Insecurity and Uncertainty

Salvadoran business owners point out that the main causes of the country's poor economic performance is still growing insecurity and a lack of a clear political course.

Tuesday, March 6, 2018

The Salvadoran business chambers agree that the beginning of the year has not been the best, since the obstacles that for several months have made it difficult to operate and grow private sector activities still remain.

Regarding this issue, the president of the Association of Distributors of El Salvador, José Mayorga, told that "...' Performance is slow. There are two things that are affecting us, first the high level of extortion that is forcing us to increase production costs more and more, since we have to increase security to get into certain neighborhoods, and the second is political uncertainty, because a lot of businesses have decided to wait until investing, they want security that the rules of the game will not change, these are the two main factors that are affecting distributors in the country'."

In relation to performance in 2017, the president of the Agricultural and Agroindustrial Chamber of El Salvador, Agustín Martínez, said that "... 'Last year was not the best for several sectors, due to various situations, with the crime that is affecting rural areas, coffee and sugar prices, on average it was not a good year'."

The situation denounced by employers is a continuation of the problem that has been going on for years, because according to the Legal and Institutional Situation Report, in the third quarter of 2017 it was reported that " ... corruption was the third obstacle to operation and growth of companies identified by the business people surveyed (5.5), outflanked in seriousness by crime (7.0) and low sales (5.6)."

See "Legal and Institutional Situation Report - 2nd Semester 2017".

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More on this topic

Business and Insecurity

August 2018

Citizen insecurity, political uncertainty and low levels of investment are the main factors that are still affecting the quality of life of the population and the business climate in El Salvador.

Analysis undertaken by the Salvadoran Foundation for Development (Fusades) points out the main factors that are preventing the Salvadoran economy from achieving better levels of growth. In its Legal and Institutional Report, it notes recent advances in trade facilitation, but points out that public insecurity continues to be the factor that most negatively affects the quality of life of the population and the investment climate. 

More Extortion, Fewer Companies

May 2018

In El Salvador every week at least two companies report that they intend to close down due to the impact of extortion, a problem that, far from being resolved, seems to be getting worse every year.

Representatives from the Chamber of Commerce and Industry of El Salvador (Camarasal), said that the country's employers do not see any significant improvement in the security climate, following the six month extension last April of the extraordinary measures of the Sánchez Cerén administration to try to control crime and insecurity.

El Salvador: Increasing Insecurity and Decaying Business Climate

February 2016

Warnings have been given over increased insecurity, stagnation in the fight against corruption, and little capacity for Government dialogue in the second half of 2015.

The adoption of higher taxes without a dialogue, the consequences for the country of the increase in homicides from 10 to 18 a day in 2015, and stagnation in the fight against corruption, were highlighted in the evaluation made by the Salvadoran Foundation for Economic and Social Development ( Fusades) regarding the legal and institutional framework of the country during the second half of 2015.

Salvadoran Economy: First Quarter 2010

May 2010

FUSADES published its economic situation report for January March 2010; it highlights crime as the main issue affecting economic recovery.

In its chapter on investment climate, the Foundation for Economic and Social Development of El Salvador (FUSADES), remarks that “businessmen feel that the country’s situation is still unfavorable for investing, a trend that has been sustained for the past two years.

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