Senior researcher and Director of IPS Projects of the Latin American Center for Competitiveness and Sustainable Development (CLACDS) of INCAE Business School, and expert in methodology of The Social Progress Imperative, where he participates in the design and implementation of sub-projects ...
After commemorating the bicentennial, we must accelerate
September 2021 ended, another month of pandemic and vaccination; but also, the month of the bicentennial of independence in the region. A historical event that allowed us to talk about the same topic and our common history. This milestone was celebrated in different ways in the countriesThis is how fireworks, historical re-enactments with empty stages, drones, holidays, parades without an audience, commemorative coins, concerts, advertising campaigns, online conferences, etc. were seen. Also, and as is to be expected in a migrant region, holidays in the United States by the Central American communities that live in that country, making those ties that know no borders more visible.
And of course this date must be commemorated, it is an achievement consolidation of an identity national, that set of socio-cultural factors that make the national sentiment of the chapines different from the catrachos, for example. But they have also been seen, different reflections and studies on the outstanding debts, lags and challenges; highly relevant aspects in a region that has not yet consolidated a model that generates economic growth in a sustainable and inclusive way, we also have that in common.
And it is that although the region has had its different moments of economic boom; when the value of goods and services produced in the countries is measured, adjusting for differences in purchasing power and population, using the GDP per capita in dollars adjusted for purchase parity. It is found that the size of the economy, prior to the pandemic with data from 2019, is $ 5,451.71 for Nicaragua, $ 5,736.18 for Honduras, $ 8,653.31 for Guatemala, $ 8,796.54 for El Salvador, and $ 20,805.34 for Costa Rica. The CA4 countries are below the average for Latin America and the Caribbean, which has $ 16,410.18, and the 5 countries are all below Panama, which has $ 31,432.11, the leader in the region, and all are still far from the average of the countries in the region. OECD with $ 44,553.59. In other words, before the pandemic, although progress was made, we were already lagging behind in relation to Latin America and the Caribbean, and also in relation to the most advanced economies on the planet.
Figure 1: GDP per capita in dollars adjusted for purchase parity (constant 2017 US $).
Measuring the impacts of the pandemic, in this same indicator of GDP per capita in dollars adjusted for purchase parity, for 2020, there is a fall in the Central American countries that erases the progress of recent years in economic prosperity. Thus, in Costa Rica it returns to levels similar to those of 2016, in Guatemala to those of 2017, in Honduras to those of 2014, in Nicaragua to those of 2013, in El Salvador to those of 2014, and in Panama to the levels of 2012. Obviously this is a global crisis, Latin America and the Caribbean the most affected region returned to 2010 levels; and OECD countries on average at 2016 levels.
In a single year wealth was destroyed in our economies, years of progress were erased; and economic pressures were added to a context affected by structural deficiencies and multidimensional impacts of the pandemic. Today as 200 years ago there is a common agenda, no longer to build a national identity and consolidate independence; if not to build a model that generates prosperity in a sustained way, recover what was lost by the pandemic and close the gaps with Latin America, and if possible, also with the most advanced economies.
Of course, this agenda has always been present in the regional narrative and diagnosis. But the pandemic brought changes, some trends accelerated, in the way we produce, work, consume, learn, travel, the world changed. If we do not take advantage of these changes to accelerate the economic growth of our countries, we will not only take time to recover what was lost, we will continue to lag behind. The main message towards the next 200 years of Central America has to go through making the economies of the region more competitive, efficient, sustainable and inclusive, and it is not enough just to grow, we need to accelerate as soon as possible. Will we have the capacity to do so?