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Steve Colantuoni

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economic sciences research institute of the university of costa rica

The Economic Sciences Research Institute of the University of Costa Rica predicts that the national economy’s GDP will grow by around 4.2% in 2025.

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On January 14, 2025, the Economic Sciences Research Institute (IICE) of the University of Costa Rica (UCR) published its Quarterly Economic Analysis: Third Quarter 2024 and Projections for the First Quarter of 2025 and the Full Year.

The researchers emphasized that the country could sustain economic growth in 2025, similar to the previous year. However, this will depend on various conditions of national and international stability. The Economic Sciences Research Institute of the University of Costa Rica noted that maintaining steady household consumption and effective economic policies would be critical in achieving these projections.

The IICE’s first report of the year projects GDP growth between 3.8% and 4.7% by the end of 2025. For the close of the first quarter of this year, a higher growth rate is expected, reaching 5.1% (with an estimated range of 4.5% to 5.8%). The Economic Sciences Research Institute of the University of Costa Rica attributed this potential growth to robust performance in the special regime (including free trade zones), which is leading this growth with a projected 10.9% increase by the end of the year (range: 8.1% to 13.8%). In comparison, the definitive regime is expected to grow by 3.1% (range: 2.5% to 3.7%).

The institute’s analysis highlights that although domestic demand declined in the third quarter of last year, household consumption has remained strong. On the other hand, the Economic Sciences Research Institute of the University of Costa Rica observed that the year-on-year change in family spending represented 1.28% of GDP in the third quarter of 2024, almost half of the 3.72% recorded in the same period in 2023. Despite the decrease, it remains the main component of domestic demand.

The year-on-year final household consumption expenditure growth fell from 6.04% in the third quarter of 2023 to 2.94% in 2024. Of this change, 1.21 percentage points came from services (less than half the previous year’s 3.9 p.p.), 0.72 p.p. from non-durable goods, 0.55 p.p. from durable goods, and 0.46 p.p. from semi-durable goods.

In terms of economic activity, the main contributors to year-on-year GDP growth in the third quarter were professional, scientific, and technical activities (0.98 p.p.), followed by manufacturing (0.88 p.p.). Most other categories showed small but positive or nearly flat growth, except for electricity, water, and sanitation services (-0.1 p.p.) and construction (-0.43 p.p.).

Employment

Year-on-year increases were recorded in employment levels and hours worked in primary jobs. Employment grew by 8.6% between the third quarters of 2023 and 2024, while hours worked increased by 6.7%.

In the mobile quarter from August to October, employment saw a year-on-year increase of 7.61%, with 10 out of 14 evaluated labor activities contributing to this rise. The sectors that stood out the most were trade and repair (1.99 p.p.), professional and administrative support activities (1.84 p.p.), and transport and storage (1.84 p.p.).

On the other hand, the activities that showed a year-on-year decline were agriculture, livestock, and fishing (-0.85 p.p.), “unspecified” (-0.37 p.p.), manufacturing (-0.34 p.p.), and construction (-0.30 p.p.). Productivity per hour worked dropped by 2.88% between the third quarters of 2023 and 2024.

Prices

According to the Economic Sciences Research Institute of the University of Costa Rica, prices remain below the inflation target. The year-on-year General Consumer Price Index (CPI) remained below zero from September to November, although it exited negative territory in December. While the CPI in September stood at -0.14%, it fell to -0.79% in October, rebounding to -0.09% in November. By December, it had risen to 0.84%.

Additionally, the IICE projects that the March year-on-year CPI change will range between 1.06% and -0.11%.

Interest Rates and Currency

In January 2025, the Central Bank of Costa Rica (BCCR) reduced its Monetary Policy Rate (MPR) to 4.0%, a rate similar to the Basic Passive Rate (BPR) of 4.15%. Daniela Córdoba Solano, coordinator of the analysis, explained:

“The reductions in the MPR have also put downward pressure on passive rates in the economy. In the case of active rates, the decline has been much slower. These rates have remained high for longer. That explains why loans have not grown significantly. However, we have started to see a slightly greater reduction in active rates recently, which has favored an annual increase in the credit balances of the banking system to the non-financial private sector, especially for consumption, trade, and services.”

Furthermore, the Economic Sciences Research Institute of the University of Costa Rica highlighted the 3.5% appreciation of the colon’s value between October 2023 and October 2024, surpassing the 3.3% revaluation recorded in recent months.

Between November 2023 and October 2024, exports grew by 4.9% in the definitive regime and 10.8% in the special regime, representing 66% of total exports. The precision and medical equipment sector led exports, accounting for 67% in October. The electrical and electronics sector grew from just 2% of the total in January of the previous year to 38% by October. Meanwhile, the agricultural industry experienced a significant reduction, dropping from 15% to 6% over the same months.

Lastly, imports under the definitive regime increased by 8.6%, while those under the special regime fell by 9.7%.

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Historic achievements in El Salvador

Historic Achievements in El Salvador: Transforming Security

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Security Reforms Drive Tourism and Investment

Improved safety measures are another example of historic achievements in El Salvador, bolstering tourism and foreign investment. Reduced crime rates have reassured international travelers and investors, making the country an attractive destination. Urban centers like San Salvador and Santa Ana have undergone revitalization, with safer public spaces encouraging cultural and recreational activities. These developments enhance El Salvador’s global image and create new economic opportunities.

Tourism, in particular, has experienced exponential growth due to these security advancements. Popular destinations such as El Tunco, Cerro Verde National Park, and Ruta de las Flores have seen a surge in visitor numbers, contributing to local economies. Encouraged by improved safety conditions, international investors have begun funding luxury hotels, eco-lodges, and cultural restoration projects. Combining public and private investments creates a virtuous cycle where increased tourism drives further development and innovation.

Infrastructure Investments: A Foundation for Growth

In 2024, El Salvador’s historic achievements included the largest infrastructure investments in the nation’s history. Landmark projects like the Integración Overpass in San Salvador, the UNICAES Overpass in Santa Ana, and the Gerardo Barrios Beltway in San Miguel were inaugurated, revolutionizing road connectivity.

Integración Overpass: This project reduced chronic traffic congestion in San Salvador, cutting commuters and commercial transport travel times. The project’s strategic location has facilitated smoother trade routes and improved access to key business districts.

UNICAES Overpass: This has improved access to educational institutions and local businesses, stimulating regional economic activity. Connecting previously isolated areas has enhanced opportunities for students and professionals alike.

Gerardo Barrios Beltway: Alleviated traffic in San Miguel and improved connectivity to nearby areas. This project is expected to spur economic growth in eastern El Salvador, providing new opportunities for commerce and industry.

