The Central American Integration System (SICA).

By Daniel Beltré Acosta

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Latin America from the general to the sub-regional.
Currently in Latin America there is a great diversity of economic integration projects.

But this concurrence of projects isn't just a regional phenomenon; it also exists at the subregional level. This is the case, for example, in Central America.

The failures of the region's new integration processes have given rise to alternative integration models. In other words, the impossibility of uniting all Latin American countries has led to the emergence of subregional integration processes that envision economic unification culminating in the adoption of a single currency.

The two most important but unsuccessful general integration processes were the now defunct Latin American Free Trade Association (1960) and the Latin American Integration Association that replaced the former (1980).

It is only at the subregional level where the most notable integration efforts have taken place.

There are economic integration initiatives in four subregions
Latin American: in Central America, in the Andean subregion, in the southern cone formed by the MERCOSUR countries, as well as in the Caribbean.
Integration in Central America The process of economic integration in Central America dates back to the colonial era.

Let us recall that from 1823 to 1839, the nations of Central America had decided to form a Federal Republic. However, this process had to be interrupted several times between that time and the present day. Let us also recall the violent conflicts between Honduras and El Salvador in 1969, or, worse still, the armed conflicts in the 1980s between El Salvador, Nicaragua, and Guatemala, settled by the Esquipulas II Agreement, a peace treaty signed by the Central American governments in 1987.

Following this Agreement, efforts to integrate the region have been successfully resumed to this day.
Despite the wars, the early influence of integrationist thinking in this region is notable. As early as 1959, Central America began a significant integration process with the creation of the Organization of Central American States (ODECA).

On October 14, 1951, the governments of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua signed the Charter of the Organization of Central American States. This instrument, better known as the Charter of San Salvador, effectively established the republics as separate parts of a single nation.

However, ODECA continued to be an interregional consultation and conflict resolution body. This organization's objective was to promote economic, social, and cultural development through cooperation among states. Article 4 of the 1951 San Salvador Charter provided for the creation of several bodies, such as a Central American Office and an Economic Council. The Council's powers

Economic were decided by the Meeting of Ministers of Foreign Affairs, the main body of the Organization.

But the purpose of the Charter of San Salvador would be strengthened and made clearer in 1962 when the Central American governments decided to replace the 1951 Charter with a new Charter of the Organization of Central American States. A more effective instrument was needed, capable of guaranteeing a process of industrial expansion in the region, which was then considered an "economic and political community," according to the 1962 Charter.

This instrument would increase the number of bodies already created in 1951 while giving them an integrationist character. Thus, Article 4 of the 1962 Charter establishes the creation of the Meeting of Heads of State, the Conference of Ministers of Foreign Affairs, the Executive Council, the Central American Defense Council, the Council of Culture and Education, as well as the Legislative Council, the Central American Economic Council, and the Central American Court of Justice. This time, the purpose of the Central American Economic Council would be clearly outlined in Article 17 of the Charter.

The purpose of this body is the planning, coordination, and implementation of Central American economic integration. It is composed of the ministers of economy of each of the member countries. The powers of the Legislative Council were no less important, as its mission was to launch a process of unification of the laws of the Central American states (Article 10).

Creation of the Central American Bank for Economic Integration
One of the most important events in this process since the adoption of the new ODECA Charter in 1962 has been the promotion of the Central American Bank for Economic Integration. This Bank was founded on December 13, 1969, through Article XVIII of the General Treaty on Central American Economic Integration, to promote economic integration and the balanced economic and social development of the member countries. The founding associate members are Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica. Mexico, Taiwan, Argentina, and Colombia joined in the 1980s; then Spain joined in 2005, and Belize in 2006 as a beneficiary member; and finally, Panama and the Dominican Republic became beneficiary countries of CABEI in 2007. The creation of this Bank constitutes a very important step for the subregion; it currently constitutes the main source of financing for Central America. The Central American Integration System (SICA)

The Charter of the Organization of Central American States was amended in 1991. Indeed, on December 13 of that same year, the Tegucigalpa Protocol to the Charter of the Organization of Central American States was signed. This legal instrument, which seeks to update the legal framework of the ODECA, gave rise to the Central American Integration System (SICA). The fundamental difference between the old organization and the new System is the functional autonomy (Art. 8) of the institutional structure, which will ensure the continuity of the integration process. The Central American Integration System, like the ODECA, provides for the establishment of an economic union and the consolidation of the financial system of the Central American subregion. Likewise, this System is intended to be founded on an institutional and legal framework (Art. 3.b, j).

A single currency for Central America?

Once again, the integration process in this subregion would undergo a new change. On October 29, 1993, the governments of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama decided to sign a Central American Economic Integration Protocol. This agreement, better known as the Guatemala Protocol, provides for the monetary union of Central America. Indeed, the aforementioned text considers economic integration to constitute a "subsystem" within the Central American Integration System, which provides for "global" integration.

Consequently, according to the preamble to the Guatemala Protocol, it was necessary to adapt the rules to the current reality and needs of the integration process. This new adaptation has been oriented toward the establishment and consolidation of the "Central American Economic Integration Subsystem."

Chapter One of Title III of the Guatemala Protocol is entitled "The
"Perfection of the different stages of the economic integration process"; five stages are understood at the subregional level: first, the free trade zone; second, foreign trade relations; third, the customs union; fourth, the mobility of production factors; and finally, fifth, Central American monetary and financial integration.

Since 2003, the Dominican Republic has participated as an associate state in the Central American Integration System (SICA). It will soon become a full member of SICA, which will allow us to explore new economic and political horizons.