1

Central America Fourth State of the Region Report on Sustainable Human Development (2011)

2 Demographic Challenge

Demographic transition process pressures the future development

3

Changes in population age 3

-15% -10% -5% 0% 5% 10% 15%

0 a 4

5 a 9

10 a 14

15 a 19

20 a 24

25 a 29

30 a 34

35 a 39

40 a 44

45 a 49

50 a 54

55 a 59

60 a 64

65 a 69

70 a 74

75 a 79

80 and more

2000 2010

Men Women

Central America: Population distribution by sex and age group.

2000 and 2010

Source: Own elaboration based on Cepal, 2009.

4

Labour force: dynamic in short term, stagnant in 10 years 4

45%

50%

55%

60%

65%

70%

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Belice Costa Rica El Salvador GuatemalaHonduras Nicaragua Panamá

Central America: Percentaje of population from 15 to 64 years

old. 1980-2025

Source: Own elaboration based on Cepal, 2009.

5 Armonía 5

Population over 65 years is growing fast

6

a/ Estimación de Presanca, 2010

Source: Sauma, 2011, based on Presanca, 2010 and Celade, 2010.

Malnutrition threats human development

Country

Children in chronic malnutrition

a/

Percentage of children under 5 years old

Region 1.796.000 34,9

Costa Rica 10.000 2,7

El Salvador 189.000 31,1

Guatemala 1.123.000 51,9

Honduras 263.000 27,1

Nicaragua 132.000 19,3

Panama 79.000 22,9

Central America: chronic malnutrition rate for children under 5 years

old. 2008

7 “Ni-nis” limit

improvements education 7

8 Settlement Challenge

Migration: drains societies in the long term, benefits currently

9

Migrants are mainly in labour age

International migration out of the region 1. Destination: USA / Spain

2. Crime / stronger control

3. Changing policies: new migration law in USA

International migración within the region 1. Destinations: NIC->CRI; GUA->BEL

2. Local networks

3. Regional policies: intra regional conflicts

Intern migration 1. Destinations: rural-rural (zafras); rural-urban

2. “By your own”: poorest of the poor

3. No policies

Main migration flows

10 The wish to migrate 10

Central America: Persons with the intention to migrate. 2008 and 2010 (percentage)

CR ELS GUA HON NIC PAN

Persons with the intention to migrate

2008 16,6 25,4 18,5 21,6 33,3 12,9

2010 11,2 24,4 20,0 15,0 26,7 14,4

Persons with insuficient incomes and with the intention to migrate

2008 17,2 25,0 21,1 18,8 34,6 8,9

2010 10,4 24,0 21,4 13,2 29,1 9,5

Source: Based on Lapop surveys.

11 11

Census data from

each country Costa Rica El Salvador Guatemala Honduras Nicaragua Panamá

Belice (2000) 70 6.045 14.693 4.961 279 39

Costa Rica (2000) 8.714 1.996 2.946 226.374 10.270

El Salvador (2007) 779 7.904 10.387 6.958 402

Guatemala (2002) 265 12.484 5.491 5.604 197

Honduras (2001) 611 6.291 3.274 5.519 283

Panamá (2000) 4.565 1.862 590 823 4.883

Intra regional migrations

Central America: Population born in Central America, but registred in

national census different from the originary country

Source: Census of each country..

BZ: 13,8% of

population are

migrants (2010,

WB)

12 Low remittances

contraction 12

0%

5%

10%

15%

20%

25%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Belice Costa Rica El Salvador Guatemala Honduras Nicaragua Panamá

Central America: Remittances as Percentaje of GDP, per

country. 2000-2009

Source: Roales, 2010 based on Central Banks.

