AID grant to the Federation of Private Sector Entities in Central America and Panama (FEDEPRICAP) to strengthen the Central American private sector

FEDEPRICAP will provide its members with policy analysis, negotiation, representation, and information and referral services in the areas of transportation, capital mobilization, and trade. The transportation component will focus on problems such as excessive delays at border crossings, regulations prohibiting foreign truckers from picking up freight, and the lack of a regional brokerage system for truck shipments. The capital mobilization component will encourage the development of financial instruments to mobilize resources for productive investment. Such efforts may include joint ventures, debt/equity swaps, and franchising. The trade component will address problems brought about by excessive protectionism, poor access to capital, and inefficient regional transportation. Issues of particular importance include: weak balances of payments and low reserve levels; regional trade debt; and poor regional credit facilities. The project will provide FEDEPRICAP with TA and training in these areas. In the area of policy development and reform, FEDEPRICAP will take the lead in promoting region-wide policies and regulations to stimulate foreign and domestic investment and stem capital flight. Efforts will include: conducting analyses; hosting seminars and workshops for FEDEPRICAP members, the public sector, and organized labor; formulating options for policy reform; and monitoring existing and proposed policies. FEDEPRICAP will help resolve conflicts within the business community, as well as disagreements between labor and management, and will work with regional organizations such as the Central American Institute for Business Administration (INCAE) to facilitate dialogue among competing interests. FEDEPRICAP will also serve as Central America"s private sector representative in dealings with foreign investors and banks, and it will represent regional issues before national Central American governments. Finally, FEDEPRICAP will establish an information referral service for its members in such areas as finance/credit, debt securization, investments, exports, etc., and provide members with TA and training in conducting negotiations. Amendment of 9/27/89 funds two additional activities: (1) improving cargo transportation by helping to modernize port tariff systems; and (2) financing the attendance of up to 15 women at a U.S. entrepreneurial conference. Amendment of 4/11/90 strengthens activities in six areas. FEDEPRICAP will: (1) support studies on women"s economic status, promote women entrepreneurs, and provide training; (2) work with government authorities and businesspeople to counter the negative impact of illicit drug trade on legitimate businesses, and seek TA/training from the U.S. Drug Enforcement Agency; (3) pursue an aggressive strategy of debt/equity swaps as a means of capital mobilization and promote national and/or regional futures and securities markets; (4) conduct studies aimed at promoting regional cooperation in international trade, and seek funding from the International Development Bank for promising business ventures; (5) in the area of regional transportation, hire an additional staff member and help the Asociacion Centroamericana de Consejos de Usuarios develop a capacity to represent private exporters; and (6) install a local area network to facilitate information sharing among its affiliates. (PD-ABD-073) Amendment of 5/11/92 authorizes a 4-month extension, to 12/31/92. During the extension period, FEDEPRICAP will shift its focus from trade and integration, financial market development, and transportation, to barriers to trade and cross-border investments, and constraints on trade in financial and infrastructure services. FEDEPRICAP will accelerate its efforts to restructure for sustainability, in anticipation of the cessation of ROCAP core funding. (PD-ABE-579)