DEVELOPMENT: 9 Billion Dollars for Central American Reconstruction

By Thelma Mejía Reprint | | Print |

Thelma Mejia

STOCKHOLM, May 28 1999 (IPS) - International donor nations have pledged 9 billion US dollars to repair the devastation in Central America caused by Hurricane Mitch last October.

A meeting of donors comprising the “Consultative Forum for the Reconstruction and Transformation of Central America” wound up a meeting here Friday by announcing details of the aid programme that primarily will benefit Honduras and Nicaragua – the countries hardest hit by the hurricane.

The donors imposed conditions of transparency, decentralisation, and concerns for ecological and social welfare for reconstruction project funding.

Some 200 people from 46 countries participated in the meeting – sponsored by the Inter-American Development Bank (IDB) and the Swedish government – including representaives from government, financial institutions and non-governmental organisations.

Hurricane Mitch left caused the death of some 10,000 people and left another million homeless, according to reports by the Swedish government. Honduras and Nicaragua suffered the most damage from the hurricane, followed by El Salvador and Guatemala.

Central America has been long recognised as one of the world’s most natural-disaster prone areas. The region, located at the western end of the Caribbean hurricane belt, straddles earthquake faults and contains more than 27 active volcanoes.

At the Stockholm meeting, donor countries warned that reconstruction did not mean just rebuilding bridges and roads, but also included guarantees of equality and sustainability for 38 million people.

A document covering the region’s ecological and social weaknesses, prepared by the IDB and the United Nations showed that the region experienced hundreds of smaller natural disasters every year. For example, Costa Rica, El Salvador and Guatemala suffered more than 2,400 incidents between 1990 and 1995.

In addition to hurricane devastation, there also was the problem of damage to biodiversity caused by humans. Less than 10 percent of original forests have survived deforestation and farmland expansion.

Environmental resources remained a primary concern of donor countries, stressed Mayra Falck, IDB advisor and expert in poverty and rural development. But while donors emphasised the need to include environmental issues in all projects, “that doesn’t mean we need to create more and more laws,” she added.

Falck also said that one of the meeting’s most important decisions was to promote regional co-operation in managing shared water resources.

Donor countries also would promote improvements in “small- scale farming practices, especially in coastal and hillside farming, in addition to providing long-term incentives for land ownership,” she added.

The decision on transparency included proposals for the modernisation of public administration and control of government purchases and contracts, as well as improved internal auditing systems for government organisations.

In addition, the donor group asked Central American governments to hire outside specialists to supervise state purchases and the execution of state contracts.

The Honduran Minister of the Presidency, Gustavo Alfaro, said his government approves of the transparency mechanisms requested by the donors, adding, “we believe it will strengthen our democratic systems as well as improve trust in democratic processes.”

On the issue of decentralisation, representatives agreed that Central American countries must strengthen their political ties with city and local governments.

Ximena Ibanez, technical consultant for the United Nations in Honduras, said that Central America had extensive experience with transparency and participatory politics, through a process she called “the establishment of negotiated democracies.”

Democracy still faced huge social problems that had been made worse by Hurrican Mitch, he said. Illiteracy rates among adults reached 30 percent and average reading levels still hung below that of a five-year-old.

According to a UN report, the richest 20 percent of Central America’s population had 60 times the wealth of the poorest 20 percent.

Representatives from El Salvador, Guatemala, Honduras and Nicaragua originally sought nearly 6 billion dollars in Hurricane relief.

The consultative meeting provided a means for the donor community to renew its interest in Central America, a region it had begun to back away from after the signing of peace treaties in those countries in the 1980s.

Compared to a decade ago, when conditions placed on aid packages dealt primarily with human rights, concern in Stockholm focused on transparency, an end to corruption, and greater participation.

Presidents Arnoldo Aleman of Nicaragua and Carlos Flores of Honduras were the only heads of state to attend the meeting. The remaining Central American countries sent their vice-presidents.