Unlocking Central America’s mineral potential: Leveraging transparency to address governance challenges

Abstract

This paper reviews governance challenges and opportunities in six Central American and Caribbean countries (Belize, Dominican Republic, Guatemala, Honduras, Nicaragua and Panama) as they develop new extractive projects. Despite important differences, governments in these countries share the need to improve their capacity to manage and control growing mining operations and potential revenues. In this paper we argue that mineral extraction faces challenges that go beyond traditional prescriptions to strengthen governance, such as environmental impacts and the cost born by local communities in terms of loss of land, water sources and culture; the right to free, informed and fair consultation; and polarization among the different stakeholders. Yet, we claim that transparency offers a starting point for governments to build trust and to demonstrate that they are prepared to address concerns surrounding mining operations, managing potential mineral windfalls and taking into consideration local community interests.