13 Alleviate poverty 13

Costa Rica El Salvador

2007 2009 2007 2009

Households with remittances (%) 4,1 1,0 26,2 21,3

Poverty rate

Not recieve 17,1 18,6 37,5 40,2

Receive 9,1 9,0 26,5 28,6

Poverty rate without remittances

Total 17,7 18,8 42,4 44,2

Change 1,0 0,3 7,8 6,4

Receive 32,9 37,7 56,3 58,8

Change 23,8 28,7 29,8 30,2

a/ Puntos porcentuales de diferencia en el indicador del 2009 respecto al 2007.

Fuente: Trejos, 2011b, con base en procesamientos de las encuestas de hogares de los países.

14 Environmental Challenge

Region highly vulnerable to climate change

15 Region historically

impacted by disasters 15

16 Unsustainable use of

natural resources 16

00

00

00

00

00

01

01

01

01

01

01

00

01

02

03

04

05

06

07

08

09

Costa Rica El Salvador Guatemala Honduras Nicaragua Panamá EEUU África World

Hu

man

Deve

lop

me

nt

Ind

ex

Glo

bal H

ec

tare

s p

er

ca

pit

a

Ecological Footprint Biocapacity Human Development Index

Ecological Footprint, Biocapacity and Human Development

Index. Circa 2007

Source: Global Footprint Network and UNDP

17 Armonía 17 Increasing impacts

18 18

Index of climate severity. 2020/2050, B2 and A2 scenarios

Source: Cathalac et al., 2008.

Central America: the most vulnerable region to climate change

• Central America is responsible for less than 0.5% of greenhouse gas

emissions •Guatemala and Honduras are responsible for 76% of GHG emissions in

the isthmus.

19 Social Exclusion Challenge

High and persistent social exclusion and weak instruments for social inclusion

20 Armonía 20 Problem is sharper in the central and

northern countries

Households under social exclusion, per country. 2001, 2005 y 2009

(percentajes)

Country 2001 2005 2009

Costa Rica 11,3 10,3 10,0 El Salvador 40,1 42,2 39,8 Guatemala

a/ 38,7 41,6

Hondurasb/ 48,3 48,9 48,5

Nicaragua 44,8 35,6 Panamá 30,0 29,8 29,1

a/ Data for 2005 is actually from 2006.

b/ Data for 2009 is actually from 2007.

Source: Pérez-Sáinz et al., 2010, based n Housing Surveys.

21 Less dynamic labour markets

21

Central America: Employment by type of sector. 2007 and 2009

Country Year Percentage Annual change 1/ Formal sector Informal sector Formal sector Informal sector

Costa Rica 2007 54,9 45,1 3,6 -0,8 2009 56,4 43,6 0,8 -1,2

El Salvador 2007 37,5 62,5 7,4 8,5 2009 34,9 65,1 -6,0 4,2

Nicaragua 2007 35,7 64,3 3,4 0,3 2009 35,1 64,9 -6,8 -1,3

Panamá 2007 49,7 50,3 7,3 2,7 2009 50,2 49,8 0,0 2,5

Region 2007 43,5 56,5 5,3 3,1 2009 43,0 57,0 -2,9 1,2

1/ The first column of each country refers to the change between 2007 and 2008 and the second one the change from 2008 to 2009. For ELS the first colum is overrated. Source: Trejos, 20011, based on Households Surveys.

22 Social Security Systems with very

low coverage 22

Central America: Coverage of Social Security System. 2005-2008

(porcentajes)

Country

Total covered populationa/

2005 2006 2007 2008

Belize b/

64,3 70,0 65,7 69,2

Costa Rica 87,6 87,5 87,6 88,8

El Salvador 21,5 22,8 23,8 23,9

Guatemala 18,1 17,9 17,6 17,4

Honduras 16,9 16,9 18,7 20,5

Nicaragua 16,4 18,2 19,5 18,9

Panamá 66,7 70,0 74,1 77,4

a/ Includes indirect and direct coverage. b/ Percentaje of the labour force.

Fuente: Martínez, 2010.

