Common currency, credit, and passport for SICA countries?

Following their lackluster meeting to respond to the financial crisis in October, the presidents of Central America came together yesterday and agreed to a 41 point plan including several major stimulus and stabilization plans.

Among them are agreements in principle for common passports allowing freer traffic between the member countries (4 countries have already signed on to this), a credit fund accessible to member governments, and perhaps most notably, a common currency (El Salvador and Panama are currently dollarized, while the other 6 SICA countries use their own currencies; no agreement was made as to what currency would be adopted, or if a new one altogether would be instituted).

Details on each of these have yet to be laid out, and while the proverbial devil will inevitably be found therein, these agreements should be seen as potentially major shifts in moving towards regional financial integration. While international press coverage has been slim so far, I expect the development (if it happens) to become major news in the coming weeks, and for the comparisons to the EU will abound (if not only by the EU countries themselves, with whom the Central Americans just signed a separate agreement, making the EU the largest development aid donor to the sub-region).

In other news to come out of the meeting, Daniel Ortega assumed the SICA presidency for a 6 month term. In his acceptance speech, the Nicaraguan president didn't miss the chance to stick to the world's capitalists, declaring "Nos vendieron un modelo, nos impusieron un modelo, y ese modelo nos tenía y nos tiene amarrado de manos de pies, y nos ha tenido amordazado," and adding "Hoy más que nunca tenemos que unirnos."


Sources: SICA, Univision, El Nuevo Diario, AFP, Deutcshe-Welle

SICA Presidents gather in Honduras tomorrow

Tomorrow, the presidents of the 8 member countries of the Central American Integration System (SICA) will gather in San Pedro Sula, Honduras' "second city" and industrial center for the XXXIII SICA summit and to follow up their October 4th emergency meeting in response to the global financial crisis, held in Tegucigalpa.

Perhaps in response to the criticism of the October 4th meeting that the agreements made therein were broad and toothless, the agenda for tomorrow's summit features presentations by each president on the concrete actions being taken to shield their respective economies from the pangs of the global financial crisis.

Today, off-site technical meetings are being held with foreign and finance ministers from each country. Tomorrow's meeting with the presidents will be held at the exclusive Honduran-Arab Club.

According to press reports, a ceremony has been planned tomorrow for Honduran President Manuel Zelaya to be turn over the role of "President Pro Tempore" of the SICA to Nicaraguan President Daniel Ortega, a position he will hold through summer 2009.

Reports also confirm that the only president that will not be present is Costa Rica's Oscar Arias, who is currently travelling through Asia to negotiate possible bilateral trade deals.

Can Central Americans expect much from these meetings? Perhaps they shouldn't hold their breath through the weekend, and like anywhere else, things will still probably get worse before they get better. Nonetheless, the individual presentations on each country's response to the crisis is both a promising follow-up to the vagaries pronounced 2 months ago, and a good chance for the region's leaders to get a broad sense of the measures being taken in the region and the menu of options available to them. Hopefully, it will translate to more concrete pronouncements for which citizens can hold their leaders accountable to move on.

Sources: El Heraldo, La Prensa, El Informador, Inside Costa Rica, Associated Press

Central American presidents gather in Honduras

Presidents Oscar Arias, Alvaro Colom, Daniel Ortega, Antonio Saca, and Manuel Zelaya gathered on Saturday in Tegucigalpa, Honduras for a special summit of the Central American Integration System (SICA). Presidential envoys from Panama, Belize and the Dominican Republic attended, as well.

The summit was designed to forge a regional response to pending issues of mutual import, such as fiscal responses to the US economic crisis, integration efforts to increase intra-regional commerce, and new alliances with international actors aside from the economically-shaken US.

The meeting of presidents, which followed a technical meeting of ministers and experts on Friday, resulted in a special declaration, signed by each of the heads of state, which stipulated 7 main agreements:

1) Defend and strengthen intra-regional commerce, which is currently on the rise

2) Seek concrete mechanisms through the SICA and national economic ministries to support continued growth in intra-regional commerce.

3) Urge the SICA's banking entity (BCIE) to extend credit lines of up to $200 million to national central banks, as well as the same amount to private lenders, in order to combat the negative effects of the international economic crisis, as well as the onset food security crisis.

4) Urge the SICA to continue its push for increased regional integration where possible in order to shore up individual / national vulnerabilities.

5) Encourage the SICA's council of ministers to design a regional plan (in the next month) that will help mitigate the effects of the international economic crisis on the region's employment rate, agricultural production, and overall economic productivity.

6) Seek concrete mechanisms for national ministers to stimulate agricultural production and social and public investment in social and economic programs.

7) Encourage the SICA's council of ministers to seek alliances with countries in thee South, Asia, and the Caribbean.

Popular reaction to the meetings was mixed; some officials noted that the summit represented a concerted and solid first step towards a regional response, while others considered the meeting and its resolution devoid of any substantial or action-oriented measure.

Sources: El Heraldo, AFP, Prensa Latina, Xinhua Net, Sica.int