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Unleashing Central America’s Growth Potential : Synthesis Report (English)

Central America’s priority is to recover from its deepest economic contraction and restore strong, sustainable economic growth. With increases in working age population projected to decline sharply, strong growth in the long run can only be achieved with higher productivity. More effective participation in global value chains (GVCs), as well as a robust shift towards sophisticated exports of goods and services will be needed, but neither can be ensured without firms investing in productivity-enhancing innovations. With a high likelihood of limited structural change, greater aggregate productivity must come from within each sector of manufacturing, services and agriculture. The synthesis report analyzes the main findings of the Unleashing Central America’s Growth Potential Study, focusing on productivity and export performance of the region over the past three decades and accounting for the impact of the Coronavirus (Covid-19) pandemic on the region. It aims to identify broad strategic directions for the region that would help to increase sophistication of exports, reduce productivity gaps within the region and vis-à-vis other regions, and achieve higher productivity growth. Where relevant, the report suggests areas for further work that could help develop more granular policy recommendations. The rest of this synthesis report is organized as follows: the first section provides an overview of the growth performance of the region over the last thirty years, and provides the current and future challenges facing the region; the second section reviews the performance of productivity growth during 1991-2017; and the third section reviews the growth of exports of goods and services during 1991-2017.


  • Author

    Ulku,Hulya, Zaourak,Gabriel Roberto

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  • Country

    Central America,

  • Region

    Latin America & Caribbean,

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  • Doc Name

    Synthesis Report

  • Keywords

    female labor force participation; productivity growth; low levels of income; value-added trade; access to secondary education; access to financial service; food and beverage sector; low per capita income; Cost of Doing Business; Upper Middle Income Countries; labor productivity growth; export of goods; high productivity growth; global value chain; cross-cutting themes; total factor productivity; crime and violence; increase in labor; Poverty & Inequality; labor market policy; employment share; flexible labor market; factor of production; women in labor; Rule of Law; policy and institution; Type of Investment; open trade policies; sophistication of exports; aggregate productivity growth; pattern of development; adverse social impact; engine of growth; per capita term; Labor market rigidities; growth in agriculture; gap in knowledge; investment in innovation; labor participation; foreign direct investment; rate of investment; rate of growth; Early childhood education; expansion of export; human capital accumulation; labor force growth; reduced poverty; labor market rigidity; rate of crime; number of workers; reallocation of resource; number of jobs; cooperation and development; agriculture and industry; privileges and immunity; labor market distortion; share of employment; working age population; total employment; investment rate; working-age population; public debt; female participation; goods export; fiscal space; labor reallocation; export growth; across border; exporting firms; poor infrastructure; manufacturing sector; digital infrastructure; historical context; financial market; manufactured export; global market; Real estate; natural disaster; stimulus package; business service; productivity effect; productivity differential; value added; criminal activity; in work; manufacturing productivity; merchandise export; productivity gap; canal rehabilitation; informal employment; capital input; cost advantage; economic linkage; noncommercial purposes; comparative advantage; improving infrastructure; restrictive regulation; real gdp; innovative capacity; manufacturing operation; retraining program; Vocational Education; foreign investor; land transport; mountain chains; subsidiary right; longer period; affecting competitiveness; opportunity cost; job opportunities; job opportunity; gender norm; productivity level; Business Climate; medical equipment; property right; legal framework; removing barriers; choice model; regulatory business; business opportunity; skilled labor; labor flow; agricultural sector; labor pool; retail trade; negative growth; positive impact; export sector; childcare services; export opportunity; high employment; business environment; labor regulation; regulatory barrier; export opportunities; third section; export performance; supply shock; Emerging economies; emerging economy; economic volatility; new investor; fiscal deficit; effective participation; employment growth; reduce trade; trade agreement; diminishing return; smaller share; Public Spending; raise revenues; Civil War; industrial growth; program leader; debt crisis; future productivity; research assistance; asian countries; agricultural price; recent years; demand shock; income rise; intraregional trade; social progress; complementary factor; product market; working-age women; productive activity; domestic transport; Public Goods; other sectors; social transfer; domestic policies; recent studies; external condition; negative effect; border crossing; Intra-regional Trade; labor mobility; Macroeconomic Policy; Macroeconomic Stability; market efficiency; external environment; global trade; increasing investment; commodity price; government effectiveness; open economy; economic prosperity; rising trend; private investment



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Ulku,Hulya Zaourak,Gabriel Roberto

Unleashing Central America’s Growth Potential : Synthesis Report (English). Unleashing Central America's Growth Potential Washington, D.C. : World Bank Group.