international network of mesoamerican highways (ricam)

Photo: left to right, Rafael Alburquerque, Vice President of Dominican Republic; Jaime Morales, Vice President of the Republic of Nicaragua; Porfirio Lobo, President of the Republic of Honduras; Felipe Calderón, President of the Republic of Mexico; Juan Manuel Santos, President of the Republic of Colombia; Laura Chinchilla, President of the Republic of Costa Rica; Álvaro Colom, Presi-

dent of the Republic of Guatemala; Juan Carlos Varela, Vice President of the Republic of Panama; and Hugo Martínez, Minister of Foreing Affairs of the Republic of El Salvador.

www.proyectomesoamerica.org

2009-2010 EXECUTIVE REPORTMesoamerica Project Executive Commission

XII Summit of Heads of State and Government of the Tuxtla Mechanism for Dialogue and Coordination

Cartagena de Indias, ColombiaOctober 25 and 26, 2010

I. INTRODUCTION ..................................................................................... ...............................................................4Message from the PM Executive Commission............................................................................................................4II. BALANCE: PROGRESS AND CHALLENGES....... .......................................................................................................6III. PROGRESS IN THE ECONOMIC AREA…………........................................................................................................7INFRASTRUCTURE INTEGRATION: TOWARDS A MESOAMERICAN MULTIMODAL TRANSPORTATION SYSTEM….........8Mesoamerican Multimodal Transportation System (STMM)........................................................................................8International Network of Mesoamerican Highways (RICAM).....................................................................................9Acceleration of the Pacific Corridor (CP).................................................................................................................10RICAM’s Complementary Projects………………..........................................................................................................12Short Distance Sea Transport Project (TMCD)………………….........................................................................................14Mesoamerican Railway System...............................................................................................................................14TRADE FACILITATION AND COMPETITIVENESS........................................................................................................15Mesoamerican Procedure for the International Transit of Goods (TIM)....................................................................15Promotion of Mesoamerican PYME’s Exports………………………………………..................................................................16Mesoamerican Fruit Production Project (PROMEFRUT)..........................................................................................18Mesoamerican Indicators for Competitiveness.......................................................................................................18Mesoamerican Support System for Patent Applications........................................................................................19MESOAMERICAN ENERGY INTEGRATION ................................................................................................................21Central American Electrical Interconnection System (SIEPAC)...............................................................................22Electrical Interconnection Mexico-Guatemala........................................................................................................23Electrical Interconnection Panama-Colombia.........................................................................................................23Regional Electricity Market Consolidation..............................................................................................................24Mesoamerican Biofuels Program (PMB)…………………...............................................................................................24Mesoamerican Network for Research and Development of Biofuels (RMIDB)……………..……….........................………25TELECOMUNICATIONS ...........................................................................................................................................26Mesoamerican Information Highway (AMI)............................................................................................................26Interconnection of telecommunication networks between Mexico and Guatemala…..............................................26Harmonization of Regulatory Frameworks ............................................................................................................27Strengthening of the National Research and Education Network (RNIE).................................................................27Reduction of long-distance and roaming fees. .......................................................................................................27

I N D E X

IV. PROGRESS IN THE SOCIAL AREA………........……………………………………………………........................................................28HEALTH............ ..........................................................................................................................................................29Mesoamerican Public Health System (SMSP)..............................................................................................................29ENVIRONMENT.. ......................................................................................................................................................31Mesoamerican Strategy for Environmental Sustainability (EMSA)...............................................................................31Climate Change ........................................................................................................................................................32NATURAL DISASTERS................................................................................................................................................33Mesoamerican Territorial Information System (SMIT)...............................................................................................33Financial Management of Natural Disaster Risk........................................................................................................34HOUSING..................................................................................................................................................................3 5Central American Social Housing Development Program .............................................................................................35V. INTERNATIONAL LINKS .........................................................................................................................................36Latin American and Caribbean Unity Summit............................................................................................................36Link to other regional integration instances...............................................................................................................36VI. FINAL CONSIDERATIONS .....................................................................................................................................37VII. OUR STRATEGIC PARTNERS.................................................................................................................................38VIII. ANNEXES ...........................................................................................................................................................40PM Executive Commission Directory…....…………...........................................................................................................40PM Executive Direction Directory.............................................................................................................................41Regional Entities.......................................................................................................................................................42Cartagena Declaration, Mesoamerica Project chapter.................................................................................................................43List of Abbreviations and Acronyms.. ........................................................................................................................47

I N D E X

1 Belong to GTI: Inter-American Development Bank (IDB), Central American Bank for Economic Integration (CABEI), Andean Development Corporation (CAF), Economic Com mission of the United Nations for Latin America (ECLAC), Central American Integration System (SICA), Secretariat for Economic Integration of Central America(SIECA)and Pan American Health Organization (PAHO).

2 In this regard the Government of Guatemala stated its position in the sense that this country, the issue of Regional Public Goods not include water.

This document presents a report on the current status of the work developed within the framework of the Mesoamerican Integration and Development Project

(MIDP) or Mesoamerica Project (PM). It recapitulates the progress made during the past year, as well as the activities required for the 2010-2011 period that will allow further advance in the stated objectives, in order to provide development and improve the quality of life of the inhabitants of the region.

The Executive Committee of the PM, with the support from the PM Executive Direction and the agencies from the Inter-Institutional Technical Group (GTI) 1, seek to provide these annual reports with accurate and relevant information to expedite the monitoring of its programs and projects, for accountability to the Heads of State and government, as well as providing input for decision making and the direction of regional public policies.

This report, together with the mandates that derive from the Presidential Declaration of the XII Summit of Tuxtla Mechanism for Dialogue and Coordination, will be the basis on which PM progress will be measured in 2010-2011.

Message from the PM Executive Commission

The Mesoamerica Project allows the governments of Belize, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and the Dominican Republic, to advance in the solution of common challenges. With a long-term strategic vision, the governments of the participating countries undertake projects that enhance regional

cooperation, while promoting integration, complementarity and connectivity among them, generating a platform to develop the potential of the Mesoamerican region in a competitive global scenario.

The PM nourishes the development and integration activities that are promoted within the framework of the XII Tuxtla Mechanism for Dialogue and Coordination and seeks to complement the efforts of other regional entities such as the Central American Integration System (SICA) and its different Minister Councils.

The added value of PM is mainly based on five elements.• Political Dialogue: It is a high-level forum bringing

together the heads of state to review regional priorities.

• Regional Integration: Its activities seek to generate greater interaction, interdependence and connectivity amon the participating countries, coordinate national efforts in a strategic regional vision and set the foundations for the convergence of the economies and services for human development.

• Specialization: Promotes specific projects and supports for complements regional bonding experiences that bring about other forums and initiatives.

• Resource Management: Facilitates source mobililization from international cooperation agencies and multilateral banks towards priority projects of Mesoamerica.

• Regional Public Goods: Fosters the creation of goodsthat generate benefits for more than one country, as a result of

I . I N T R O D U C T I O N

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coordinated action of the countries involved. 2In the PM, the financing of the regional action originatesfrom the resources that the member countries set aside to bring about the initiatives and the valuable support from GTI, which provides financial and technical resources for the development of the work and projects from this regional integration mechanism.

In compliance with the presidential mandates from the XI Summit Tuxtla Dialogue and Concertation Mechanism held in Guanacaste, Costa Rica, on July 29, 2009, the Executive Commission of the PM promoted and monitored the progress of social and economic projects.

Among the main results of this mechanism throughout this year include:

• In terms of energy, an electric interconnection between Mexico and Guatemala was inaugurated, which brought about the export of electric energy between both countries.

• The Mesoamerican Network of Research and Development of Biofuels (RMIDB) was built, in order to contribute to the generation of bio-energy knowledge and provide an added value to the biofuel plants already established in the region.

• In terms of transportation infrastructure, the Acceleration of the Pacific Corridor Program (CP) got underway. Between May and June 2010, the Road Safety Caravan: “Safe Roads for Everyone” was held, which ran 3,244 kilometers of the Pacific Corridor, from Mexico to Panama, in order to evaluate the conditions and current state of certain stretches of road.

• In the field of health, the master plans of the four initial

components of the Mesoamerican Public Health System (SMPS) were concluded. At the same time, on June 14, 2010 the Mesoamerican Health Initiative 2015 (SM 2015) was presented, to which the Bill & Melinda Gates Foundation, Carlos Slim Health Institute , and the Spanish Government will contribute US $50 million each, joining their efforts to the work of Mesoamerican Public Health System (SMPS)

• In environmental matters, the Plan of Action for the implementation of the Mesoamerican Strategy for Environmental Sustainability (EMSA) was drawn.

• Regarding risk management, the Diagnostic of Regional Information Gap was concluded, workshops were held in five countries, and the process of hiring information system experts was started, in support of civil protection agencies, as the acquisition of computer equipment for the development of the Mesoamerican Territorial Information System (SMIT).

• Under the Central American Social Housing Development Program, the Mexican Government contributed the Technical Assistance component. A funding of US $4.2 million under the San Jose Agreement to generate credits through its network of intermediaries in Central America was made effective.

• Finally in an effort to strengthen synergies with other regional mechanisms, the “First Mesoamerican Dialogue on Social Policies” was celebrated in coordination with the Councils of Ministers of the Central American Social Integration and with the Secretariat of Central American Social Integration Secretariat (SISCA) which allowed the exchange of experiences on social policies in the region and the establishment of priority lines of cooperation in the subject matter.

I . I N T R O D U C T I O N

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II. BALANCE: PROGRESS AND CHALLENGES

Two years after its launching, the Mesoamerica Project has steadily progressed in its institutional and operational strengthening, and at the same

time it has been reinvigorated with the recent addition of the Dominican Republic and concrete achievements in its agenda program.

It terms of institutional strengthening, in signing the “Acta que institucionaliza el Proyecto Mesoamérica”, document that institutionalizes the Mesoamerica Project, on July 29, 2009, the member countries specified the nature, principles and operational structure of this area of integration. Also, the Executive Commission approved the “Regulations for the Functioning of the PM” on March 11, 2010, establishing solid ground in its operation dynamics. Likewise in the same semester of 2010 the selection process of the new Executive Director of the Mesoamerica Project was concluded.

Additionally, under the pro tempore presidency of Colombia a strengthening process has started, introducing management tools to improve the formulation, implementation and evaluation of the regional action within PM; as well as a Strategic Planning exercise to 5 years. The challenge is to complete these processes and maintain those assessment dynamics and continuous improvement, constantly adapting the Project to the evolving needs of the region. There are also advances to a process of updating the guidelines for the merger of projects in the portfolio of PM, an instrument that positions the Mesoamerica Project as a regional forum that has eligibility criteria, which favors the regional character and alignment with the defined priorities in this mechanism. At the same time, the exercise of accountability to the heads of state which is expressed in this Annual Report constitutes a guideline for countries to monitor the topics covered in PM.

From a programming standpoint, through our projects, member countries, with the full support of GTI and other Instances, advance joint efforts and allocate resources for international cooperation. Also, they consolidate technical and political groups to carry out the regional work, without providing additional bureaucracies, building national

abilities. Thus establishing positive dynamics of South-South Cooperation and consensus are erected, thus laying the foundations for regional action and foreseeing the previous steps for investment. These projects have been complemented by efforts to encourage communication with other Latin American and extra-regional cooperation organizations such as the Central American Integration System (SICA) and the European Union. In the same manner, the coordination with GTI and the articulation with the heads of the Sector Ministries in charge of project development has been strengthened, and deepening the ownership and coherence with national agenda of development strategies.

