The conflict over charging for non intrusive inspections at borders has negatively affected exporters.
In January there were exports for $402.8 million, 16% less than the amount reported in the same month in 2013, when $477.9 million worth of goods was sold abroad, according to the Central Reserve Bank (Banco Central de Reserva).
The improvised implementation of a new system of customs administration and the opposition to the collection of $18 for each declaration of goods is already affecting regional trade.
The implementation of an inspection system for cargo transportation in El Salvador has not only generated traffic chaos but has also caused delays in intraregional trade. Private unions think that this is happening because pilot tests were not carried out prior to implementation.
Salvadoran agrifood businesses have expressed their concern that the announced investments are part of a political project.
An article in Laprensagrafica.com that "Alba Foods, another productive programs, along with Alba Petróleos- tied to the political strategy of the FMLN, has invested $30 million this year and among the basic grain harvest 2012 and 2013, expects to complete $60 million to expand its geographical presence.
El Salvador's Annual inflation for June was 0.2%, and demand contraction would take it to negative ground in the next months.
Jorge Arriaza is the executive director of the Salvadoran Industry Association, known in Spanish as ASI. He referred to the delicate subject by saying that "even though the consumer benefits, in the medium term this always leads to a trap in the economy."
In order to provide greater transparency and agility, an Operations Traceability System was developed.
With this new software, users of the customs system will obtain information on the flow of products through the different entry points of the country. By means of a password, clients will know, for example, where their product are at any given time.
The possible elimination of the 6% subsidy on exports has led the Corporation of Salvadoran Exporters to discuss other options.
The benefit received by the export sector from the government is 6% of the value of non-traditional exports outside Central America and it will expire in December. For the Salvadoran government, this subsidy represents a disbursement of $23 million.
If the Salvadoran Constitution is not amended so that it is in accord with ILO requirements, the country would lose GSP benefits.
In order for El Salvador to continue enjoying the Generalized System of Preferences (GSP) tariff benefits, Articles 47 and 48 of the Salvadoran constitution must be amended so that they will be in agreement with International Labor Organization (ILO) pacts regarding unionization and collective bargaining in the state sector.
Up to and including November, 2008, industry sales fell 36.1% due to lower demand for products.
Jorge Arriaza, executive director of the Salvadoran Association of Industrialists (ASI by its initials in Spanish), told Laprensagrafica.com: "This is shaping up as a difficult year for the sector. We believe that we are going to grow by 1.5%, which is quite low. Last year, we grew by 2% and we believe that the recession is going to have an impact throughout the year. The IVOPI (Industrial Production Volume Index) has dropped to 3%, a strong downward trend in production as a result of the decline in consumption."
The Association of Industrial Companies (ASI) indicated that it will need at least $200 million to reactivate the industry and investments that have been paralyzed due to lack of credit.
The proposal was made by the executive director of ASI, Jorge Arriaza, who pointed out that they are concerned about comments by the Salvadoran Banking Association (Abansa) which complained that credit from the Inter-American Development Bank (IDB) for 500 million dollars was too expensive and had short terms, in addition to the fact that certain sectors would not have greater access to the funds.
The export and industrial sector in the country has indicated that market conditions have worsened.
"We are now feeling a reduction in credit access, with the consolidation of the banks there is now a restrictive policy, and the international financial crisis is causing more credit to be closed due to the demand for capital in other markets," Jorge Arriaza, executive director of the Salvadoran Industrial Associacion (ASI), manifested.
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ATS El Salvador is a Customs Agency with 26 years of providing services for imports, exports, transits, consultancies and international transport.
Operates in El Salvador
Phone: (503) 2235 6522 - (503) 2235 6524