Conflicts over environmental protection and excessive bureaucracy in the process of granting concessions are the factors that limit the great mining potential in the region.
The mining sector in Central America represents great potential for investment and business, however, it has so far contributed only 0.75% to the Gross Domestic Product (GDP), averaged from the six countries in the region, between 2008 and 2012. Costa Rica reported the lowest activity with 0.1% and Panama the highest with 1.7% of GDP.
The increasing number of foreign residents in the country and the good performance of the economy explain the 16% increase in transfers of money abroad in 2013 compared to the previous year.
Unlike other countries in Central America, in Panama there are more dollars sent out in the form of remittances than those coming in, a trend that has been consolidated in recent years, in parallel with the economic growth and the growing presence of foreigners coming to work in the country.
The increase in production to 24,500 tons and rising international prices took revenues from this category from $74 million to $150 million in three years.
In the last ten years Nicaragua has made progress in the modernization of production of farmed shrimp and improved the processes of industrialization, reaching a production of 24,500 tons in 2013. It is currently the second largest Central American producer, second only to Honduras which produced 28,900 tons in 2013.
The Mexican government is considering constructing a pipeline and eventually a refinery to supply the region.
Miguel Hakim, Mexican Secretary for Latin America and the Caribbean, said his country is considering building a refinery and natural gas pipeline which would cross the isthmus and would be an alternative option for generating power at low cost. Petroleos Mexicanos (Pemex), has $2 billion to invest.
During the first quarter of 2013, foreign direct investment totaled $440.8 million, and if this pace is kept up, the year could close at $1.5 billion.
According to data from ProNicaragua, the sector which contributed the most was industry with $131.6 million and growth of 143% compared to the same period in 2012, followed by the financial sector with $96.5 million and an increase of 36% as well as trade and services with $83.4 million and an increase of 151%. The telecommunications and energy sectors, which are often the biggest contributors, contributed $54.8 and $19.2 million respectively.
On 22nd and 23rd of August entrepreneurs from 10 American countries related to activity of free zones will be meeting in Panama.
Representatives from Colombia, the Dominican Republic, Guatemala, Uruguay, the USA, Paraguay, Brazil, Ecuador, Argentina and Panama, will be taking part in the event organized by the Association of Users of the Colon Free Zone (AU).
The country ranks third in Latin America in terms of the difference between income and expenditure in relation to GDP.
In 2012, government revenues totaled 14.4% of GDP while expenditures were 18.8%.
Data from the Economic Commission for Latin America and the Caribbean (ECLAC), reveals that compared with 2007 figures the country shows a significant deterioration . "... While last year the deficit was 4.4% in that year there was a surplus of 0.6%. Revenue was 15.5% of GDP and expenditure of 14.9%," noted an article in Elfinancierocr.com.
In the past five years, consumption of imported alcoholic beverages has tripled, led by a preference for premium quality spirits.
From an article by the Costa Rica Foreign Trade Promotion Office (PROCOMER):
The consumption of imported spirits in Peru has tripled in the last five years, according to Matías Jullian, marketing manager of Pernod Ricard in this country. This increase is reflected especially in premium drinks, whose sales were up 30% during 2012. In that year about 19,000 boxes were sold, whereas five years ago in 2008 only 6,000 were sold.
An ECLAC study has revealed that companies in Guatemala and El Salvador pay the highest costs because of organized crime in Latin America.
According to data from the Global Competitiveness Index 2012-13, analyzed by the Economic Commission for Latin America and the Caribbean (ECLAC), in its report on safety in the logistics sector in the region, Guatemala has a score of 1.86, on a scale of 1 to 7, regarding the influence of crime and violence in operating costs of enterprises, where 1 is "very much" and 7 means "nothing".
From 23 to July 26 Latin American telecommunications executives will meet in Panama to discuss how to close the digital divide in the region.
From a press release by the Telecommunications Congress:
Ministers from governments and regulating authorities, CEO's of telecommunications companies, innovators and executives from the private sector, academic experts and representatives from international organizations will participate in a high level meeting related to the XXIII Latin American Summit of Heads of State and Government , which will analyze the challenges facing Latin America and the Caribbean in closing the digital divide by 2020.
$500 million is the estimated amount that has not been invested due to bad business climate, poor image and lack of institutional credit, which frightens investors away.
These are the indications of the economist and former president of the Central Reserve Bank, Mauritius Choussy: "In four years, the amount lost adds up to $2 billion, which could have generated more than 150,000 jobs. Choussy made this calculation based on the idea that one job is generated for every $20,000 invested, approximately ", reported Elsalvador.com.
Lack of policies for attracting investment and the climate of insecurity both legally and for citizens is scaring away local and foreign investors.
In terms of Foreign Direct Investment (FDI), this barely grew, by $22 million, during 2012, closing with $463 million while the previous year it had been $441 million.
For every million dollars that comes into Central America as Foreign Direct Investment, only 4.7 jobs are created on average.
In Nicaragua, for example, an average of six new jobs are created per million dollars in incoming FDI, this is the highest number among the countries in Central America. "The data reflects the recent report on FDI in Latin America and the Caribbean 2013, by the Economic Commission for Latin America and the Caribbean (ECLAC)," noted an article in Laprensa.com.ni.
The region received a combined total of $8.876 billion in FDI in 2012, representing an increase of 7% compared to 2011.
Panama remained the largest recipient of foreign investment, with $3.020 billion, followed by Costa Rica with $2.265 billion, Guatemala ($1.207 billion), Honduras ($1.059 billion), Nicaragua ($810 million) and finally El Salvador with $516 million.
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