Since 2010, less frequently discussed Central American and Caribbean countries such as Costa Rica, Panama, and Nicaragua have started to attract significant investment limelight. Effective government initiatives, complemented with availability of young and qualified labor as well as advantageous geographical location are helping these countries attract an increasing number of investments in various industries with each passing year. However, certain challenges continue to hamper these countries in realizing their full investment potential. Therefore, there exists a lingering need to take actions against such challenges and further bolster investment scenarios.
Costa Rica, Panama, Guatemala, Nicaragua, and Dominican Republic are emerging as attractive investment destinations in the Central American and Caribbean region. Their promising investment landscapes are reflected in estimated investment growth rates and net FDIs, amongst other investment parameters.
Government initiatives play a critical role in encouraging both domestic and foreign investors to establish and expand their operations in an assortment of industries, but certain challenges, for instance corruption, poor infrastructure, and weak legal system are plaguing the investment environments.
Government Initiatives
Investment Driven Industries
Challenges and Recommendations
Poor infrastructure, either at a general level or in terms of shortage of electricity is challenging Costa Rica, Guatemala, Nicaragua, and Dominican Republic. Since quality infrastructure is one of the critical pillars for various types of investments to operate profitably, effective steps need to be taken to prevent investments from being further hindered by this challenge. The affected countries should come together and synergistically utilize their resources through mutual agreements and infrastructure-oriented development projects.
Although, all of the five countries are presently experiencing relatively accelerated investment growth, they seem to not realize the opportunity cost being incurred from not taking sufficient actions to root out challenges faced by investors. Perhaps, only when total investment value growth starts becoming sluggish, these countries might recognize the importance of effectively implementing measures to overcome investor related risks.