Central American Nations Agree on New Currency

Posted By: Lucy44

Central American Nations Agree on New Currency - 12/28/08 04:17 PM

Executive Summary – Friday (12/05/08) the leaders of the Central American nations met for the 33rd Summit of the Central American Integration System. They issued statements in response to the world financial crisis. One of the measures they intend to implement is the start of a new currency. We assume this is to be called the Central American Dollar and will be tied to a basket of other currencies to avoid fluctuations that a single currency is subject to.

The Central American nations are also going to standardize their passport. It is expected that the new passport will have the name of the country and above or below it say “Central America Passport” similar to the way the Mercosur nations do it now. The nations participating were: Belize, El Salvador, Nicaragua, Guatemala, Honduras, Costa Rica, Panama and Dominican Republic participating as an associate member.

Discussion – With a new currency you can expect to see a new money wiring system similar to the SWIFT system. The big difference is that the USA and EU will not be able to view any and all confidential banking transactions going through this new system. Bank secrecy is still a way of life in these nations and if anything the new system will allow for more secrecy and confidentiality. This will also lessen the demand for US dollars.

It appears to this writer that these are not the only countries to be moving in this direction. Russia has dropped some subtle but clear comments about relying on the US dollar. China is also not happy. Venezuela is in the process of starting a new central bank and has the support of several South American nations. So while the USA can go and push Lichtenstein around other nations are moving to get away from the USD and go back to sensible international banking. In the USA one just goes into a bank and shows a drivers license and leaves in 30 minutes with a bank account. In the offshore world this process can take days or weeks.

I expect the process to soon go back to being a 30-minute process as soon as there is no longer a monopolistic grip on the nations to use the wire systems passing wires through the USA or EU. Without having to rely on the USA and EU wire systems there is no penalty to be imposed on nations practicing banking the way they like to. Will the good old numbered bank accounts with no ID return? We will have to wait and see but this author is optimistic.

So while everyone is saying doom and gloom regarding Lichtenstein and Obama shouting anti-tax haven slogans you now know what is in store shortly down the road. And yes you did read correctly Panama was at the conference. Did anyone notice the Russian battleship being allowed to cross the Panama Canal a few days ago? First time a Russian warship crossed the Panama Canal since WWII. The world financial crisis brought on by the USA changed things. Be patient and watch for these changes to emerge.
Posted By: Belize-N-Us

Re: Central American Nations Agree on New Currency - 12/28/08 04:27 PM

I read where Belize had decided not to participate with the common passport or common currency.

I'll see if I can locate that article.
Posted By: Belize-N-Us

Re: Central American Nations Agree on New Currency - 12/28/08 04:48 PM

Belize enjoys having a relatively strong currency compared to other sister countries in regions of Central America and the Caribbean – the Belize dollar, pegged at a rate of 2:1 to the US dollar. Belize also boasts a unique passport, branded with the symbolic and historic coat of arms. However, it has formally signaled its commitment to adopt a common CARICOM passport – a move that is now in progress, but a government officialtells Amandala that the plan to implement a common CARICOM currency has been pushed back to 2015.

Still, Belize’s Deputy Prime Minister and Minister of Natural Resources and the Environment, Hon. Gaspar Vega, last week signed a 59-point declaration in San Pedro, Sula, Honduras, on Friday, December 5, 2008, encompassing the region’s plans for integration under the Central American Integration System.

The San Pedro Sula Declaration, in article 38, specifically calls for the group to look into the establishment of a single currency for Central America. The declaration also covers migration, international cooperation, tourism, economic growth and development, agriculture & fisheries, regional transport, education, as well as environmental and social issues.

The most widely reported outcome from the meeting was the decision to advance efforts to establish a common currency and passport for Central America.

An official release of SICA – whose information is published entirely in Spanish – cites the world financial crisis and high food prices as critical concerns of the region.

It is noteworthy that while Belize was represented at the meeting by our deputy prime minister, Hon. Vega, Guatemala was represented by president Alvaro Colom Caballeros – talking regional integration only three days before foreign affairs ministers of the two countries were to meet in Washington, D.C., to sign a special agreement – purportedly to submit Guatemala’s age-old claims over Belize’s territory for determination by the International Court of Justice in The Hague, Netherlands.

At Monday’s signing in Washington, D.C., the Foreign Affairs Minister of Guatemala, Haroldo Rodas, while still insisting on his country’s territorial claim over Belize, mentioned on several occasions the regional move towards integration under the banner of the Central American Integration System, abbreviated SICA in Spanish.

Meanwhile, Belize’s Prime Minister, Dean Barrow, was leading a delegation to the Cuba-CARICOM summit in Barbados.

(The Government of Belize has not issued any official reports on either the Honduras or Barbados meetings.)

Last February, Belize was the host country for a joint meeting of Central America and the Caribbean, and the venue for the signing of a cooperation agreement between SICA and CARICOM.

Official proponents of CARICOM in Belize seem still uncertain of exactly how Belize would fulfill simultaneous integration efforts being pushed by SICA and CARICOM.

We are advised that even before Belize became a member of SICA, it was already a member of CARICOM, and actively involved in the integration talks for that region.

We do know that while there are regional integration talks at both the CARICOM and SICA levels, there are, in fact, discussions taking place for wider integration in Latin America and even more so the entire Americas, as talks of a common currency for the entire Americas have for years been entertained, and continue to be promoted by some. In the recent years, those talks have sometimes come under the “dollarization” proposals.

Of note is that the world financial crisis is providing renewed impetus for proponents of a common currency beyond national borders, but within countries there are still many unanswered questions – and concerns - as to exactly how such a system would benefit nations such as Belize.
Posted By: Leah-Ann

Re: Central American Nations Agree on New Currency - 12/28/08 04:50 PM

Belize is part of the Central American Integration System and apparently voted in favor of the changes.
Posted By: Belize-N-Us

Re: Central American Nations Agree on New Currency - 12/28/08 04:51 PM

The Reporter | Sunday, 28 December 2008

Belize not a part of Central America Common currency, passport

The Belize government has denied media reports that it has committed itself to a single passport and single currency for the Central American region.

Both His Excellency Alexis Rosado and Alfonso Gahona, the Head of International Affairs at the Ministry of Foreign Affairs, said Belize could not commit itself to such agreement as stated in regional news media reports, especially since Belize is a signatory to the Caribbean Single Market and Economy.

Posted By: Peter Jones

Re: Central American Nations Agree on New Currency - 12/28/08 04:55 PM

Maybe this is Guatemala's backdoor way of getting influence over Belize.
Posted By: Lucy44

Re: Central American Nations Agree on New Currency - 12/28/08 05:05 PM

I wonder if Belize will be pressured into membership with El Salvador, Nicaragua, Guatemala, Honduras, Costa Rica, Panama and Dominican Republic. It would be difficult for a country of a mere 300,000 to go it alone; particularly one with so much poverty.
Posted By: Leah-Ann

Re: Central American Nations Agree on New Currency - 12/28/08 06:55 PM

Thanks for the update, Belize-N-Us. Good reminder that Amandala isn't known for its accurate reporting!

Reporter's article of 12/12/08 @
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