El
Salvador is emerging as an attractive destination for several
industries. The Central American Free Trade Agreement or CAFTA,
has given the country the opportunity to increase trade with the
United States.
According
to PROESA, the National Investment Promotion Agency of El Salvador,
which helps bring in foreign investment, the economically active
population or EAP, for the year 2002, was recorded at 2,707,272
people, of which 63% were located in urban areas and 37% were
located in rural areas. The country's education focus can be observed
in the number of students and graduates that the country generates.
About 110,000 students enroll at universities each year. With
5000 students graduating with technical degrees per year, it has
a strong technical base
Located
in Central America, El Salvador has the advantage of being well-positioned
to both the North and Central American markets. Its close proximity
to the United States provides a competitive edge over China, as
goods can be produced and transported at a faster rate. Apart
from that, the country is also situated close to capital cities
from which 70 per cent of regional commerce takes place. El Salvador
is one of Latin Americas country that is able to boast an established
democracy and open trade system that enables more foreign trade
and greater global competitiveness for the region.
The
2005 Index of Economic Freedom ranked El Salvador as the second
freest economy in Latin America and in the 2004-2005 Global Competitiveness
Report by the World Economic Forum, the country was listed as
the fourth most competitive country in Latin America and 53rd
out of 104 economies in the world.
El
Salvador also has a good infrastructure such as an international
airport, paved highways that connect airports and ports. A deep-sea
port is being built in La Union, which will be the second-largest
after Panama and which will have an overland route to connect
it to the Atlantic.
PROESA
says it has managed to garner USD 242.8 million in two years from
June 2004 to May 2006. Out of this, USD 22 million was from electronics
and automotive manufacturers which between them, generated 3000
jobs. One such automotive company is Arnecom, which is a joint
venture between the Mexican Xignux and the Japanese Yazaki Corporation,
which manufactures harnesses, automotive components and instruments.
Recently,
US-based Saturn Electronic, which manufactures electronics, components
for fuel, actuators or electronic controllers and solenoids and
electrical cables and harnesses for batteries for the automotive
sector, set up an unit in El Salvador. The company's initial investment
of USD 2 million, is likely to go up. Saturn will initially hire
500 people in El Salvador.
*After
an exhaustive search of 2 years that took place in Mexico, Central
and South America, we found in El Salvador competitive and stable
labor, a labor market open to foreign investment and government
plans and private initiative well focused in investments attraction"
stated Mario Okubo, Vice President of Operations of Saturn.
© 2006
