Communiqué at the Conclusion of the High-Level Conference on Investment in Central America

San José, Costa Rica
February 2, 2007

Senior policymakers and leaders of business associations from Central America and the Dominican Republic, major international investors, and senior representatives from international financial institutions took part in a High-Level Conference on Investment in Central America during the last two days in San José, Costa Rica. At the conclusion of this conference, participants issued the following statement:

"We wish to express our gratitude to President Arias, the Government of Costa Rica, its Ministry of Foreign Trade, and the Costa Rican trade promotion agency (Procomer) for hosting this important event and our thanks to the International Monetary Fund and the World Bank for helping organize it.

This is a vital time to enhance Central America's ability to attract investment. Raising investment and increasing its efficiency are key to tackling the region's central challenge of moving to a higher growth plateau and reducing poverty, which has remained stubbornly high. The Free Trade Agreement between the United States, Central America, and the Dominican Republic (CAFTA-DR), the initiation of negotiations on a partnership agreement with the European Union, and the increasing integration of Central American economies offer important opportunities to pursue these objectives successfully.

We all agree that the most important factors for investment in any country are economic and political stability. Over the past year, several countries in the region have experienced a smooth transition of power, which is a tribute to the strength of their democracy. Commendable efforts to strengthen macroeconomic policies, coupled with a supportive global environment, are starting to bear fruit, reflected in rising growth and moderating inflation. We encourage all countries of the region to continue their efforts in this direction.

Central America's geographic location, notably its proximity to the vast North American markets, its industrious labor force, and its dynamic productive sectors make it an appealing destination for investment.

During the meeting, we discussed the key challenges that need to be addressed to take advantage of these attractive conditions, in a way that benefits all sections of the community. We focused on three areas: improving education and infrastructure; reducing the costs of doing business; and strengthening institutions, all of which would catalyze and deepen private sector participation across the region. As a result of this dialogue, we agreed on the following priorities for action:

• Improving the quality of education and training, and access to health services;

• Strengthening transportation, communication and energy infrastructure, developing appropriate long term policy frameworks, and accelerating regional projects, with a view to making Central America a hub for commerce between Asia, Europe, and the United States;

• Improving the legal and regulatory framework to facilitate private participation in infrastructure projects;

• Pursuing regulatory reform efforts and eliminating red tape to promote increased competition and reduce the costs of doing business;

• Making tax and customs regimes more transparent, efficient and predictable, ensuring a level playing field, and continuing to work towards regional harmonization;

• Developing strong and well supervised financial institutions, deepening capital markets, providing broader access to finance, and harmonizing regional financial regulation;

• Continuing to build efficient, transparent and agile public services;

• Enhancing the rule of law through independent, efficient and accessible justice administration systems that ensure enforceable contracts; and fighting crime.

This conference has given the opportunity for a very fruitful exchange of views between policymakers, investors, and the international financial institutions active in the region. We look forward to a continuation of this dialogue in the future."

Participants

Óscar Arias, President of Costa Rica, Costa Rica

Rodrigo de Rato, Managing Director, International Monetary Fund

Felipe Aja Espil, General Manager Latin America, Volkswagen Group

Ana Vilma Albanez de Escobar, Vice President of the Republic, El Salvador

José María Álvarez-Pallete, Chairman and Chief Executive Officer, Telefónica Internacional

Rodrigo Arias, Minister of the Presidency, Costa Rica

Álvaro Baltodano, Executive Secretary, Free Trade Zone Commission, Nicaragua

Eugenio Beaufrand , Vice President Latin America, Microsoft

Vicente Bengoa, Secretary of Finance, Dominican Republic

Hugo Beteta, Minister of Finance, Guatemala

Harry Brautigam, President, Central American Bank for Economic Integration

Mario Canahuati, President, Honduran Council of Private Enterprises (COHEP), Honduras

Peter C. Cardinal, Executive Vice President Latin America, Scotiabank

Rafael Carrillo, President, Costa Rican Union of Chambers and Associations of Private Enterprises (UCCAEP), Costa Rica

Agustín Carstens, Secretary of Finance and Public Credit, Mexico

Martin Castillo, Managing Director Central America & the Caribbean, Hewlett Packard

Pamela Cox, Vice President for Latin America & the Caribbean, World Bank
Murray Dean, International Tax Director, Intel Corp.

Jorge Familiar, Executive Director, World Bank

Alexander A. Flockhart, President and Group Managing Director Latin America and the Caribbean, HSBC

Carlos García-Moreno, Chief Financial Officer, América Móvil

Roberto Guarnieri, Executive Director, International Monetary Fund

Francisco Gutiérrez, Central Bank Governor, Costa Rica

Christopher J. Hetherington, Chief Executive Officer Americas and the Caribbean, Cable & Wireless

Erwin Krüger, President, Council of Private Enterprises (COSEP), Nicaragua

Elías Larach, Business Development Manager, Hutchison Port Holdings

Domingo Latorraca, First Vice President, Chamber of Commerce, Industry and Agriculture (CCIA), Panama

Lisandro Macarulla, President, National Council of Private Enterprises (CONEP), Dominican Republic

James V. Mahoney, Corporate Vice President Global Operations, Hospira Inc.

Rubén Méndez, Vice President Latin America, Hanes Brands Inc.

Temístocles Montás, Technical Secretary of the Presidency, Dominican Republic

Jaime Morales, Vice President of the Republic, Nicaragua

José Manuel Prieto, General Director, Unión Fenosa Internacional

Max Quirin, Member of Economics Committee, Coordinating Council of Agricultural, Commercial, Industrial and Financial Associations (CACIF), Guatemala

Fernando Quiroz, Chief Executive Officer, Corporate and Investment Banking Latin America, Citigroup

Andrés Regué, Delegate for Colombia & the Caribbean, Endesa

Marco Vinicio Ruiz, Minister of Foreign Trade, Costa Rica

Elvin Santos, Vice President of the Republic, Honduras

Rebeca P. Santos, Minister of Finance, Honduras

Anoop Singh, Director, Western Hemisphere Department, International Monetary Fund

Eduardo Stein, Vice President of the Republic, Guatemala

Julio Torre, President Central America, Duke Energy

Carlos Vallarino, Minister of Finance, Panama

Guillermo Zúñiga, Minister of Finance, Costa Rica



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