New bus routes and modernized fleets have enhanced public transportation, providing Salvadorans with more efficient and environmentally sustainable transit options. The administration’s commitment to clean energy is evident in introducing electric buses, reducing the carbon footprint of public transport. These advancements illustrate the administration’s focus on inclusive growth by addressing long-standing logistical challenges.

Rural areas have also benefited from infrastructure improvements. Road paving projects have connected remote communities to larger cities, facilitating access to markets, healthcare, and education. The administration’s efforts to balance urban and rural development underscore its vision for equitable progress nationwide.

Tourism: A Rising Star in Central America

Tourism emerged as a key pillar of historic achievements in El Salvador, with the nation experiencing unprecedented growth. El Salvador International Airport welcomed over five million passengers in 2024, including 3.5 million international tourists. Events such as Surf City competitions showcased the country’s natural beauty and established it as a premier destination for water sports. These events have garnered global media attention, enhancing the country’s reputation as a must-visit location.

The revitalization of historic landmarks has further boosted tourism. The restoration of the San Salvador Historic Center transformed it into a vibrant cultural hub, attracting visitors and supporting local businesses. Streets once plagued by neglect now feature bustling cafes, artisan shops, and museums, offering both locals and tourists a rich cultural experience. Eco-tourism initiatives, such as those in Cerro Verde National Park and La Libertad’s beaches, offer sustainable travel options that align with global trends. These efforts highlight El Salvador’s commitment to preserving its natural heritage while promoting economic growth.

Economic Ripple Effects of Tourism

The tourism boom has transformed various economic sectors, highlighting historic achievements in El Salvador. Hotels, resorts, and local artisans have reported record revenues, while job creation across hospitality, retail, and transportation has surged. The government’s support for small and medium-sized enterprises (SMEs) has further amplified the economic benefits of tourism. Local entrepreneurs are thriving, creating innovative products and services catering to the growing visitor influx.

In addition to direct economic benefits, the tourism sector has spurred infrastructure and public services improvements. Enhanced airport facilities, upgraded road networks, and better waste management systems exemplify how tourism-driven growth positively impacts the community. These developments foster national pride and showcase El Salvador’s growing potential on the global stage.

A Vision for Sustained Growth

The historic achievements in El Salvador during 2024—security reforms, infrastructure investments, and tourism growth—mark a year of transformative progress. These accomplishments demonstrate President Bukele’s administration’s commitment to national development and set the stage for sustained prosperity. The government’s forward-thinking policies, combined with the resilience and determination of the Salvadoran people, have created a foundation for long-term success.

As the country moves forward, these milestones inspire confidence in El Salvador’s ability to overcome challenges and achieve its ambitious goals. El Salvador is positioning itself as a leader in regional development by prioritizing safety, investing in infrastructure, and promoting sustainable tourism. The achievements of 2024 serve as a testament to what can be accomplished through visionary leadership and collective effort, offering hope and inspiration for the years ahead.

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Costa Rican role in US supply chains

The Costa Rican Role in US Supply Chains: Medical Devices and Semiconductor Manufacturing

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The U.S. State Department has presented an account of its Economic Growth Strategy for Latin America, highlighting Costa Rica’s role in US supply chains as a critical element in fostering economic growth and resilience. José W. Fernández, Under Secretary of State for Economic Growth, Energy, and the Environment, delivered the report. In his remarks, Fernández emphasized Costa Rica’s specialized production capabilities and its critical role in the United States’ efforts to strengthen supply chains by fostering investments in closer, more reliable countries.

Costa Rica’s Role in Semiconductor Supply Chains

One key focus of the US strategy is the semiconductor industry, a cornerstone of modern technology. Fernández discussed the support provided through the CHIPS Act, which aims to re-shore a significant portion of the semiconductor industry from Asia. To achieve this goal, the U.S. is fostering cooperation with countries in Latin America, including Costa Rica. The Costa Rican role in US semiconductor supply chains is especially significant, given the country’s established expertise in advanced manufacturing and strategic geographic location.

The CHIPS Act allocates substantial funding to strengthen the semiconductor sector and reduce dependence on overseas production. In this context, the Costa Rican role in US supply chains emerges as a vital factor due to its ability to meet semiconductor companies’ needs and enhance regional manufacturing capabilities.

“We at the State Department, through our ITSI and TSI programs, have integrated Mexico, Costa Rica, Panama, and other countries in the region to bolster our supply chains,” Fernández explained. These initiatives aim to create a resilient supply chain network that benefits both the U.S. and its partners in Latin America.

U.S. Expansion Plans and Regional Benefits

Fernández highlighted that Latin America’s role in semiconductor production will be pivotal to the United States’ technological expansion plans. As the demand for advanced chips grows, neighboring countries are positioned to become indispensable allies.

“In the next decade, the United States expects to produce one-quarter of the world’s advanced semiconductors,” Fernández stated. “This is a field where Latin America will play an essential role.”

Costa Rica, Panama, the Dominican Republic, and Mexico are well-suited to support these efforts while reaping economic benefits. The collaboration extends beyond manufacturing to include support services, ensuring these nations are integrated into the global semiconductor supply chain. The Costa Rican role in U.S. supply chains is pivotal for ensuring this growing sector’s seamless operation and integration.

Costa Rica’s Leadership in Medical Device Manufacturing

In addition to semiconductors, Costa Rica is a leader in the production of medical devices, an area that has become a hallmark of its economy. Fernández praised the country’s growth in the healthcare sector, noting its contributions to regional supply chain integration.

“Costa Rica, the Dominican Republic, Panama, and Ecuador have been key partners in the Alliance for Development in Democracy,” Fernández remarked. “Together, we are working to strengthen supply chains, especially in medical equipment.”

Costa Rica’s advanced manufacturing capabilities and skilled workforce have made it a hub for producing high-quality medical devices. The Costa Rican role in US supply chains for medical devices ensures the continued delivery of innovative healthcare solutions. These products support global healthcare needs and drive economic growth and job creation within the country.

A Broader Vision for Economic Cooperation

The Biden administration’s recognition of Costa Rica underscores its broader vision for economic cooperation with Latin America. The US aims to build more resilient and diversified supply chains by fostering partnerships in semiconductors and medical devices. This strategy reduces reliance on distant regions, mitigates geopolitical risks, and promotes shared prosperity across the Americas.

The Road Ahead

As the Biden administration concludes its tenure, its engagement with Costa Rica is a testament to the country’s strategic importance. The partnerships forged under initiatives like the CHIPS Act and the Alliance for Development in Democracy reflect a commitment to mutual growth and innovation.

