Carmen Aída Muñoz, executive director of the American Chamber of Commerce of El Salvador, Amcham, explained recently why is important for El Salvador to get closer to target markets. Nearshoring is a key driver for achieving that goal.
According to Muñoz, Salvadoran companies should bet on increasing investment and generate more employment. She pointed out that nearshoring allows attracting higher levels of Foreign Direct Investment (FDI) and exports.
Nearshoring: A Central American Trend
Neighboring countries such as Costa Rica, Colombia, and Panama are already investing to improve their competitiveness and processes and digitize their government services and make a transformation in their institutions to make them more transparent, agile, and efficient, said the executive director of AmCham.
Bringing investments and companies closer together would allow physical proximity with suppliers, cost reduction, job creation, technological and infrastructure development, among other advantages.
The executive director of AmCham also indicated that “a higher level of competitiveness for investments, which translates into less bureaucracy, greater legal and political certainty, solid institutions and a rule of law accompanied by a robust public and private dialogue”, are other strategies that can increase foreign investment to El Salvador.
El Salvador looking for Asian Companies
The AmCham representative insisted that the productive sector should aim to attract companies that are located in Asia. “The pandemic has taught us a lesson caused by country border closures and it is important to be close to the target market,” she insisted.
“We can analyze how the costs and time to export from China has increased, this is due to the biosecurity restrictions that countries have implemented more fear of possible contagion,” she added.
According to the executive director of AmCham, companies with American capital have been impacted in their investments due to the restrictions imposed in the country and the closure of the economy that took place in the country last year.
“Companies have had to adjust since the demand for goods and services has decreased, which has limited the companies’ ability to invest due to the uncertainty of the second wave of COVID-19 in the country and the need for public policies to reactivate the economy and recover the jobs that have not been implemented for the moment, ” she said.
AmCham represents 80% of the investment of the United States of America in El Salvador, with companies belonging to a variety of more than 50 sectors and sub-sectors such as hotels, construction, telecommunications, legal services, various distributions, airlines, services financial, technology, retail sales, call center services among others.
Promoting trade between the US and El Salvador
The American Chamber of Commerce of El Salvador, AmCham, is an institution that promotes trade and investment between the United States and El Salvador.
The objective of the Chamber is to work together with local and American companies to achieve a business environment that facilitates investment.
“AmCham’s main objective is to promote trade and investment between the United States and El Salvador. It seeks to help our members to create ties and approaches with the government, simplifying their procedures, and promoting economic growth ”, explained its executive director.
Among AmCham’s major accomplishments are protecting and promoting the business interests of the United States by representing companies to the general public and the business community.
The American Chamber of Commerce of El Salvador has supported the interests of the United States, El Salvador’s main commercial partner, for the benefit of both countries in business areas.
It has also facilitated the creation of working committees in areas such as technology, tax matters, trade, among others, which have promoted interaction between the member companies that look out for their mutual interests.
AmCham has 326 members and its main services include training its members in the latest technology, security advice, business networking events, advertising packages, webinars in the area of interest chosen by the companies, the annual directory of members, the publication of Business magazine, and breakfast of the month, in which companies talk and update themselves on the most relevant issues of the moment.