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Latin America Investment News on Viva Tropical

Top 2 Reasons El Salvador Cannot Find Investors

Article Summary:

El Salvador’s administration has lacked a clear strategy for seeking out and recruiting direct foreign investment. This year alone, investment by foreign investors fell by $116 million and is expected to continue a dive downward throughout 2013.

Photo Credit: TonysMafia

Original Article Text From el Salvador via Google Translate :

Foreign Direct Investment Fell to $ 116 Million this Year

Foreign Direct Investment (FDI) continues to be subdued, and that according to the Central Reserve Bank and the Agency for Investment Promotion and Export of El Salvador (Proesa), have only reached around 116 million by June this year.

This amount is much less than the 242.2 million dollars the country received last June, said Proesa CEO, Giovanni Berti.

For exvicepresidenta of the Republic, Ana Vilma de Escobar, El Salvador still has the capacity to attract investors, but the problem is that the government has no clear impact of this variable in the economy.

According to her, with the new government in attracting FDI remains a growth rate that does not exceed 13 percent year, making the country one of the last in the Latin America.

It was not until the recent Ibero-American summit in Cadiz, where the President, Mauricio Funes said in public investment is key to increase production, create jobs and improve the welfare of society, he said.

“I listened to the President, from Cadiz, when he mentioned that they had identified there among the countries, that the solution to many of the problems was to strengthen the productive, and this is achieved through investments. Y I say, go to good already understand the importance of attracting investment, “he said.

But the investment does not wake up comes as confidence in investors, so that they feel at home and that what is offered, you are going to meet, plus they have legal certainty and clear rules and such as public safety, in the very special case of El Salvador, said.

Lack methodology
According to Escobar, who was responsible for leaving the country to promote to potential foreign investors in the last government, this administration has lacked a clear strategy of how to go and meet businessmen. Without planning and a clear identification of the competitive advantages of the country and the areas or sectors where there is capacity to attract investment and the strengths of the economy, it is hard to convince investors to come to El Salvador, said .

In addition to this, it is necessary to improve the position in the competitiveness ranking in the World Economic Forum and other international organizations and to distinguish potential investors to which are our comparative advantages to the rest of Central America and with which countries have FTAs (TLC), added.

Escobar also said that it is necessary to explain to investors how nations have good trade relations to boost investment rounds, and interest them upon those countries which is closer in terms of gaining time for exports, he said.

Example of this is the recent work planned tour was a senior representative of the British government in El Salvador, that in 48 hours he met with various officials and clearly determined from this country to operate its business center for Central America.

The exvice-presidenta noted that when this kind of officials, may at any given time, come and identify opportunities in El Salvador or any other country, is because they have done their homework before making a visit, with mental clarity about what they want .

“Before I came they have already considered the country before arriving have seen the possibilities, we have compared with other countries, have seen what we have to offer and have determined that the conditions offered by the country are favorable for the project they intend to install. This is what we did in Proesa “explained the official.

With this government began to see the issue from an ideological angle, thereby lost the true meaning of an effective policy to attract investment, he said.

“I saw that they chose new countries from which we sought (the current government) to attract investment. Could not governed by this ideology. Investment attracts not based on ideology. Might not suddenly Cuba was one of the countries that had estimated investment could come from where or where export promotion simply because a country is related to the current government ideology, “he said.

“It was also said, China, but why, not only because I share ideology. Ideology has nothing to do with the possibility of making an investment or a business or not,” the exvicepresidenta.

Link to Original Article:

From el Salvador

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