Costa Rica sees these collaborations as an opportunity to solidify its position as a regional leader in advanced manufacturing. By continuing to invest in its workforce, infrastructure, and technology, the country can further enhance its role in shaping the future of global supply chains.

This evolving partnership between the United States and Costa Rica is more than a diplomatic achievement—it is a blueprint for sustainable economic growth in the 21st century. The Costa Rican role in US supply chains will remain a key driver of this shared success.

Summary

The US State Department has emphasized Costa Rica’s role in U.S. supply chains, particularly semiconductor and medical device manufacturing. Under Secretary of State José W. Fernández highlighted Costa Rica’s advanced production capabilities, skilled workforce, and strategic location as pivotal assets for U.S. economic resilience and regional collaboration.

The United States aims to reduce its dependence on overseas semiconductor production through initiatives like the CHIPS Act. By fostering partnerships with Latin American nations, including Costa Rica, the US seeks to expand its global semiconductor market share while enhancing regional manufacturing capabilities. Costa Rica’s integration into this strategy underscores its importance in supporting advanced chip production and related support services.

Costa Rica also leads medical device manufacturing, contributing significantly to global healthcare supply chains. Fernández acknowledged Costa Rica’s growth in this sector as a driver of regional economic integration, citing its collaboration with Panama, the Dominican Republic, and Ecuador within the Alliance for Development in Democracy.

These partnerships align with the Biden administration’s broader vision of diversifying supply chains, reducing geopolitical risks, and promoting shared prosperity. For Costa Rica, these collaborations strengthen its position as a regional leader in advanced manufacturing and economic innovation.

The evolving US-Costa Rica partnership reflects a strategic alignment that benefits both countries, ensuring sustainable economic growth and robust supply chains in the 21st century. Costa Rica’s ongoing investments in technology and workforce development will further enhance its role in this critical collaboration.

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El Salvador and the IMF

Expectations Regarding a Possible Agreement Between El Salvador and the IMF

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The prospect of an agreement between El Salvador and the International Monetary Fund (IMF) has generated widespread discussion among economic analysts, business leaders, and government officials. While such an agreement is expected to demand significant fiscal adjustments, including reducing social spending, it also promises to improve the country’s economic conditions.

Potential Impact on Market Conditions

Carlos Turcios, Executive President of Banco Atlántida, recently addressed the potential benefits of a deal with the IMF. According to a report by El Mundo, Turcios emphasized that an agreement with the IMF could mark a turning point for El Salvador’s financial future. He explained that one of the key benefits of reaching a deal would be its impact on interest rates and the perception of country risk, both critical factors in determining the cost of international financing.

“The perception of country risk changes, which lowers the cost of funds for international financing for banks. This means we can access more capital under better conditions,” Turcios stated. He noted that this shift could significantly enhance the financial ecosystem, enabling banks to provide capital under favorable terms and ultimately foster economic growth. For El Salvador and the IMF, this agreement would signify a critical step toward stabilizing the nation’s finances.

Addressing the Challenges of Fiscal Adjustment

Despite these potential benefits, the negotiations between El Salvador and the IMF have not been without challenges. Mauricio Choussy, former President of the Central Reserve Bank (BCR), highlighted the difficulty of these discussions. According to Choussy, the fiscal adjustments required by the IMF, including reducing public spending and implementing stricter financial controls, are politically sensitive measures that the government must navigate carefully.

One of the most pressing concerns is the debt interest burden, which currently consumes more than 20% of the state’s budget. This significant expenditure limits the government’s ability to invest in critical areas such as education, healthcare, and infrastructure. Choussy also warned of potential public dissatisfaction with the government’s fiscal policies, mainly if austerity measures disproportionately affect vulnerable populations. For El Salvador and the IMF, reaching an agreement that balances fiscal discipline with social stability will be a delicate endeavor.

Overcoming Barriers to Foreign Direct Investment

A successful agreement with the IMF could also positively impact foreign direct investment (FDI) in El Salvador. Turcios noted that the deal would remove many barriers currently deterring international investors.

“An agreement with the IMF is close to being finalized, and this will create a more favorable environment for foreign direct investment,” Turcios stated. By improving the country’s creditworthiness and reducing perceived risks, the deal would make El Salvador a more attractive destination for global investors. This is a critical development for a country seeking to diversify its economy and stimulate sustainable growth.

In addition, recent upgrades to El Salvador’s credit ratings underscore the progress being made. Moody’s recently upgraded the country’s rating to B3, signaling a modest improvement in its financial outlook. While this rating still falls within the speculative category, it reflects growing confidence in El Salvador’s ability to meet its financial obligations. For El Salvador and the IMF, these improvements represent a step toward achieving greater fiscal stability and restoring investor confidence.

Bitcoin and Its Role in IMF Negotiations

One of the more controversial aspects of El Salvador’s financial strategy has been its adoption of Bitcoin as legal tender. This decision has been a point of contention in negotiations with the IMF, which has expressed concerns about the potential risks associated with cryptocurrency. According to Choussy, this issue has delayed progress toward an agreement. However, government officials remain optimistic that the IMF’s concerns can be addressed without derailing the negotiations.

The government’s continued commitment to achieving fiscal stability has been crucial in maintaining dialogue with the IMF. While adopting Bitcoin has garnered international attention, the discussions focus on implementing reforms that will strengthen El Salvador’s economic foundation. Resolving these differences will be essential to finalizing the agreement for El Salvador and the IMF.

Optimism Amid Economic Challenges

Despite the challenges, there is optimism about El Salvador’s economy’s future. Carlos Coto, Deputy Vice President of Finance and Treasury, recently expressed confidence in the country’s financial system’s resilience. He noted that ongoing efforts to secure an agreement with the IMF and improvements in credit ratings are positive signs for the economy.

However, not all sectors are experiencing the same level of optimism. Silvia Cuéllar, President of the Salvadoran Exporters Corporation, pointed out that the country’s export sector is slowing down. “We are selling more but at lower prices,” Cuéllar stated, highlighting the challenges posed by global market conditions. Addressing these sectoral challenges for El Salvador and the IMF will ensure sustainable economic growth.

Conclusion: A Critical Juncture for El Salvador’s Economy

The potential agreement between El Salvador and the IMF represents both an opportunity and a challenge. On the one hand, it offers a pathway to improved market conditions, reduced country risk, and increased foreign direct investment. On the other hand, significant fiscal adjustments are required that could impact social spending and public sentiment.

As the year draws to a close, all eyes are on the Salvadoran government and its ability to finalize this critical agreement. For El Salvador and the IMF, the success of these negotiations will not only shape the country’s financial future but also serve as a benchmark for its broader economic strategy. Whether the deal will deliver on its promises remains to be seen, but the potential benefits make it a development worth watching closely.

