The program is implemented on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), in cooperation with the Council of Ministers of Finance and Treasury of Central America, Panama, and the Dominican Republic (COSEFIN). Together, they are committed to strengthening regional institutions, as well as fostering learning and innovation through knowledge sharing and cooperation among member countries to address common challenges.

To address these challenges, one of the priorities is the implementation of the actions defined in the COSEFIN Fiscal Priorities Matrix Work Plan, thereby strengthening COSEFIN’s regional institutional framework. In this way, the governments of Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, and the Dominican Republic can respond in an immediate and coordinated manner to the the challenges arising by the impact of COVID-19 and other crises, making the most of their shared potential.

The Program aims to strengthen good governance in public finances in SICA member countries. It also contributes to improving their resilience, particularly with regard to the economic impacts resulting from the COVID-19 pandemic, natural disasters, and other crises.

Good Financial Governance enables governments to rely on effective, efficient, and modern institutions that transparently demonstrate how public resources contributed by citizens are used to address their priority needs, which have been exacerbated in the aftermath of the pandemic, such as employment, health, education, and security.

The economies of Central America, Panama, and the Dominican Republic are too small to individually develop efficient and deep capital markets. Financial markets in this region are characterized by a predominance of public debt, whose dynamism and operational efficiency, consequently, depend on the transaction mechanisms for this type of instrument. In this regard, significant regional effort was made during the past decade toward harmonizing domestic public debt markets, as a first step toward the development of a regional market.

In this context, the program entitled “Design of a clearing, settlement, and custody mechanism to facilitate a Regional Primary and Secondary Public Debt Market with its corresponding investment budget and governance structure” was launched by the Central American Monetary Council (CMCA), in coordination with the Council of Ministers of Finance of Central America, Panama, and the Dominican Republic (COSEFIN), and the supervisory authorities of security markets.

This regional technical cooperation program stands out for having trained a generation of officials from central banks and Ministries of Finance responsible for public debt management, thereby contributing to the professionalization of public debt management in the region. As a result of this process, in 2013 the CMCA and COSEFIN approved the regional standards that have since served as a guide for the development of national public debt markets in CAPARD.

Through Resolution COSEFIN-03/2017 of April 28, 2017, the Council requested support from the Central American Bank for Economic Integration (CABEI) to continue advancing this agenda and to identify appropriate strategies in coordination with COSEFIN and the CMCA. The resolution also instructed CABEI to play a key role in the development and integration of a regional capital market.

In this context, CABEI, CMCA and COSEFIN have agreed to reactivate the initiative aimed at developing domestic public debt markets of CAPARD, in line with international standards, with a medium-term vision of establishing a regional primary and secondary public debt market.