31 years of economic and political information and analysis on the region

Guatemala

Vying political and economic interests undermine Executive
Alejandro Sinibaldi's suspension as director of the Guatemalan Institute for Tourism (INGUAT) not only reveals how politics trumps efficiency in the government of president Oscar Berger, but also corroborates the suspicion that influential business groups are weeding out government officials viewed as "not being part of the team." Numerous commentators have contrasted this attitude with Berger´s campaign speeches, which called for unity as a priority above party lines. According to this analysis, Berger is being influenced by economic and political groups that brought him to the presidency. Leaders from civil society and political opposition glimpsed a scenario in which the Berger administration finds itself in greater isolation and disrepute as a direct consequence of a "heterogeneous", inconsistent and vulnerable government.

Doubts over ex PAC payments
Congress legalized the payment to ex members of the former Civil Defense Patrols (ex PAC) by passing the 24-2004 law on August 19 2004. A month later, the Constitutional Court (CC) provisionally suspended the law. The ex PAC have threatened to take matters into their own hands, should the court maintains its position. According to those parties in congress that voted in favor of the law, there is no basis on which to claim unconstitutionality; they point out that the source of the funds has already been confirmed by the government in its 2004 and 2005 budgets.

Costa Rica

Corruption threatens future of leading parties
In the light of recent numerous and widely publicized corruption allegations among the political elite, various analysts have speculated that the bipartisan political system is in crisis. Some blame the neo-liberal globalization agenda that has become prdominant among the political class, whose members see the state and what it owns as assets to sold on an international market. Foreign capital interests and domestic political and business-sector groups seem to share this same goal, the latter expecting to be "rewarded" for easing through negotiations for the sale or privatization of state-owned resources.

El Salvador

FMLN quits gov´t-led party forum
Just as the National Republican Alliance (ARENA) government of President Antonio Saca reaches its first 100 days, the most important opposition party in El Salvador decides to pull out of the Permanent Political Forum, complaining that the government was not conducting negotiations in good faith. Critics of the new government say that key problems such as security, poverty and health care have yet to be tackled, and that the forum has failed to become an effective space for negotiating solutions to national problems.

Nicaragua

FSLN and PLC lead in local elections
The main battle to win the majority of municipalities is between the National Sandinista Liberation Front (FSLN) and the ruling Constitutional Liberal Party (PLC). Although the FSLN is seen as a front runner in Managua, a recent poll shows that the PLC rival is ahead.

Region

Economic stability disguises crisis
The Central American Bank for Economic Integration (CABEI) forecasts 3.2% growth for Central America (excluding Panama) for 2004. El Salvador and Guatemala are the least dynamic with zero per-capita growth, while Honduras, Nicaragua and Costa Rica averaged 3.8% GDP growth (between 1% and 2% per capita). The region´s trade deficit for 2004 alone is equivalent to more than 50% of the total existing foreign debt. If not for the increasing levels of remittances to the region, this trade gap would be unsustainable. Increasing prices for petroleum products may exacerbate this imbalance, and contribute to a spike in inflation in coming months.

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22 October 2004