The economic relationship between Honduras and China is a dynamic and evolving partnership that has gained significant momentum over the past two decades. Honduras, a Central American nation with a growing economy, and China, the world’s second-largest economy, have forged ties encompassing a range of economic activities and strategic interests.

Honduras proposes the construction of an interoceanic train in Central America

With an estimated investment of 20 billion dollars, the recently expressed proposal was made within the so-called Honduras-China Mixed Trade and Investment Commission framework, where both nations also carried out the first round of negotiations to sign a Free Trade Treaty (FTA).

The Honduran government proposed to China the construction of an interoceanic train in Central America to link the Atlantic and Pacific coasts, Economic Development Minister Fredy Cerrato said on Friday.

“We are talking about the construction of dams, the construction of an interoceanic railway in Central America that has to do with the electricity generation system,” Cerrato said at a press conference.

The official commented that the Chinese government has shown interest in the proposal with both public and private investment.

If approved, the interoceanic train in Central America would be operational in about 15 years, Cerrato added.

Honduras recently began negotiations on a Free Trade Agreement (FTA) with China after establishing diplomatic relations in March between the Central American country and the Asian giant and the break with Taiwan.

A statement from the Honduran government reported on the “beginning of the negotiations of the Free Trade Agreement (FTA) between the People’s Republic of China and Honduras” in a “milestone” for bilateral relations.

The two countries will seek “a broad and equitable trade agreement that considers the asymmetries, sensitivities, and development needs of Honduras.”

Characteristics of the economic relationship between Honduras and China include:

Trade Relations

One of the central pillars of the economic relationship between Honduras and China is their robust trade partnership. Honduras exports various goods to China, primarily agricultural products, such as bananas, coffee, and seafood. In return, China exports various manufactured goods to Honduras, including electronics, machinery, and textiles. This trade relationship has expanded significantly recently, with bilateral trade volume surpassing $1 billion in 2019.

A trade imbalance characterizes the trade relationship between the two countries, as Honduras imports more from China than it exports. While this imbalance may pose challenges for Honduras, it also presents opportunities for further diversification and expansion of exports to China. To address this issue, both countries have explored avenues to enhance Honduran exports to China by improving product quality, exploring new market niches, and reducing trade barriers.

Investment Flows

China’s investment in Honduras has steadily increased over the years, reflecting its broader strategy of expanding its global economic footprint through investments in developing countries. Chinese investments in Honduras primarily focus on infrastructure development, energy projects, and telecommunications. Notable examples include the development of the deepwater port in Puerto Cortés, which has the potential to transform Honduras into a regional logistics hub, and the construction of the Patuca III hydroelectric plant. Partnering with Honduras to construct an interoceanic train in Central America will deepen this trend.

These investments have the potential to bolster Honduras’ economic development and improve its infrastructure, thus contributing to economic growth and job creation. However, they also come with challenges, such as concerns about large-scale projects’ environmental impact and financing agreements’ terms. Ensuring that investments are conducted transparently, adhere to environmental regulations, and benefit the local population is essential for the long-term success of these projects.

Cooperation and Development Assistance

China has increasingly become a source of development assistance and cooperation for Honduras. This assistance encompasses many areas, including healthcare, education, agriculture, and technology transfer. China’s South-South Cooperation framework has been instrumental in facilitating such aid to Honduras, with projects aimed at poverty reduction, technology transfer, and capacity building.

One notable example of cooperation is China’s provision of medical equipment and supplies to Honduras during the COVID-19 pandemic. Additionally, China has supported agricultural initiatives in Honduras, including cultivating hybrid rice varieties and establishing agricultural technology demonstration centers.

Furthermore, educational and cultural exchanges have strengthened people-to-people ties between the two countries. Scholarships for Honduran students to study in China and vice versa have become more common, fostering mutual understanding and cultural exchange.

Geopolitical Implications

The economic relationship between Honduras and China also has geopolitical implications, as it aligns with China’s broader geopolitical strategy in the Latin American region. China has been actively engaging with countries in Latin America, including Honduras, through its Belt and Road Initiative (BRI), which seeks to enhance connectivity and trade across the world and promote China’s geopolitical interests.

Honduras’ economic ties with China offer an alternative to traditional partnerships with Western countries. This diversification of diplomatic and economic relations can give Honduras increased leverage in international negotiations and reduce its dependency on a single trading partner.

Challenges and Future Prospects

While the economic relationship between Honduras and China presents numerous opportunities, it has challenges. Key challenges include addressing the trade imbalance, ensuring that Chinese investments benefit the local population, and managing environmental concerns associated with large infrastructure projects.

Moreover, as the global geopolitical landscape evolves, Honduras must carefully navigate its relationship with China to avoid potential political entanglements and maintain its sovereignty. Honduras needs to strike a balance between its economic interests and its diplomatic and strategic considerations.

Conclusion

The economic relationship between Honduras and China is characterized by a growing trade partnership, increasing Chinese investments in Honduras, and a wide range of development cooperation initiatives. This cooperation may expand to include the construction of an interoceanic train in Central America.

While challenges exist, such as the trade imbalance and environmental concerns, the relationship holds significant potential for both countries. As they continue to strengthen their ties, Honduras and China can mutually benefit from their economic engagement, contributing to Honduras’s economic development and prosperity and advancing China’s interests in the Latin American region.

The main products sold globally by companies in the Dominican Republic export sector led by women in 2022 are gold, jewelry, cocoa beans, soybean oil, plantains, and bananas, among others. The leading consumer markets for these products are Switzerland, India, the United States, and Haiti.

