OECD Territorial Reviews The Mesoamerican Region SOUTHEASTERN MEXICO AND CENTRAL AMERICA OECD ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
Table of Contents Abbreviations List 10 Introduction 13 Assessment and Recommendations 15 Chapter 1. Trends and Challenges in the Mesoamerican Region... 35 Introduction 36 1.1. Defining the unit of analysis - Mesoamerica 36 1.2. The region's shared economic potential 39 Improving infrastructure to capitalise on the privileged geographic location 40 Regional economic opportunities linked to rich natural and cultural resources 45 Assembly and light manufacturing industries: competitive challenges and new opportunities 49 1.3. Mesoamerica's economic and social challenges 52 Macroeconomic performance 53 Territorial disparities and poverty 66 Trends in inequality. 73 1.4. Conclusion : 78 Notes ''. 78 Chapter 2. Improving Competitiveness and Social Cohesion 81 Introduction 82 2.1. The emergence of the competitiveness agenda in the MAR region 83 Regional integration efforts: setting the stage 83 Competitiveness policies: the business climate and growth sectors 86 MAR competitiveness performance and strategies 87 Common competitiveness challenges and priorities... 90 2.2. Crucial cross-sectoral determinants of competitiveness... 92 Building human capital 92 OECD TERRITORIAL REVIEWS: THE MESOAMERICAN REGION - ISBN 92-64-02191-4 - O OECD 2006
Quality standards and technological upgrades to increase productivity and market access 100 Regional networks between cities 108 2.3. Key industries for greater sectoral specialisation Ill Developing tourism Ill Agro-industry: from regional production to world exports 116 Assembly and light manufacturing industries: capturing greater value-added in the supply chain.. 121 Logistics industry: synergies with other sectors 125 Cluster initiatives to support microenterprises, SMEs and large firms 127 2.4. Competitiveness and poverty 131 Poverty alleviation still a challenge, especially in rural areas 131 Are competitiveness and poverty alleviation mutually reinforcing? 132 Linking competitiveness and poverty reduction: stakeholders and strategies 133 Rethinking competitive strategies to integrate the poor.. 135 2.5. Conclusion 139 Notes 140 Chapter 3. Towards More Effective Governance 145 Introduction 146 3.1. The governance of Mesoamerica 146 Regional integration and governance 147 The need for a strategic vision and the cost of non-coordination 150 Successful areas of mesoregional co-operation 155 Towards an effective governance of the Mesoamerican region 157 3.2. Multilevel governance in Mesoamerican countries 165 Decentralisation trends in MAR countries 165 Weak spending and administrative capacity at both national and sub-national levels 171 Lack of a multi-level framework for regional development 174 Towards an integrated, territorial approach to policy-making 175 Notes. 186 Bibliography 189 OECD TERRITORIAL REVIEWS: THE MESOAMERICAN REGION - ISBN 92-64-02191-4 - OECD 2006
List of boxes 1.1. Mesoamerica's population statistics 37 1.2. Logistics: what is it? How much does it cost? 42 1.3. The Mesoamerican Biological Corridor: integrating conservation and competitiveness 48 1.4. Characteristics of the poor and informal labourers in Mexico 59 1.5. The impact of remittances on regional development 63 1.6. Lack of land and credit access affect the indigenous populations 70 1.7. The MAR's general migration trends 72 2.1. Successful experiences in education 95 2.2. Linking research and training for innovation in the MAR... 102 2.3. Parmalat and Nicaraguan dairy producers 107 2.4. International Regional Metropolitan Networks: the Baltic Palette 110 2.5. Three tourism success stories 115 2.6. Four MAR food industry success stories 117 2.7. Apparel maquila success story 123 2.8. The case of INTEL in Costa Rica 125 2.9. Port authority typologies 127 2.10. Cluster initiatives in developing and transition economies... 