Entrepreneurs Mustn't Let Central America Deteriorate

Growing institutional weakness in several countries of the isthmus brings to the forefront the responsibility of the business sector to keep the economy of this region moving forward.

Wednesday, May 6, 2015


rrently, the governments of several Central American countries are showing signs of weaknesses which - to different degrees- point to a sharp decline in institutional quality. Whether due to severe episodes of corruption, as is the case in Guatemala, or because of the notorious political inexperience such as in Costa Rica, or exacerbated by populist practices such as in El Salvador, the normal functioning of the economy is being hampered, taking away the ability to compete in real productive activities, and opeing the floodgates to lobbying actions on the part of businesses, to the detriment of those improving the quality of their products and services.

In Guatemala the crisis is already evident from the popular demonstrations calling for the resignation of the president and vice president, who are wrapped up in a corruption and customs fraud scandal which is without precedent in the country. Joining the clamor of the populace are business leaders, who through the Coordinating Committee of Agricultural, Commercial, and Financial and Industrialists, have publicly called for the resignation of the Vice President Roxana Baldetti.

Meanwhile, in El Salvador, the Sanchez Ceren administration continues to increase the country's indebtedness in order to fund welfare policies, while productive sectors are being increasingly affected by insecurity and crime which are on the rise again.

In Costa Rica the inability of the Solis administration to chart a clear course for the country and the economy is worrying entrepreneurs whose economic prospects are deteriorating rapidly.

Beyond what happens in each particular country, it is essential that the Central American business sector, the engine of the regional economy, keep moving forward. As Fanny Estrada, director of the Guatemalan Exporters Association notes in her article "The country can not stop," what is needed is for the "...waters to recede, for the guilty to be punished and for us to move on, because the task ahead is immense. "

More on this topic

Proposal to Bring Forward Presidential Elections

May 2018

In search of a solution to the crisis that has Nicaragua on tenterhooks, the business sector has asked Ortega to bring forward presidential elections in an orderly manner and with a renewed Electoral Council.

In a letter signed by the main Nicaraguan business leaders, the private sector demands that President Ortega stop the violence against the demonstrators and call presidential elections early, as a last step to begin to solve the crisis in which the country has been immersed since mid-April.

Businessmen Take Action Against Corruption

September 2017

Guatemalan businesses have declared persona non grata congressmen who voted for a law which exempted general secretaries of political parties from responsibility in matters relating to illicit electoral financing and increased the possibility of commuting prison sentences with money.

The law, popularly known as the "Corruption Pact", was heavily resisted by Guatemalan society. Pressure from the populace, together with a resolution contrary to the norm from the Constitutional Court, forced Congress to backtrack and archive the law.

New President in Guatemala

September 2015

With the resignation of Pérez Molina and Alejandro Maldonado sworn in as president, the institutional crisis should moderate in its intensity.

From a statement by AmCham Guatemala:

After several months of political uncertainty in Guatemala it has been demonstrated that nobody is above the law and that the country's institutions are able to perform their job.

The Future of Investments in Guatemala

August 2015

In the view of the private sector the decision taken by President Perez Molina to remain in his position contributes to the further deterioration of the country's image, at a time when the economy is showing signs of stability.

Just as the decision by the Public Ministry and the International Commission Against Impunity (CICIG) to conduct an investigation was applauded by the Guatemalan business sector, the president's decision to remain in office has not been well received and has caused deep concern, mainly because of the negative impact it has on the country as a destination for foreign investment.

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