For the IDB, investment in infrastructure is the most important priority when increasing the probability of improving productivity and reaching higher per capita income levels in the countries of the region.
The Inter-American Development Bank (IDB) published its report "Building Opportunities for Growth in a Challenging World," in which it addresses the benefits of infrastructure investment and its influence on productivity growth in the countries of the region.
Sustainable economic development requires the maximization of these three factors in a combined form.
EDITORIAL
- There is no use opening a country to the world if you do not have the minimum capacities to compete in international markets.
- To base development on offering a list of a few products or services to the worldgenerates a dangerous dependence of their value in the market or on fluctuations in their production.
The Morales administration intends to raise the GDP growth rate from 3.8% in 2016 to 5.1% in 2021 and increase the rate of annual investment from 3.9% to 7.4% in the public sector and 4, 5% to 7.5% in the private sector.
From a statement issued by the Government of Guatemala:
The Minister of Economy, Ruben Morales explained that there are two main economic challenges in the country: addressing local challenges (poverty, young people who neither study nor work -so called "Ninis" from the Spanish "Neither-Nor" -, needs in territories, environmental degradation) and seizing global opportunities (global market, global value chains, digital world).
Gaps in GDP per capita between different countries are directly related to the productivity gaps between their respective economies, with education being the main factor in these differences.
The OECD report "Promoting inclusive growth of productivity in Latin America" says that although the region made progress in reducing poverty over the past 20 years, it still stands out at the global level, because of the unequal income its inhabitants.
"... 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 emigration of six out of seven Salvadorans who have studied for 12 years or more is removing a vital resource for economic performance, preventing improvements to labor productivity in the country.
Up until 2000, 85% of high school and college graduates with twelve or more years of education had migrated, reveals the study 'Measuring the international mobility of skilled workers'.
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.
The productive sector requests the government to focus in the real needs the economy has while it concentrates on prosecuting the alleged crimes of past administrations.
From a statement issued by the Chamber of Commerce, Industry and Agriculture of Panama (CCIAP):
It's been 8 months since the current administration assumed power granted by the people.
The country which used to stand out in the region because of its good relative level of economic, social and educational development, is accelerating its march downhill in terms of productive competitiveness, income distribution and training.
EDITORIAL
A national entrepreneur's comments about how his half a century old company has no market problems and is in full swing in the phase of increasing investment, but can no longer keep production in the country because Costa Rica "has become very expensive and high risk", is confirmation of the march downhill of the real economy.
The private sector has pointed to the fact that the government lacks clarity and a strategy for productivity and creating conditions for employment.
Constant closures show lack of confidence
The Costa Rican Union of Chambers and Associations of Private Businesses (UCCAEP) said this morning that the rise in unemployment due to recent closures is a national concern which warrants a declaration of emergency.
The business sector in Nicaragua has suggested that in addition to inflation and economic growth the level of productivity of workers should be taken into account when defining salary adjustments.
According to employers the current legislation has not been changed in 10 years, therefore the method for making adjustments to wages does not reflect the changes that have been experienced in the production structures in companies.
In the public sector in Costa Rica collective agreements have become synonymous with illegal privileges and economic dysfunction, under the concept that acquired rights are unassailable.
Editorial
If a private sector company ceases to be competitive, no matter for what reason, it will eventually fall into bankruptcy and its employees will lose their jobs, no matter how many agreements they have signed with their employer.
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.
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.
Although it is well known that there has been an increase in GDP in recent years, productivity has fallen by 0.4% a year.
Nicaragua's productivity has declined by 0.4% each year for two decades, while the Gross Domestic Product (GDP) has grown by 4.02%. According to an economic bulletin by ECOVISION, if the productivity of Nicaragua is compared with some economies in America and Europe, the country ranks second to last, only one position above Venezuela.
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