ECONOMY
Industry:
Most plants of Central America process raw materials of the region, such as sugarcane, coffee, cotton, timber, and fish. In addition, since the 1950s an attempt has been made to reduce the need to import basic fabricated articles. As a result, factories manufacturing paint, detergents, tires, paper and cardboard articles, fertilizer, and insecticide have been established in the cities of Central America.
Manufacturing establishments in Central America employ fewer than 100 people. In Costa Rica opening of a microprocessor manufacturing plant in the late 1990s has encouraged the growth of other high-technology industries.
Fishing is a comparatively minor economic activity in Central America. Since the mid-1960s only Panama has developed a fish-meal and a fish-oil industry.
The mineral output of Central America is not big. Guatemala, Honduras, and Nicaragua produce of silver, gold, lead, copper, and antimony. Guatemala exports small quantities of crude oil.
Agriculture:
Farming is a leading economic activity in Central America. The cash crops, such as coffee (in many countries of this region coffee growing is the main industry), bananas, sugarcane, cacao, rubber, and coconuts are typically produced here, and a substantial part of the harvest is exported, mainly to the United States and Europe.
Cattle are also raised in the region mostly in the Western part of Central America. Many small farmers in Guatemala, El Salvador, Honduras, and Nicaragua were hit hard by drought in the early 2000s.
Trade:
Central America has intercontinental trade relationships with the United States. Most of the rest is with Western Europe, Japan, Canada, Mexico, and with the countries of South America. Central America's principal imports are manufactured goods, such as motor vehicles, farm machines, textiles, electrical equipment, processed food, chemicals, and pharmaceuticals.
The main exports are basic goods, which include bananas, coffee, cacao, meat, chicle, cotton, mahogany, balsa, and rubber; an exception is Costa Rica, which exports computer components and medical equipment, and El Salvador, where foreign-owned factories produce clothes and other goods.
Trade among the countries of Central America has increased since the 1960s. The Central American Common Market (1960) has reduced barriers to trade among member countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and has established a definite external tariff on many goods. One of its institutions is the Central American Bank for Economic Integration which makes loans to finance development projects.