## Central America: Global Integration and Regional Cooperation

_Occasional Papers, July 14, 2005_

## Source details

**Canonical URL:** [Central America: Global Integration and Regional Cooperation](https://www.imf.org/en/publications/occasional-papers/issues/2016/12/31/central-america-global-integration-and-regional-cooperation-18160)

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## Bibliographic details
- Authors: Markus Rodlauer, Alfred Schipke
- Published: July 14, 2005
- Series: Occasional Papers
- DOI: https://doi.org/10.5089/9781589064461.084

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### Overview
- Central America has received growing attention as a region that is integrating successfully into the global economy.
- The paper examines the macroeconomic and fiscal implications of the Free Trade Agreement with the United States (CAFTA-DR), noting that the agreement will provide a boost to the integration process.
- To maximize benefits—faster sustainable growth, poverty reduction, and social progress—the region needs ambitious structural reforms and enhanced regional cooperation.

### Key findings
- CAFTA-DR is expected to provide a boost to the region’s integration into the global economy.
- Achieving faster sustainable growth, poverty reduction, and social progress requires:
  - Ambitious structural reforms to entrench macroeconomic stability.
  - Ensuring an attractive environment for investment.
  - Stepping up regional cooperation in specific areas (see below).

### Policy recommendations and areas for regional cooperation
- Taxes and tax administration:
  - Strengthen tax policy and tax administration across the region to support revenue mobilization and fiscal stability.
- Financial systems:
  - Deepen and harmonize financial systems to improve resilience and integration.
- Statistics:
  - Improve statistical capacity and comparability to inform policy and regional coordination.
- Structural reforms:
  - Advance reforms that support macroeconomic stability and an investment-friendly environment.

### Subject coverage and keywords
- Subjects: Exchange rate arrangements, Foreign exchange, Imports, International trade, Public debt, Revenue administration, Tariffs, Taxes
- Keywords include: bank, Caribbean, Central America, Central American country, country, debt-to-GDP, definitions in El Salvador, Europe, exchange rate, Exchange rate arrangements, exchange rate regime, Imports, North America, OP, policy reform, Primer Banco del Istmo, tariff, Tariffs

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_Source: https://www.imf.org/en/publications/occasional-papers/issues/2016/12/31/central-america-global-integration-and-regional-cooperation-18160_