Reduced Investment in El Salvador

Lack of policies for attracting investment and the climate of insecurity both legally and for citizens is scaring away local and foreign investors.

Monday, May 27, 2013

In terms of Foreign Direct Investment (FDI), this barely grew, by $22 million, during 2012, closing with $463 million while the previous year it had been $441 million.

"A recent report by the Economic Commission for Latin America and the Caribbean (ECLAC) specifies that the balance of private foreign investment at the end of last year was $516 million, while in 2011 was only $385," reported Elsalvador.com. Although it was $130 million (34%) more than the amount of investment in the previous year, El Salvador was placed, for the fourth consecutive year, among the countries with the lowest FDI inflows in Central America.

In the view of analyst Rigoberto Monge, representing the private sector, this is due to the country's poor economic growth in the last four years (except 2009) because the government has not issued policies to promote it. Nor have they created a friendly environment to attract foreign and domestic investors.

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For the third consecutive year, in 2017, foreign investment received by Guatemala fell compared to 2016, explained by a lack of legal certainty, particularly in the mining industry.

Even though no one expected great results at the end of 2017, the 3% fall with respect to foreign investment received in 2016 has worried the business sector, as it reinforces the downward trend seen since 2015, when the FDI received by the country was 12% lower than the amount reported the previous year.

Safety is More Important Than Tax Incentives

September 2014

In the view of entrepreneurs, insecurity is still the main factor preventing the arrival of larger flows of foreign direct investment to the region.

Despite the benefits and incentives of all kinds offered by governments to encourage the establishment of foreign companies in Central America, as long as violence and insecurity is not tackled in a more effective manner, investment flows will continue to dwindle.

Panama's Investments in Honduras Affected by Insecurity

July 2013

When choosing a destination for their investments, Panamanian businessmen see poor conditions for both physical and legal security in Honduras.

This was explained by the Panamanian ambassador in Honduras, Mario Ruiz, adding that lately, trade between the two nations has had difficulties because of the issue of insecurity which "has affected business and has generated concerns about continuing to invest".

What El Salvador is Losing in Terms of Investment

June 2013

$500 million is the estimated amount that has not been invested due to bad business climate, poor image and lack of institutional credit, which frightens investors away.

These are the indications of the economist and former president of the Central Reserve Bank, Mauritius Choussy: "In four years, the amount lost adds up to $2 billion, which could have generated more than 150,000 jobs.

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