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Foreign investment moves forward

Tuesday, May 8, 2012

Foreign direct investment in Central America set a record in last year in dollar terms. In relative terms, investment grew much faster than in Mexico, with which Central America to some degree competes. Among neighboring countries, only Colombia did better than Central America.

At $8.3 billion, investment in the region represented an increase of 36 percent over the previous year, according to the UN Economic Commission for Latin America and the Caribbean.

Panama led the way with $2.8 billion, followed by Costa Rica with $2.1 billion. Each was a record for the individual country, as was the case in Honduras and Nicaragua, although for lesser amounts - $1 billion and $970 million, respectively. Managua's promotion agency, ProNicaragua, and Honduras’ Open for Business initiative, have both done well.

Guatemala, with by far the largest population in the region, remains a sleeping giant, with only $800 million in foreign direct investment.

For its part, El Salvador has grounds for concern. The country recorded $1.6 billion of foreign direct investment in 2007. Last year, it received a mere $386 million.

The region did well, compared to Mexico, which in recent years attracted about double the per-person investment in Central America. In 2011, however, per-person investment in the region was as high as that of its northern neighbor.

At the same time, Central America might want to look south, to see an example of even faster growth. Colombia, with a population about the same size as that of Central America, last year it received investment of no less than $13.2 billion.