This semester, the Joint Presidency composed by Colombia and Mexico, in collaboration with GTI and the Ministers of Finance, activated the Commission for Promotion and Funding (CPF), with the purpose of establishing effective communication to determine material and financial basis that provide feasibility for projects being promoted by this mechanism.

Consequently, PM has currently positioned itself in the international and Latin American scene as a mechanism that favors conceptualization, the financing and implementation of tangible ventures of great strategic importance, which aim to develop the potential of the Mesoamerican region, improve competitiveness, promote its privileged geographic location, and generate cooperation in transnational challenges.

In order to develop our strategic agenda in a balanced manner, all the countries faced the challenge to continue to deepen the internal coordination and articulate the PM with national efforts both bilateral and multilateral. This integration space will undoubtedly find fresh resources amidst a complex financial context. Let us boost the Mesoamerica Project to its maximum expression at a time in which the international community ponders on the effectiveness of the assistance, the proposals of regional impact shall always be benefitted.

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TRANSPORTATION

TELECOMMUNICATIONS

ENERGY

TRADE FACILITATION AND COMPETITIVENESS

I I I . PROGRESS IN THE ECONOMIC AREA

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INFRASTRUCTURE INTEGRATION: TOWARDS A MESOAMERICAN

MULTIMODAL TRANSPORTATION SYSTEM

The PM seeks to consolidate projects to make the transport of people and goods more efficient, by reducing the costs associated with movements, distances and travel times. In order to achieve this, PM works on the following strategic projects: the International Network of Mesoamerican Highways (RICAM) in which the Pacific Corridor (CP) and the complementary projects of RICAM were given priority, and, which in addition to the work on Short Distance Sea Transport Project (TMCD), seek to consolidate a Mesoamerican Multimodal Transportation System (STMM). Mesoamerican Multimodal Transportation

System (STMM)

The creation of STMM aims to integrate infrastructure, operations, technology, transportation service and freight logistics, allowing the promotion of economic and functional advantages belonging to each mode of transport and which adapt to the international trade characteristics in each country, as to the competitive advantages of the Mesoamerican region in general.

In April 2010, the first proposal to the creation of STMM was drafted, under the “Multimodal Transport to Facilitate Mesoamerican Trade” international workshop framework,

27. To adopt as a regional priority the program entitled “Development of the Pacific Corridor of the International Mesoamerican Highway System (RICAM),” plan the technical and budgetary programming of investments and the efforts to harmonize weight and size and highway safety standards in each country, to complete this program as soon as possible. This program is being coordinated by Costa Rica.

Mandates of the XI Heads of State and Government Summit Guanacaste, Costa Rica, July 29, 2009

28. To conduct the feasibility study and diagnostic assessment of necessary infrastructure and port services, to implement short sea transport in Mesoamerica. This project is being coordinated by Panama, with support from the Central American Commission on Maritime Transport (COCATRAM).35. To extend, over the short term, the Mesoamerican Procedure for the International Transit of Merchandise (TIM) to the entire Pacific Corridor of the International Mesoamerican Highway System and, in the future, to all land and sea transport operations in the region, with support from SIECA.

TRANSPORTATION

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E C O N O M I C A R E A P R O J E C T S

Source: this chart was made for the Mesoamerican Transport Ministers Assemblage, May 28, 2010, edited and updated to September 2010. Source: Mesoamerican Ministryof Transport and CTT. (a) Currently searching for financial resources for the Jicaro Galan-Choluteca-Guasaule stretch (88Km)(b) Panama finished working on the foreseen investments for the RICAM corridors as of last year. At this date, they have only provided maintenance, and the stretches that

are to be restored, are still under bidding process.c) Honduras has been updated up to June 2010.Nd: Information not available.

held in Morelia and Puerto Lázaro Cardenas, Michoacán, Mexico, which included 50 representatives from government agencies related to the transport sector from Central American countries and representatives of regional entities such as IDB, SIECA, COCATRAM, and ECLAC. The meeting was held with the purpose of learning from the Mexican experience in logistic corridors.

This proposal arises in the “Intermodal Planning for an Efficient Logistics Chain in Mesoamerica” workshop, which was held in Antigua Guatemala, July 2009, with support from CIDITRANS, AECID, CABEI, ECLAC, and CAF, in order to initiate the planning for STMM.

International Network of Mesoamerican Highways (RICAM)

RICAM is made up of 13,132 kilometers of highways, distributed among five corridors, whose advance opens new possibilities to the Mesoamerican integration, enabling the flow of goods and movement of people in the region and including technical standards for the construction of infrastructure for transport, and international standards for the traffic of vehicles and road safety.

RICAM Components:1. Pacific and Atlantic Corridors;2. A tourism-oriented corridor;3. Five inter-oceanic corridors, with a logistics vocation

and a series of branch-roads and additional connections.

AdvancesIn the 2009-2010 period, the Mesoamerican countries advanced in the conclusion of 682.95 kilometers, as described in the following table, according to data from the

Transport Technical Commission (CTT).

Kilometers intervened for maintenance, restoration and expansion

Country Atlantic Corridor

Branches and Complementary

Conexions

Pacific Corridor

Interoceanic Corridor

Caribbean Touristic Corridor

MexicoBeliceGuatemalaEl SalvadorHonduras (c)NicaraguaCosta RicaPanama (b)Total

42,9Na00

5.545,0

00

93.4

0Na

60,4726.80

025,06.12

0118.39

10,0Na

36,029,23(a)

17,041,0

135.4248,65

0Na

11,247,6

41.370

78,00

138.21

70,5Na

13,80

Nd000

84,3

Total

123.4Na

121.5343.6346.87

87125.12135.4

682,95

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Table 1. RICAM Progress.


On October 27, 2009, the Presidents of Mexico and Guatemala, officially inaugurated operation of the El Ceibo-Lagunitas Road, with a length of 20 kilometers, joining the Department of Petén, Guatemala, with the State of Tabasco, Mexico, as part of the RICAM project. The project represents a step forward in regional integration and will directly benefit the residents of the border between both countries and will allow greater exchange of goods and services, improving the prosperity of the area. The total investment amounts to US$12.54 million provided by the Mexican government.

In May 2010, Transport Ministers agreed to reform the Constitutional Memorandum of the RICAM in order to incorporate the stretches of road requested by Colombia: Transversal de las Américas and Autopistas de la Montaña.

Finally, it is important to point out that countries continue to advance in the pre-investment phase of the projects to be implemented in the other corridors.

Acceleration of the Pacific Corridor (CP)

The IDB conducted the study “Alternatives for the Development of RICAM’s Pacific Corridor”, which demonstrated that the most efficient way to modernize the road system is the Mesoamerican Pacific Corridor, which links Mexico and Panama. For this reason, it was decided to modernize it during the XI Tuxtla Summit, with the aim to turn it into a “Five-Star”3 highway. It was also decided to diagnose the needs for infrastructure and equip the border crossings along the route.

RICAM’s Acceleration of the Pacific Corridor Program, was

designed to meet this objective, which locally addresses the road infrastructure and operation limitations both in roads and border crossings, as well as the differences in weight and dimension regulations among the countries.

Advances

In December 2009, the IDB approved partnerships for US $10 million which mark the beginning of the acceleration of the Pacific Corridor works in order to develop an investment program of regional interest and later define its funding mechanisms.

IDB Technical Cooperation for the Pacific Corridor Acceleration Project:

• RICAM’s adaptation, maintenance and operation of the Pacific Corridor highway stretch. The aim is to develop all the studies of investment planning, regulation, pre-investment and bidding documents to ensure the adaptation, extraordinary conservation, maintenance, and operation of all Pacific Corridor for at least 20 years. It considers the harmonization of the weight and dimension policies and the exercise of a method which allows a stretches classification on Pacific Corridor highways from a road safety standpoint and define infrastructure improvement proposals.

• Definition of the operation and optimization of border crossings in RICAM’s Pacific Corridor. It will give support with the optimization of border crossings, through the development of design proposals and implementation of road access and the necessary infrastructure at border posts to reduce costs and waiting time. This includes support for defining the most appropriate control procedures.

3 Score granted by “Road Protection Score” to the highways which meet international standards of road safety and infrastructure design.

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• Support the expedition of customs and border crossings along the PM. Implement the Mesoamerican Procedure for the International Transport of Goods (TIM) at the customs office of the PM countries and support the strengthening of relations between public control

entities and sector trade operator to identify and promote measures to facilitate trade.

RICAM’s ACCELERATION PACIFIC CORRIDOR (2009-2015)Shortest route between Mexico and Panama: 3,244 kilometers across 6 borders and 7 countries

Carries 95% of traded goods in the region by land

Table 2. Progress in the Acceleration of the Pacific Corridor Project 2009-2010

GOALTo convert the Pacific Corridor (CP) into a “Five Star” highway, and a main logistic corridor for trade and transport integration in Mesoamerica. The program has had the following advances:

ADAPTATION, MAINTENANCE AND OPERATION OF PACIFIC CORRIDOR ROAD SECTIONS:• The team of international and national experts began the technical work for the development of CP’s investment plan, based on

road sections which are subject to adaptation, maintenance and operation proposals.• With the purpose of incorporating road safety considerations in the CP, advances were made in: i) Starting Road Safety Executive

Committees (CESVI’s) in all the countries it goes through, with the purpose of coordinating activities, disseminating and recommending to national governments actions to strengthen the corridor’s infrastructure; ii) the Road Safety Caravan “Safe Roads for All” was held along the 3,244 kilometers of the corridor, in order to assess the current status of all the sections and make appropriate recommendations to improve road safety conditions; iii) the contracting of international experts to support countries in the study of road safety.

MODERNIZATION OF INFRASTRUCTURE AND EQUIPPING BORDER CROSSINGS:• Two runs were performed in the three border crossings in the municipalities of Tecun Uman, Mexico, and Malacatan, Guatemala,

in order to check the status of the infrastructure and the promptitude of customs procedures in trade and movement of people.• A preliminary report was developed and presented on the current status of border crossings between Guatemala and Mexico,

located in the CP and is currently in consultation with the authorities of both countries.

IMPROVEMENT IN THE BORDER CROSSING CONTROL PROCEDURES OF FREIGHT AND PASSENGERS:• The Mesoamerican Procedure for International Transport of Goods (TIM) was implemented on the border crossings of: Ciudad

Hidalgo (Mexico) – Tecun Uman (Guatemala), Cd. Pedro de Alvarado (Guatemala) – La Hachadura (El Salvador), El Amatillo (El Salvador-Honduras), Guasaule (Honduras-Nicaragua), on the Pacific Corridor and the border crossing of San Cristobal (Guatemala-El Salvador) on the Carretera Panamericana (branch and complementary conection of RICAM)

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Source: DEPM – IDB.


The Road Safety Challenge in Mesoamerica

One of the main challenges that the Mesoamerican countries face is related to road accidents. Around the world, 1.2 million people die and 50 million are injured as a result of road accidents each year.

The most recent diagnostics on road safety in Latin America and the Caribbean point out that the region has a road accident mortality rate of 17 for every 100,000 residents, a number well above the average of countries with higher income, where the mortality rate is of 10 for every 100,000 residents. It is estimated that the number could escalate to 26 for every 100,000 by the year 2020 4.

