Central America: Pulling Together

Once known as "banana republics," five small nations of Central America-have a history of bad-neighborliness, with frequent border skirmishes and damaging trade barriers against one another's goods. But they are beginning to learn some important lessons of development through cooperation. Now grouped in a common market barely two years old, the five have lowered the barriers on a list of 1,000 goods ranging from farm products to automobile tires. Internal trade jumped 30% to $43.2 million last year, and new plastics, textile and chemical industries have sprung up to service a market of 11 million people. Last week two of the five nations took another step with a plan to pool natural resources.

The first stage of Honduras' 120,000-kw. Río Lindo dam goes into operation late this year. When it is completed, Honduras will have more power than it can use in the immediate future. Neighboring El Salvador, the driest country in Central America, needs power for its growing textile, food-processing and shoe industries. The plan is to build a $3,000,000 transmission line from Rio Lindo to El Salvador's capital city of San Salvador -thus giving the Salvadorans electricity and the Hondurans the paying customers they need for further development.

* Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica.