Central America Business Opportunities
Central America, the southernmost portion of the North American continent, encompasses seven countries situated between Mexico and South America. Central America is currently undergoing a process of political, economic and cultural transformation that started in 1907. The combined population of Central America is between 41,739,000 (2009 estimate) and 42,688,190 (2012 estimate). GDP for the region as whole is estimated at $203 billion USD (2013).
Key Central American Countries
Belize (more info)
- Nation state on the eastern coast of Central America. Formerly British Honduras; gained independence from the UK in 1981; only country in Central America whose official language is English. Capital city is Belmopan; largest city is Belize City.
- Central American and Caribbean nation with strong ties to both the Latin American and Caribbean region. It is a member of the Caribbean Community (CARICOM), the Community of Latin American and Caribbean States (CELAC), and the Central American Integration System (SICA).
- Mostly privatized enterprise economy that is based primarily on export of agriculture, and agro-based industry products. Belize tourism industry attracts almost half of its visitors for scuba diving and snorkeling.
- Population 353,900 (‘16E); GDP nominal $3.0 billion US$ and per capita 8,200 US$; Belize dollar fixed at $2 Belize to $1 US.
- Government offers a variety of incentives that can be attractive to even the most cautious investor.
- Infrastructure remains a major economic development need. Major trading partners are the US, Mexico, the EU and Central America.
Costa Rica (more info)
- Population 4.8 million (’16E); GDP nominal 79.3 billion US$ ('16E) and per capita 16100 US$ ('16E).
- Capital and largest city is San Jose; official language is Spanish.
- Known for its progressive environmental policies, being only country that meets all five criteria which are purported to measure environmental sustainability.
- High levels of education among residents make the country an attractive investing location.
- Pharmaceuticals, financial outsourcing, software development, and ecotourism have become the prime industries. Global high-tech corporations developing in the country, and are exporting goods
- Country obtained full Asia-Pacific Economic Cooperation Forum (APEC) membership in 2007.
El Salvador (more info)
- Population 6.6 million (‘16E); GDP nominal 54.7 billion US$ ('16E) and per capita 8,900 US$ ('16E).
- Capital and largest city is San Salvador; official language is Spanish. Official currency is US dollar.
- Member of the Organization of American States (OAS), the Central American Common Market (CACM), the Central American Parliament (PARLACEN), and the Central American Integration System (SICA).
- Dependence on coffee has been reduced; diversifying the economy by opening up trade and financial links and expanding the manufacturing sector.
- In 2006, first country to ratify the Central America-Dominican Republic Free Trade Agreement (DR-CAFTA). Agreement has stimulated exports of processed foods, sugar, ethanol, and supported investment in the apparel sector.
Guatemala (more info)
- Population 15.2 million (‘16E); GDP nominal 132.3 billion US$ ('16E) and per capita 7,900 US$ ('16E).
- Capital and largest city is Guatemala City; official language is Spanish.
- Largest economy in Central America.
- Some of main exports are fruits, vegetables, flowers, handicrafts, and cloths.
- With rising demand for biofuels, the country is growing and exporting an increasing amount of raw materials for biofuel production, especially sugar cane and palm oil.
- In March 2006, country's congress ratified the Dominican Republic – Central American Free Trade Agreement (DR-CAFTA). Guatemala also has free trade agreements with Taiwan and Colombia.
- US is the country's largest trading partner... provides 34% of its imports and receives 42% of its exports.
Honduras (more info)
- Population 8.9 million (‘16E); GDP nominal 43.2 billion US$ ('16E) and per capita 5,300 US$ ('16E).
- Capital and largest city is Tegucigalpa; official language is Spanish.
- Known for its rich natural resources, including various minerals, coffee, tropical fruit, and sugar cane, as well as for its growing textiles industry. US is Honduras' chief trading partner.
- In 2005 Honduras signed the DR-CAFTA free trade agreement with the United States. Also, in 2005, Puerto Cortes, the main seaport in Honduras, was included in the US Container Security Initiative.
- Foreign investment has been an important factor for the economic development of the country; government continues to place high importance on attracting foreign investment through economic and fiscal policies, and other movements supporting free markets.
Nicaragua (more info)
- Nicaragua is among the poorest countries in the Americas.
- Population 5.9 million (’16E); GDP nominal 33.5 billion US$ ('16E) and per and per capita 5,300 US$ ('16E).
- Capital and largest city is Managua; official language is Spanish.
- Agriculture represents 17% of GDP, the highest percentage of the countries in Central America.
- Nicaragua is currently a member of the Bolivarian Alliance for the Americas, which is also known as ALBA.
Panama (more info)
- Population 3.7 million ('16E); GDP nominal 93.1 billion US$ ('16E) and per capita 22,800 US$ ('16E).
- Economy has been among the fastest growing and best managed in Latin America.
- Revenue from canal tolls continues to represent a significant portion of GDP; growing sectors include commerce, banking and tourism.
- The Panama Canal Expansion is the largest project at the Canal since its original construction. The project will create a new lane of traffic along the Canal doubling the waterway’s capacity.
- Panamanian currency is officially the balboa, fixed at a rate of 1:1 with the US$ since independence in 1903. In practice US dollars are legal tender and used for all paper currency, while Panama has its own coinage.
Trade and Related Organizations
Building on the process started in 1907, the integration process in Central America has continued with the San Salvador Treaty in 1951, which created the ODECA, the Organization of Central American States.
In 1991, integration was further advanced with the creation of the Central American Integration System (SICA). SICA provides the legal basis to avoid disputes between the member states; membership includes the seven nations of Central America plus the Dominican Republic, a state traditionally considered part of the Caribbean.
The Central American region already has several supranational institutions such as the Central American Parliament, the Central American Bank for Economic Integration and the Central American Common Market.