Pacific Corridor’s Road Safety Caravan: “Safe Roads for All”

The caravan traveled 3,244 kilometers of the Pacific Corridor (CP), from Puebla to Panama, between May and June 2010 to assess their current status in terms of road safety. IDB technicians accompanied by specialized personnel on a tour throughout the CP in a vehicle equipped with high tech (a software system, GPS, sensors, and high resolution video cameras collected information throughout the tour to identify the stretches of road that presented the highest risk throughout the road network). IRAP (International Road Assessment Program) technology was used. The results will be presented to the authorities of

each country, specifying points or road sections that require public investment to improve road safety in compliance with international standards. The caravan circulated according to the following schedule: Mexico (May 13-18), Guatemala (May 19-22), El Salvador (May 22-25), Honduras (May 31 – June 3), Panama (June 4-8).

Source: Self made with data from IDB.

Source: Mexican Presidency.

4 Source: IDB


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RICAM’s Complementary Projects

In March 2010, the multimodal transport agenda was strengthened with the announcement of two new Non-Reimbursable Technical Cooperation from IDB to develop the Mesoamerican logistic chain – international as well as national and regional – and at the same time, adopt a sustainable conception of regional transport.

• Freight logistics in the Mesoamerican region (CTRG-T1660) (US$ 1.5 million). The study will provide systematized information on the flow of freight, intensity and variability of commerce, generating a tool for decision taking; There will also be an assessment on the availability, prioritization, and specialized logistics infrastructure requirements such as warehouses, distribution centers, truck service centers, multimodal infrastructure, logistic platforms, harbors, dry ports, and the integral management of urban distribution of goods which are key in the value chain, development and management. An efficient and sustainable regional logistic strategy will be developed and the necessary interventions will be planned in order to strengthen the region’s cargo logistics.

• Sustainable Transportation and climate change (CTRG-T1901) (US$1 million). Its goal is to develop a Sustainable Mesoamerican Transportation Program and Climate Change and design sustainable transportation plans in the region, as well as provide mitigation measures of motorization in order to fight the climate change through carbon bonds and green corridors (Green Logistics) – requested by CTT. In order to discuss the urban transportation needs of the region, with fostering from CIDITRANS, AECID, SIECA and PM, the International Transportation Solutions for

Mesoamerican Countries Seminar was held in Antigua, Guatemala from July 27 – 30.

Additionally the technical support from ECLAC has also been requested for the discussion of topics such as inter-modality, road concessions, cargo safety and multinational infrastructure projects.


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Short Distance Sea Transport Project (TMCD) )

Given the need to strengthen the alternative transportation modes in the movement of freight among the Mesoamerican region, work has been done since 2009 for the development of a Short Distance Sea Transport Project (TMCD) in Mesoamerica, under the coordination of Panama, through its Port and Maritime Authority and the support of the Central American Commission of Maritime Transport (COCATRAM).

A “Plan of Action for the Development of TMCD“ was drawn up in order to promote a strategy to encourage the development and modernization of shipping in Mesoamerica, an integral element of STMM, for which it is essential to work in the following areas: i) customs procedures; ii) port facilities; iii) legislation, and iv) maritime norms.

Advances

Reference terms for the feasibility of TMCD were approved, with which the characteristics and volume of commerce will be analyzed, the potential routes will be identified, and the state and characteristics of the institutional design will be diagnosed, as well as the condition of the existing port infrastructure to define the necessary adjustments. Additionally, the necessary changes to maritime law will be determined. This project will be carried out through a non-reimbursable Technical Cooperation from IDB for US $1

million, which will be complemented with in-kind support for administrative costs equivalent to US $250,000 granted by the government of Panama and the governments of beneficiary countries. An initial bid was carried out and produced a short list of companies that competed for the study and proceed to the final selection of the firm that will carry it out.

Mesoamerican Railway System

In June 2008, the heads of state conducted a study on the feasibility of developing a railway transport in the Mesoamerican region, with the purpose of reviving the railways system to complement an intermodal transportation model that integrates all systems and generates an efficient logistics platform in Mesoamerica.

AdvancesMeetings with the Ministers of Transport and railway authorities have been held, as well as with the Technical Committee of Transport, which have allowed the design of the Reference Terms in order to carry out the study and the support from IDB has been requested in order to locate resources to carry out such study. 5

5 Currently they are waiting for Guatemala’s decision to join the study, under an ongoing international dispute, concerning the subject.


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6 TIM is based on the use of computer systems and standardized customs procedures of Mesoamerican countries, in order to optimize the immigration, customs, and quarantine formalities at border points. It consolidates into the Single Transit Document (DUT) all requirements established by these authorities.7 In the first phase of the Project, the design and implementation were made by SIECA; while their funding was carried out with resources from IDB and CABEI (US$3 million from Non-Refundable Technical Cooperation)

TRADE FACILITATION AND COMPETITIVENESS

It is also carrying out preliminary work to assess the extent of TIM to sea and air transit, assuring the participation of non-neighboring countries in a global control system, monitoring and facilitating the operation of international freight traffic in the region.

In May 2010, as part of the framework of the Customs General Directors meeting, the projects on trade facilitation were presented, and the proposed dates for the implementation of TIM were announced:

Mesoamerican Procedure for the International Transport of Goods (TIM)

This procedure expedites the processes and reduces the costs of transporting goods, creating a positive impact on regional competitiveness. In 2008 TIM launched a pilot program 6 on the border crossings of “El Amatillo” (El Salvador-Honduras) and “Pedro de Alvarado-La Hachadura” (Guatemala-El Salvador), which succeeded in reducing the average crossing-time of goods of more than one hour to less than 8 minutes. 7

Advances

In July, 2010, testing began at the border port of Ciudad Hidalgo, Mexico – Tecun Uman, Guatemala, on Ing. Luis Cabrera bridge (Suchiate II) and at the end of this month, 960 operations were performed using the TIM. 70% of these Mexican exports went to El Salvador and the remaining to Honduras and Nicaragua.

The IDB is working with customs and quarantine authorities of Mesoamerica, for the implementation of the TIM around the Pacific Corridor no later than the first quarter of 2011.


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Mandate XI Heads of State and GovernmentGuanacaste, Costa Rica, July 29, 2009

37. To promote the implementation of specific programs, projects, and activities to help boost the participation of small and medium-sized enterprises (PYME´s) in foreign trade in the region.

Table 3. TIM: IMPLEMENTATION SCHEDULEActivity Time Horizon

Diagnostic of trade flow among chosen countries for extension of TIM to sea and air operations.Border crossings in both directions throughout Honduras, El Salvador, Guatemala, and Mexico along the Pacific Corridor8 Border crossings Guasaule (Honduras-Nicaragua) and Peñas Blancas (Nicaragua-Costa Rica).Border crossing Anguiatú – La Ermita (El Salvador-Guatemala) on the Interoceanic Corridor between both countries.Border crossing Paso Canoas between Costa Rica y PanamáIMPLEMENTATION OF TIM THOUGHOUT THE ENTIRE PACIFIC CORRIDORExtension of TIM to air and maritime transport, connected to Colombia and the Dominican Republic.

August – December 2010

October 2010

December 2010

December 2010

March 2011March 2011

October – December 2011

Source: DE-IDB.

Promotion of Mesoamerican PYME’s Exports

The projects in the area of integration of transport infrastructure are complemented in the PM with initiatives that improve the competitiveness of the region, though programs related to the promotion of business opportunities for Mesoamerican PYME´s, registration applications patents, among others.

Under the PM framework “LAC FLAVORS” is being developed, an initiative that began in 2009 with the purpose of supporting small and medium-sized exporters in the food industry in the region to expand their business networks and access new international markets through business conferences aimed at the expansion and strengthening of trade in Mesoamerica.

The LAC FLAVORS fair held on October 21 and 22 2009 in Cancun, Mexico, contributed to the generation of new business opportunities through the organization of 862 appointments from 84 Mesoamerican PYMEs, 10 exporting agencies and 23 importing companies from the food sector from the U.S. and Canada (“Matchmaking”) generating business valued at US $9.2 million to date and US $17 million in transactions-to-be.

The second version of the event was held in Cartagena,

8 Border crossing El Amatillo (El Salvador-Honduras), La Hachadura-Cd. Pedro de Alvarado (El Salvador-Guatemala) and Tecún Umán-Ciudad Hidalgo (Guatemala-Mexico)


16

Colombia, June 15 and 16 2010, where 91 Mesoamerican PYMEs participated and offered their natural and organic products. 1,031 appointments were made, specifying business valued at US$8.1 million to date, and transactions to be achieved in the future for US$17.3 million. 29 buyers

from the U.S., Canada and Italy attended, as well as 11 export promotion agencies from the region. Haiti participated as guest country.

Table 4. Results of LAC FLAVORSLAC FLAVORS 2009-2010: Concrete Results

In 2009• 84 PYMEs from Belize, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, and

the Dominican Republic participated.• 23 food-importing companies from the U.S. and Canada participated.• 862 business meetings among the attendees were held.• US$9.2 million were generated from business and US$17 million from transactions to be consolidated in the

future.• Horizontal Strategic Alliances were defined among the participating PYMEs for US $1.7 millon, and US$1 million

to be defined in the future.• For every dollar of the total cost of the event resulted in US$57 in consolidated business and US$111 in potential

business.

In 2010 • 91 PYMEs from Belize, Colombia, Costa Rica, El salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama , and

the Dominican Republic participated.• 29 food-importing companies from the U.S., Canada and Italy participated.• 1,031 business meetings among the attendees were held• US$8.1 million were generated from business andUS$17.3 million from transactions to be consolidated in the

future.• Horizontal Strategic Alliances were defined among the participating PYMEs for US $670,000 and US$1.5 million to

be consolidated in the future.• For every dollar of the total cost of the event resulted in US$47 in consolidated business and US$107 in potential

business. • A technical component with two training workshops of “The Latest Trends in private Standards of Food Quality”

and “Fair and Sustainable Trade”.

Source: IDB


17

Mesoamerican Fruit Production Project (PROMEFRUT)

On March 12th 2009, the agreement for the implementation of the Regional Cooperation Framework Project to Enhance Competitiveness of the Fruit Production Sector PROMEFRUT in America was signed between the IDB and Mesoamerica Project, with the assessment from the Inter-American Institute for Cooperation on Agriculture (IICA).

The purpose of the project is the preparation and adoption of a regional cooperation framework for the government sector to become a strategic partner of fruit producers. This framework consists of: the Regional Policy Development of Fruit (POR-FRUTAS); and three regional coordination platforms i)market intelligence, ii) exchange and knowledge generation, iii) health, innocuousness and quality.

AdvancesMesoamerica has a proposal of a Regional Policy for the Development of Fruit Production (POR-FRUTAS) and a consensus of the implementation mechanism of such proposal (Regional Fruit Production Council and a public-private Technical Committee) product of an extensive process of consultations carried out within the framework of eight national and regional workshops, that brought together about 450 fruit-farming representatives of the public and private sector. It depicts 42 measures and 82 instruments arrange by topic that demonstrate POR-FRUTAS multi-sectorial implications: trade, quality, competitiveness, innovation, skills development, risk management, environment management, and SAN (Food and Nutrition Safety). It is complemented with its Strategic Plan which sets out the activities to be implemented within five years, as well as their managers and partners, and a proposed mixed-public mechanism of implementation. The POR-FRUTAS has been methodically supported by the Executive Secretariat

of the Central American Agricultural Council (SECAC) and is the first sub-sectored policy proposal framed in Agricultural Policy (PACA).

