Logistics as A Central American Fetish

Money in the pocket for every grandstanding politician and every wannabe business consultant, logistics in Central America is a much talked about theme on which no action is actually taken.

Thursday, June 4, 2015

EDITORIAL

Logistics is vital for sustainable economic development, and it is perhaps the area of ​​business management that has made the greatest strides in the last 50 years. Information Technology and real-time communications are based on these developments, but the main factor of modern logistics are the facilities that globalization has brought, having torn down trade borders.

Central America, because of its geographical location, could be the logistics hub of the Americas, as Singapore is in Asia and Rotterdam is in Europe. Awareness of this has lead to every Central American who claims to be well informed to talk about logistics as the savior of the poor economies of the region. But even Panama, self styled as a logistics hub, is only now ceasing to be the only the place with a sea crossing between two oceans, in order to try to really organize itself as such.

Throughout the entire region, you just have to say "LOGISTICS !!!" to get attention and be published the next day in every media outlet. "Logistics is salvation" cry the modern messiahs, and they announce and promise ports and airports, roads and dry canals, as they are incapable reaching any agreement with the country's rulers, putting to one side the only real way to achieve sustainable development in Central America : real and effective integration through the disappearance of all trade borders. Intraregional trade which is free of tariffs, sanitary and pseudo bureaucratic obstacles, would significantly increase the productivity of the Central American economy, which need to stop being "the Central American economies," in order to become just that: one economy with the power all its more than 40 million inhabitants.

The failure to grant a concession for Puerto La Union is a sad and powerful confirmation that logistics is much more than infrastructure. it begins with the political will to start talking seriously about these issues, leaving aside the paraphernalia advertised in ministerial meetings and by officials of all ranks, in favor of continuous communication (cheap and effective) via phone or Skype.

Without a productive "critical mass" to generate a real integration of their economies, Central America will never realise its potential as a logistics hub for the Americas.



More on this topic

Guatemala-Honduras Customs Union

February 2015

Both governments announced that they have signed an agreement to unify customs in order to expedite the transport of vehicles and people, with effect from 1 June.

With this agreement, it is expected that the border between the two nations will be fully liberated for both freight and passengers in December. Immigration procedures will be carried out online or in an office to be located near the border area.

Customs Offices Should be Open 24/7 for Cargo

June 2014

In order to expedite intraregional trade it is necessary for customs offices dealing with cargo freight, to be open all hours, just as immigration customs offices are.

A study commissioned by the Federation of Chambers of Commerce of Central America (Fecamco) concluded that there are 87 barriers to trade in the region, one of the major ones being operations of the systems at customs offices at borders, followed by bureaucratic requirements and lack of adequate infrastructure.

Central American Integration Not a Reality

April 2014

The difficulties and obstacles highlighted by exporters in intraregional trade reveal the serious shortcomings of the much vaunted concept of Central American Integration.

Chambers representing exporters in Central American countries believe that instead of moving towards the integration of the region, the slow progress of the customs union and the high costs of transport is retracting from it.

Paso Canoas: The Irresponsibility of Two States

August 2013

Conflicts of interest between carriers and the apathy of the authorities of Costa Rica and Panama have kept the border blocked for all regional trade.

EDITORIAL

It's not just that immigration and customs officials do not provide a 24 hour service, as is needed, and as occurs at other Central American borders, but that in Paso Canoas, the governments of Costa Rica and Panama are not exercising their authority in a responsible manner, resulting in conflicts for one reason or another, with consequent blockades and closures that produce serious economic losses not only for Panamanians and Costa Ricans, but also for all Central American companies whose imports or exports pass through this border.

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