The devastation caused by Hurricane Katrina in the United States will have a severe economic impact on Central America, the head of the Central American Bank for Economic Integration said Wednesday.
The disaster could drive up energy costs, affect trade and cut remittances to families in Central America, Harry Brautigam, the bank’s executive president, said.
“The disaster in the U.S. Gulf will certainly have a strong impact in Central America,” Brautigam told a news conference before a meeting of the bank’s governors in Madrid.
“The Gulf is an important area for producing and refining oil [and] is an important source for Central America.”
Strong effect on regional economies
Brautigam said recent oil price rises had led to a situation of great concern in Central America, strongly affecting regional economies.
“This disaster only increases the chances that Central America will suffer more in this regard,” he said.
The Gulf of Mexico area was a major destination and transit point for Central American exports and an important source of Central American imports, which would lead to increased costs, Brautigam said.
Many Central Americans lived in the Gulf area, sometimes temporarily, and Central American families would be hit by reductions in the money that relatives sent home.
The Central American Bank for Economic Integration, founded in 1960, aims to further economic and social development in the region. Spain recently became a strategic partner of the bank, subscribing $200 million of capital.
