April 2008: Nieuwsflits Regio
From Handelswijzer Midden-Amerika van de Koninklijke Nederlandse Ambassade te Costa Rica
Dutch trade mission to Central-America a great success
The Dutch trade mission led by Ideavelop with support from EVD, AGEXPORT (Guatemala), CADEXCO (Costa Rica) and the Embassies of the Kingdom of the Netherlands in San José, Managua and Guatemala resulted into a great success. Business meetings took place in Guatemala and Costa Rica, where national and international businesses from the region met with 35 Dutch companies and government entities to exchange their supplies and demands needs, as well as the services and products.
Economic Growth
Latin America and the Caribbean will grow an average of 4.7% in 2008, according to projections of the Economic Commission for Latin America and the Caribbean (ECLAC), 0.2% lower than the 4.9% estimate issued by the United Nations regional body last December. ECLAC projects that the countries with the highest growth rates this year will be Panama (8%) and Argentina, Cuba and Peru (7%). Mexico and Ecuador will have the lowest growth, with 2.7% and 3%, respectively. The countries with growth rates nearing the regional average will be Bolivia and Paraguay (5%), Brazil (4.8%), and Chile, Costa Rica, Guatemala and Honduras (4.5%). Last year, average Gross Domestic Product in Latin America and the Caribbean reached 5.7%, completing five consecutive years of growth.
Foreign Direct Investment Central America
| Land | 1992-96 | 1997-01 | 2002-2006 | 2005 | 2006 | 2007 |
|---|---|---|---|---|---|---|
| Costa Rica | 307 | 502 | 830 | 861 | 1.469 | 1.889 |
| El Salvador | 13 | 366 | 342 | 517 | 219 | 1.526 |
| Guatemala | 91 | 319 | 186 | 208 | 354 | 536 |
| Honduras | 50 | 187 | 301 | 372 | 674 | 816 |
| Nicaragua | 62 | 235 | 237 | 241 | 282 | 335 |
| Panama | 271 | 892 | 1.094 | 1.027 | 2.574 | 1.825 |
| TOTAAL | 794 | 2.501 | 2.990 | 3.226 | 5.572 | 6.927 |
Source: CEPAL
Foreign direct investment (FDI) inflows to Central America rose by 24% last year, to 6.9 billion, marking four consecutive years of strong growth. Costa Rica and Panama consolidated their positions as the largest recipients of this investment. El Salvador had a very large increase in FDI due to several bank consolidations (Banagricola, Cuscatlan and BancoSal). A combination of strong regional growth and CAFTA free trade agreement led to the FDI upturn. In terms of GDP the main FDI recipients were Panama, Chile and four Central American countries (Honduras, Costa Rica, El Salvador, and Nicaragua). The main foreign investors in Latin America and the Caribbean in 2007 were the United States, the Netherlands and Spain.
IADB to finance sustainable power projects in Central America
The Inter-American Development Bank wants to make sure that smaller countries considering bio fuels for domestic needs or for export to Europe and U.S. do so responsibly. The biggest obstacle so far has been the lack of knowledge, so research was the top priority in the last year. The bank has disbursed $1.5 million (€1 million) biofuel-related grants to El Salvador, Guatemala and other, mostly Central American, countries for technical, agricultural, environmental and financial studies. Central America has well-developed sugar industries, meaning the cost of installing an ethanol distillery would be relatively low and can provide immediate savings through blending ethanol and gasoline. Bank-assisted biofuel projects in development in Honduras and Costa Rica could begin to come on line by the end of next year. The bank has also been looking to develop projects using crops that don't compete with food, such as the jatropha bean, which grows in arid environments where most human and animal grains do not. The ethanol industry could become a very strong growth industry over the next several years with plenty of business opportunities for Dutch companies.
Parlacen urges Costa Rica to withdraw mining license
The Central American Parliament (Parlacen) urged Costa Rica to block exploitation of gold near San Juan River, bordering with Nicaragua. The petition was instigated by Nicaragua members. It regards mining activities in Las Crucitas (Costa Rica) that might pollute the river. The Costa Rican government authorized the exploitation of gold at Las Crucitas sector, three kms away from San Juan River, to Industrias Infinito S.A, a subsidiary of Canadian firm Vanessa Venture Ltd. The mining exploitation in San Juan River infringes a resolution adopted in 2004 by Parlacen, in which Costa Rica is not represented.
Latin Americans issue regional food emergency
Source: ETF
Seventeen Latin American governments issued a regional food "emergency" at the close of a one-day summit on the food crisis that took place in Nicaragua. The summit, convened by the Alba trade group (Venezuela, Bolivia, Nicaragua and Cuba) called for speeding up food production in Latin America and urged the 63rd UN General Assembly to take up the world food crisis when it meets in September. Regional governments were urged to increase investment in agriculture and the international community to "significantly" boost cooperation to ease the crisis Global food prices have nearly doubled in three years, according to the World Bank, sparking riots and protests in several poor countries (Nicaragua, Honduras and Haiti). In Central America, a major importer of grain and oil, the price increases are wreaking havoc on already fragile economies. Aid agencies are warning of rising social tensions in countries where a typical day's wages won't buy a gallon of gas and food inflation is breaking family budgets. In Honduras, thousands took to the streets last month to protest their eroding purchasing power. Bakers in El Salvador did the same in March to vent their anger over expensive wheat flour. In Guatemala, prices for corn tortillas have jumped 30 % in recent months.
Gulf Ethanol wants to start a biofuel production plant in Central America
Gulf Ethanol Corporation met with government officials, investors and industry partners in Central America to discuss plans to manufacture biofuels in Central America. Central America has abundant sources of biomass. Negotiations identified a strong demand for biodiesel production in Costa Rica along with available, low cost, feedstock to produce it. With hardly any domestic hydrocarbon reserves, Central American countries rely heavily on imported oil for their energy needs. The countries of Central America, including Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, have traditionally been dependent upon agricultural exports for a large portion of their economic activity. However, in recent years, these countries have begun to diversify their economies towards manufacturing and tourism. As a result, the countries have been especially affected by high world oil prices in recent years. The Netherlands embassies in Central America see opportunities for the Dutch BIOPEC consortium partners to participate in this new developing energy sector.
