No. 16 (1989): Development financing

The crisis affecting the Central American isthmus has accelerated the process of irruption into social and political life of traditionally dominated groups, has created favorable conditions for the spread of modern ideologies, but has also allowed conservative political conceptions to express themselves directly or covertly under new political-ideological garb.

Overcoming the crisis represents a challenge that affects the content and scope of public action in each of the countries of the region, especially in terms of finding formulas for solving medium- and long-term financial problems. Central America needs international financial resources, and at the same time it must make a better internal allocation and use of its own and international resources to obtain the greatest impact in the execution of stabilization, reactivation and economic development policies, as well as social welfare. Central America requires better payment conditions for its absolute external debt.

External financial resources are partially blocked by the conditions established by international financial organizations, especially those related to the payment of interest and overdue amortizations of the external debt and the need to advance in structural adjustment programs.

Central America has internal financial resources, but in several countries the owners of these resources only make them available to a minority of businessmen and financial intermediaries or invest them abroad; there are even cases in which these owners demand that they be given access to financial resources obtained from abroad. In view of this, some Central American governments have adopted measures to improve the collection and channeling of credit, one of them being bank nationalization.

Central American businessmen are facing a market problem, so the reactivation of regional economic integration and the opening of export possibilities to the US and Europe become the tasks of the moment.

Negotiations on the payment of the foreign debt and the possibilities of obtaining additional financing is one of the main concerns of the Central American governments.

Given the importance of these issues, the Central American Institute of Public Administration has decided to dedicate this issue of its magazine to Central America: Financing for Development.