Mesoamerican Indicators for Competitiveness

The “Indicators for Mesoamerican Competitiveness” project seeks that member countries have common indicators for measuring, monitoring, and competitiveness analysis, which allows recommendations to governments for the purpose of facilitating the adoption of public policies that contribute to improve their competitiveness and expedites the development of an agenda of competitiveness through regional projects.

Advances

In 2010, IDB financed a study for US$35,000 which was presented in June on “Competitive Evolution of Mesoamerica, Causes and Preliminary Agenda”. In the 2010 Work Plan it was agreed to make advances with two specific products, the Mesoamerican Competitiveness Indicator, beyond the average weighted competitiveness of each country, taking into account the synergies of the region and the Competitiveness Agenda for Mesoamerica. Indicating the changes to be expected in the countries, so that the region gains international competitiveness and can be inserted properly in the international circuits of production.

Mandates of the XI Summit of Heads of State and Government Guanacaste, Costa Rica, July 29, 2009

36. To promote the generation of the Mesoamerican Competitiveness Indicators, as well as their periodic update and dissemination by national governments, to contribute to the development of public policy to help enhance regional competitiveness.


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Mesoamerican Support System for Patent Applications

The Support System for the Mesoamerican Management of Patent Applications is the result of consensus and analysis of the meetings of the Directors of Industrial Property Office which started in 2006 and concluded with the creation of the Support System for the Management of Patent Applications for Central American Countries and the Dominican Republic (CADOPAT).

The Project contributes to the process of search and substantive examination of patent applications, in response to requests for support and contribution to the reduction

of costs and time in the patent registration offices in Mesoamerica, by giving support in developing their capacity for resolution, generating legal certainty for the benefit of applicants and promoting the use of free technology.

Advances

• In December 2009 the Executive Committee approved the inclusion of this Project.

• From January to September 2010, as shown in the chart below, 108 applications were tended with an equivalent in Mexico (type 1) and 46 applications that have an equivalent in Mexico (type 2).

Table 5. Competitive Agenda ResultsCONCRETE RESULTS

1. A report containing results of identification and adjustments to the methodology of the Mesoamerican Competitiveness Indicator.

2. An evaluation of the impact in the competitiveness of the specific areas of the Mesoamerica Project.3. A validation plan and work schedule of the Feasible Theoretical Agenda of competitiveness for each one of the

Mesoamerican countries.

Source: IDB.


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Type 1: Receiving applications in offices that have an equivalent in MexicoType 2: Receiving applications in offices that do not have an equivalent in Mexico.P: Published, S: In study, Cl: In Clarification, R o C: Rejected or cancelledSource: Based on data from the Mexican Institute of Industrial Property (IMPI)

CountryNicaraguaHondurasEl SalvadorGuatemalaDominican RepublicPanamaCosta RicaBelice Colombia TOTAL

R o C 0 0 1 04

0 0 0 0 5

Type 200

240

14

0800

46

C l 0 0 10

11

0 2 0 0

14

S 0 1

19 06

0 0 0 0

26

C l 0 1 10

18

0 0 0 0

20

Type 105

560

46

1000

108

P03

350

18

100 0

57

P00

1001

000 0

11

R o C0 0 702

0 60 0

15

S 0 0 600

0 0 0 0 6

Table 6. Pattent applications 2007-2010

• In May 2010, the “Sub-Regional Meeting of Heads of Office and Patent Experts of Central American Countries and the Dominican Republic for Updating the Manual of the Central American Patent Application Processing and the Strengthening of Mechanisms of Collaboration in Terms of Patents” was held in Mexico.

• The participating countries agreed that the World Organization of Intellectual Property (OMPI) and the Mexican Institute of Intellectual Property (IMPI) coordinate a group to define the reach of a common platform for the exchange of information.

• The delegation from Guatemala suggested that Central American countries analyze the inclusion of this topic in the Ministry Meeting in Guatemala, to be held next December.

• To the request of Belize and within this Project, IMPI and the Office of Intellectual Property from Belize (BELIPO), agreed to sign an agreement of cooperation, innocuousness and quality.


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9 Except for a 30-kilometer stretch in Costa Rica between the Parrita and Palmar Norte substations.10 On October 26, 2009, the Presidents of Mexico and Guatemala inaugurated the electrical interconnection between Guatemala and Mexico, which has currently allowed

energy exchanges from Mexico.

MESOAMERICAN ENERGY INTEGRATION

The purpose of the energy integration program is to set up the Regional Electricity Market (MER), that will make the energy generation projects feasible, guarantee energy safety of the region and will stimulate productive investment, significantly boost regional economy. During 2010, 98% of the construction of the Central American Electrical Interconnection System (SIEPAC) was reached 9, in addition

of two electrical projects, the electrical interconnections of Guatemala-Mexico 10 already inaugurated and Panama Colombia, which is in an environmental study underway. With the culmination of these projects (transmission lines, compensation equipment, and substations) the construction phase of the necessary infrastructure for MER is completed.

29. To accelerate efforts to complete the acquisition of the rights of way that will make it possible to finish installing the SIEPAC infrastructure within the established deadlines.30. To urge the countries that have not yet done so, to complete their internal procedures for bringing into effect the Second Protocol for the Framework Treaty of the Regional Electricity Market (MER), which is an essential step to bringing the system on line in 2010. In particular, the appropriate entities and regulatory bodies are urged to carry out the work of interfacing national and regional regulations over the short term.31. To carry out complementary infrastructure projects to strengthen the interconnection of the Regional Electricity Market (MER) with the Mexican electric system. Also, to underscore the completion of the electric infrastructure between Mexico and Guatemala, and to promote its use.32. To make progress in the electrical interconnection between Panama and Colombia, by acknowledging the start of operations of the company ICP (Interconexión Colombia-Panamá S.A.), and the opening of a binational project coordination office in Panama City, which represent a key step toward interconnection.

ENERGY

Mandate XI Heads of State and Government Guanacaste, Costa Rica, July 29, 2009


21

AdvancesTable 7. SIEPAC Progress.

ELECTRICAL INTERCONNECTION SYSTEM FOR CENTRAL AMERICAN COUNTRIES AND THE REGIONAL ELECTRICITY MARKET

Purchase of rights of way 98.40%Tower foundations: 4167 of 4584 91%Tower assembly: 3990 of 4584 87%Laying of conductors: 774 of 1791 kms 43%

Beginning of operations in partial sections starting 2010. Weighted progress of the Project: 91% August 2010

11 The network will connect to 15 substations in the countries of the region, through 28 access bays. 12 With the possibility of installing a second circuit.13 Made up by: National Institute of Electrification (INDE) Guatemala, Hydroelectric Commission of the Rio Lempa (CEL) from El Salvador, National Company of Electric

Energy (ENNE) from Honduras, National Company of Electric Transmission (ENATREL) from Nicaragua, Costa Rican institute of Electricity (ICE) from Costa Rica, Electric Transmission Company (ETESA) from Panama, Electrical Interconnection (ISA) from Colombia, Spanish Energy Company (ENDESA) from Spain, Federal Electric Commission (CFE) from México. On the innovative formation of this new regional company, visit www.eprsiepac.com.

14 Since October 2010 it is referred to as the MER Board of Directors

Central American Electrical Interconnection System (SIEPAC)

The system is made up of two components: i) The construction of the required infrastructure, and ii) the legal and institutional framework for the functioning of the electrical market.

The infrastructure component of SIEPAC 11 consists on the design, engineering, and construction of a transmission line of 1,790 kilometers of 230KW 12. It will have a reliable and secure

Responsible entities• Implementation Unit of the SIEPAC project• Regional Electrical Interconnection Commission (CRIE)• Network Business Owner (EPR)• Regional Operating Entity (EOR)• Central American Electrification Council (CEAC)• SIEPAC Project Director Group (GD-SIEPAC)14

capacity of electrical conduction of up to 300 (MW). The total investment amount of this project adds up to US$494 million and has been covered by the six participating Central American countries and three extra regional partners (EDENSA from Spain, ISA from Colombia and CFE from Mexico) through the financing of IDB, CABEI, BANCOMEXT and CAF. Its initiation will begin in 2010, in partial sections. SIEPAC is built under the responsibility of Network Business Owner (EPR) 13 a vanguard scheme throughout the world.

MER consolidation in 2010, in parallel with the partial operation.Source: EPR-SIEPAC, August 2010.


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Electrical Interconnection Mexico-Guatemala

The interconnection Mexico-Guatemala consists of a 103 Km electrical transmission line (32 kilometers in Mexico and 71 in Guatemala) of 400 Kw, as well as the expansion of two electrical substations located in Tapachula, Mexico, and “Los Brillantes” in Retalhuleu, Guatemala.

Advances

On October 26 2009, the presidents from Mexico and Guatemala inaugurated the infrastructure of the electrical interconnection between both countries. Within the “Test Phase”, electrical energy transactions originating from Mexico have taken place.15

On September 15 2010, the “Operations Conditions of the Mexico-Guatemala Electrical Interconnection Agreement” was signed, between The Mexican National Center for Energy Control (CENACE) and the Wholesale Market Manager (AMM) from Guatemala, which ended the test period of the interconnection between both countries and the purchase agreement came into being with which the Federal Commission of Electricity (CFE) of México exports electric energy to Guatemala, this way initiating the Mexican electrical system

integration with the Central American Electricity Market. In order to bring this integration to life, it is necessary to promote complementary infrastructure projects that will strengthen the interconnection, as well as develop regulatory harmonization between Mexico and Guatemala, and the Central American Electricity Market.

Electrical Interconnection Panama-Colombia

The project consists of the construction of a 600 Km electrical transmission line, in direct current (HVDC), between the substations of Cerromatoso in Colombia and Panama II in Panama, with a transport capacity up to 600MW. This project will allow the integration of the Andean and the Mesoamerican market, with the consistent benefits not only for the agents from both countries, but also, in terms of optimization of the available resources in the region.

Advances

In 2009 the Project “Electrical Interconnection Colombia-Panama S.A. (ICP) started operations, responsible make feasible, build and operate the power transmission line between the two countries.

According to a defined work plan in 2010, advances in the implementation of the project continue. The current priority is the creation of conditions that lead to the successful completion of the auction, the allocation of financial rights, access to interconnection capacity (which is the mean through which ICP will receive their earnings), ensuring the line’s maximum usage.

As a result of the consulting services developed in the framework of a Technical Cooperation within the IDB, detailed electrical studies have been carried out, the pre-design and the basic specifications of the project are accounted for, and the process to request access to the systems of the two

15The export of electricity from Mexico to Guatemala, in the test phase was from 0 to 120 MW daily.

Source: Mexican Presidency


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countries and the regional transmission network has begun. The Environmental Impact Assessment will be carried out with the resources from the same cooperation, for which a previous detailed analysis and harmonization project has been underway, in order to define the most favorable route for the interconnection’s development, considering social, technical and financial aspects.

On its part, the regulatory authorities of the two countries have enacted regulatory harmonization proposals, opening a space for consultation and discussion. It is hoped that through this process clear, stable and harmonized rules be defined that enable the exchange of energy between the two countries.

