Following the visit of US Vice President Kamala Harris to Guatemala, the business sector assures that in order to reduce illegal migration from Central America to the US, it is necessary to create a favorable and comfortable environment for local and foreign investment in the countries of the region.
As part of Harris' visit to Guatemala, Agexport prepared a document with proposals that reflect the experience it has accumulated over many years, incorporating Guatemalans and small rural businesses into export chains, generating income that allows them to remain in their territories.
In the context of the tense diplomatic and commercial relationship between the two world powers, Central American countries could have the opportunity to attract new investments, as it is estimated that some American companies would need to migrate their operations to the American continent.
As a result of the tension between the two nations, Mauricio Claver-Carone, an advisor to President Trump, believes that U.S.
Because of the tension between the productive sector and the government, coupled with the lack of official statistics from the Central Bank, some companies in Nicaragua have chosen to stop providing information to the authorities.
In an attempt to hide the complicated economic situation, the country is going through, local authorities have not published information on the Monthly Economic Activity Index since February 2019, when the year-on-year drop was 7.5%. This prevents businessmen from making decisions based on the real situation of the economy.
Strengthening government institutions in the areas of contract enforcement, property rights protection and investor protection are part of the recommendations made by the IMF in its most recent visit to the country.
According to the international organization, policies to regain the confidence of the private sector, including a frank assessment of the impact of recent measures, are essential to promote economic recovery and compensate for increased poverty. In the short term, strengthening government institutions in the areas of contract enforcement and efficiency of the legal framework for dispute resolution, protection of property rights, investor protection, property registration, and insolvency resolution could significantly improve the country's competitiveness.
In Nicaragua, the authorities have not published information on the Monthly Index of Economic Activity since February 2019, when the year-on-year fall was 7.5%, a situation that prevents businessmen from making decisions based on the real situation of the economy.
After 14 months of socio-political crisis in Nicaragua, companies in the country face a reduction in consumption and investment, as well as the impact on national economic activity of rising unemployment.
According to studies conducted by the Consejo Superior de la Empresa Privada (COSEP) and the Nicaraguan Foundation for Economic and Social Development (FUNIDES), the local economy faces a contraction in economic activity that continues to deepen, prevailing uncertainty and distrust in consumers and investors.
The latest risk ratings for the issuance of long-term debt of Central American economies identify Panama as the most attractive country to invest in.
On March 8, Moody's decided to raise its long-term issuer rating in foreign currency from Baa2 to Baa1, arguing that the outlook remains more favorable in the medium term.
In the first half of the year private fixed investment increased by almost 6% compared to the same period in 2016, driven mainly by the good performance of the construction sector.
From the Central Bank's "Quarterly GDP Report II"
Private fixed investment grew by 2.8% (5.6% in the first half of the year), as a result of increases in construction (9.3%) and other investments (3.25) and a decrease in machinery and equipment (-2.2%).Fixed investment increased by 2.2% (4.6% in the first half of the year), as a result of a positive performance in machinery and equipment (15.3%) and decreases in other investments (-8.1%) and those under construction (-1.0%).
The economic expectations of entrepreneurs have fallen, in particular because of the business climate, with projections for the rest of 2016 being for less private and public investment.
From the Executive summary of the II Economic Situation Report by Funides:
In the first four months of 2016 the Nicaraguan economy behaved as predicted by FUNIDES in its first Economic Situation Report, with the exception of exports, which were projected to be more vigorous than were actually recorded.
Noting the political system's inability to agree on fiscal issues, Standard & Poor's has downgraded, from BB to BB-, the rating for the country's long-term debt, giving it a negative outlook.
Costa Rica Long-Term Ratings Lowered To 'BB-' On Continued Fiscal Deterioration; Outlook Is Negative
25 Feb 2016
Source: Standardandpoors.com
OVERVIEW
The combination of growing spending pressures and lack of tax reform has weakened Costa Rica's public finances and raised its vulnerability to
Poverty has declined, foreign investment has quintupled in a decade, the economy has grown more than the average in Central America and Nicaraguan businessmen are applauding it.
Carlos Pellas, one of the most successful Central American businessmen with investments in sectors relating to financial insurance, agribusiness, information technology, energy, vehicle distribution, and production and beer and spirits, did not make a statement in a merely personal capacity but rather one relating to the economy of his country, Nicaragua, when he said that "people think that things are going well, there is a lot of investment, construction has grown, it is a dynamic sector, you can tell that from one look".
In light of the alarm generated by the proposal for the de-dollarization of the economy, the President of the Central Bank announced that there will be no change in the system of free convertibility of currencies.
An article in Elnuevodiario.com.ni reports that Ovidio Reyes, president of the Central Bank of Nicaragua, said that "... many people are concerned because they believe the government will start to add controls to the buying and selling of dollars. 'That will not happen, a key attraction of foreign investment has been the system of free convertibility of our currency and the dollar that exists in the country'. "
International rating agencies have not recognized the substantial improvement in macroeconomic indicators in recent years.
A contradiction between the "B-" awarded to the country and the increasing flow of foreign investment has been highlighted.
Ovidio Reyes, Manager of the Central Bank of Nicaragua, asked international rating agencies such as Moody's to improve the country's credit rating which is currently "B-".
Arguing that the economy has benefited, the private sector will pursue and strengthen its model of negotiations with the government.
This was the message given by the Superior Council of Private Enterprise (Cosep) during the celebration of National Entrepreneurs Day. According to the Cosep, this strategy has resulted in positive economic growth in Nicaragua.
The stagnation of competitiveness in Latin America demonstrates a need for structural reforms and investments which increase productivity.
• The Global Competitiveness Report 2013-14 indicates that competitiveness is stagnating in Latin America and reforms and investments to ensure future economic growth are long overdue.
• Excellence in innovation and robust institutions are increasingly important factors for achieving competitiveness.