Guatemala was the only country in the region that improved its position in the global ranking monitoring businessmen's conditions for doing business, while the others went backwards.
The World Bank released the results of the Doing Business 2020 report, which measures the regulations that favor or restrict the development of business activity in different countries.
In the 2019 Global Competitiveness Index, Costa Rica, Panama, Guatemala, El Salvador, and Nicaragua fell back in the ranking, while Honduras registered no changes and the Dominican Republic was the only country that improved.
According to the report by the World Economic Forum, during 2019 Costa Rica ranked 62 out of 141 countries. It was followed by Panama at box 66, the Dominican Republic at 78, Guatemala at 98, Honduras at 101, El Salvador at 103 and Nicaragua at 109.
One of the best parameters of the strength of an economy is the amount of businesses it creates. In Panama, 47% fewer companies were created in 2017 than in 2016.
Not only were fewer companies were created in 2017, but more companies were closed than in 2016.
Although growth of the economy in general still remains above 5% -still far from the vigorous 10% of a few years ago- other macro data, such as the increase in unemployment and the growth of independent or informal work, shows that, starting in 2018, Panama has entered a phase of economic slowdown.Businessmen in the commerce sector are even talking about "recession", both in retail and in wholesale sales.
Salvadoran industrialists claim that with the presidential veto of the administrative simplification law, the country has lost a valuable opportunity to improve the already deteriorated business climate.
EDITORIAL
With the veto of the Administrative Simplification Act, the Salvadoran government is sending a clear message to the business community and to society in general: There is no interest in paving the way for the private sector to generate more jobs and, consequently, more wealth and socioeconomic development.
Knowing how to laugh at yourself is a virtue that every entrepreneur in Costa Rica should have, even though it might all end in tears.
This is what Alfonso Carro does in his article on Crhoy.com: laugh at himself, at the same time bringing to light the helplessness felt in light of the deteriorating conditions for investment in an economy such as Costa Rica, which was once number one in Central America.
The private companies should have to consider the risk posed to Costa Rica's business climate by the excesses of state union leaders.
EDITORIAL
Costa Rica's democratic traditions pale before the attempt made by a trade unionist to silence the media by threatening the safety of journalists.
An article in Crhoy.com quote statements made by the union member Fabio Chaves regarding the news in Costa Rican media revealing information about unacceptable privileges enjoyed by many officials, acquired against article 57 of the Constitution itself: "Wages will always be equal for equal work under identical conditions of efficiency."
The problem with income tax exemptions is that they favor high-return projects that would probably have been made anyway.
From an IDB document entitled "The effectiveness of tax incentives: The case of export processing zones in Costa Rica, El Salvador and the Dominican Republic".
Introduction and Summary
Policies encouraging investment make use of a variety of instruments.
A World Bank study has evaluated regulations which exist in 22 cities in the region for starting new business, registration, construction, and border trade.
From a statement issued by the World Bank:
Doing Business in Central America and the Dominican Republic 2015 compares business regulations in 6 Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) and the Dominican Republic.
Employers in the region are complaining about a lack of long-term development policies, and are asking for Government transparency, effectiveness and legal certainty, so that they can continue investing in the region.
During a meeting between businessmen and government called 'Expanding opportunities: promoting the private sector and job creation', entrepreneurs from different sectors shared their concerns and views on the investment climate in the region.
In the view of entrepreneurs, insecurity is still the main factor preventing the arrival of larger flows of foreign direct investment to the region.
Despite the benefits and incentives of all kinds offered by governments to encourage the establishment of foreign companies in Central America, as long as violence and insecurity is not tackled in a more effective manner, investment flows will continue to dwindle.
The money that the State of Costa Rica will lose in the dispute over the failed concession of the Crucitas mine will come from taxpayer's pockets.
Editorial
During the 20 year period of the soap opera that is Crucitas gold mine, none of the individuals who are involved in one way or another have suffered any financial loss and many, on the contrary, have seen an increase in their income and their bank accounts.
Of the $34.095 billion in Foreign Direct Investment in Central America which arrived in the last 4 years $21.925 million left the region in the form of expenses.
The information comes from a report by the Central Institute for Fiscal Studies (ICEFI), which reveals that the most affected country is Guatemala, where outflows were 1.3 times more than income.
Honduras, Guatemala, Nicaragua and El Salvador attract investment based on the exploitation of natural resources and unskilled, but cheap, labor.
A report by the Central American Institute for Fiscal Studies (ICEF), reveals that Central America recorded last year $9.70 billion in foreign direct investment (FDI), with Panama and Costa Rica being the recipients of about 60% of these flows.
The slowdown in the economy and rising labor costs are reducing the competitiveness gap that the Asian giant has with other countries.
Investment in China rose by 17.4% in 2010 and 9.72% in 2011, however, official data from the Ministry of Commerce shows that foreign direct investment in 2012 totaled $116.010 billion, representing a decrease from the previous year, in this case of 3.7%.
In Guatemala investment is between 16% and 17% of gross domestic product, in Southeast Asia, the figure is between 25% and 35%.
Elperiodico.com.gt reports that a group of experts met last week in this country to discuss how to foster Guatemala’s growth. The analysis of the issue carried out by a member of The Growth Dialogue think tank can be extrapolated to most Central American countries.