Finally, under the SIEPAC framework, a joint project for the understanding and technical discussion of the harmonization proposal has been agreed on, with the coordination of the Implementation Unit SIEPAC, whose goal is to ensure the required interfaces between the Colombia-Panama regulation and MER, to achieve the harmonization that will bring about the expected benefits for the regional market. It is considered that in order to make the economic exchange of energy between Central America and Colombia feasible, it is necessary to develop regulatory harmony between Colombia, Panama and the Regional Electricity Market (MER).

Regional Electricity Market Consolidation

The consolidation of MER is a crucial task for the success of SIEPAC. Additionally the Technical Cooperation of US $1.5 million to support the consolidation of the Regional Electricity Market (MER), the IDB approved in September 2010 a second Technical Cooperation for the same amount, which will complete such consolidation and make progress in four components: a) Harmonization of national legislation and regulation with MER’s regional regulation; b) Promotion to the private projects of regional generation and demand through MER; c) Implementation of MER´s regulations; and d) Institutional Strengthening of CRIE and EOR.

As a result of the projects within the context of early completion and entry into the operation of SIEPAC, the interest in making investments on the generation of electricity from renewable resources to feed the regional system has been renovated. Such is the case of the funding granted by the BCIE to the Hydroelectric Commission of the Rio Lempa (CEL) of El Salvador, more than US $114 million for the expansion to 80 MW at “November 5” Hydroelectric Plant.

Mesoamerican Biofuels Program (PMB)

The Mesoamerican Biofuels Program (PMB) is seeking to implement alternative and decentralized energy schemes, which in turn contribute to the revival of local economies.

It includes the set up of biofuel plants in the Mesoamerican region, made from non-food resources and the formation of Mesoamerican Biofuels Research and Development Network (RMIDB). With these two components, PMB promotes research and technology transfer in the subject matter and in orderly growth of the biofuels sector with technical and scientific support.

Mandate XI Heads of State and Government SummitGuanacaste, Costa Rica, July 29, 2009

33. To strengthen the Mesoamerican Biofuel Research and Development Network, which will contribute to energy and food security in the region, and to hail the progress in the Mesoamerican Biofuel Program, especially the installation of two pilot plants for biodiesel production in El Salvador and Honduras, as well as the progress achieved in Costa Rica, Guatemala, Mexico, and Panama.


24

Advances

Through the Colombian Technical Cooperation Program, two plants were installed in March 2009, one of them in Honduras and one in El Salvador, they were of an experimental character and with a production capacity of 10,000 liters/day of biodiesel, which are operative today. Also, in Chiapas, Mexico, a “Research and Technology Center for the Production of Biodiesel” was installed. Such project consists of four phases, in which biodiesel production modules of diverse technologies

promote research and transfer of technology in this field and promote the exchange of experiences in this sector among mesoamerican countries.

From August 24 to the 26 2009, the first RMIDB meeting was held in Chiapas, Mexico, in which more than 75 representatives from 10 countries of the Mesoamerica Project, who identified opportunities and challenges in the Biofuels subject matter, they also produced a Regional Work Plan and approved the contents of the Memorandum of Understanding (MOU) of

will be installed, including the development a module with technology from Mexico and Colombia. The first two phases, corresponding to the experimental and small-scale production, are already operating, and they are in the final stage of installation and construction for industrial production phase. The government of Colombia continues to coordinate with the IDB and local authorities for the implementation of new plants in Panama and The Dominican Republic.

Mesoamerican Network for Research and Development of Biofuels (RMIDB)

The Mesoamerican region, under the leadership of Mexico and Colombia, promoted the creation of the Mesoamerican Network for research and Development of Biofuels (RMIDB) to

creation of the RMIDB, signed in December 2009 16, establishing Mexico and Colombia as regional network coordinators.

In compliance with the work plan, the meeting of the task force of Jathropa in Chiapas was held from March 3 to the 5 2010, where a regional proposal for the genetic improvement of Jathropha curcas, which it is native to and abounds in Mesoamerica.

At the same time, a web page was made available to the RMIDB members and the general public, which promotes the exchange of information on the topic. (www.redmesobiocombustibles.chiapas.gob.mx).

CountryEl Salvador

HondurasMéxico

Dominican RepublicPanama

SuppliesJatropha/Ricinus/Oil Palm/LardPalm OilJatropha/Palm Oil/Vegetable OilTo be defined

Recicled oil

FinancingColombian Technical Cooperation

Colombian Technical CooperationOwn resources

IDB

IDB

EstadoIn operation

In operationIn the process of installationIn technical studies

In tender

Table 8. Biofuel production plants in Mesoamerican countries

Source: Colombian Goverment

16 Signature pending Belice, Nicaragua and El Salvador.


25

Advances

The AMI infrastructure follows the same times and predictions than construction of SIEPAC power grid, which reported a progress of more than 90% on its construction. While the infrastructure is being built, REDCA, with the financial support of CAF, carried out a study of the telecommunications market sector as a key input for their business plan. Additionally, Nicaragua was defined as its administrative, operational and commercial headquarter, and the selection and hiring process of the CEO is currently underway.

A Technical Cooperation from ECLAC for US$75,000 has been achieved, and the study of the countries of the region has started, in order to identify the Governments’ demand for connectivity that could be met by AMI’s supply and suggest management options on the governments’ usage capability.

Interconnection of telecommunications networks between Mexico and Guatemala

Under the agreement of the heads of state of making progress in interconnections in the matter of telecommunications between Mexico and Guatemala, and taking advantage of the fiber optic infrastructure installed in the electrical interconnection, the interconnection of telecommunications networks from REDCA and CFE was suggested, and a point of presence was established (POP, commonly known as telecom hotels) in Los Brillantes substation in Guatemala, which will enable them to offer neutral access to the fiber optic network REDCA to telecom operators. Mexico, through the CFE, has offered to share with the INDE of Guatemala, the plans for the construction of the hotel and the technical support for its operation. The hotel facility also requires the lying of fiber optic cable for a length of 180

The agenda of the PM in telecommunications is comprised of three core initiatives: i) Construction of the Mesoamerican Information Highway (AMI) as a fiber optic backbone, lying on the SIEPAC transmission line, and regulatory harmonization to facilitate the transmission of data can operate at regional level; ii) Strengthening of the National Research and Education Network (RNIE); iii) A regional strategy for the lowering of tariffs for long distance and roaming.

Mesoamerican Information Highway (AMI)

The Mesoamerican Information Highway (AMI) is an infrastructure for broadband communications (fiber optics) that interconnect the Mesoamerican countries, drawing on the electrical infrastructure from SIEPAC. The administration and operation of the network will be borne by the Central American Fiber Optic Network (REDCA), a subsidiary of the EPR (Network Business Owner). The AMI will increase data transmission capacity between countries and may help promote the use of information technology extensively, which will help expand access and reduce the digital divide, integrating the countries into the society of

knowledge.

Mandate XI Heads of State and Government SummitGuanacaste, Costa Rica, July 29, 2009

34. To strengthen the efforts needed for operation of the Mesoamerican Information Highway (AMI), a program coordinated by El Salvador, in order to: (i) implement the harmonized regional regulatory framework; (ii) develop the administrative and operational model for the usage capacity that will be available to governments on the network; (iii) design a regional strategy to promote the viability of reducing interregional long-distance and roaming fees.

TELECOMMUNICATIONS


26

kilometers, running from Los Brillantes substation to Guatemala City to interconnect with AMI CFE network. This interconnection is a key factor for AMI, as an alternative to the interconnection with the various submarine cables and to a reduction of tariffs.

Harmonization of Regulatory Frameworks

The future operation of the optical fiber main network between the Mesoamerican countries raises the need for adjustments in the regulatory frameworks of countries, with the purpose of introducing this infrastructure in the regional telecommunications market in conditions of free and undistorted conditions which are similar in the six affected countries. These adjustments contribute to the harmonization of the communications sector, which promises various benefits to both regulators and operators. It seeks to harmonize the regulatory framework for interconnection of transportation and internet networks, with the appropriate regulatory instruments, to contribute to regional integration of telecommunications services and facilitate the entry into operation of fiber optic networks at a regional level.

Advances

Through the Central American Technical Commission of Regional Telecommunications (COMTELCA) and with the financial support from IDB for US$320,000, the regional regulatory harmonization project is running (RG-T1507). The short-listing of four firms to provide the consulting services on regulatory harmonization has been completed, the reference terms for the consultancy tender assessment of the situation and proposals for harmonization which are under review by regulatory authorities were prepared, and a task force which will act as technical partner of the firm in consulting arrangements. Bidding is expected to begin in early November and the hiring of the firm with the best technical and financial proposal in early December.

Strengthening of the National Research and Education Network (RNIE)

To strengthen the management capacity and promotion of the National Research and Education Network for two purposes: i) achieve greater and better use of value added services offered by RNIE´s by the scientific and research communities of the

universities of each country, among the countries and with the rest of the world, through its link with the CLARA network, and ii) provide RNIE the management plans that ensure its sustainability.

Advances

The financial support from the IDB for US$200,000 has been achieved with resources from the Spanish General Cooperation Fund, for activities to strengthen the RNIE (RG-T1652), a coordinator for the project was hired, the baseline study on the current situation and strengthening needs of RNIE strengthening was carried out; a detailed design of the actions to each RNIE (each one will have US$15,000 to hire staff in charge of the management and promotion of the network) was drawn out.

Reduction of long-distance and roaming fees

To reduce international long-distance and roaming fees between different operators in the Mesoamerican region, in direct benefit of the users.

Advances

A Non-Reimbursable Financial Cooperation from the IDB for US$220,000 has been achieved, also with resources from the General Spanish Cooperation Fund, in order to design and implement long-distance and roaming fee reduction mechanisms among Mesoamerican countries. COMTELCA is in charge of defining the focus of the work for the reduction of fees and activities that would be required to implement rate changes.


27

1922

NATURAL DISASTERS

ENVIROMENT

HEALTH CARE

HOUSING

IV. PROGRESS IN THE SOCIAL AREA

29

Mesoamerican Public Health System (SMSP)

The Mesoamerican Public Health System (SMSP), seeks to answer the common major public health challenges and strengthen national health systems through targeted interventions and operational support of the Mesoamerican Public Health Institute (IMSP) 17 constituted on July 3, 2009. An estimated cost of a basic package of interventions would amount to US$340 million over 5 years. The SMPS would provide a flexible mechanism for coordination and development joining their efforts to achieve greater national cooperation among countries for the benefit of the Mesoamerican population, in line with the Millennium Development Goals18

Advances

The SMPS priority areas were agreed upon by the region with the support of the Central American Health Ministries Council (COMISCA), these being: nutrition, maternal and child health, vaccination, and vector-borne diseases (malaria/dengue). Both have two pillars: strengthening human capital through IMSP and epidemiological surveillance.

On June 14, 2010, the launching of the Mesoamerican Health Initiative 2015 (SM2015) was announced, which represents the consolidation of a total contribution of US$150 million from the Bill and Melinda Gates Foundation, the Carlos Slim Institute of Health and the government of Spain through the Spanish Agency of International Cooperation for Development (AECI), which together form a public-private partnership which through this effort will add to the work done in the region through the SMPS. The resources of the SM 2015 will be managed by IDB, an entity that in turn will coordinate with the Mesoamerica Project and COMISCA to support the implementation of the Regional Master Plan.

