El Salvador is a destination for investment in the region. Located in the heart of the western hemisphere, it not only has a strategic geographical position, but it also offers an attractive investment climate, including a productive workforce and fiscal flexibility. These assets are a result of national efforts in legal, administrative and fiscal matters.
Those efforts include solid protection frameworks for those who decide to bet on our country. They cover issues such as investments, international services, free-trade zones, incentives for renewable energies, public-private partnerships and legal stability, through which the same treatment is granted to foreign and national investments. They include regulatory reforms that simplify paperwork. The changes have received broad international support from strategic allies with which we have co-operation agreements or support systems in infrastructure, human capital and regulatory improvement and business climate, among others. These have eased the completion of important projects aimed at strengthening the country’s ability to attract investment.
All this has been recognized internationally. El Salvador is ranked among the 10 economies in the world that show the most notable improvement in “doing business” indicators, according to the World Bank. The World Bank has also named El Salvador the second best country in Central America with which to do business in 2017-2018.
Canada is currently an important partner for El Salvador, and there is no doubt we have enormous potential for our friendship of almost six decades to translate into a more dynamic economic and commercial relationship.
There are signs that this is already happening. For example, thanks to an agreement on the promotion and reciprocal protection of investments, signed in June 2000, the investment from Canada in the first quarter of 2018 amounted to $326 million, including projects by internationally recognized companies such as machinery parts maker Spintex Canada Inc., Bell Canada and Telus. These confirm the confidence and stability offered by the country’s business climate.
In the commercial sphere, both countries have also had substantial exchanges, which have been growing. According to the Central Reserve Bank, the total value of exports from El Salvador to Canada between 2013 and 2017 was $333 million and imports from El Salvador for the same period totalled $523 million. The main products we export to Canada are non-refined sugar, coffee beans, cotton shirts and clothing made with synthetic or artificial fibres. Imports from Canada include polymers such as ethylene, motor vehicles, animal or vegetable fats and oils, potassium chloride and wheat, among others.
Without a doubt, our trade and investment activity has increased the opportunities for other products that have not yet been explored. El Salvador is interested in high-quality organic products derived from coffee as well as fruits and corn derivatives. Canada’s interest may extend to industrial products, such as textured polyester yarns; polyester fibre yarns mixed with cotton; cotton; simple yarns; ethylene polymers and technological products.
The progress the government of El Salvador has achieved in terms of attracting investments and developing commercial mergers, especially in recent years, is substantial and can continue to deepen. Canadians should be looking at the fields of energy, aerospace and banking. In addition, we continue to hope for a free-trade agreement — a pending issue in our bilateral file.
At press time, El Salvador and Canada were about to sign an air transport agreement that will bring further opportunities for investment in aerospace.
El Salvador is a country open to trade and investment, and with that vision, we invite our Canadian friends to explore the opportunities we offer. Together, we can continue to build the best conditions to strengthen the bonds that unite us.
Tania Molina Avalos is the ambassador of El Salvador. Reach her at molinat@rree.gob.sv or (613) 238-2939.