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costa rica manufactures and designs medical devices

Costa Rica Manufactures and Develops Medical Devices: 16 Areas of Specialization Stand Out in the Country

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Among the world’s 30 leading medical device brands, 14 have production plants in Costa Rica. Over the past two decades, these factories have transitioned from assembling parts to conducting research and developing advanced cardiovascular, respiratory, neuro-endovascular, and orthopedic mechanisms. These advancements underscore the critical role plays in Costa Rica’s national economy.

The Costa Rican Investment Promotion Agency (CINDE) reports that 2023 medical device exports exceeded $7.5 billion. This milestone reflects an impressive average annual growth rate of 18% since 2017. Today, Costa Rica manufactures and develops medical devices at a scale that makes it the second-largest exporter of medical devices in Latin America and the fifth-largest supplier to the United States, cementing its reputation as a leader in the industry.

Expansion and Specialization in the Sector

Over the past 23 years, Costa Rica has expanded its expertise from five to 16 areas of specialization, positioning itself as a global competitor in the medical device sector. This progress is supported by ongoing efforts to increase competitiveness and innovate. Costa Rica manufactures and develops medical devices in Class I and II categories while advancing in designing, developing, and validating Class III products. These high-value products require unparalleled precision and adherence to rigorous certification standards.

“We have achieved high sophistication with a unique value proposition for investors, but we can still do more,” says CINDE’s General Director, Marianela Urgellés. This acknowledgment underscores the ongoing commitment to innovation and growth.

Medical Devices by the Numbers

The growth of the medical device sector in Costa Rica is nothing short of remarkable. Since 2017, the number of medical device companies operating in the country has increased from 67 to 86. In the same period, employment in the sector has more than doubled, rising from 22,399 jobs to over 55,000. CINDE highlights that the number of original equipment manufacturing (OEM) companies has grown by 39%, with exports doubling and employment increasing by 127%.

In 2023 alone, precision products and medical equipment accounted for 42% of Costa Rica’s total goods exports, a significant increase from 26% in 2017. These statistics illustrate how deeply embedded Costa Rica’s manufacturing and development of medical devices have become in the national economy.

Factors Driving Success

Several factors contribute to Costa Rica’s success in the medical device industry:

Political Stability: Costa Rica’s long-standing political stability provides a reliable environment for foreign investment.

Well-Defined Regulatory Framework: A transparent and robust regulatory framework ensures compliance and fosters investor confidence.

Highly Specialized Workforce: The country’s workforce is highly trained and equipped to meet the complex demands of the medical device industry.

Robust Ecosystem: Costa Rica has developed an ecosystem that enables multinational companies to develop end-to-end. This ecosystem includes a diverse network of suppliers providing raw materials, essential processes, and key services.

“Costa Rica manufactures and develops medical devices within a robust ecosystem that allows multinational companies to manage everything from design to manufacturing in one location,” notes CINDE. This comprehensive support system is a significant draw for international investors.

Competition and Challenges

While Costa Rica has made significant strides, it faces competition from the Asian market, where countries like China and India dominate the medical device manufacturing space. Nearby nations in Latin America are also vying to establish themselves as contenders in this sector.

“Although Costa Rica ranks third in the FDI Global Greenfield Investment Index, its current challenge is not only to attract investment but also to retain it and make it sustainable in the long term,” explains CINDE. To meet this challenge, the country must continue to innovate, enhance its workforce, and develop sustainable practices.

Innovation and Sustainability: The Next Frontier

The medical device industry must embrace innovation and sustainability in a rapidly evolving technological landscape. Costa Rica manufactures and develops medical devices with established product redesign, process automation, new product development, and testing capabilities. These strengths position Costa Rica to participate in more complex research and development projects.

“The ‘next frontier’ for Costa Rica’s medical device industry will be its transition to a comprehensive research, development, and advanced manufacturing center,” says Urgellés. “This will solidify our position as a leader in a global market that demands innovation and responsibility at every stage of production.”

Sustainability is another critical focus area. As global markets increasingly prioritize environmentally responsible practices, Costa Rica’s efforts to integrate sustainability into its manufacturing processes will enhance its competitiveness and appeal to investors.

Future Prospects and Global Engagement

Costa Rica is committed to strengthening its position as a leader in the medical device industry. Efforts to attract and retain investment will continue into 2025, with participation in prominent industry events like MD&M West 2025. This event, recognized as the most important business fair for the medical device industry in North America, will feature Costa Rica, which manufactures and develops medical devices alongside companies like BAC, Baker Tilly, Cushman & Wakefield, B Advisory, and Aguilar Castillo Love.

Participation in such events showcases Costa Rica’s capabilities and provides opportunities to forge new partnerships and attract investment. The country aims to establish itself as a reliable and advanced strategic partner for the global medical technology market.

Conclusion

Costa Rica’s journey from assembling medical device components to becoming a leader in research, development, and advanced manufacturing is a testament to its commitment to innovation and excellence. With a robust ecosystem, specialized workforce, and strategic focus on sustainability, Costa Rica manufactures and develops medical devices to meet the demands of the global market. As the country continues to evolve, it will undoubtedly play a pivotal role in shaping the future of this vital industry.

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El Salvador and the IMF

What Is the Bukele Economic Plan for El Salvador?

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President Nayib Bukele has crafted a comprehensive and strategic vision to improve El Salvador’s economy, emphasizing technological innovation, enhanced security, and attracting foreign investments. Central to the Bukele economic plan for El Salvador is fostering sustainable development through measures designed to address historical economic challenges while preparing the nation for a more dynamic and competitive future. By leveraging traditional and innovative approaches, his administration aims to transform El Salvador into a global economic player.

Innovation and Security as Pillars of the Bukele Economic Plan

The dual focus on security and innovation is a cornerstone of the Bukele economic plan. These two pillars are interconnected, as economic stability and growth depend on a safe and business-friendly environment. The administration has implemented stringent measures to combat crime, notably reducing criminal activity. This significant progress has created a sense of security, fostering trust among domestic businesses and foreign investors.

Safety is a prerequisite for sustained economic development, and the Bukele administration has positioned it as a foundational element of its strategy. El Salvador is creating a robust platform for growth by eliminating barriers posed by crime and insecurity. This secure atmosphere is expected to encourage local entrepreneurs to expand their ventures while attracting multinational corporations looking for stable and promising investment destinations.

How Does Bitcoin Impact El Salvador’s Economy?

