The report "Economic Results At Close of 2013 and Prospects for 2014 " indicates that macroeconomic stability is threatened by rising public debt in relation to GDP.
In order to reverse the trend of economic stagnation reflected by the indicators analyzed, the Chamber proposes adopting measures such as the award of Puerto La Union, improving the investment climate, reforming the Law of Public-Private Partnerships (key to securing approval of the disbursement of funds from the second round of FOMILENIO), the adoption of the Law on Legal Stability of Investments and approval of a competitiveness agenda focused on reducing the costs incurred for operating in the country, among other things.
A proposal has been made to reduce the number of times a public-private partnership project would pass through the filter of the Legislative Assembly.
Among the reforms to the Law on Public-Private Partnerships that the Council for Growth has suggested to Congress is a reduction, from three to one, of the number of times a Public- Private Partnership (PPP) project should go through the filter of parliamentary approval.
The coastal areas contain half of the most fertile land in the country with substantial resources for fisheries and tourism.
With the implementation of Fomilenio II in the coastal area of El Salvador, there is great opportunity for the development of agriculture, leveraging funds expected to be provided by the U.S. government with a counterpart by the Salvadoran government, in addition to the private investment that could go along with production projects.
The special controls for Politically Exposed Persons (PEP), was one of the reforms that was left out because the deputies did not approve it and the President, Mauricio Funes did not suggest it despite this being a recommendation by the Caribbean Financial Action Task Force Group (CFATF by its initials in Spanish).
The U.S. Ambassador to El Salvador stressed the need to adopt reforms to laws against money laundering and Public Private Partnerships.
According to the U.S. Ambassador Mari Carmen Aponte, laws against money laundering and Public Private Partnerships need to be passed in order to issue "clear signs" along with efforts to combat corruption in the country.
If approval is not given to the amendments to the Law on Public-Private Partnerships and the Money and Asset Laundering Act, the second disbursement will not be realised.
This was explained by Salvadoran President Mauricio Funes. "Donors are free to stipulate any conditions deemed appropriate. Everything that is the responsibility of the Executive has already been done," he said.
FUSADES is asking the Salvadoran Congress to make reforms to the Special Act on Public-Private Partnerships in order to ensure its effectiveness.
The Salvadoran Foundation for Economic and Social Development (FUSADES) is refering to the reforms that have been put forward by the ARENA party which among other things suggest that the Agency for Promotion of Exports and Investments of El Salvador (PROESA) be in charge of monitoring the administration of the law. The recently passed legislation "includes a new administrative institution: the Directorate of Public-Private Partnerships", reported Laprensagrafica.com.
These are, according to Mari Carmen Aponte, the U.S. ambassador in El Salvador, some of the requirements which the country must take into account so that a second Millennium Fund is approved. "The eyes of the U.S. are fixed on El Salvador, a country which has an outstanding conflict between the Constitutional Chamber and the Chamber of Administrative Litigation of the Supreme Court of Justice (CSJ), which could hamper the disbursement of $300 million in a Fomilenio II ", reported Elmundo.com.sv.
The infrastructure and road network built with funding from the Millennium Challenge Corporation should be the focus of new development projects in the area.
An article in ElSalvador.com reports that Jose Angel Quiros, former executive director of Fomilenio, said "I have no information on new projects in the north, but without a doubt thought must be given to how to maximize that infrastructure and road network for the country's productive sectors ... the region's strategic programs north of the country, carried out with the first funds from the Millennium Challenge Corporation (MCC) between 2009 and 2012, must be diversified and enhanced with new works. "
The Investment Committee of the Millennium Challenge Corporation has given approval for the implementation of Fomelino II in the marine coastal area of El Salvador.
This "is a momentous step for the realization of this strategic commitment which will bring significant benefits to the population of the coastal area and the country in general," said Alexander Segovia, Technical Secretary of the Presidency.
Meco of Costa Rica sued the Salvadoran government and Fomilenio for $1.3 million related to increased costs in the contract to build a road.
Elsalvador.com reports: "An international arbitration court has ruled in favor of the Salvadoran government and the Millennium Fund of El Salvador (Fomilenio) who the Costa Rican company MECO sued for $ 1.3 million alleging that El Salvador breached the "financial suitability" clause of the contract for construction of section II of the Northern Longitudinal Highway: Metapan-Santa Rosa Guachipilín. The 'financial suitability', that MECO refers to concerns the calculation of the cost increases of the work over time (known as polynomial formula). "The company explained that this formula did not cover the increases in material that might be seen during the course of the execution of the work.
A Wall Street Journal article has pointed out the futility of the Northern Longitudinal Highway and a recession in the Salvadoran economy over the last 10 years.
"... The Northern Highway (which passes through some of the least populated areas of the most densely populated country in Central America) is an unfinished work, courtesy of the North American taxpayers," noted an article on Online.wsj.com.
Resonant rubblization is the process of fracturing existing PCC pavement, in place, ready for a direct asphalt overlay.
Resonant rubblization was the method of choice on one of the busiest and most heavily traveled roads in Panama City, Panama, Avenida Domingo Diaz. Including multiple projects with various contractors throughout Central America that past 5 years, rubblization of Avenida Domingo Diaz was successfully performed in 2012 with the consortium ICA-MECO. Rubblization, with a hot mix asphalt overlay, is proven to have an initial design life of 22+ years, while being 65% less expensive and 5 times faster compared to total reconstruction.
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The Central American Business Council is a London-based organisation which is working to increase significantly the current levels of trade and investment between the UK and Central America.
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