Maart 2008: Nieuwsflits Regio
From Handelswijzer Midden-Amerika van de Koninklijke Nederlandse Ambassade te Costa Rica
Remittances: a US $ 12.4 billion Central-American business growing fast
By 2010, remittances sent to their families by Central American migrants living outside their countries could reach US$ 15 billion according to the Inter-American Development Bank (IDB). Remittances exceed all foreign investment and financial aid in the region and remittance growth will continue but at a more moderate rate due to the slowing economy and tougher immigration laws and controls of the US. The remittance sector and growing consumption has led towards a consolidation of the banking sector in the region the last couple of years (Citibank, HSBC, GE Capital, Scotiabank and Western Union). Potential opportunities still remain for Dutch banks and financial institutions as 90% of the remittances remain outside the formal financial system. Banks should considering entering the region by offering besides remittances other financial products (banking accounts, credit/debit cards, insurance, etc.) and technological innovation.
Central-America insurance industry reports a 40 % increase in net profits
Central-American’s strong economic growth contributed to the 16,5% growth in total written premiums in the insurance industry, surpassing the US $ 2 billion mark for the first time. The positive trends in written premiums combined with declining operating expenses has led to US $245 million net profits for the insurance industry, a 40% increase over 2006. The largest growth rates were recorded by Costa Rica (30%), Panama (27%) and Honduras (22%). Business opportunities are plentiful for Dutch insurance institutions (AEGON, ING, Rabobank) as consolidation of the insurance sector in the region has not yet taken place and Costa Rica’s (state-owned monopoly) insurance market will be opened to foreign investment in the next couple of years.
IDB provides US$2 billion in investments for new initiatives and projects in Central America and the Dominican Republic
Inter-American Development announced the IDB’s new initiatives and projects for Central America and the Dominican Republic in 2008, which include some US$2 billion in investments. Initiatives include formulating action plans and programs for bio fuels, energy efficiency and renewable energy; support for infrastructure projects by both the public and private sectors; sector strategy plans for water and sanitation; and specific projects under the IDB’s Opportunities for the Majority Initiative. The IDB is expected to approve US$2 billion in loans for 2008 for the countries in the sub region, including US$700 million for private sector projects. Plenty of opportunities for Dutch companies active in the sanitation, water and renewable energy sectors.
EU and Central America conclude successful second round of negotiations for a bi-regional Association Agreement
The European Commission, negotiating on behalf of the European Union (EU), and Central America met in Brussels from 25 to 29 February 2008 for a second round of negotiations of a bi-regional Association Agreement. These negotiations cover the three pillars of Political Dialogue, Cooperation and Trade. The EU welcomed the most recent achievements in the Central America regional integration process, notably the signature of the Customs Union Framework Agreement by five Central American countries. The EU and Central America expressed their hope that Panama will soon join the negotiations as an active participant, recognizing this country’s efforts towards Central America regional economic integration process. All twelve Trade sub-groups met during the course of the week and good progress was made. Both sides showed engagement and willingness to move the process further in the upcoming negotiating rounds. With regard to the next immediate steps, the Parties aim at finalising the preparation of their respective offers on trade in goods and trade in services/establishment; these first offers will be exchanged on Monday 17 March 2008. Regarding the Political Dialogue and Cooperation pillars, the Parties agreed to proceed to a timely exchange of proposals and reactions in the run up to the third round of negotiations, scheduled mid April in El Salvador. Three other rounds are envisaged this year with the objective to conclude the negotiations if possible by 2009.
Central American summit
The President of Costa Rica Dr. Oscar Arias criticized what he defined as the hypocrisy of the European Union, because it talks of free trade while subsidizing its farmers. Honduras’s Manuel Zelaya, El Salvador's Elías Saca, Costa Rica's Oscar Arias, Guatemala's Alvaro Colom and Nicaragua's Daniel Ortega regrouped at the San José Casa Presidencial for a summit of Central American presidents, in which they pledged to “respect” the laws of each country and that the EU should respect the constitution of each country. The region's leaders are negotiating an “association agreement” with the EU. The EU wants that all Central America countries ratify the Statue of Rome/International Criminal Court which has not been done by Nicaragua, El Salvador and Guatemala due to Constitutional reasons. In the meeting, the Presidents also agreed on establishing a common credit fund to help lower poverty in Central America.
Taiwan-Central America and Caribbean Business Leaders Summit
The Republic of China (Taiwan)-Central America and Caribbean Business Leaders Summit brought together 50 trade officials, business leaders and reporters from Belize, the Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Nicaragua and Panama, as well as 150 representatives from Taiwan's industrial and business sectors on the 10th of March. The business summit, jointly organized by the Ministry of Foreign Affairs and the Ministry of Economic Affairs (MOEA), was aimed to enhance Taiwan's economic and diplomatic ties with those countries, in the face of growing diplomatic pressure from China. During the meeting, participants discussed bilateral investment, trade exchanges and cooperation between Taiwan and its Central American and Caribbean allies, while business leaders from both sides held face-to-face trade talks.
Central American sovereign creditworthiness to suffer because of US recession
Reuters
Central American sovereign creditworthiness could deteriorate due to a U.S. economic slowdown because of a likely drop in trade and export activity in 2008 according to credit rating agency Standard & Poor's. "Average GDP growth in the region may fall to 4.5% in 2008 from 7% in 2007, depending the decline in the U.S. economy. Central America had record economic growth rates in 2006 and 2007 which led to improved fiscal and external performances and overall creditworthiness. The outlook for Panama, Costa Rica, El Salvador, and Guatemala are mixed as U.S. economic deterioration would slow remittances to all of Central America.