An innovative aspect of the Bukele economic plan for El Salvador is the adoption of Bitcoin as a legal tender. This move has placed El Salvador at the center of global discussions on cryptocurrency. This initiative seeks to achieve several transformative goals:

Attracting Foreign Direct Investment: The plan envisions El Salvador as Central America’s technological and financial hub. The country hopes to appeal to international investors drawn to cutting-edge financial ecosystems by embracing cryptocurrency.

Promoting Financial Inclusion: Over 70% of Salvadorans lack access to traditional banking services, a reality that has long hindered economic participation for large population segments. Bitcoin offers a unique opportunity to bridge this gap. Through digital wallets, individuals in even the most remote areas can access financial services, enabling them to save, invest, and engage with the global economy.

While the adoption of Bitcoin has faced skepticism, particularly regarding its volatility, the government remains optimistic about its potential. The Bukele economic plan for El Salvador positions this move as critical in creating a modern, inclusive financial system that embraces innovation. El Salvador aims to cement its reputation as a forward-thinking nation capable of adapting to the rapidly evolving global economy by establishing a legal framework for cryptocurrency.

What Strategies Does Bukele Use to Boost Tourism?

Tourism represents another key pillar of the Bukele economic plan for El Salvador, focusing on promoting El Salvador’s natural and cultural treasures. Recognizing the economic potential of this sector, the administration has launched several initiatives aimed at revitalizing tourism and increasing its contribution to the national economy:

International Promotion: The government has rolled out campaigns showcasing the country’s pristine beaches, breathtaking volcanic landscapes, and historic sites. These efforts are designed to position El Salvador as a must-visit destination for global travelers.

Infrastructure Investments: Significant upgrades to transportation infrastructure, including roads, ports, and airports, have improved accessibility for tourists, making it easier to explore the nation’s attractions.

Sustainable Tourism Development: Bukele’s administration has emphasized environmentally responsible projects that balance ecological preservation with economic growth. This approach ensures that tourism contributes to long-term prosperity without compromising the nation’s natural heritage.

These strategies have increased visitor numbers, spurred job creation, and stimulated complementary industries, including gastronomy, retail, and local crafts.

Educational Reforms: Building the Future Economy

Educational reform is critical to the Bukele economic plan for El Salvador, particularly regarding technology and digital skills. By prioritizing education, the administration aims to prepare the Salvadoran workforce for the demands of a rapidly evolving global economy.

Preparing the Workforce for the Future: The government has launched programs to equip citizens with skills in coding, data analysis, and other in-demand fields, enabling them to access higher-paying jobs in tech-driven industries.

Reducing Poverty Through Education: The administration seeks to address the root causes of poverty and inequality by enhancing access to quality education. Education is viewed as a tool for empowerment, enabling individuals to break free from cycles of economic hardship.

The emphasis on education is a testament to Bukele’s commitment to long-term progress. The administration lays the groundwork for sustained economic growth and a more resilient economy by bridging the country’s technological gap and fostering innovation.

Expected Outcomes of Bukele’s Economic Plan

The Bukele economic plan envisions a transformed El Salvador which is competitive, inclusive, and prosperous. Among the anticipated outcomes are:

  • A surge in foreign direct investment, driven by enhanced security and innovative financial policies.
  • Greater financial inclusion through the widespread adoption of Bitcoin and digital financial tools.
  • A significant boost in tourism was spurred by strategic marketing and improved infrastructure.
  • A workforce equipped to meet the challenges of the global digital economy.

A Vision for the Future

At its core, the Bukele economic plan for El Salvador is a bold and forward-looking roadmap for transforming the Central American Nation. By focusing on security, innovation, and sustainability, the administration seeks to unlock the nation’s potential and improve the quality of life for all Salvadorans.

While political stability and international cooperation remain critical, the government’s comprehensive approach demonstrates a commitment to overcoming obstacles. If successful, the Bukele economic plan could redefine El Salvador as a regional leader and a global example of how innovative policies can drive national progress. Through determination and a clear vision, the administration is working to turn the country’s challenges into opportunities, ensuring a brighter future for future generations.

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professional internships in Costa Rica

ULACIT and CINDE Form Alliance to Provide Professional Internships in Costa Rica

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The Latin American University of Science and Technology (ULACIT) and the Costa Rican Investment Promotion Agency (CINDE) have announced a groundbreaking alliance to enhance student career opportunities through professional internships with multinational companies in Costa Rica. This collaboration aligns with the growing demand for skilled talent in strategic sectors such as life sciences, manufacturing, corporate services, and digital technologies.

Strategic Collaboration to Build Talent

The cooperation agreement reflects a shared commitment to developing a skilled workforce in Costa Rica. ULACIT and CINDE seek to address global companies’ talent requirements within the country by integrating students into professional environments. These companies demand expertise in areas aligned with international processes and market needs, making the initiative critical for educational institutions and the private sector. This partnership focuses on providing professional internships in Costa Rica that bridge academic learning and real-world application.

“This partnership provides students with a unique opportunity to enhance their academic learning through hands-on experience,” stated ULACIT’s Rector, Marianela Núñez. “It also allows them to refine their English skills, as many of these companies operate in English.”

Marianela Urgellés, General Director of CINDE, emphasized the alliance’s alignment with CINDE’s strategic focus on talent development. “This initiative enables students to improve their professional profiles, identify the skills most sought after by multinational companies, and gain firsthand experience of the day-to-day operations within these organizations.”

Program Benefits for Students

Through this partnership, students will access various opportunities to bridge the gap between academic learning and professional application. Key features of the program include:

Preparation Workshops: Students will participate in tailored workshops that prepare them for their initial steps into the labor market. These sessions will cover professional communication, resume building, and interview preparation.

Site Visits to Multinational Companies: The program facilitates visits to the facilities of global companies, allowing students to observe operations, interact with professionals, and gain a deeper understanding of industry expectations.

Exclusive Internship Fairs: Students will have access to internship fairs explicitly organized for them, which will connect them directly with hiring managers from leading multinational companies in Costa Rica.

Skill Development Resources: Participants will benefit from resources developed jointly by CINDE and multinational corporations. These resources are designed to enhance strategic skills in high demand in the global job market.

Empowering Students for the Global Workforce

The alliance also addresses the growing need for bilingual professionals in Costa Rica. Many multinational companies participating in the program operate in English, allowing students to practice and improve their language skills in real-world settings. This focus on bilingualism is particularly significant, as professional internships in Costa Rica offer students invaluable opportunities to prepare for roles in an increasingly globalized economy.

“Students will emerge from these internships better equipped to meet the demands of today’s competitive job market,” Núñez added. “The combination of academic knowledge and professional experience will give them a significant advantage.”

