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11. Competitiveness in Central America: The Road to Sustained Growth and Poverty Reduction

Author:
Liliana Rojas-Suarez, José Luis Guasch, and Veronica Gonzales
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Over the last decade, Central American countries—Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua—have made significant progress in social and economic areas. In particular, they have stabilized their economies after decades of civil war and the economic volatility that plagued the region through the 1990s. Most countries in Central America have taken important steps to improve their business climates, particularly by enhancing macroeconomic stability, improving the soundness of their financial systems, making improvements in infrastructure services and trade facilitation, reducing red tape, and simplifying their regulatory and tax frameworks. As a result, before the 2008 financial crisis, GDP per capita in Central America grew at an average rate of 3 percent per year from 2003 to 2008, which, albeit modest, was the most robust and stable period of growth the region had witnessed since the early 1990s. However, despite this achievement, Central American economies are still lagging behind the rest of Latin America and other middle-income countries by per-capita growth rates of 0.5 to 2 percentage points. Even more worrying are the levels of poverty and inequality, which show the lack of inclusiveness in their growth models. Moreover, recent developments in the region show a number of red flags that are weakening macroeconomic and democratic stability. Significant structural changes are urgently needed to secure sustained and inclusive growth.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Latin America and Central America

12. The United States and Mexico: More Than Neighbors

Author:
Andrew Selee, Katie Putnam, and Christopher Wilson
Publication Date:
05-2010
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
No country in the world affects daily life in the United States more than Mexico. The two countries are deeply intertwined, and what happens on one side of the border necessarily has consequences on the other side. Almost one in ten Americans is of Mexican descent, and a third of all immigrants in the United States today are from Mexico, while well over a half-million Americans live in Mexico. Mexico remains the second destination for U.S. exports after Canada, and millions of American jobs depend on this trade. From south to north the linkages are even greater: over three quarters of Mexico's exports go to the United States and one in ten Mexicans lives in the United States.
Topic:
Economics, Emerging Markets, Politics, Regional Cooperation, Bilateral Relations, Immigration, and Law Enforcement
Political Geography:
United States, Canada, Central America, and Mexico

13. The United States and Mexico: Towards a Strategic Partnership

Publication Date:
01-2009
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
It is time to strengthen the U.S. relationship with Mexico. here are few countries—if any—which are as important to the United States as Mexico. We share more than just a two-thousand mile border. Our economies and societies are deeply interwoven and what happens on one side of our shared border inevitably affects the other side. As the United States seeks to redefine its role in the world, it is vital to start at home, with our neighbors.
Topic:
Economics, Emerging Markets, Regional Cooperation, International Security, Bilateral Relations, Immigration, and Law Enforcement
Political Geography:
United States, Central America, and Mexico

14. What if the United States Sneezed and Latin America Didn't Catch a Cold?

Author:
Megan Davy
Publication Date:
05-2008
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Latin American and Caribbean (LAC) economies, usually susceptible to international financial turmoil, are especially vulnerable to even minor tremors in U.S. markets. Regional policymakers and entrepreneurs, therefore, have been closely watching the current U.S. subprime credit crisis. Here is the good news: all signs point to relatively minor symptoms in LAC countries—despite a rocky financial history during the 1980s and 1990s—thanks in large part to reforms undertaken in response to previous financial crises, as well as continued high commodity prices that will likely buoy export markets. Although the economic downturn in the United States and other global markets will likely expose lingering weaknesses in the region's economy, this latest crisis can provide an impetus to complete the unfinished business of building more modern, resilient economies.
Topic:
Development, Economics, and Emerging Markets
Political Geography:
United States, South America, Latin America, and Central America

15. Upgrading in Agricultural Value Chains: The Case of Small Producers in Honduras

Author:
Ingrid Fromm
Publication Date:
12-2007
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
Local producers, in their interaction with local processors or exporters and international retailers have the possibility to acquire new skills and knowledge. The type of trust relationship and coordination pattern can determine how information flows and how firms upgrade. In addition, the implementation and compliance with standards provides opportunities for learning and acquiring skills and knowledge. Focusing on this kind of interactions, the study explains how local producers in Honduras engage in upgrading and whether this had an impact on the sales of those firms. The majority of the producers in the sample upgraded their products and internal processes. A limited number of producers engaged in functional upgrading. Most of the producers were aware of the important role of standards. They affirmed that in the process of implementing and complying with standards, they have gained new knowledge and were convinced that they succeeded in securing at better position in the value chain.
Topic:
Development, Economics, and Markets
Political Geography:
Central America

