San José, Costa Rica, since 1956

Regional Integration Reforms Postponed

COSTA Rica was accused this week ofimpeding efforts by the rest of CentralAmerica to open up borders and create aneconomically unified region.The accusations came the day before asummit of the region’s Presidents Tuesdayin Guatemala to discuss the future ofregional integration.The primary goals of the summit wereto put integration efforts back on the righttrack and reform the Central AmericanParliament (PARLACEN), which has beensharply criticized in recent years.Though the Presidents made a handfulof formal agreements at the summit,reform of PARLACEN was put on hold fortwo months.SINCE the 1950s, Central Americancountries have been taking steps to integratetheir economic and political systems.After being halted by civil wars in the1980s, the process was revived in 1991with the establishment of the CentralAmerican Integration System (SICA).Since then, progress has been slow.While some – perhaps most notably PARLACENPresident Mario Facussé – blameCosta Rica, others insist integration hasbeen plagued by inefficient financing andinability to address regional needs.COSTA Rica is the only CentralAmerican country that is not part of PARLACEN,created in 1991. Nor does thecountry participate in the judicial branch ofSICA – the Central American Court ofJustice.It also has been slow to join a customsunion that would allow the free passage ofgoods, and eventually people, across bordersin the region. Guatemala and ElSalvador initiated efforts toward a customsunion in 1992, and in March this year theyintegrated their mutual border to facilitatethe movement of people and goods.Honduras and Nicaragua joined the customsunion process in 2000. Costa Ricaentered the efforts in 2002 and in November2003 joined an official agreement that willultimately lead to its participation in theunion, planned since the 1990s.FACUSSÉ on Monday blasted CostaRica as “anti-integrationist.”“In their schools they teach about thebenefits of not being integrated intoCentral America. It is considered the Switzerlandof CentralAmerica, but fromSwitzerland to CostaRica there is a worldof difference,” hesaid.However, PresidentAbel Pacheco –along with the Presidentsof Honduras,El Salvador, Nicaragua,Guatemala andDominican Republic,Vice-President ofPanama and Vice-Prime-Minister of Belize– on Tuesday signed an accord adopting ageneral framework for the negotiation ofthe customs union.This customs union could be completeby the end of the year, GuatemalanPresident Oscar Berger told the pressTuesday.“December 31 is a goal, but we hopebefore this date we are going to have thefree movement of all people in CentralAmerica and the free movement of commodities,”Berger said.Costa Rican Foreign Trade MinisterAlberto Trejos was more cautious.“The customs union is very importantto Costa Rica. However, to address thecomplex and ambitious project, we shouldcontinue making firm steps in the rightdirection,” he said in a statement.Pacheco did not comment on the possibilityof opening borders with Nicaraguaby the end of the year. However, he diddeclare at the close of the summit thatCosta Rica would consider joining PARLACENif it becomes an organization thattruly debates the future of CentralAmerica, “for all Central Americans andnot just some.”Although the details will not be determineduntil August, the Presidents agreedTuesday it would be good to reduce thenumber of PARLACEN seats from the current20 officials and20 substitutes.It was also agreedthat former Presidentsand Vice Presidentsshould not automaticallybe given seats inthe parliament, as theyare now. PARLACENhas been condemnedfor providing immunityfrom prosecution toformer leadersaccused of corruptionand, in one case, drug trafficking.PARLACEN has also been sharplycriticized for its apparent inefficiency, anddoubts have arisen about its purpose.“The parliament has almost no drivingcapacity to assure their decisions are followed.So they are not followed – not bythe organizations within the integrationsystem, much less by the member countries,”said Ricardo Sol, director of thecivil society program of the Foundation forPeace and Democracy (Funpadem).Participating countries pay $1.7 millionannually for PARLACEN’s operation,which amounts to 40% of the total budgetof all Central American integration programs,according to Funpadem.Funpadem, based in San José, releasedan analysis last month on how to reformCentral American integration. The reportwas based on a May forum of SICA officials,ambassadors, ministers, universityprofessors and leaders from the UnitedNations and non-governmental organizationsin the region.SICA needs to focus more on interregionalissues, rather than topics that can beaddressed in each country individually,according to the Funpadem report.While SICA facilitates the sharing ofinformation, the current integration structurehas been unable to deal with borderconflicts, regionwide negotiation of theCentral American Free-Trade Agreement(CAFTA) with the United States, and therole of the region in globalization, accordingto Sol.The Presidents did agree Tuesday topush forward the ratification of CAFTAand to arrange an economic and politicalsummit between Central America andJapan in August 2005.BUT these accords are as ineffective asPARLACEN, according to Sol.“In these presidential summits, therehave been maybe 2,000 accords madebetween the Presidents. I would say maybe200 have been carried out,” Sol said.SICA’s financing structure also needsreform, according to the Funpadem report.When each country contributes to theseentities individually, favoritism and corruptioncan arise regarding how, when andif payments are made, Sol said.Funpadem proposes that the CentralAmerican Economic Integration Bank –which recently completed a new buildingin San Pedro, and has offices throughoutCentral America – instead handle all thefinancing of SICA entities. Countrieswould supply one lump sum to the bankfor distribution, according to the proposal.

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