Colombia’S Growing Investment Footprint In El Salvador: A New Economic Frontier
Date
9/30/2024 8:21:17 AM
(MENAFN- The Rio Times) Colombia's investment in El Salvador has surged over the past decade, reaching $504 million in 12 years. Colombian capital inflow to El Salvador has grown at double-digit rates since 2019.
The Banco de la República reports $32 million in Colombian foreign investment in El Salvador by June 2024. This figure nearly matches the total $35.4 million invested in 2023, signaling a rapid acceleration of interest.
Several prominent Colombian companies have established a presence in El Salvador. Davivienda, Grupo EPM , Procaps, and Organización Carvajal lead this investment wave.
Carvajal, a Valle del Cauca-based company, plans to inaugurate a new plant in El Salvador. Pedro Felipe Carvajal, the company's president, revealed a $10 million investment in El Salvador.
He stated, "We're about to inaugurate a plant in El Salvador. We entered the market in 2007 with an acquisition in Carvajal Empaques."
Additionally, the investment surge coincides with Nayib Bukele's presidency in El Salvador. Bukele's strict security policies have drawn criticism from NGOs and human rights defenders.
However, he enjoys a 92% approval rating according to CID Gallup. El Salvador's Investment and Export Promotion Agency highlights several competitive advantages.
Strengthening Economic Ties
These include a dollarized economy, robust infrastructure, an investor-friendly legal framework, and improved security conditions. The Salvadoran government has updated its legal framework, including reforms to income tax laws.
Colombian companies have shown interest in El Salvador for over a decade. Davivienda entered the market in 2012, while Grupo EPM arrived a year earlier. Corficolombiana has also expressed interest in infrastructure investments in El Salvador.
Gustavo Tamayo, delegate of the Colombian-Central American and Caribbean Chamber of Commerce, emphasized security as a key factor.
He noted, "Security has become the biggest attraction. What kind of security? Legal and financial security." Other Colombian companies investing in El Salvador include Noel, Grupo Oma, and Crepes & Waffles.
The investment flow from Colombia to El Salvador is expected to continue growing. El Salvador's country brand, based on security, plays a significant role in attracting investors.
In addition, as Colombia and El Salvador approach 200 years of bilateral relations, both nations are planning commemorative activities.
Germán Benacek, El Salvador's ambassador to Colombia, expressed interest in technological and agricultural collaborations with Colombia. The economic ties between the two countries continue to strengthen.
Grupo Éxito, a Colombian retail giant, is now part of Grupo Calleja, a Salvadoran chain. However, this partnership exemplifies the growing economic integration between Colombia and El Salvador.
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