75 y 85% do

not have any

insurance

23 Institucional Challenge

Weak infrastructural capabilities of States

24 Armonía 24 Small States…

25 Armonía 25

Central America: Indicators about the Infrastructural Capabilities of States. 2005-2009

… and weak to implement public policies

26 Armonía Uncomplete coverage in their territories

Central America: Road Net and Human Development Index. Circa

2009

Source: Bonilla, 2011, con base en mediciones del IDH del PNUD en los

países y CCAD-SICA y Banco Mundial, 2004.

27 Armonía 27 The power of the purse

Central America: Source of Resources to Finance the Budget of Public Institutions. 2009

Type of Resources

Country Institutions % of national budget % mixed incomes % decentralized incomes

Belice 102 58 25 17 Costa Rica 276 34 19 47 El Salvador 162 77 6 17 Guatemala 121 68 0 32 Honduras 92 68 31 1 Nicaragua 104 34 51 15 Panamá 111 36 51 13 Total general 968 51 24 25

a/ El presupuesto de la institución es un rubro del Presupuesto Nacional, financiado con los ingresos recaudados centralmente

por el Ministerio de Finanzas o Hacienda.

b/ El presupuesto de la institución se financia por dos fuentes: ingresos propios e ingresos provenientes del Presupuesto

Nacional.

c/ El presupuesto de la institución se financia enteramente con ingresos propios previstos por las leyes correspondientes.

Fuente: Elaboración propia a partir de la base de datos sobre entidades públicas de Centroamérica.

28 Armonía 28 Highly centralized Executive

29 Political Challenge

Hybrid political regimen and democratic backwards

30 Most are imperfect democracies

or hybrid regimes 30

Índex of Democracy of The Economist Intelligence Unit. 2010

Region Country Full democracies

Imperfect democracies

Hybrid regime

Authoritarian regime

África Subsahariana 44 1 8 10 25

América Latina (SMCA)

18 2 11 5 0

Asia y Australasia 28 4 10 7 7

Centroamérica 6 1 3 2 0

El Caribe 6 0 4 1 1

Europa del Este 28 1 15 6 6

Total 173 27 56 35 55 Fuente: Elaboración propia con base en The Economist Intelligence Unit, 2010.

31 Armonía Risk of “Failed States”

Country Social exclusion

level

Index of Failed Statea/

Stateness indexb/

Belize ND 61,0 ND

Costa Rica Low 50,6 10,0

El Salvador High 76,0 8,3

Guatemala High 80,1 6,8

Honduras High 78,3 7,5

Nicaragua High 81,2 8,0

Panamá Middle 57,8 8,5

a/ Los datos corresponden al 2011. El índice evalúa doce indicadores con una escala de 1 a 10, según el riesgo de generar un Estado fallido; 12 significa

menor riesgo y 120 mayor riesgo.

b/ Los datos corresponden al 2010. Se usa una escala de 1 a 10, donde 10 es la mejor situación. El índice evalúa el estado de la democracia y los

sistemas de mercado, así como la calidad de la gestión pública.

c/ Posición ocupada entre un total de 178 países evaluados.

Fuentes: Foreign Policy, Instituto Bertelsmann y Transparencia Internacional.

32 Democratic Backwards

Fraud on local elections: Nicaragua 2008.

Cout d’ Etat: 2009 Honduras

Guatemala 2011: political murders and organized crimen

Weak check and balance system:

• Judiciary independence jeopardized

• Free of expression and murders of journalists

• General Comptrollers influenced by political parties

33 Confluence of diverse and complex challenges

Most risky and complex situation in the last 20 years

34 Trade led to economic growth …

Fuente: Construcción propia a partir de CEPAL: Comisión Económica para América Latina y el Caribe