17 The institutions of the IMSP are Gorgas Institute for the Study of Health of Panama, the Center for Research and Health Studies (CIES) of the Autonomus National University of Nicaragua, the National Institute of Public Health (INSP) of Mexico and the University of Costa Rica, Faculty of Medicine of the University of El Salvador, the Faculty of Medical Sciences from the University of San Carlos, Guatemala, and the Colegio de la Frontera Sur (ECOSUR) in Chiapas, Mexico.

18 The SMSP will help generate a positive impact on national compliance of the countries of the Mesoamerican region with the objectives 2, 3, 4 and 5 of the Millennium Development Goals through the implementation of master plans of the components of maternal and child health, nutrition, vaccination and epidemic surveillance.

HEALTH CARE

Mandate XI Heads of State and Government Summit, Guanacaste, Costa Rica, July 29, 2009

38. To strengthen the Master Plan of the four initial components of intervention for developing the Mesoamerican Public Health System (SMSP) for implementation starting in 2010. In this regard, we commend the Ministries of Health and the academic institutions of Mexico, Central America, and Colombia for forming the Mesoamerican Public Health Institute. We also express our appreciation to COMISCA for supporting the development of this system.

S O C I A L A R E A

For its part, 97 region nationals benefitted from scholarships for courses, trainings, masters and doctorates, as part of the IMPS programs offered through: Mesoamerican Program of Training and Updating Health Professionals, Training and institutional development programs, and Mesoamerican Program for Technical Support and Knowledge Transfer. Some of these scholarships were offered by the Carlos Slim Health institute.

Finally, the Ministers of the region agreed to the governance mechanism of the SMPS and operation statute of the SMSP is in the process of approval.

30

Launching of the Mesoamerican Health Initiative 2015 (SM 2015)Source: Presidency of the Republic of Mexico.

Launching of the Mesoamerican Health Initiative 2015 (SM 2015)Source: Presidency of the Republic of Mexico.

S O C I A L A R E A

Mesoamerican Strategy for Environmental Sustainability (EMSA)

The Mesoamerican Strategy for Environmental Sustainability (EMSA) is the result of a consensus process of the environmental authorities of the region, whom with the support from the Central American Commission for Environment and Development (CCAD) and the Mesoamerica Project, formulated a cooperation scheme to promote sustainable development, which includes priorities and action lines determined by mutual agreement, in three strategic areas: i) Biodiversity and forests; ii) Climate change, and iii) Sustainable competitiveness.

Mandate XI Heads of State and Government Summit, Guanacaste, Costa Rica, July 29, 2009

39. To carry out the actions needed to structure the Mesoamerican Environmental Sustainability Program (EMSA) in the context of the Mesoamerican Environmental Sustainability Strategy, and to implement, over the short term, regional projects in the areas of cooperation set out by the strategy: biodiversity and forests, climate change, and environmental competitiveness.

ENVIROMENT

31

Advances

A plan of action which sets out the regional working lines to meet the short, medium, and long term needs was devised, according to the priorities established in the Strategy, work done by the “EMSA Ministerial Contacts” in four working sessions in Mexico, Costa Rica and Panama, since October 2009, for which they received support from IDB and ECLAC.

During the first half of 2010 two ministerial meetings were held in Mexico and Panama, with the purpose of making progress in the approval of the Plan of Action of the EMSA, which defines, among others, cooperation actions to be carried out in the 2010-2013 period, thus ensuring effective coordination among the environmental authorities by the strengthening the political will gains relevance for its development. Likewise, once the plan is approved it will be necessary to work on the identification of partners in order to raise funds for technical and financial cooperation to enable its implementation.

S O C I A L A R E A

Climate Change

Climate change is the major global environmental challenge of this century and represents, in the medium and long term, one of the greatest threats to the process of human development and welfare; however it also represents an opportunity to promote sustainable human development. Efforts to tackle the tasks of mitigation and adaptation bring multiple benefits, including energy security, cleaner production processes, efficiency and competitiveness, improving air quality and natural resource conservation.

The year 2010 is a key period for the Mesoamerican region. Under the PM, it is necessary to create a clearer and more articulate position in the Mesoamerican region, ensuring access to future financing windows, through the development of projects for climate change adaptation.

Advances

In May 2010, the IDB organized a regional workshop on adaptation held in Guatemala City. With the participation of the links of the Mesoamerican countries to the negotiations taking place under the UN Framework Convention on Climate Change (UNFCCC), who shared their views on the immediate needs of the region and the challenges before the negotiations.

As a result, it was agreed to work together on the following topics relevant for adaptation to climate change: (i) develop climate change scenarios and methodologies for prioritization of adaptation activities in the context of sustainable development, (ii) generate more detailed information regarding the costs and benefits of adaptation, (iii) harmonize methodologies for a vulnerability detailed analysis of impacts of climate change and its subsequent inclusion in development projects, (iv) promote to the highest level activities of cooperation among countries, sharing and disseminating scientific information on climate change and practical experience in the process of mainstreaming the issue, and (v) develop adaptation activities which are demonstrative and highly replicable.

Mandate XI Heads of State and Government Summit,Guanacaste, Costa Rica, July 29, 2009

40. To support the coordination and development of regional projects related to climate change, primarily in the area of adaptation, by promoting the management of international financial resources. In this context, to seek common ground in the countries’ positions vis-à-vis the current negotiations under the United Nations Framework Convention on Climate Change (UNFCCC).

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S O C I A L A R E A

Mesoamerican Territorial Information System (SMIT)

The project aims to strengthen the capacities of institutions involved in risk management and civil protection, establishing a uniform platform that expedites the exchange of information on threats, vulnerabilities and risks. It has a technical cooperation grant from IDB for US$800,000, to be complemented by contributions of counterpart staff and facilities of member countries, as well as the Water Center for the Humid Tropics of Latin America and the Caribbean (CATHALAC).19

Advances

In 2009, the “Regional Assessment of Demand and Supply of Territorial Information on threats, vulnerability and risks in the countries of the Mesoamerican region” was developed.

In April 2010, and as a result of SMIT’s Second Regional Workshop, held in Panama City, progress was made in the joint formulation of Standards and Procedures Manual for the use of territorial information, through the review and validation, the “Strategy for Reducing Gaps in the management of Territorial Information”. This strategy will serve as a basis for designing the institutional strengthening in the area of techno-scientific information on the decision-making process on territorial planning with a focus on disaster prevention. The program consists on supplying equipment to the national offices of civil protection and in the hiring of national and regional experts to manage the tools to be used in the operation of the system. The process of procurement of equipment and hiring of such experts to support civil protection bodies has already begun.

A SMIT working prototype was also developed, setting the model in the countries of the region. The information to be used, will be integrated with compiled satellite data on a continuous basis in the Regional Visualization and Monitoring System (SERVIR) and provide the civil protection authorities and others with expertise in the subject, a flexible and effective mechanism to use cartographic and satellite information in the risk reduction process.

The SMIT will establish itself as a vital tool for national and task planning in the development of Mesoamerica, through the use of timely and reliable data.


41 To adopt the platform and secure the resources needed for the operation and sustainability of the Mesoamerican Territorial Information System (SMIT) for Reducing Natural Disaster Risks. This project is headed up by the Water Center for the Humid Tropics of Latin America and the Caribbean (CATHALAC), with the participation of the region’s civil protection authorities and geographical institutes.

NATURAL DISASTERS

19In implementing the SMIT, institutions such as: Central Executive Unit CATHALAC, civil protection agencies, IDB and the PM.

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S O C I A L A R E A

Financial Management of Natural Disaster Risk

Based on a regional assistance request by the Council of Secretaries and Ministers of Finance of Central America and the Dominican Republic (COSEFIN), the IDB developed a strategic approach to the financial management of natural disaster risks which aims to assist countries in the design and implementation of integral programs of financing and risk transfer of natural disasters.

The strategic approach comprises four main lines of action: (i) development of a Regional Facility, indexed for catastrophe-type disaster coverage; (ii) development for a Credit Facility for severe natural disaster emergencies; (iii) the creation or strengthening of reserve funds for disaster emergencies and budget planning, and (v) development of domestic insurance markets.

Advances

During 2010 the sector technical dialogue has continued with the PM countries on the financial management of natural disasters, and a strategic approach to financial management in the countries of the Mesoamerican region has continued, through the strengthening of comprehensive financing programs and natural disaster risk transfer.

The IDB has made great efforts to display the Credit Facility Contingent, under which, an emergency standby contingent loan for natural disasters in Honduras for US$100 million has been designed and is in the process of being prepared. In turn, the result of the intensification of technical dialogue, other two contingent loan operations for Costa Rica and Panama are in process with the IDB, while the Dominican Republic has a standby loan of US$100 million since late 2009.

On the other hand, progress has been made in implementing the Insurance Facility for catastrophic events (hurricane and earthquake coverage) in the Dominican Republic, at the same time, with resources from non-reimbursable technical assistance, the design and development of a new Insurance facility in a second country in the region has begun. Finally, it is important to highlight that in the course of action development of the insurance market, the technical support to the Central American Insurance Superintendence has continued, in order to improve regulation and supervision of the insurance market.

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S O C I A L A R E A

Advances

Through the Mexican National Housing Commission, information exchanges on the regulatory framework with the Central American counterparts were made, in order to identify the need for cooperation and legal issues that need to be modified to create a financial market in the region. As a result of this exchange, in October 2008, a Memorandum of Understanding on cooperation and technical assistance in terms of housing was signed in El Salvador; in September 2009, a similar one with Nicaragua was signed, and in October of the same year, one else with Guatemala.

The Government of Mexico provided the technical assistance through the Federal Mortgage Society, which included the proposed design of two types of guarantees, the creation of a regional workshop and the introduction of some of the best practices in the granting of loans for social housing. The CABEI will manage the allocation of new resources for new housing loans, as well as the ability to search and capture the necessary financial resources for the development of financial products as collateral.

This year, the Government of Mexico has paid US$3 million to the CABEI, which were destined for the National Popular Housing Fund (FONAVIPO) in El Salvador to generate social housing loans, in the following areas: the purchase of new or used, assisted and/or progressive self-constructed housing.

the progress in program design, which has been achieved in accordance with the Central American Strategy for Housing and Human Settlements.


42. To make progress toward implementation of the Low-income Housing Program in Central America, which is being coordinated and financed in its first phase by the Government of Mexico with resources from the San José Agreement, and executed through CABEI. To acknowledge

Central American Social Housing Development Program

Under the Central American Social Housing Development Program, the Government of Mexico, through the San Jose Agreement, has provided for the provision of reimbursable resources up to US$33 million by the Central American Bank for Economic Integration (CABEI) operated through its network of intermediaries in Central America.

Under this scheme, US$1.3 million have been donated to the Local Development Program (PRODEL) of Nicaragua for the first micro-lending project in June 2009 to generate social housing loans, in the area of improvement and progressive building.

The program is expected to consolidate a market for financing long and short-term demand for low cost housing and address the housing backlog in the region, as well as the development of institutional capacity and regional and national financial instruments. The institutions that drive the program are: Mesoamerican Project, Mexican Federal Mortgage Society (SHF), Ministry of Finance and Public Credit of Mexico, CABEI and the Central Housing and Human Settlements (CCVAH).

