, protection of workers' rights, and advances in energy and telecommunications. Under the new strategy, the Mission will continue working in most of these areas. Direct beneficiaries are people in Central American countries and the Dominican Republic, and Central American electricity consumers.

Key Results: 1) promoting more open trade and investment policies, which will permit Central America to take fuller advantage of greater trading opportunities presented by an increasingly integrated world economy; 2) accelerating the Central America's own process of WTO-consistent, regional economic integration, making the region as a whole a more efficient competitive economic unit; and 3) supporting efforts to improve the functioning of regional labor markets while strengthening the protection of core labor standards.

Performance and Prospects: Implementation under this objective will start in FY 2002.

Of the FY 2001 DA funds, $100,000 will be used to initiate Phase II and will continue support for involvement in free trade regimes (i.e., WTO and FTAA), and enlarge the internal market of the region, enhance the technical and program capacity of Labor Ministries, increase the competitiveness of the labor force, and harmonize labor laws and regulations.

Of the FY 2002 $2,600,000 DA funds, approximately $1,600,000 will be used to increase regional competitiveness through more open trade and investment policies in support of regional involvement in free trade agreements, i.e., WTO and FTAA and to strengthen some elements of economic and trade infrastructure (energy, customs, roads); $500,000 will go to support the enlargement of the internal market of the region; $500,000 will be expended to enhance the technical and program capacity of CA Labor Ministries, increase the competitiveness of the region´s labor force, and harmonize labor laws and regulations in the region.

Other Donor Programs: USAID is the only bilateral donor with a strong regional presence and will continue to play a unique role in regional trade and investment initiatives. The IDB also funds activities to help modernize labor markets and will provide assistance to regional authorities in energy and customs areas. USAID maintains close contact with the United Nations Economic Commission for Latin America-Central American Office, which provides research and technical analysis on Central American economic integration issues. The regional program played a catalytic role in donor coordination during the previous strategy period, helping the Central American Secretariat for Economic Integration (SIECA) to leverage other donor resources; PROALCA also builds on programs funded by other donors, such as the Internet site financed by the Canadian International Development Agency (CIDA) to expand trade public awareness activities. The European Community has not been active recently in the economic-growth-through-trade area, but is preparing to renew its involvement.

Central America Program: 596-005

U.S. Financing

(In thousands of dollars)

	Obligations		Expenditures		Unliquidated
Through September 30, 1999	0	DA	0	DA	0	DA
	0	CSD	0	CSD	0	CSD
	0	ESF	0	ESF	0	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA
Fiscal Year 2000	0	DA	0	DA
	0	CSD	0	CSD
	0	ESF	0	ESF
	0	SEED	0	SEED
	0	FSA	0	FSA
	0	DFA	0	DFA
Through September 30, 2000	0	DA	0	DA	0	DA
	0	CSD	0	CSD	0	CSD
	0	ESF	0	ESF	0	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA
Prior Year Unobligated Funds*	0	DA
	0	CSD
	0	ESF
	0	SEED
	0	FSA
	0	DFA
Planned Fiscal Year 2001 NOA	100	DA
	0	CSD
	0	ESF
	0	SEED
	0	FSA
	0	DFA
Total Planned Fiscal Year 2001	100	DA
	0	CSD
	0	ESF
	0	SEED
	0	FSA
	0	DFA
			Future Obligations		Est. Total Cost
Proposed Fiscal Year 2002 NOA	2,600	DA	17,350	DA	20,050	DA
	0	CSD	0	CSD	0	CSD
	0	ESF	0	ESF	0	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA

Central American Regional

Activity Data Sheet

Central America Program: 596-005

U.S. Financing