Central America: GDP per capita. 1960 - 2010

,0

1000,0

2000,0

3000,0

4000,0

5000,0

6000,0

7000,0

8000,0

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Dó

lare

s p

or

hab

itan

te a

pre

cio

s d

el

2000

Belice Costa Rica El Salvador Guatemala

Honduras Nicaragua Panamá América Latina

35 The most violent region in Latin America

43,4 Regional rate for

2010

Northern countries

36 Armonía 36

More than 75 homicides per 100 thousand inhabitants at the sub national level

37 37 Increasing gaps among the countries. Circa 2009

Indicator Unidad de medida

Country with

highest rate

Country with

lowest rate

Gap size

Children mortality rate

Per 1.ooo live births

32,6 9,6 3,4

Education social expenditure

% of GDP 7,2 3,6 2,0

GDP per cápita US$ per person

6.018 1.328 4,5

Tax rate % GDP 22,4 10,4 2,2 Unemployment rate % 13,1 3,5 3,7 Homicide rate Per 100.000

inhabitants 82 10 8,2

Poor population % 64,5 21,7 3,0

38 Overview 2008-2010

The worst predictions for the isthmus did not materialize

39 Advances 2008-2010

Domestic market and intra-regional trade

mitigated the impact of the international crisis.

Family remittances did not declined as

expected, preventing a further decline in

incomes and employment.

Education coverage and life expectancy

increased at all levels and in all countries.

40 40 Vulnerability and threats

• Demographic transition pressures future development

• Migration: benefits now but risks for long term

• Highly vulnerable to climate change

• High and persistent social exclusion

• Weak infrastructural capabilities of States

• Hybrid political regimes and democratic backwards

41 Previous reports

First Report 1999

• Positive decade for the

first time in thirty

years.

• New stability.

• Authoritarian

governments and

armed conflict come to

an end.

• Path to economic

growth.

• Milestone: Esquipulas

II

Second Report 2003

• Lost momentum in the

drive for progress

• Large groups of

population lagged

behind

• Democratization

process decelerated

Third

Report

2008

• New and more complex

international situation.

• Deep and simultaneous

transformations over the

last 20 years.

• Best performance in

decades.

• Historical deficits.

• Regional action.

42 What can be done?

Two levels of action: National: lasting and

inclusive agreements

Regional: collective and inter-state action

43 Armonía

Regional dimension of the political agreements

Substancial improvement in the integration process depends on:

• State compliance on minimum

standards.

• Strengthening cohesion inside the country

44 Fourth State of the Region Report 2011

State of the Region: social and technical product

45 45 Institutional framework

46 46 Advisory committee Belice: Carlos Santos, Filiberto Penados, Ángel Cal.

Costa Rica: Sonia Picado, Adriana Prado, Arturo Condo, Félix

Cristiá, Ricardo Sol.

El Salvador: Héctor Dada Hirezi, David Escobar Galindo, Ana Evelyn

Jacir, Alex Segovia.

Guatemala: Otilia Lux García, Fernando Carrera, Leonor Calderón.

Honduras: Alvaro Cálix, Ramón Custodio, Luis Cosenza, Pablo

Rodas, Reina Rivera.

Nicaragua: Carlos Tunnermmann, Alta Hooker, Jaime Incer, Carlos

Fernando Chamorro, Ana Quirós, Néstor Avendaño.

Panamá: Jorge Arosemena, Alida Espadafora, Angélica Maytin,

Stanley Motta, Raúl Leis (+)

47 47 Participatory research process

• Research network:

63 researchers y 136 associated assistants. 127 sources y 760 bibliography notes.

• 14 institucional arrangements:

DANIDA, AECID, TI, OPS/OMS, UICN, RUTA-FIDA, CEPAL, ICEFI, ASIES, FESPAD, Alianza Ciudadana Pro Justicia, Universidad de Panamá, IARNA, Florida State University.

• Consultation process:

350 persons (contents, research, reviewing).

200

350

48

Section Chapter

Synopsis

Regional panorama 2. Demographic

3. Social

4. Economic

Impacts of the crisis

5. Environmental

6. Political

7. Regional integration

Challenges for development

8. States for democracy

9. Climate change

Strategic dilema 10. Social exclusion

Statistical Compendium Statistics

Definitions, sources and technical notes

Contents

49

Central America Fourth State of the Region Report on Sustainable Human Development (2011)