HOUSING

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S O C I A L A R E A

Latin American and Caribbean Unity Summit

On February 22 and 23, 2010, the Latin American and Caribbean Unity Summit, was held in the Mexican Riviera. With this meeting, Mexico completed its two years as Pro Tempore Secretariat of the Permanent Mechanism for Political Consultation and Consensus (Rio Group) and at the time of the Second Summit of Latin America and the Caribbean on Integration and Development (CALC), complied with the commitment made in December 2008 in Salvador de Bahia, Brazil. The Summit was, therefore a joint space between the Rio Group and CALC.

The Summit was a meeting involving the Heads of State and Government of Latin America and the Caribbean from 32 countries, who developed a common agenda of political concertation, cooperation, development and integration.

The Summit brought together the representatives from 16 international organisms including the Executive Director of the PM and members of the GTI. The IDB and ECLAC contributed to the reflection of some of the issues that the Heads of State and Government addressed during the Summit such as regional integration and climate change.

IDB prepared the document “Challenges and Opportunities for Latin America and the Caribbean in the Current Economic Climate”, while ECLAC presented the document “Integration: communication, coordination and synergy of the sub-regional processes”.

Link to other regional integration instancesRelationship PM – Council for Central

American Integration (CIS)

In the context of the relationship that Mexico’s PM national Office has begun with the Central American Social Integration Council (CIS), was jointly promoted with the Secretariat of Central American Social Integration System (SISCA) the First Social Policy Dialogue, held in Mexico City on November 26 and 27 2009. As a result of this dialogue, in which representatives

of the Ministries of Social development or their PM countries equivalents, the need to establish a regional public good of a social area was established. This should consist initially of two actions: i) regional initiatives on food and nutrition, and ii) strengthening and sharing of technical skills of the social development observatories that exist in the Mesoamerican region. Additionally, it was agreed to continue this dialogue in Panama 2010.

In the LIV General Meeting of the CIS, also held in Mexico, it was also agreed that the PM will participate as an observer to the regular meetings of the CIS in order to maintain proper coordination and monitoring of social issues. The LV meeting of the CIS was held in Panama on April 8th and 9th 2010.

European Union

On April 12, 2010, negotiations with the Latin American Investment Facility (LAIF) member of the Cooperation Agency from the European Union (EuropeAID) were initiated, in order to include Mesoamerican investment projects in its portfolio.

1st Meeting of Latin American Integration Agencies

In the same line of further linking PM with other regional integration initiatives, the PM Executive Director participated in the 1st Meeting of Latin American Integration Agencies, held via videoconference on March 16, 2010, following the Latin American and Caribbean Unity Summit mandate. Through this first meeting, a dialogue and coordination process began among the regional integration mechanisms, the areas of work and a schedule of virtual encounters for follow up.

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V. I N T E R N A T I O N A L L I N K S

As has been noted in this report, after two years of operation, the Mesoamerica Project has managed to build consensus and bring fresh resources to

regional priorities. In this way we have generated a trusted source based on cooperation, which promotes a process of regional identity and cohesion to deal with common challenges with common solutions, under the principle of shared responsibility. This would certainly not have been possible without the input of resources and technical support provided by the GTI, which has been crucial to the work and projects of this mechanism.

Currently, the PM is being strengthened through a strategic planning exercise and the introduction of management tools needed to optimize management, monitoring and evaluating, our projects and programs.

PM’s efforts are aimed at achieving concrete results in the medium and long term. The Executive Committee has identified the following perspectives: the start operation of the electrical interconnection and telecommunications from Mexico to Colombia, the modernization of the Pacific Corridor of RICAM road with the aim of turning it into a “five star” highway, the promotion of regional competitiveness by reducing the times of transit of goods through innovative programs such as the TIM from Mexico to Panama, and its sea and air implications covering the entire region, the strengthening of the RMIDB and operation of a network of biofuel plants throughout the region, allowing the orderly development of this sector.

Additionally, recognizing the priorities of the region, we will strengthen the work in order to continue promoting social and sustainable projects. In this effort, we expect the implementation of SMSP to increase the supply and quality of basic health services; strengthening regional coordination in risk reduction caused by natural disasters through the platform of the Action Plan activities by SMIT;

and financing new housing projects in the region and the implementation of EMSA plan.

For these reasons, it is necessary to build a strong financial and political alliance among our governments and multilateral banks to progress in the integration and development of the Mesoamerican region, not forgetting that, as a central focus of our work, we also have the responsibility to seek adaptation to future conditions that climate change creates and to reduce the incidence of natural disasters in our region.

Without a doubt, the Commission for Promotion and Funding (CPF) is a critical area for the progress of the consolidation of programs and projects that are promoted by this mechanism and will strengthen Mesoamerica Project ties with other mechanisms of regional integration.

In addition and considering the fact that the region faces in the current political and economic context, the PM is defining itself to continue strengthening the integration and to promote the generation of new opportunities for the inhabitants of the region. Therefore, the ten countries involved and the Executive Committee, reaffirm their strong belief in the Mesoamerica project and reaffirm their commitment to continue working together to overcome the challenges and seize the areas of opportunity to achieve the set goals each of the programs and projects presented in this report.

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V I . F I N A L C O N S I D E R A T I O N S

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Central American Bank for Economic Integration (CABEI)

Inter-Institutional Technical Group (GTI)

Inter-American Development Bank (IDB)

Andean Development Corporation (CAF)

Economic Commission of the United Nations for Latin America (ECLAC)

Pan American Health Organization (PAHO)

Central American Integration System (SICA)

Secretariat for Economic Integration of Central America (SIECA)

V I I . O U R ST R AT EG I C PA RT N E RS

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Yearly accountability presented by the PM Executive Commission and the Inter-Institutional Technical Group (GTI) to Heads of State and Government, XII Summit of Tuxtla Mechanism, Cartagena de Indias, Colombia, October 26 2010. Source: PM Executive Direction

Yearly accountability presented by the PM Executive Commission and the Inter-Institutional Technical Group (GTI) to Heads of State and Government, XII Summit of Tuxtla Mechanism, Cartagena de Indias, Colombia, October 26 2010. Source: PM Executive Direction

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PM Executive Commission Directory

Officer ChargeBelize

Colombia

Costa Rica

El Salvador

Guatemala

Honduras

Mexico

Nicaragua

Emb. Alexis RosadoPM Presidential Commissioner Lic. Alfonso GahonaPM Presidential Deputy Commissioner

Dr. Miguel Peñaloza BarrientosPM Presidential CommissionerAMB Miguel Camilo Ruiz BlancoPM Presidential Deputy Commissioner Lic. Carlos Roverssi RojasPM Presidential Commissioner Licda. Gabriela CastilloPM Presidential Deputy Commissioner

Lic. Carlos Alfredo CastanedaPM Presidential CommissionerLicda. Liduvina MargarínPM Presidential Deputy Commissioner

Ing. Guillermo Alfonso Rodríguez MahuadPM Presidential Commissioner

Lic. María Antonieta Guillén de BogránPM Presidential CommissionerM.A. Octavio Sánchez BarrientosPM Presidential Deputy Commissioner

AMB Rubén Beltrán GuerreroPM Presidential Commissioner Lic. Arturo Barrio GonzálezPM Presidential Deputy Commissioner

Lic. Valdrack Ludwing JaentschkePM Presidential CommissionerLic. Orlando GómezPM Presidential Deputy Commissioner

Vice Minister of Foreign Affairs, Ministry of Foreign Affairs and Foreign TradeDirector of Foreign Policy, Ministry of Foreign Affairs and Trade

Senior Advisor for Regions and Civil Participation, Presidency of the Republic of Colombia American Director, Ministry of Foreign Affairs

Vice Minister of Foreign Affairs, Ministry of Foreign Affairs and Worship Ministry of Foreign Affairs and Worship

Vice Minister of Foreign Affairs, Ministry of Foreign AffairsMesoamerica Project Director National Office, Ministry of Foreign Affairs

Ministry of Foreign Affairs

First Presidential Appointee, Responsible for the Secretariat of State in the Presidential OfficePresidency of the Republic

Deputy Secretary for Latin America and the Caribbean, Secretariat of Foreign Affairs General Director of the Mesoamerica Project (Mexico), Secretariat of Foreign Affairs

Vice Minister of Foreign Affairs, Ministry of Foreign Affairs General Director of America, Minisitry of Foreign Affairs

V I I I . A N N E X ES

Officer Charge

Panama

Dominican Republic

Dominican Republic

M.A. Álvaro AlemánPresidential CommissionerDr. Alfredo Castillero HoyosPresidential Deputy Commissioner

AMB Sandra Milena Cadavid GómezPresidential Commissioner

M.A. Elayne Whyte Gómez

Vice Minister of Foreign Affairs, Ministry of Foreign AffairsGeneral Director of Foreign Policy, Ministry of Foreign Affairs

Ministry of Foreign Affairs

Executive Director

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PM Executive Direction Directory

TitularM.A. Elayne Whyte GómezExecutive [email protected]

Executive Director of the Mesoamerica Project8th Level Torre Roble, Blvd. de Los Héroes, San Salvador, ElSalvadorTelephone Number: (503) 2261-5444, 2260-9176 and 2260-9175

Support Personnel

• M.A. Vinicio Martínez, Coordinator for the Infrastructure and Competitiveness Area

[email protected]• M.A. Rosibel Flores, Coordinator for the Human

Development Area [email protected]• M.A. Carlos Trinidad, Communications Coordinator c. [email protected]• Carolina Olivares, Assistant Project Monitoring Unit

(USP) [email protected]• Licda. Cecilia Guevara, In charge of TIC’s [email protected]• Licda. Elizabeth Dordelly, Administrative Assistant [email protected]• M.A. Nadia Chalabi, PROMEFRUT Coordinator [email protected]

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Regional EntitiesMesoamerica Project Entities• Mesoamerican Transport Ministers Assemblage• Transport Technical Comission (CTT)• Forum of Senior Telecommunications Officials• Joint Monitoring Commission AMI Project • Mesoamerican Competitivenes Indicators Task Force• Mesoamerican Network for Research and Development of Biofuels (RMIDB)• Directors Comitee of PROMEFRUT

SICA Entities• Central American Health Ministries Council (COMISCA)• Central American Social Integration Council (CIS)• Secretariat for Central American Social Integration (SISCA)• Central American Commission for Environment and Development (CCAD)• Central American Electrification Council (CEAC)• Central American Technical Commission of Regional Telecommunications (COMTELCA)• Central American Commission of Maritime Transport (COCATRAM)• Secretariat for Economic Integration of Central America (SIECA)• Executive Secretariat of the Central American Agricultural Council (SECAC)

Regional entities that support PM• Network Business Owner (EPR)• Regional Operating Entity (EOR)• Regional Electrical Interconnection Commission (CRIE)• Board Director of the Regional Electricity Market • Implementation Unit of the SIEPAC project • Central American Fiber Optic Network (REDCA)• Water Center for the Humid Tropics of Latin America and the Caribbean (CATHALAC)• Inter-American Institute for Cooperation on Agriculture (IICA)

National authorities that support PM• Federal Commission of Electricity (CFE) from Mexico• Colombian Corporation of Agricultural Research (CORPOICA)• Mexican Institute for Competitiveness (IMCO)• Agustín Codazzi Geographic Institute of Colombia• Mexican National Disaster Prevention Center • Mexican National Housing Commission• Salvadoran National Popular Housing Fund (FONAVIPO)

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We, the Heads of State and Government of Colombia, Costa Rica, Guatemala, Honduras and Mexico, as well as the Vice-Presidents of Nicaragua, Panama, Dominican Republic and the Chancellor of El Salvador, members of the Dialogue and Concertation Mechanism of Tuxtla, have met in Cartagena de Indias, Colombia, on October 26, 2010, to celebrate the XII Summit of this important Mesoamerican forum, with the purpose of strengthening relations among our countries,

Convinced that the Mechanism of Tuxtla is the forum in which we can advance the political dialogue, economic, technical and scientific cooperation, and social cohesion among our nations,

Considering that the main purpose is to achieve the welfare of our peoples, through the strengthening of democracy and cooperation in the Mesoamerican region,

HAVE AGREED TO THE FOLLOWING

(... ... ...)General57. Welcome the yearly accountability presented by the Executive Committee and the Inter-Institutional Technical Group (GTI) of the Mesoamerica Project (PM), through the Executive Report 2009 – 2010, which reveals the significant progress registered within the PM framework, on regional integration and joint regional action, as well as highlight the strengthening institutional process.

