Due to the precariousness of the English language, in recent years’ companies in the Contact Center & BPO sector have decided to close thousands of jobs in the region and relocate their investments to other markets where they have no difficulty in recruiting qualified personnel.
Reports at a global level show that the command of English is one of the weaknesses at a Central American level.
Because of the economic crisis, Foreign Direct Investment flows have practically vanished, and in order to attract the few investments that are projected for next year, countries are expected to compete by offering incentives and aid programs for businesses.
The covid-19 outbreak dissipated the investment intentions of companies globally. At the beginning of the fourth quarter of the year, there are signs that business confidence has begun to recover; however, pessimism among investors is expected to continue next year.
The health and economic crisis will result in a reordering of foreign investment at the global level, and countries like Central America will have the opportunity to take advantage of their geographical position to attract fresh capital.
The outbreak of covid-19 worldwide will cause a drop in production in 2020, however, by 2021 and 2022 the forecasts of international organizations anticipate that economic activity could rebound, a rise that would be coupled with new investments in various markets and sectors.
Panama and Honduras were the only two Central American countries to report increases in foreign direct investment in 2018 over the previous year, with year-on-year changes of 36% and 3%, respectively.
The growth of investments directed to Panama, which concentrated 51% of the sub-regional total, explained the increase that was reached in 2018 in Central America (9.4%), since except Panama and Honduras, the Central American countries received less Foreign Direct Investment (FDI) than in 2017, explains the report "Foreign Direct Investment in Latin America and the Caribbean 2019", produced by the Economic Commission for Latin America and the Caribbean (ECLAC).
Despite the location and the fiscal benefits that in some cases the countries of the region offer, the lack of education of the population will be the main barrier to continue attracting large investments.
The lack of guarantee of finding the competent and sustainable human capital necessary for the proper operation of companies is an issue that negatively influences the attraction of important investments in Central America.
Partly explained by the regimes created to encourage investment in different sectors, countries in the region went from receiving $11 billion in 2016, to $12.1 billion last year.
According to a study by the Center for Economic Integration Studies, in 2017 inflows of Foreign Direct Investment (FDI) in the region reached a record figure of $12.083 billion, registering an increase of 9.8% compared to 2016.When analyzing the period from 2010 to 2017, it can be seen that the inflow of FDI has increased considerably, showing a growth rate of 7.9%.
In 2016 44% of foreign direct investment in the region was concentrated in Panama, and a fourth consecutive year of increases was recorded, with 16%, while Costa Rica received 27% and increased by only 1.1%.
From chapter I of the report "Flows of FDI in Latin America and the Caribbean", by the ECLAC:
FDI into Central America grew by 3.7% in 2016 and totaled 11,833 million dollars.The increase in investments to the two main recipients of the subregion -Panama, which recieved 44%, and Costa Rica, 27%- compensated for the drop in FDI to the other Central American countries.
The Chinese multinational Midea, already present in South America, plans to invest $30 million in expanding and reaching out to markets in Mexico, Central America and the Andean region.
The company Midea, founded in 1968 in Guangdong, China, believes that there is "... a lot of room for expansion"in this region. This was explained to EFE by the Brazilian Joao Cláudio Guetter, president of the Latin American operation.
Bucking the historical trend, since 2013 the isthmus has taken off positively as an investment destination compared to other Latin American countries.
A study by the CABI highlights how in recent years the Central American region, including the Dominican Republic, has been "seen with new eyes" by the rest of the world, as demonstrated by a study on Gross Capital Formation and Imports of Capital Goods variables, in Latin American countries.
The union of exporters and the Turkish government are proposing setting up a business center in Panama that will function as a platform for trade with the rest of the region.
The aim of the Turkish Exporters Assembly is to explore business opportunities in the region, using Panama as a central point and from there to presenting its exports not only to Central America but also to South American countries.
Michelin has announced a production plant in Leon, Guanajuato, to manufacture high quality tires for passenger cars and light trucks.
The new plant will be number 21 of the Michelin Group in North America and the 69th worldwide.Michelin's announcement indicates that their location reflects the commitment of the company to produce its tires as close as possible to the markets where its customers are based.
With 43% of the total, in 2015 Panama continued to be the largest recipient of FDI in the subregion, followed by Costa Rica (26%), Honduras (10%) and Guatemala (10%).
From the chapter Central America in the report on Foreign Direct Investment in Latin America and the Caribbean:
Determinants of investment, committed figures, and key economic sectors in the region in which Colombian companies have ventured into in recent years.
From the summary of the document by Cepal: "Colombian Investment in Central America":
The main objective of paper on Colombian investment in Central America is to analyze the business strategies that have led to increased Colombian foreign direct investment (FDI) in Central American countries.
The promise of a lifting of the embargo by the US government has generated great expectations for investors and entrepreneurs from around the world.
The Governor of New York is traveling Cuba to explore the business opportunities that could arise from the lifting of trade restrictions imposed by the US government 50 years ago.
An article on Elpais.com items , outlines that "...The Solomon Islands and the Arab Emirates have opened embassies, and the Cuban diaspora who are dreaming up fabulous ventures and transfering money to relatives on the island to buy local land and buildings and rent shops are legion . "