Fostering Career Growth in Strategic Sectors

Costa Rica’s strategic sectors—life sciences, manufacturing, corporate services, and digital technologies—are critical drivers of the country’s economy. By focusing on these industries, the ULACIT-CINDE partnership ensures that students are prepared for careers in areas that offer high growth potential and global relevance. Through professional internships in Costa Rica, students will gain exposure to cutting-edge technologies and practices, positioning them as valuable contributors to the workforce.

For example, the life sciences sector in Costa Rica has seen significant expansion in recent years, with multinational companies specializing in medical devices, pharmaceuticals, and biotechnology. Similarly, the manufacturing sector is evolving to incorporate advanced technologies, while corporate services and digital technologies continue to attract investment and innovation.

Exclusivity and Long-Term Vision

This cooperative agreement is exclusively available to ULACIT students, highlighting the university’s dedication to providing its students with unparalleled career development opportunities. By partnering with CINDE, ULACIT ensures its students gain academic knowledge, practical skills, and industry exposure needed to thrive in competitive fields. The focus on professional internships in Costa Rica underscores the program’s goal of preparing students for leadership roles in critical industries.

Urging students to take full advantage of the program, Urgellés remarked, “This is a chance to learn directly from industry leaders and understand what it takes to excel in today’s job market.”

A Model for University-Industry Collaboration

The ULACIT-CINDE partnership models how educational institutions and industry organizations can collaborate to drive workforce development. By aligning academic programs with the needs of multinational companies, this alliance ensures that students who complete professional internships in Costa Rica are well-prepared to excel in their chosen fields. The initiative also contributes to Costa Rica’s reputation as a hub for innovation and talent.

As ULACIT and CINDE continue to work together, they are paving the way for a future in which Costa Rican students are prepared for the challenges of the global market and empowered to lead in their chosen fields. This alliance represents a significant step forward in fostering a dynamic and skilled workforce capable of driving the country’s economic growth.

With a clear focus on talent development and strategic alignment with industry needs, the partnership between ULACIT and CINDE is set to transform the professional landscape for students in Costa Rica.

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seed capital in el salvador

Banco Cuscatlán and the Chamber of Commerce and Industry of Launch Training Program and Seed Capital in El Salvador for SMEs

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Introduction to the Program

Banco Cuscatlán, in collaboration with the Chamber of Commerce and Industry of El Salvador (CAMARASAL), has launched an exciting new business training program designed to support the growth and modernization of small and medium-sized enterprises (SMEs) in El Salvador. This initiative offers seed capital in El Salvador, up to US$15,000, to help local businesses enhance their operations, embrace digital transformation, and become more sustainable. A particular emphasis is placed on businesses operating through e-commerce platforms, such as Cuscatlán Crece Contigo, a tool for boosting online sales and business development.

The program is part of a broader strategy to strengthen the local business ecosystem by providing entrepreneurs with financial resources and the knowledge and skills to scale their operations effectively. By offering seed capital in El Salvador, this initiative aims to create opportunities for business owners to implement modern business practices and improve their competitiveness in the marketplace.

Target Audience and Eligibility Criteria

The seed capital program in El Salvador is open to registered companies that meet specific eligibility criteria. These criteria are designed to ensure that the businesses receiving the funding are established and have growth potential. Specifically, companies must:

Be legally registered and have been in continuous operation for at least one year.

Annual sales range between US$50,000 and US$75,000.

Be active participants on the Cuscatlán Crece Contigo platform, which supports online sales and the growth of e-commerce ventures.

The program includes all sectors of the economy, welcoming businesses from a wide range of industries. Whether in retail, manufacturing, technology, or services, companies of various types are encouraged to apply for seed capital in El Salvador. This broad scope allows for the participation of diverse businesses that can contribute to the country’s economic development.

Incentives and Seed Capital Awards

To motivate businesses to enhance their operations and implement modern business practices, the program will offer seed capital in El Salvador to the top-performing companies during the application and training phases. The awards will be distributed as follows:

First place: US$15,000

Second place: US$10,000

Third place: US$5,000

These financial incentives are intended to help businesses make concrete improvements to their operations, such as investing in new equipment, integrating advanced technology, or increasing their capacity for innovation. However, to ensure the funds are used responsibly, companies receiving seed capital must submit documentation of how the money was spent within six months of receiving the award. If businesses fail to provide evidence of appropriate use of the funds, they must return the seed capital in El Salvador.

Focus on Professionalization and Digitalization

The program’s overarching goal is to support businesses’ journey toward sustainable growth. To this end, it includes a series of comprehensive training sessions that will equip entrepreneurs with the knowledge and skills needed to succeed in a rapidly changing business environment. These courses will cover critical areas such as e-commerce strategies, financial management, marketing, and overall business administration. The program seeks to enhance local businesses’ operational efficiency and competitiveness by providing specialized training.

The training will be led by expert instructors with experience in these areas, ensuring the content is relevant and practical for the participants. This professional development aspect is critical to the program’s success, as it will help entrepreneurs improve their current operations and adapt to future trends in business. A particular emphasis will be placed on digitalization as the global economy continues to shift toward online commerce. With the support of seed capital in El Salvador, businesses can implement these newly acquired skills and technologies to modernize and increase their digital presence.

In today’s competitive market, having access to digital tools and strategies is crucial for growth. As part of this effort, the program encourages SMEs to embrace e-commerce platforms, online marketing, and data-driven decision-making. The goal is to prepare local businesses for the future and help them remain relevant in an increasingly digital world.

Quotes from Stakeholders

The importance of this initiative is underscored by the statements of key stakeholders involved in the program. Ximena Robin, Corporate Relations and Sustainability Manager at Banco Cuscatlán, expressed the bank’s belief in the transformative power of small businesses for the country’s economy. “At Banco Cuscatlán, we are firmly committed to supporting microenterprises as a driving force for economic revitalization and job creation in El Salvador. By offering seed capital in El Salvador and supporting the professionalization of these businesses, we aim to help them scale their operations and reach new heights,” she stated.

Nelson Morales, Executive Director of CAMARASAL, also emphasized supporting SMEs as a vital component of El Salvador’s economic and social development. “It is essential that we work together to provide our micro, small, and medium-sized businesses with not only access to capital but also the training and skills that will ensure their long-term success,” Morales said. His comments highlight the collaborative effort needed to nurture a thriving SME sector in the country.

Evaluation Process and Final Selection

The program includes a rigorous evaluation process to identify the most promising businesses. Initially, a panel of evaluators will assess the applications and select the companies eligible for further consideration. These selected companies will then advance to the final evaluation phase, where a panel of independent experts and representatives from Banco Cuscatlán and CAMARASAL will determine the winners.