58. Acknowledge the technical and financial support they provide to the programs, projects and activities of the PM, the international agencies that make up the GTl: IDB, CABEI, UNDP, CAF, ECLAC, SG-SICA, SIECA, PAHO and agencies of the Central American Integration System. Encourage them to continue funding and supporting projects in Mesoamerica. 59. Celebrate the recent activation of the Commission for Promotion and Funding and urge the Treasury and Finance Ministers to keep this valuable coordination channel, with the

purpose of establishing the financial basis that allow the execution of programs promoted by PM.

60. Continue to strengthen Mesoamerica Project coordination mechanisms with other regional and multi-lateral forums, through greater involvement of the cooperation authorities from countries, particularly in the formulation, monitoring and evaluation of cooperation projects.

61. Celebrate the 50th anniversary of the Central American Bank for Economic Integration (CABEI) and the Secretariat for Economic Integration of Central American (SIECA) created within the General Treaty of Central America Economic Integration, and highlighting SIECA’s technical support as well as the financial, administrative, and technical support given by CABEI to the Mesoamerica Project. In the same manner, congratulate CAF on its 40th anniversary in which it has consolidated itself as an institution for the development of Latin America and show our gratitude for its permanent support to the Mesoamerica Project.

Interconnection Transportation Infrastructure

62. Urge the authorities to double their efforts to boost the Mesoamerican Multimodal Transportation System (STMM). Reiterate the importance of the continued modernization of the corridors of the International Network of Mesoamerican Highways (RICAM) and highlight the process of incorporating road corridors in Colombia. In connection with the STMM, carry out technical studies on issues of supply chain security, public policy design and strategic planning of the transport system, with the support from ECLAC. In addition, instruct the maritime cargo authorities to timely carry out a study of Short Sea Transport in Mesoamerica.

63. Recognize the progress in the Project “Acceleration of the Pacific Corridor”, in the field of study for improvements to border crossings in the road sections and the installation of the Road Safety Executive Committees in infrastructure and the

Cartagena DeclarationMesoamerica Project Chapter

Cartagena de Indias, October 26, 2010

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tour that gathered the technical information to improve this corridor, with support from the IDB.

64. Instruct the transport authorities, in coordination with the GTI, to finish studies and the priorities of Pacific Corridor’s investment plan, as well as address road safety of people and goods, climate change, sustainable transport, and the reduction in vulnerability in a risk management framework in the case of natural events.

Energy Integration

65. Recognize the progress in the infrastructure construction of the Central American Electrical Interconnection System (SIEPAC), congratulate ourselves on the operation of the Guatemala-Mexico electric interconnection and the progress on the agreements and studies that allow the works for the electrical interconnection between Panama and Colombia, which will allow the Mesoamerican integration and energetic redundancy. Encourage regulators to work in coordination on the development on harmonized regulatory schemes that allow the exchange of energy between Mexico, Central America and Colombia. At the same time, request the exploration of possibilities of collaboration with the Dominican Republic.

66. Pursuant to the Second Protocol of Regional Electricity Market (MER) Treaty, designate as soon as possible each country’s representative to the MER Board Directors, who should be a senior official competent in the formulation of policies of electrical integration in their country on the MER.

67. nstruct electrical integration agencies: Regional Electrical Interconnection Commission (CRIE) and the Regional Operating Entity (EOR), start the operation of Regional Electricity Market (MER) Regulation in the first half of 2011. Request supports from the GTI, which together with the national authorities, take actions to promote the production of renewable energy and energy efficiency.

Mesoamerican Biofuels Program

68. Welcoming the establishment of the Mesoamerican Network for Research and Development of Biofuels (RMIDB) and request the IDB to continue its technical and financial support for the activities of the work plan of the network as well as financing for the construction of plants included in the Mesoamerican Biofuels Program.

Integration of Telecommunication Services

69. Reiterate the importance of broadband connectivity, to enhance competitiveness, innovation and social inclusion. Recognize the efforts and the work done by telecommunication’s high authorities to promote the Mesoamerican agenda for the integration of these services.

70. Request the authorities responsible for the development of telecommunications and information technologies (TICs), to conduct a dialogue to redefine the scope and priorities of the Mesoamerican Telecommunications Agenda and design public actions to accelerate the implementation of the Mesoamerican Information Highway (AMI) and to promote maximum utilization in social sectors, as well as innovation in the sector.

Trade Facilitation

71. Instruct competent authorities to take the necessary steps to extend the application of the Mesoamerican Procedure for the International Transit of Goods (TIM) at all border crossings in the Pacific Corridor, as well as the customs of the region.

Fostering Regional Competitiveness

72. Instruct the PM Executive Committee to establish dialogue with national authorities responsible for the issue of competitiveness, to generate an agenda item that promotes Mesoamerican competitiveness.

73. Recognize the results of the Small and Medium Sized Enterprises (PYMEs) Export Support Program through LAC

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Flavors cycle, and to instruct the PM Executive Committee that outlines the basis of its constitution as a permanent program to promote greater participation of PYMEs and market diversification.

Mesoamerican System of Public Health

74. Recognize the progress of the Mesoamerican Public Health System (SMSP), particularly the completion of the Regional Master Plans. Also, welcome the launching of the Mesoamerican Health Initiative 2015, which will provide the technical and financial support for the innitial implementation. For this reason, we ask the stakeholders involved in the System to make the necessary efforts for the early implementation of the plans and the implementation of governance and consolidation of the Council of Ministers of the SMSP.

Mesoamerican Strategy for Environmental Sustainability

75. Urge the governments’ environmental authorities who so wish to, to extend in their capabilities, review and advance in the agreements related to the Mesoamerican Strategy for Environmental Sustainability (EMSA).

Mesoamerican Territorial Information System

76. Instruct national authorities responsible for disaster prevention and management to continue supporting the Mesoamerican Territorial Information System (SMIT), through ongoing coordination with the stakeholders involved for the generation of a regional platform of territorial information for the reduction of disaster risks and climate change adaptation. Recognize that the Information Platform SMIT would be strengthened with the establishment of a Mesoamerican network of weather radars, proposed by Panama.

Financial management of natural disaster risk

77. Instruct national authorities to advance and financial management for natural disasters risks and climate change, to develop with support from IDB, mechanisms such as reserve

funds, loans, risk transfer instruments and progress in the development of expedite regional insurance for Mesoamerica.

Central American Social Housing Development Program

78. Recognize the compliance of the technical assistance component of the Central American Social Housing Development Program by the Government of Mexico. Also acknowledge the progress made by the Central American Bank for Economic Integration (CABEI) in the expansion of knowledge and promote best practice in social housing at the Mesoamerican region, as well as the placement of the resources offered by Mexico under the San Jose Agreement.

Express our gratitude to the Government and people of Colombia for their kindness and hospitality during our stay in Cartagena, Colombia.

Agree to hold the XIII Summit of the Dialogue and Agreement Mechanism of Tuxtla in Panama in 2011.

Signed in the City of Cartagena de Indias, Colombia, October 26, 2010.

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List of Abbreviations and Acronyms

AcronymAECIDALCAMICABEICACCAFCALCCATHALACCBMCCADCCAV CECEACCESVIsCFECIDITRANSCISCLARA COCATRAMCOMISCACOMTELCACOSEFINCPCPFCRIECTC CTT DEECLACEMSAEOREPRGD -SIEPACGEF GPSGTIICPIDBIICAIIRSA IMSP INDEIRAP

Spanish International Cooperation Agency for DevelopmentLatin America and the CaribbeanMesoamerican Information HighwayCentral American Bank for Economic Integration. The Spanish acronym is BCIECentral American Agriculture Council Andean Development CorporationSummit of Latin America and CaribbeanWater Center for the Humid Tropics of Latin America and the caribbean Mesoamerican Biological CorridorCentral American Commission for Environment and Development Central American Council of Housing and Human Settlements PM Executive CommissionCentral American Electrification CouncilExecutive Committees of Road SafetyFederal Commission of Electricity (Mexico)Spanish-American center for the Integrated Development of TransportCentral American Social Integration CouncilLatin American Cooperation of Advanced NetworksCentral American Comission of Maritime Transport Central American Health Ministries CouncilCentral American Technical Commission of Regional Telecommunications Secretaries and Ministers of Finance of Central America and the Dominican RepublicRICAM’s Pacific CorridorCommission for Promotion and FundingRegional Electrical Interconnection CommissionRicam’s Caribbean Turistic CorridorTransport Technical CommissionPM Executive DirectionEconomic Comission for Latin America. The Spanish acronym is CEPAL. Mesoamerican Strategy for Environmental SustainabilityRegional Operating Entity Network Business Owner SIEPAC Project Director Group Global Environment FundGlobal Positioning System Inter-Institutional Technical GroupColombia-Panamá Electrical InterconnectionInter-American Development Bank. The Spanish acronym is BID.Inter-American Institute for Cooperation on AgricultureInitiative for thr Integration of Regional InfrastructureMesoamerican Public Health InstituteNational Institute of Electrification (Guatemala)International Road Assessment Program

Meaning

List of Abbreviations and Acronyms

AcronymMERPAHOPIDMPMPMBPNUDPOR FRUTASPROMEFRUTPYMESREDCARICAMRMIDBSECACSG-SICASHF SICASIECASIEPACSISCASMITSMSPSMSVSTMMTIMTMCDUNFCCC

MeaningRegional Electricity MarketPan American Health Organization. The Spanish acronym is OPS. Mesoamerica Project of Development and IntegrationMesoamerica ProjectMesoamerican Biofuel Program United Nations Program for DevelopmentRegional Policy Development of FruitMesoamerican Fruit Production ProjectSmall and Medium Sized EnterprisesCentral American Fiber Optic Network International Network of Mesoamerican HighwaysMesoamerican Network for Research and Development of Biofuels Executive Secretariat of the Central American Agricultural Council General Secretariat of Central American Integration SystemMexican Federal Mortage SocietyCentral American Integration SystemSecretariat for Economic Integration of Central America Central American Electrical Interconnection System Central American Social Integration Secretariat Mesoamerican Territorial Information System Mesoamerican Public Health SystemMesoamerican Road Safety System Mesoamerican Multimodal Transportation System Mesoamerican Procedure for the International Transport of GoodsShort Distance Sea Transport Project UN Framework Convention on Climate Change

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international network of mesoamerican highways (ricam)

Documents