If free zones -with their tax breaks and other privileges- are good for the economy, why isn't the entire country made into a free zone?
EDITORIAL
Why not provide companies founded with Central America capital the same benefits and privileges enjoyed by foreign firms operating under free zone regimes? The job creation and contribution to the economy that can be made by companies in free zones because they enjoy these privileges should be able to come from business founded with Central American capital as well, which in contrast to foreign firms, have to deal with excessive regulations and bureaucracy in the States of Central America.
Growing institutional weakness in several countries of the isthmus brings to the forefront the responsibility of the business sector to keep the economy of this region moving forward.
EDITORIAL
Currently, the governments of several Central American countries are showing signs of weaknesses which - to different degrees- point to a sharp decline in institutional quality.
"... State overregulation has made business legality a privilege that can only be accessed with economic or political power. "
EDITORIAL
In these countries, poor since time immemorial, state bureaucrats whose regular salaries allow them to live in a first world fantasy land have as their primary concern checking that things are done as they should be, that is to say, as they are done in the first world.
The Global Financial Integrity report places Costa Rica and Panama in positions 14 and 18 in the list of countries that moved the largest flows of illegal money in the world between 2003 and 2012.
EDITORIAL
The report entitled "Illicit Financial Flows from Developing Countries: 2003-2012" by Global Financial Integrity, said that between those years, the flow of illicit money in Costa Rica exceeded $94 billion, about $30 billion more than the amount accumulated between 2001 and 2011, according to reports from the same institution in mid-2013.
Low productivity in Central American economies is the barrier which needs to be overcome if we want to grow in a sustainable way.
A study prepared by the Nicaraguan Foundation for Economic and Social Development (Funides) analyzes the evolution of productivity in different production factors in Nicaragua, Costa Rica, El Salvador, Guatemala and Honduras.
Trade unionists who promote it, the officials who estimate it, the rulers who decree it, are not part of the legion of unemployed who surely would work for less than the official minimum wage.
EDITORIAL
The unemployed have no voice, in principle because they do not pay a sindical fee, and if they did have one, they would not raise it, because it feels devoid of the dignity necessary to do so, because they are used to adopting a very humble position in job interviews. Nothing further impoverishes the human spirit that lack of gainful income of one form or another.
Standard & Poor's has warned of the risk of default in the next two years and reduced the rating for the sovereign debt of Venezuela, the principal debtor of the Colon Free Zone.
From a statement issued by Standard & Poor's:
OVERVIEW
The Venezuelan government's failure to take timely corrective actions to address growing economic distortions has contributed to economic deterioration and shortages of foreign exchange.
Accepting personal responsibility for your own and your family's progress is a direct result of the knowledge of the fundamentals of economics and finance.
In order to manage the personal wealth in an adequate way and to properly assess the economic policies governments apply, it is essential to have an economic and financial education since primary school.
Panama exemplifies the relevance of air, sea and telecommunications connectivity for the competitiveness and economic growth of a country.
Having sea and air connectivity with the rest of the economic world is one of the main factors that has enabled the Panamanian economy to achieve higher growth rates, which are on average 7% per year.
Ardito Barletta, CEO of the National Competitiveness Center of Panama, pointed out in an article on Capital.com.pa that "...Another aspect of connectivity is that of telecommunications, as due to its geographical position there are six submarine fiber optic cables which amplify the power of data, voice and other communications relative to other countries in Latin America. "
Naive or something else... ? The European Union will be paying for a local consultant to diagnose the economy of Central American countries, identify potential risks and determinants of development in the region, and propose actions in this regard, in a timeframe of only 55 days.
The required procurement is part of the Regional Project for Support of Central American Economic Integration and Implementation of the Association Agreement (PRAIAA), which is the entity responsible for the hire and the one with the required funds.
Productivity, an indicator of the relative capacity of wealth creation, has been stagnant in the region for thirty years.
Manuel Hinds' analysis in an article published in Elsalvador.com, notes that "... Latin America has two problems with productivity. One is that it is low compared to developed countries. The other is that, with the modest exception of Chile, it has not been increasing over the past thirty years.
The only routes to success that exist, "whether they are right wing or left wing, are those requiring structural reforms to boost value, and prudence in the administration of the State".
"In Latin America, ... not all countries take advantage of the bonanza in the same way ... [the bonanza] in prices of raw materials, low interest rates, easy access to the international financial markets and in receiving FDI are abundant ...
Some companies can become richer than others overnight, depending on decisions made by a few public officials.
Editorial
An article in Elfinancierocr.com reports on the positive effects of the devaluation of the national currency of Costa Rica, the-Colón, agains the dollar, for exporters in the country.
The causes of the devaluation were mainly external, but were catalyzed by decisions made by public officials, the Central Bank, whose missive it is to defend the value of the national currency, because this supposedly contributes to the economy.