How to Make a Central American Country Grow

In Guatemala investment is between 16% and 17% of gross domestic product, in Southeast Asia, the figure is between 25% and 35%.

Tuesday, January 22, 2013 reports that a group of experts met last week in this country to discuss how to foster Guatemala’s growth. The analysis of the issue carried out by a member of The Growth Dialogue think tank can be extrapolated to most Central American countries.

What issues should be addressed in any dialogue focussing on development?

- There are certain constants for small economies where per capita income is not high, like Guatemala. The starting point is growth: determining which type is aspired to and generating the most jobs. To do this you have to consider what exports be must focued on; identify where you have got to do and what competitors are doing. Another essential ingredient is maintaining macroeconomic stability, because it provides certainty for investment. "

"... Every day less human resources are needed. It is also important not to lose sight of the fact that Korean and American maquilas will only remain in the country if they are competitive. It's very easy to close factories and move them elsewhere. Therefore it is important to invest in the appropriate technology in Guatemala. "

"... How can the rates of violence in Guatemala impact on this?

- Although it may be a disadvantage, other countries have faced similar situations. Rwanda has taken a dramatic turn, Peru is now relatively safe. It is defeatist to think that you can not get out of a situation like this, but it is important that society decides to reach a consensus soon. Windows of opportunity available today may be close. We do not know what the world will be like in 15 years, and if we are not ready to face it we could lose out on a great deal. Guatemala's population is young and will need work. '

More on this topic

Nicaragua According to USA: Good, but Bad

July 2016

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.

Difficulties in Investing in Central America

November 2014

Employers in the region are complaining about a lack of long-term development policies, and are asking for Government transparency, effectiveness and legal certainty, so that they can continue investing in the region.

During a meeting between businessmen and government called 'Expanding opportunities: promoting the private sector and job creation', entrepreneurs from different sectors shared their concerns and views on the investment climate in the region.

Entrepreneurs in the Region Demand Legal Certainty

October 2013

They are also asking for policies that encourage the creation of new businesses and credit facilities, especially for young people.

During the XXIV Summit of Ibero-American Business Organizations which took place this week in Panama, employers from the region concluded that clear rules are needed to ensure legal certainty and thereby further advance the economic development of the countries.

Investment Flees Due to Political Instability

June 2012

"Nothing threatens stability as much as lack of respect for the law. No one invests in an unstable country," Javier Siman, president of ASI.

An article in reviews a speech by the president of the Salvadoran Association of Industries (ASI), which criticizes "the ongoing confrontation between the Legislature and the Supreme Court, and the government and private enterprise."

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