The evaluation will focus on several critical criteria, including the company’s commercial viability, growth potential, and ability to implement the insights gained during the training. Additionally, the originality of the business concept and the potential impact of the business on the local community will be crucial factors in the final selection. Throughout the competition, companies must document the results they achieve as they apply the knowledge from the training program.

The comprehensive evaluation process ensures that seed capital in El Salvador is awarded to companies that demonstrate the most substantial potential for growth and innovation, maximizing the program’s impact on the country’s economy.

Program Summary

Banco Cuscatlán’s partnership with CAMARASAL marks a significant step toward strengthening the SME sector in El Salvador. By offering both seed capital in El Salvador and a targeted training program, this initiative aims to provide small and medium-sized enterprises with the tools they need to succeed in a competitive global market. Through the program, businesses can enhance their digital presence, improve their operational efficiencies, and build sustainable growth models for the future.

In summary, the seed capital program is a holistic approach to helping SMEs in El Salvador thrive. Beyond just offering financial assistance, it provides businesses with the knowledge, training, and resources they need to adapt to the rapidly changing business landscape. With a focus on professionalization, innovation, and digitalization, this initiative will empower entrepreneurs to scale their operations and achieve lasting success. Banco Cuscatlán and CAMARASAL are fostering a new generation of forward-thinking business leaders who will contribute to the long-term prosperity of El Salvador’s economy. By combining seed capital with expert training, the program represents a comprehensive approach to boosting the competitiveness of local SMEs and ensuring they are prepared for the challenges and opportunities of the digital age.

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the free trade zones in costa rica

The Free Trade Zones in Costa Rica Contributed Over $12 Billion to the Economy in 2023

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In 2023, Costa Rica’s free trade zones generated approximately $12.276 billion, representing about 14% of the country’s Gross Domestic Product (GDP). These zones also contributed nearly 40% of the total foreign direct investment (FDI) inflows to Costa Rica, according to a recent report released by the Promotora de Comercio Exterior (Procomer), the country’s export promotion agency. The findings highlight the critical role that the free trade zones in Costa Rica play in driving economic growth, attracting investment, and fostering employment opportunities across various sectors.

This comprehensive report, titled Free Trade Zones: A Driver of Competitiveness and Economic Growth in Costa Rica 2023, underscores the importance of this economic model, which has proven to be a significant catalyst for business development, local supplier integration, and overall national prosperity.

The Economic Impact of Free Trade Zones in Costa Rica

The study reveals that the $12.276 billion in production generated by businesses operating within Costa Rica’s free trade zones includes $5.621 billion in local purchases. This represents a 24% increase compared to 2022, illustrating how these zones contribute to export-driven growth and support domestic suppliers and services.

Manuel Tovar, Costa Rica’s Minister of Foreign Trade, emphasized in a statement that the free trade zones in Costa Rica “impact many sectors of our economy, not only by generating investment and quality employment but also by acting as a catalyst for local business opportunities and being an active contributor to the country’s well-being.”

The study also highlights Costa Rica’s excellent return on investment from its free trade zones. For every dollar that the country exempts from taxes for companies operating within these zones, Costa Rica receives $2.80 in return, leading to a net benefit of $1.80 for every dollar invested. This exceptional return reinforces the value of maintaining and expanding the free trade zone model in Costa Rica.

Job Creation and Workforce Development in Free Trade Zones

Another noteworthy aspect of the study is the substantial number of jobs created in Costa Rica’s free trade zones. Employment within these zones has grown at an average rate of 9% annually. By 2023, the zones provided direct employment to 186,658 people and indirect employment to 64,871 individuals. These numbers demonstrate these zones’ direct impact on job creation in the country, significantly enhancing the national labor market.

Minister Tovar added, “The sustained growth in local purchases, wages, and fiscal contributions shows how the free trade zones in Costa Rica are boosting international competitiveness while strengthening the economic and social fabric of Costa Rica.” This continuous growth also highlights the significant role of free trade zones in improving the country’s overall economic resilience.

Foreign Investment and the Role of Free Trade Zones

Regarding foreign investment, the businesses in Costa Rica’s free trade zones were responsible for $1.542 billion of the $3.788 billion in total foreign direct investment (FDI) that entered the country in 2023. This means nearly 40% of all foreign investment in Costa Rica was channeled into businesses operating within these zones.

The figures also demonstrate how Costa Rica’s free trade zones are a significant attraction for multinational companies seeking to establish a presence in Latin America. In 2023, 567 companies operated across 68 different free trade zones in the country. Of these companies, 65.8% are in the services sector, 25.6% in the industrial sector, and 8.6% in the agroindustry.

A Thriving Export Hub: Free Trade Zones as Key Export Drivers

The study also illuminates the vital role that free trade zones play in Costa Rica’s export economy. In 2023, 64% of Costa Rica’s total exports of goods were shipped by companies located within these zones. This emphasizes how free trade zones are vital for domestic economic growth and positioning Costa Rica as a critical player in global markets.

Furthermore, it is noteworthy that 59% of the businesses operating in Costa Rica’s free trade zones are foreign-owned, reinforcing the country’s attractiveness as a hub for international companies looking to access regional and global markets.

The Benefits of Free Trade Zones Beyond Economics

Apart from the economic benefits, the free trade zones in Costa Rica also contribute significantly to the development of specialized human capital. These zones serve as a platform for creating high-quality jobs and developing skilled workers, particularly in high-tech industries, manufacturing, and services.

Laura López, the General Manager of Procomer, emphasized that the free trade zones in Costa Rica are competitive advantages. She noted, “It fosters the development of specialized human talent and actively promotes the inclusion of thousands of women in the workforce. Moreover, these companies contribute to economic well-being by offering salaries 1.8 times higher than the national private sector average.”

This focus on skill development and gender inclusion is critical to building a sustainable and equitable economic future for Costa Rica. It ensures that the benefits of free trade zones are shared among the country’s population.

The Free Trade Zones in Costa Rica and Their Long-Term Potential

Looking ahead, the future of the free trade zones in Costa Rica seems promising. The continued growth in production, investment, and employment suggests that the country’s strategy of promoting and expanding these zones effectively drives economic development. The government’s ongoing commitment to improving the regulatory framework and incentivizing businesses will likely continue attracting local and foreign investment.

As Costa Rica is a regional leader in manufacturing, services, and high-tech industries, free trade zones will remain a crucial pillar of its economic strategy. The government’s efforts to expand these zones and integrate them more fully into the global Economy will ensure that Costa Rica stays competitive on the world stage.

