Central American Logistics: A 21st Century Platform
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Central American Logistics Investment is Key to Development
Through customs integration of the shipment of goods and mobility of people, the improvement of port and airport infrastructure, and the improvement of regional highways, Central American logistics seeks to consolidate improved performance at the intra-regional and extra-regional level.
Investing in Central American logistics in a competitive and regional manner is possible if the countries of the isthmus commit to working together to reach a set of common desired goals. The countries must adopt a unified and strategic approach for promoting customs uniformity, and uniform maritime ports and air shipment facilities through a regulatory framework that allows for the systematic modernization of the region’s international transport and services market.
Each of the countries of the region has articulated the details of its own approach toward improving logistics in Central America:
Panama National Logistics Strategy 2030
Central American logistics is fundamentally important to Panama’s well-being as a nation. It accounts for one-third of the country’s economy. Because of this, it is a priority sector that drives economic growth. The development of a National Logistics Strategy was undertaken by the Panamanian government in 2015.
Ana Reyes, the coordinator of the Logistics Cabinet of Panama, has stated that “the vision of the National Logistics Strategy is to turn Panama into a world-class Central American logistics center and to make the country into a leader in innovation in distribution and value-added services with global connectivity.”
Additionally, the Central American logistics strategy put forth by the Panamanian government has been structured to consist of three main areas. These include making the country the central hub of interoceanic trade, integrating all modes of national and foreign trade logistics, and achieving institutional consensus in both the public and the private sectors.
As of the present, progress has been made in the production of the Master Plan for the Interoceanic Zone, the adoption of a new Law on Cargo Transport, and the establishment of the Panama Maritime Single Window (VUMPA). The latter has been designed to reduce the number of forms required to transport cargo through the Panama Canal, as well as to reduce the waiting times for ships.
National Logistics Plan of Costa Rica
Costa Rica has medium and long-term plans which establish the elements and projects necessary for the integral logistics development of the country.
These include the National Development Plan, the National Logistics Plan, a National Logistics Policy, and the National Transportation Plan. All of these documents place a particular emphasis on the development of seaports and airports, as well as the infrastructure of national border crossings (infrastructure and processing management).
According to the National Logistics Plan, the cost of implementing all identified measures is estimated to be approximately US $5.6 billion. The investments are to be carried out mainly by the Costa Rican Ministry of Public Works and Transport (MOPT) and the institutions that make up the transportation and infrastructure sector. The Ministry of Trade, however, will carry out investments to facilitate and improve the flow of commerce at Costa Rica’s border crossings.
Mauricio Fernandez, technical secretary of the National Council of Concessions of Costa Rica, asserts that this investment in Central American logistics means “a significant commitment in terms of the nation’s overall GDP.” He also notes that targeted investments in the logistics sector in Costa Rica will lead to a reduction in the number of times that goods will need handling, which will result in “an improvement in overall commercial competitiveness.”
Guatemala’s National Competitiveness Agenda 2020
Guatemala’s National Competitiveness Program (Pronacom) lays out a strategic National Competitiveness Agenda that seeks to strengthen Guatemala’s productive base and to improve the nation’s seaport infrastructure, airport infrastructure, and national system of roads.
In 2015, Pronacom commenced the process of authoring the National Logistics Plan with input from both the public and private sectors, as well as from the Inter-American Development Bank. It was launched in 2016 and has been integrated as a priority of the National Competitiveness Policy 2018-2032, which refers to the improvement in conditions of infrastructure, logistics, and connectivity, as well as access to local and international markets. Specific projects have been identified to address air cargo capacity and handling problems, as well as the inspection of cargo at seaports, airports, and land borders.
A major project to be implemented for the purpose of improving Central American logistics is the expansion of the air cargo area of La Aurora International Airport.
Efforts will be aimed at making improvements in infrastructure and capacity in cargo management of both imports and exports. These improvements will be made as a result of private investments in the operations.
A specific protocol has been developed for Puerto Quetzal. The port was selected to implement a pilot program for intrusive revisions. The goal of the initiative is to reduce the cost of joint inspections from US $400 to approximately US $100, as well as to reduce the time needed for inspections to five days from fifteen.
Two projects from the National Logistics Plan were undertaken between 2018-2019. These were the creation and implementation of a Logistics Observatory, whose objective is to measure the economic impact of improvements made in the areas of logistics and cross-border trade, as well as the creation of a Collection Center. This facility is for the improved management of goods transported by air for the purpose of reducing costs and transport times.
El Salvador – Central American Logistics and Mobility Policy
In its efforts to improve the nation’s logistics sector, the government of El Salvador has developed an Integrated Logistics and Mobility Policy that aligns with the country’s short and long-term goals. It is consistent with national and regional development plans.
Eliud Ayala, the secretary of the Ministry of Public Works, Transport, Housing, and Urban Development, asserts that the components of the initiative have general and sectoral scopes that will have a positive impact on all modes of transportation and road infrastructure for trade facilitation, as well as will result in increased dynamism and reduced processing times at the country’s border crossings. Additionally, an investment of US $125.3 million will be made to improve shipping infrastructure located in El Salvador’s Marine Coastal Strip.
Special Economic Zones (SEZs) will be developed around the nation’s seaports. The ports of Acajutla and La Union will be expanded and improved, as will be the Puerto Corsain in the Gulf of Fonseca.
Within the air transport sector, the Monsignor Arnulfo Romero y Galdámez Airport is being expanded and modernized. This effort is being conducted with the technical support of the Economic Commission for Latin America and the Caribbean (ECLAC). Ilopango Airport is also undergoing improvement. Additionally, the Salvadoran Ministry of Public Works (MOPS) will invest US $410 million in the development of road infrastructure by 2030.
Honduras: Logistics Center of the Americas
One of the means by which Honduras is prioritizing the issue of national mobility is through the creation of better linkages between the Gulf of Fonseca and the Atlantic ports of Castilla and Cortés. In order to accomplish this Honduras will invest in improved road infrastructure and airports.
The head of the Commission for the Promotion of Public and Private Alliances (Coalianza), Miguel Gámez, has communicated that plans for Honduras are comprised of several projects which include the establishment of a container terminal and a bulk terminal at Puerto Cortés.
Other projects that are being undertaken in Honduras include the development of the Logistics Corridor and the CA-5 Road, which is popularly known as the “Dry Canal.” This highway connects Palmerola Airport with the border of El Salvador at the Amatillo customs facility. This project is expected to be completed sometime during 2020.
Future projects currently under consideration by the Honduran government include the construction of an interoceanic railway.
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