Reducing costs and barriers to foreign trade in Central American economies is key for the region to overcome the economic recession caused by the outbreak of Covid-19.
A report prepared by the World Bank explains that boosting economic activity and employing a higher percentage of the labor force are objectives that can be achieved through reforms that strengthen the private sector and attract investment.
Central America must be the driving force behind a globally accepted document that will be vital for the recovery of the global economy and tourism in particular.
The generation of a physical or digital document of global acceptance (like national passports) that certifies that the bearer has been vaccinated against Covid-19 will facilitate the movement of people that has been severely restricted as part of the measures adopted by governments, both locally and internationally, to contain the pandemic.
As of June, Central American economies began to show signs of incipient recovery and as of August, Guatemala, Nicaragua and Costa Rica registered the smallest drops in their levels of economic activity.
Since March of this year, the region has faced a severe economic crisis generated by the outbreak of covid-19. The strict quarantines decreed, the closure of borders and commercial establishments, ended up damaging the dynamism of productive activities.
Verifying the new levels of demand, offering only basic products or services, and delaying investments as much as possible to recover cash flow, are some of the strategies that businesses plan to implement to face the new commercial reality.
Because of the covid-19 outbreak in Central America, governments decreed strict home quarantines and restricted most economic activities and the movement of consumers.
After the unemployment rate in the United States fell from 15% to 8% between April and August, it became evident that at the beginning of the crisis the capacity of recovery that the North American country could develop was underestimated and it is expected that this behavior could boost the economic activity in Central America.
During the first half of 2020, when the first cases of covid-19 began to be reported in the region, forecasts noted that the recovery of economic activity would be excessively slow, due to a significant drop in consumption globally.
After vehicle sales practically disappeared due to the decreed quarantine, the distributors in El Salvador begin to notice an incipient reactivation of the market, which is explained by the demand for units for commercial use.
Months ago CentralAmericaData predicted the behavior that is currently confirmed by vehicle distributors in El Salvador.
The Inter-American Development Bank approved two lines of credit for El Salvador, whose funds will be used for programs to improve the quality and coverage of education, and to promote productive activity through business and housing loans.
The first line of credit, amounting to $300 million, will support the expansion and improvement of the quality of education in the country, with a special focus on early childhood and vulnerable populations, sustainability, and the economic recovery of SMEs affected by the Covid-19.
CABEI approved a line of credit for the Salvadoran government to finance health care programs focused on mitigating the covid-19 outbreak and plans to reactivate the local economy.
Supporting macroeconomic stability, assisted by the Fiscal Responsibility Law, and strengthening the capacity to respond to the pandemic, through the programs that the government has implemented in response to the emergency, are two of the objectives that the loan approval is intended to fulfill.
Achieving the confidence of consumers, who have less money available to eat out in this context of economic crisis, is the main challenge for restaurants in El Salvador in the new commercial reality.
As a result of the health emergency caused by the covid-19 outbreak, the Association of Restaurants of El Salvador (ARES) estimates that 40% have already reactivated their food service, 30% are still analyzing their economic situation to return and the remaining 30% have already closed their total operations.
After the reopening phases that were supposed to be applied in El Salvador were declared unconstitutional and the restrictions to economic activities were removed, businessmen receive the news with optimism, but fear that some businesses have closed down because of the crisis.
Since March, when the first cases of covid-19 began to be registered in the country, the administration headed by Nayib Bukele decided to subject the country to a strict home quarantine.
Companies in El Salvador that do not comply with the biosecurity measures stipulated in the protocols for reopening the economy may be sanctioned with the temporary closure of their operations.
In the process of reactivating economic activities that were suspended due to the spread of covid-19, the Salvadoran authorities have established protocols for the proper functioning of companies.
After authorities suspended the start of Phase 2 on two occasions, the government of El Salvador announced that the second phase of the economic reopening plan would begin on August 20.
July 19 was the second time that the entry into force of this Phase was postponed, as it was initially planned to begin the second stage of the economic reopening process as of July 7, which contemplates the reactivation of the plastic, paper, cardboard and footwear industries, in addition to call centers, restaurants and public transportation.
President Nayib Bukele announced his decision to delay for a second time the start of Phase 2 of the Economic Reopening Plan, which was scheduled for July 21.
"After hearing the opinions of experts and, above all, the Ministry of Health, the governing body for health, and despite the fact that what our country needs is strict quarantine and not just complementary measures, I have decided to suspend Phase 2 of the economic reopening," Bukele explained on his Twitter account.
Using technology to measure the flow of visitors, reducing the furniture available in the food courts and implementing product deliveries in the parking area are part of the changes that the region's shopping centers must apply in this new reality.
Because of the threat of the spread of covid-19, since mid-March in Central America, the authorities agreed to close the shopping centers.
Attending only customers by appointment and the mandatory use of facemasks and masks are some of the rules that in the new commercial scenario, beauty salons and barbershops in El Salvador must comply with.
After almost three months of house quarantine decreed by the authorities due to the covid-19 outbreak, the country began to implement the economic recovery plan as of June 16.
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