Guatemala was the only country in the region that improved its position in the global ranking monitoring businessmen's conditions for doing business, while the others went backwards.
The World Bank released the results of the Doing Business 2020 report, which measures the regulations that favor or restrict the development of business activity in different countries.
In the 2019 Global Competitiveness Index, Costa Rica, Panama, Guatemala, El Salvador, and Nicaragua fell back in the ranking, while Honduras registered no changes and the Dominican Republic was the only country that improved.
According to the report by the World Economic Forum, during 2019 Costa Rica ranked 62 out of 141 countries. It was followed by Panama at box 66, the Dominican Republic at 78, Guatemala at 98, Honduras at 101, El Salvador at 103 and Nicaragua at 109.
The international restaurant franchise Tony Roma's has announced that it has decided to postpone the opening of its first restaurant in Nicaragua, due to the current situation in the country.
The company reported that due to the situation in the country, they have "... decided to postpone the opening indefinitely".
One of the best parameters of the strength of an economy is the amount of businesses it creates. In Panama, 47% fewer companies were created in 2017 than in 2016.
Not only were fewer companies were created in 2017, but more companies were closed than in 2016.
Although growth of the economy in general still remains above 5% -still far from the vigorous 10% of a few years ago- other macro data, such as the increase in unemployment and the growth of independent or informal work, shows that, starting in 2018, Panama has entered a phase of economic slowdown.Businessmen in the commerce sector are even talking about "recession", both in retail and in wholesale sales.
Salvadoran industrialists claim that with the presidential veto of the administrative simplification law, the country has lost a valuable opportunity to improve the already deteriorated business climate.
EDITORIAL
With the veto of the Administrative Simplification Act, the Salvadoran government is sending a clear message to the business community and to society in general: There is no interest in paving the way for the private sector to generate more jobs and, consequently, more wealth and socioeconomic development.
The US government has highlighted tax incentives and public-private sector dialogue, but warns that deficiencies in the rule of law, and extensive executive control can create significant challenges for those doing business in the country, particularly smaller foreign investors.
From the executive summary of the report "Investment Climate in Nicaragua 2017" by the US State Department:
The economic expectations of entrepreneurs have fallen, in particular because of the business climate, with projections for the rest of 2016 being for less private and public investment.
From the Executive summary of the II Economic Situation Report by Funides:
In the first four months of 2016 the Nicaraguan economy behaved as predicted by FUNIDES in its first Economic Situation Report, with the exception of exports, which were projected to be more vigorous than were actually recorded.
The efforts made by the Ortega administration to attract more foreign investment were noted, but warnings were also give regarding deficiencies in the rule of law and an extensive executive control.
The report"Investment Climate Statements for 2016"prepared by the US State Department details the efforts made by Nicaragua to attract foreign investment by providing tax incentives to productive sectors such as mining and tourism, but also points out some elements that could affect the investment climate in the country, such as weak government institutions, deficiencies of law and an all-embracing control on the part of the executive branch.
Knowing how to laugh at yourself is a virtue that every entrepreneur in Costa Rica should have, even though it might all end in tears.
This is what Alfonso Carro does in his article on Crhoy.com: laugh at himself, at the same time bringing to light the helplessness felt in light of the deteriorating conditions for investment in an economy such as Costa Rica, which was once number one in Central America.
The sovereign rating B + with stable outlook is based on the "economic performance, low debt burden of the government, political stability and partnership between government and the private sector through dialogue".
From a statement issued by the Central Bank of Nicaragua:
The Republic of Nicaragua has low per capita income, monetary policy rigidities, and vulnerability to external shocks.
The Mexican businessman has highlighted the harmony between government and businesses, confidence and existing physical and legal security in the country.
From a statement issued by the Superior Council of Private Enterprise:
Carlos Slim outlines conditions for investments in Nicaragua
The Mexican businessman Carlos Slim participated on Thursday September 10 in a conversation with Nicaraguan businessmen united under in the Superior Council of Private Enterprise (COSEP).
The private companies should have to consider the risk posed to Costa Rica's business climate by the excesses of state union leaders.
EDITORIAL
Costa Rica's democratic traditions pale before the attempt made by a trade unionist to silence the media by threatening the safety of journalists.
An article in Crhoy.com quote statements made by the union member Fabio Chaves regarding the news in Costa Rican media revealing information about unacceptable privileges enjoyed by many officials, acquired against article 57 of the Constitution itself: "Wages will always be equal for equal work under identical conditions of efficiency."
The problem with income tax exemptions is that they favor high-return projects that would probably have been made anyway.
From an IDB document entitled "The effectiveness of tax incentives: The case of export processing zones in Costa Rica, El Salvador and the Dominican Republic".
Introduction and Summary
Policies encouraging investment make use of a variety of instruments.
A World Bank study has evaluated regulations which exist in 22 cities in the region for starting new business, registration, construction, and border trade.
From a statement issued by the World Bank:
Doing Business in Central America and the Dominican Republic 2015 compares business regulations in 6 Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) and the Dominican Republic.