Conclusion: Free Trade Zones as a Pillar of Costa Rica’s Economic Success

In conclusion, the free trade zones in Costa Rica have proven to be a vital component of the country’s economic model. They generate billions in production, attract significant foreign investment, and create thousands of high-quality jobs for Costa Ricans. Furthermore, these zones contribute to the development of specialized talent, promote gender inclusion, and strengthen the nation’s overall competitiveness. With continued support and investment, free trade zones will remain a key driver of growth and prosperity in Costa Rica for years to come.

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china and el salvador advance free trade negotiations

China and El Salvador Advance Free Trade Negotiations

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China and El Salvador marked an essential step in their economic relations by recently holding their first Joint Trade and Economic Committee meeting. Convened in San Salvador, El Salvador’s capital, both nations were committed to fast-tracking negotiations for a Free Trade Agreement (FTA). The meeting underscored the mutual benefits both countries expect to gain from a strengthened economic alliance. It showed China’s strategic interest in Central America as a region for long-term partnerships.

At the meeting, China’s Vice Minister of Commerce, Wang Shouwen, expressed his country’s readiness to “accelerate bilateral negotiations of the FTA to reach a timely agreement, providing political support and institutional guarantees for trade and investment between our enterprises.” Wang emphasized that, given the potential synergy between both economies, advancing the agreement is critical. Specifically, China aims to leverage complementary strengths with El Salvador, focusing on sectors like infrastructure, standards, and certification collaborations. As China and El Salvador advance free trade negotiations, these areas are crucial to fostering sustainable growth for both economies.

Strengthening Economic Ties and Mutual Benefits

China’s engagement with El Salvador also promises to bolster support for Chinese companies that can contribute to El Salvador’s key industries and infrastructure projects. Wang noted that China is ready to encourage investment in sectors vital to El Salvador’s economic development, which include manufacturing, services, and tourism infrastructure. “We are willing to support capable Chinese companies to contribute to El Salvador’s priority sectors and projects, supporting local economic development and improving livelihoods,” Wang stated. In return, China hopes El Salvador will “provide a clear policy direction and a fair, competitive environment for Chinese businesses.”

From El Salvador’s side, Minister of Economy María Luisa Hayem emphasized the country’s commitment to deepening economic ties with China. She highlighted the Salvadoran government’s desire for greater access to the Chinese market for Salvadoran agricultural products, which is a central aspect of the current negotiations. Hayem expressed her aspirations for a Free Trade Agreement with China to enable balanced commercial growth. “El Salvador welcomes Chinese investment in manufacturing, service, and tourism infrastructure, committing to fostering a favorable business environment,” she noted. By removing barriers to trade and investment, El Salvador aims to create a more diverse economic landscape that offers new opportunities for local businesses and foreign investors alike.

China’s Expanding Influence in Central America

Since El Salvador established diplomatic relations with China six years ago, bilateral trade and investment have steadily increased. High-level exchanges between Chinese and Salvadoran leaders have paved the way for closer economic cooperation, and this meeting between trade officials was a strategic move to “make this vision a reality, promoting practical cooperation for mutual benefit,” Wang emphasized.

The discussion of an FTA comes as El Salvador observes its neighboring countries’ experiences with similar trade agreements. According to Pan Deng, Director of the Latin America and Caribbean Law Center at the China University of Political Science and Law, “the FTA has long been a central focus in China-El Salvador relations, with both governments strongly committed to advancing the process.” Pan stressed that initiating the first FTA negotiations in April marked significant progress. This momentum is seen as a sign of the increasingly favorable view in El Salvador toward closer economic ties with China.

El Salvador has closely observed the benefits realized by neighboring countries such as Honduras and Nicaragua, which have already signed FTAs with China. Under these agreements, the rapid entry of local products like beef and shrimp into the Chinese market has brought tangible benefits to local farmers, fishers, exporters, and other economic sectors in these Central American countries. “This reality has played a role in shaping the favorable perspective in El Salvador for an FTA with China,” Pan explained. The positive outcomes in neighboring nations have reinforced El Salvador’s commitment to similar economic cooperation.

Progress and Challenges in Free Trade Agreement Negotiations

While China and El Salvador advance free trade negotiations, the process involves complex discussions that require contributions from multiple sectors and critical industries. Since the beginning of negotiations in April, China and El Salvador have been progressing steadily. Both countries moved from broad objectives to defining specific priorities and institutional frameworks that could underpin their economic partnership. This meeting represented a critical step in outlining the rules and standards necessary for a long-term, mutually beneficial agreement. Wang’s statement about China’s readiness to expedite the FTA highlights the strategic importance of this partnership for both sides.

For China, expanding its network of trade agreements in Latin America aligns with its broader Belt and Road Initiative, which seeks to connect various world regions through trade and infrastructure investments. Central America holds significant strategic value for China, and advancing trade negotiations with El Salvador could pave the way for more robust regional partnerships. For its part, El Salvador stands to gain from China’s vast market access, potential investments, and advanced expertise in key industries such as infrastructure and manufacturing.

The meeting also served as a platform for each country to express their expectations for future partnerships. El Salvador’s emphasis on creating favorable conditions for Chinese investment shows its proactive stance in the negotiation process. Likewise, China’s insistence on fair and competitive treatment for its businesses indicates a desire for a balanced and cooperative relationship.

Future Prospects for China-El Salvador Trade Relations

As China and El Salvador advance free trade negotiations, there is growing optimism that an agreement could be reached soon. Beyond the immediate economic gains, both countries see this potential FTA as a foundation for long-lasting collaboration. For El Salvador, the agreement could mark a turning point in its economic diversification efforts, giving Salvadoran companies access to the expansive Chinese market while fostering foreign investment in domestic industries.

Meanwhile, China views El Salvador as a valuable partner in its Latin American strategy, which seeks to build closer ties with Central America. An FTA with El Salvador would strengthen China’s economic presence in the region and provide a model for future agreements with other countries in Central America. The potential impact of the FTA could extend beyond trade, influencing areas like technology transfer, educational exchanges, and tourism.

In the broader context of China’s global economic ambitions, a Free Trade Agreement with El Salvador is part of an ongoing effort to secure reliable trade partners worldwide. For El Salvador, advancing trade negotiations with China represents an opportunity to enhance its economic resilience, boost exports, and attract new investments that could create jobs and improve infrastructure.

Conclusion

As China and El Salvador advance free trade negotiations, both nations are optimistic about the future of their economic partnership. The first meeting of the Joint Trade and Economic Committee set the stage for ongoing discussions that could bring significant economic benefits to both countries. With China’s promise of political support and El Salvador’s commitment to a favorable business environment, an FTA could catalyze mutual growth and strengthen ties. The future of China-El Salvador trade relations looks promising as each side works to finalize an agreement that could transform their economic landscapes and deepen cooperation for years to come.

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