Without Legal Certainty There is No Investment

If Central America does not strengthen the institutions that ensure a stable legal framework and full respect for contracts, foreign investment will not come and national investment will go to other countries, no matter how many incentives and tax exemptions are offered.

Tuesday, June 16, 2015

EDITORIAL

The frequent displays of discontent for the Salvadoran Executive Branch in respect to rulings issued by the Constitutional Court and the inaction of the Panamanian government over blockades by a group of people are holding not only over the hydroelectric project Barro Blanco, but also the main access roads, are appalling signals sent from the region to the world, casting doubt on those companies who consider the region to be a potential investment destination.

Legal certainty not only attracts foreign investment which creates jobs and economic growth in the countries of the region, it is the cornerstone of any nation that claims to be respectful of the Constitution and the rights of their citizens and businesses.

The Central American private sector should not desist in its efforts to ensure respect for the rights and principles of legality and legal certainty for investment which comes from both foreign and local capital.

As stated by Carlos G. Fernandez, president of the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP), "... Money is nervous. We are sending the wrong signals to investors and financial institutions, regardless (referring the Barro Blanco project) whether there is an ambitious investment plan, which requires the collaboration of the private sector.'"

¿Busca soluciones de inteligencia comercial para su empresa?



More on this topic

Legal Certainty: What are Investors asking for?

March 2021

A few weeks before the new magistrates of the Constitutional Court take office in Guatemala, the business sector is asking that the new members of the highest court advocate for a real rule of law and provide legal certainty to investments.

In recent years, Guatemala's Constitutional Court (CC) has gained prominence in the country's economic sphere, as its rulings have affected different investments that were already operating locally.

Fragile Legal Certainty

October 2018

Adverse court decisions against companies, social and political conflicts and fiscal issues are some of the factors that are impeding the development of productive projects in Central American countries.

One of the latest court decisions affecting companies with investments in the region was that of Minera Petaquilla, in Panama.

El Salvador: Legal Uncertainty Making Business Climate Worse

February 2017

Although emphasis was given to the momentum taken in the fight against corruption in 2016, lack of legal certainty continues to affect conditions for doing business in the country.

From a report on the Legal and Institutional Situation by the Salvadoran Foundation for Economic and Social Development:

Honduras: Call for Greater Political Stability

December 2012

Political instability is making both domestic and foreign investors very nervous.

An article in Laprensa.hn looks at how recent political developments related to legal certainty, are worrying Honduran businessmen, as they complicate the promotion of the country as a recipient of foreign investment.

ok