Most of Central America took a giant step toward increased economic integration this year with the start of the Central American Free Trade Agreement with the United States (CAFTA), which links the United States and four of the five countries of Central America in economic matrimony.
At year’s end, only Costa Rica had not ratified the trade agreement.
El Salvador, Guatemala, Honduras and Nicaragua all reported increased export levels this year under CAFTA, though the average level of economic growth in Central America remained around 4%.
The year ended with Central America taking another step toward negotiating a subsequent free-trade agreement with the European Union.
The union is Central America’s second most important trade and investment partner after the United States.
In other trade news this year, Panamanians voted overwhelmingly in November to approve a referendum to expand the Panama Canal. The $5.2 billion project is viewed as the future of that country’s canal-based economy.
Against the Wall
Central Americans also united this year in their opposition to the United States’ plans to build a 700-mile wall along the Mexican border in hopes of curbing illegal immigration.
El Salvador, the United States’ staunchest ally in the region, and the only country in Latin America that still has troops in Iraq, echoed the criticism of Mexico and others, arguing that the wall would not stop migration, but would increase risks to human rights.
There are millions of Central Americans living in the United States, sending home billions of dollars each year in remittances to family members. That money has become an increasingly important element of many economies in the region.
As people become more dependent on remittances, more and more Central Americans try to cross into the United States each year in search of work. The trip is perilous, with many people dying or being abused or raped along the way. Honduras this year reported that 156 of its countrymen and women died this year en route to “El Norte.”
Increased gang-related crime continued to plague northern Central America this year.
Close to 500 women were killed this year in Guatemala, and the majority of those “femicides” have gone unpunished, according to Guatemalan rights groups.
In neighboring El Salvador, the murder rate is now among the highest in Latin America, with an average of 10 people killed every day.
Honduras also continued to battle gang problems and increasing violent crime this year. President Manuel Zelaya attempted a new plan this year to engage and begin dialogue with gang members, rather than just lock them up. At year’s end, it was too soon to say if the plan was working.