Caribbean & Central America - August 2026

On 10 June Lina Ajoy, a seasoned Costa Rican diplomat, was appointed by the Central American Integration System (Sica) as its next secretary general for 2026-2030. She fills a post vacant since November 2023 following the resignation of Nicaragua’s Werner Vargas. Her appointment has sparked hopes for closer regional integration, as the first piece in this August 2026 edition of the Latin American Regional Report: Caribbean & Central America outlines.

The second piece focuses on Guatemala where, since taking over in May from discredited attorney general (AG) María Consuelo Porras (2018-2026), Gabriel García Luna has sparked optimism regarding the direction of anti-corruption efforts under the country’s left-of-centre President Bernardo Arévalo [SSR-26-06]. The next article looks at Honduras where in late June, a contentious piece of legislation which had the declared objective of strengthening and protecting the agricultural sector took effect. We then turn to Costa Rica where, since taking office in May, the new President Laura Fernández, the protégée of her predecessor, conservative populist Rodrigo Chaves (2022-2026), has announced various security measures as well as progress regarding the construction of a new maximum-security prison, Centro de Alta Contención de la Criminalidad Organizada (Cacco).

Central America’s foreign direct investment (FDI) held broadly steady in 2025, according to a new report by the United Nations Economic Commission for Latin America and the Caribbean (Eclac). However, the region is becoming increasingly reliant on companies expanding existing operations rather than attracting new investment, as the following article explores. The final focus piece on Central America ends in Nicaragua where external debt continues to increase slowly, but international financial institutions remain largely positive on the government’s macroeconomic management even as political risks mount.

Turning to the Caribbean, we begin in The Bahamas where a row over the recruitment of 300 teachers from Ghana has provided a timely reminder of the demographic challenges for the sub-region. We then look at renewed demands in the Caribbean for reparations for slavery and related injustices which have been highlighted in recent months. The next piece focuses on Trinidad & Tobago which in June approved a three-month extension of the state of emergency, which will now run to mid-September. For approximately 10 of the last 14 months the country has been under emergency rule. The business community is in two minds about the measure. This edition ends in Haiti where despite the country’s deep political and security crisis, a coalition of different groups is arguing that new investment may be the way forward.