Central America Program

Source: 1997 Nienke Beintema/IFPRI
Guatemala food market with a variety of vegetables

Central America’s Rural Development Challenge

Central America is characterized by ethnic, ecological, and economic diversity; however, countries in the region share the problems of uneven economic growth, unacceptably high poverty rates, and hunger and malnutrition rates that are among the highest in the world. While economic growth rates have varied markedly, in all countries agricultural growth is lagging. More than 60 percent of the region’s poor are found in rural areas, where slow economic growth, unequal distribution of assets, inadequate public investment and public services, and vulnerability to external natural and economic shocks are major policy issues. In addition, CAFTA, if not accompanied by an appropriate complementary public policy and investment agenda, could accelerate the already worrisome trend of increasing numbers of rural poor.

Here are some of the pressing questions that the countries of the region face:

  • In Central America, where 55 percent of the 35 million inhabitants live in poverty and where per capita annual GDP growth in El Salvador, Honduras, and Guatemala is below one percent, which policies and strategies are the most likely to achieve a sustainable path of economic growth?
  • With the advent of the Central America Free Trade Agreement (CAFTA), which policies and investments can ensure that new market opportunities are captured and that small farmers and other rural poor are not left behind?
  • When rural poverty rates in some Central American countries reach 60 to 80 percent of the population, as is the case in Nicaragua, Guatemala, and Honduras, what can be done to reverse the continuing trend of increasing numbers of rural poor and the widening income gap between rural and urban areas?
  • In a region of mountainous terrain and a high incidence of environmental degradation and natural disasters, what kinds of technologies and protection mechanisms can be established, especially in the areas where poverty and natural resource degradation are rife?
Central America Brochure (English)126.77 KB
Central America Brochure (Spanish)140.63 KB