128 2.11. Linking local producers with international markets 137 3.1. The Madrid Agenda 149 3.2. The complex structure of the SICA (Central American Integration System) 151 3.3. The Puebla Panama Plan 153 3.4. Half-year presidency of the EU: a mechanism to define and articulate the regional agenda 158 3.5. Regional cohesion policies in the European Union 161 3.6. Innovative local governance: the social funds in El Salvador and Nicaragua 169 3.7. Local health systems in El Salvador 170 3.8. Innovative experiences in participatory planning in El Salvador and Nicaragua 176 3.9. Examples of multi-level contracts in OECD countries 178 3.10. Inter-ministerial co-ordination for regional development: the cases of Mexico and Italy 180 3.11. OECD experiences in local co-ordination mechanisms in rural areas 182 3.12. Cross-border governance: the case of the "TRIFINIO" 184 3.13. Performance management and performance budgeting 185 List of tables 1.1. Higher infrastructure development's impact on growth rates and inequality 41 1.2. Electricity coverage in the MAR 43 1.3. Importance of tourist activity, 2002 46 OECD TERRITORIAL REVIEWS: THE MESOAMERICAN REGION - ISBN 92-64-02191-4 - OECD 2006
1.4. Leading exports from the agricultural sector, 2003 49 1.5. Agriculture, industry and services as % of GDP 51 1.6. Macroeconomic indicators 54 1.7. Distribution of the working population by employment sector... 57 1.8. Poverty incidence among the 12 and older working population, by sector 58 1.9. Free trade agreements in the MAR 64 1.10. Intraregional trade as a share of total trade 65 1.11. MAR countries' major trading partners 66 1.12. MAR poverty levels, 2002 67 1.13. Gini coefficient of income distribution 74 1.14. Percentage of homes with unsatisfied needs, by area, circa 2000 76 1.15. School attendance rates for the population aged 7-15 years 77 2.1. Estimated impact of DR CAFTA on trade, GDP and employment 85 2.2. Competitiveness rankings (Business, Growth, and ICT Infrastructure), 2004 87 2.3. Competitiveness programs in the MAR 89 2.4. Spending in education 93 2.5. Report card on education: Central America and the Dominican Republic, 2003 94 2.6. Higher education in select MAR countries, 2000 98 2.7. Firms providing formal training, 2003 99 2.8. Upgrading and value chain typology 104 2.9. Select Mesoamerican urban agglomerations 109 2.10. Basic tourist indicators, 2003 112 2.11. Apparel and clothing exports to the USA in USD millions, 2004 121 2.12. IMF/World Bank poverty reduction strategy guidelines 134 3.1. Mesoamerican energy sector in 2020: the case for co-ordination 154 3.2. Programas Frcmterizos (CABEI-EU) 156 3.3. Completed and future expected investments of the PPP, 2001-08 162 3.4. ODA flows in 2002-03 to Central American countries 163 3.5. Governance indicators 166 3.6. Size and number of Mesoamerican municipalities, 2002 166 3.7. Decentralisation trends in Central America 167 3.8. Per capita public spending by sector, 1998-99 172 3.9. Municipal government expenditures 172 List of figures 1.1. The Mesoamerican region 38 1.2. Cross-border concentrations of cultural tourism sites 39 1.3. Mesoamerica's logistical corridors 45 1.4. Mesoamerica's GDP growth 55 g OECD TERRITORIAL REVIEWS: THE MESOAMERICAN REGION - ISBN 92-64-02191-4 - OECD 2006
1.5. Above average, average and below average GDP per capita countries 56 1.6. Human development index (HDI) trends 56 1.7. Distribution of household per capita income, 2000 74 2.1. Composite competitiveness index, 2005 88 2.2. Tertiary education, 2000 97 3.1. Institutional structure of the SICA 152 3.2. ODA over gross national income, 2001-03 162 3.3. Indicators of fiscal decentralisation in OECD countries: sub-national governments' share in general government revenues and expenditures in 2003 173 3.4. Changes in the share of sub-national government contributions in total public revenues and spending between 1985 and 2003 177 OECD TERRITORIAL REVIEWS: THE MESOAMERICAN REGION - ISBN 92-64-02191-4 - OECD 2006