16. Great Expectations: Mexico's Short-lived Convergence under NAFTA

Author:
Carol Wise
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Upon Mexico's entry into the North American Free Trade Agreement (NAFTA), neo-classical trade theory assumed, first, that it had the greatest potential for higher rates of growth, productivity and overall welfare gains due to its relatively underdeveloped status; and second, that Mexico's adjustment to an integrated, liberal economy would be the most painful but also the most beneficial. It was envisioned that the blending of Mexico's endowment factors – cheap labour, natural resources, and proximity to the US market – with the abundant capital and advanced technology of Canada and the US would maximize on NAFTA's competitive potential over the long-term. However, these expectations have yet to fully materialize. This paper reviews the convergence/divergence debate with regard to NAFTA and Mexico, and analyzes the empirical data that have been used to tout both the benefits and the costs of asymmetrical integration. In light of the standstill in Mexico's per capita growth since 2001, this paper concludes with a critique of the potential role of NAFTA as a development tool and argues that the steep regional asymmetries call for a more proactive continental strategy.
Topic:
Development, Economics, and Markets
Political Geography:
America, Central America, and Mexico

17. The Missing Links between Foreign Investment and Development: Lessons from Costa Rica and Mexico

Author:
Kevin Gallagher and Eva Paus
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
A developing country will derive long-lasting development benefits from FDI only, if there is the right coincidence between its location-specific assets and TNCs\' global interests, and the right match between the country\'s national linkage capability and TNCs\' strategic interest in domestic sourcing. We argue that Costa Rica and Mexico have been very successful in attracting high-tech FDI due to the cumulative results of past development policies, proximity to the U.S., and trade arrangements. However, a combination of pervasive market failures, government inaction, and changes in TNC strategies explains why the two countries have not been able to reap lasting benefits from high-tech FDI. We conclude that pro-active government policies have to be an integral part of any FDI-linked development strategy. Pro-action is needed to attract FDI, to promote indigenous linkage capability, and to enhance key location-specific assets on an on-going basis in the context of a coordinated policy framework.
Topic:
Economics and Markets
Political Geography:
Central America, North America, and Mexico

18. Food Retailing, Supermarkets and Food Security: Highlights from Latin America

Author:
Mehmet Arda
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The importance of supermarkets in the world food economy has increased radically since the early 1990s. They are now major sellers and buyers of food items not only in developed but also in developing countries. Urbanization and the liberalization of the services sector have been important facilitators of this process.
Topic:
Development, Economics, and Human Welfare
Political Geography:
Latin America and Central America

19. Investing in Health for Economic Development: The Case of Mexico

Author:
Nora Lustig
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Health is an asset with an intrinsic value as well as an instrumental value. Good health is a source of wellbeing and highly valued throughout the world. Health is not only the absence of illness, but capacity to develop a person's potential. Health is also an important determinant of economic growth. Given the importance of health, both as a source of human welfare and a determinant of overall economic growth, the Popular Health Insurance (Seguro Popular) was first introduced in Mexico as a pilot programme by the federal government in 2001, becoming part of the formal legislation in 2003. This study looks at the current situation, and some of the early findings and improvements made so far with regard to public health coverage in Mexico.
Topic:
Development, Economics, and Health
Political Geography:
Central America and Mexico

20. Haiti's Economic Challenge

Author:
Emily Hsu and Robert Pierto
Publication Date:
07-2006
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Haiti's new government faces an enormous economic challenge. Haiti is the poorest country in the Western Hemisphere and among the poorest countries in the world. Two thirds of Haiti's eight million citizens live in poverty. Half of its adult population is illiterate. Only a quarter of its children attend school. Since a brief spike in the 1970's, Haiti's economy has experienced a steady decline as a result of rapacious government policies and, possibly well intentioned, but destructive international sanctions.
Topic:
Development, Economics, and Government
Political Geography:
Central America and Haiti