The Export and Investment Center of the Dominican Republic (ProDominicana) and the Dominican Association of Businesswomen (ADME) signed a collaborative agreement to develop a portfolio of services for the benefit of women in the Dominican Republic export sector to promote the productivity and global reach of the country’s businesswomen.

Women-led businesses in the Dominican Republic export sector generate jobs

In this sense, the executive director of ProDominicana, Biviana Riveiro Disla, indicated that this agreement was made to promote the relationship between trade and gender equality, promote the internationalization of products and services of Dominican origin, and establish the coordination for the execution of female empowerment projects. This includes training activities that aim to develop processes and procedures for exporting products of micro, small, and medium-sized businesses led by women.

“We are sure that this alliance will support the productive processes of Dominican women due to the large number of jobs they generate in the country and their flexibility in adapting to new technologies. This is why the government of the President of the Republic, Luis Abinader, has worked in favor of this important segment of the Dominican Republic export sector,” he indicated.

Riveiro also highlighted the commitment to developing policies promoting women entrepreneurs in the Dominican Republic export sector. “At ProDominicana, we will work actively to continue positioning women in international business,” she said.

The President of ADME, Julissa Jiménez, highlighted her organization’s commitment to guaranteeing the necessary mechanisms to position businesswomen in the Dominican Republic export sector, understanding that this segment represents one of the primary columns in the Dominican economy. Representatives of ADME, businesswomen exporters of goods and services from different provinces of the country, participated in the signing of the agreement.

ProDominicana organized a national meeting for women exporters

It is highlighted that the results achieved in the axis of supporting the promotion and internationalization of women exporters in the Dominican Republic, from August 2020 to June 2023, ProDominicana has managed the organization and execution of the National Meeting “Women in Exportation.” This meeting has had three editions that presented the study of “Exports of companies led by women and their impact on the Dominican economy.”

Within the framework of this event, a fair was held with the exhibition of products from more than 23 women-led companies in each edition from different sectors: beauty and cosmetics, agro-industrial products, jewelry and costume jewelry, clothing, furniture, crafts, cocoa, products baby, fashion, crafts, grocery, and frozen products, as well as recognition of companies led by women with outstanding performance in exports each year.

Likewise, Riveiro highlighted that exports from companies led by women in the Dominican Republic export sector closed in 2022 with US $1.8 billion, which were sold in 84 markets. This, in turn, shows the increase women have had in exports emanating from the DR. Furthermore, during the January-August 2023 period, this value stood at US$998.6 million. It is highlighted that these women-led companies exhibited the creation of an average of 25,000 formal jobs.

Regarding the main products exported by companies led by women in 2022 in the Dominican Republic export sector, they are gold, jewelry, cocoa beans, soybean oil, plantains, and bananas, among others. Switzerland, India, the United States, and Haiti are the main markets.

Supporting women-led businesses is a positive for the Dominican Republic

Supporting women-led businesses exporting products from the Dominican Republic is crucial for several reasons. Firstly, it fosters economic empowerment and gender equality. Historically, women in many parts of the world have faced barriers to accessing economic opportunities and leadership roles. Institutional backing of women-led businesses in the Dominican Republic export sector helps these entrepreneurs thrive and sets a powerful example for other aspiring female leaders. This support can increase women’s financial independence, improve living standards, and reduce gender disparities in income and wealth.

Secondly, supporting these businesses contributes to the overall economic growth of the Dominican Republic. Export-oriented companies in the country have the potential to bring in foreign exchange, create jobs, and stimulate innovation within the country. Women-led businesses often bring a unique perspective and innovative ideas, which can drive competitiveness in international markets. Furthermore, when women are economically empowered, they tend to invest more in their families, education, and healthcare, thus indirectly benefiting the entire community and fostering sustainable development. In essence, supporting women-led businesses in the Dominican Republic export sector is a win-win scenario that not only promotes gender equality but also contributes to the nation’s economic prosperity.

The Argentine satellite and aerospace industry can be competitive in the international market. The country can position itself to be a leader in the sector.

The Argentine satellite and aerospace industry is one of the booming strategic sectors that positions the country within the international market with innovative developments.

Through public-private coordination and the support of the Knowledge Economy Secretariat of Argentina’s Ministry of Economy, small and medium-sized national companies have generated unique and disruptive products such as a specialized parachute for aircraft pilots, a space rocket with biofuels and a satellite imaging system for the mining and oil industry 4.0.

Bet on local technical capacity in the Argentine satellite and aerospace industry

In 2003, Nicolás Lopez went to live in the United States due to the economic crisis at home. He began working in parachute factories in that country as a stitcher until, a few years later, he returned to his native Córdoba to set up his own repair shop that he named Aerorigging.

He began his project to create an emergency parachute for aircraft pilots. This item still needs to be manufactured in Argentina and is currently in the process of certification by the Argentine National Civil Aviation Administration (ANAC) with flight tests.

“This is my passion, and I intend to finish the verification process to demonstrate that this can be produced in Argentina. It is an industry that does not exist today, but Argentina has the technical capacity to do it. It is one part of a legal and possible aeronautical business, and we will bet that the conditions are here to advance,” said Nicolás of Aerorigging.

“The contribution of Argentina’s Ministry of Economy was significant because it accelerates time. Otherwise, carrying out this ambitious project would be practically impossible,” he added.

The Ministry of Knowledge Economy has financed 21 projects for over US $314 million through the Enhance Satellite and Aerospace Industry Program. Meanwhile, the 2023 call has a total budget of US $950 million and will grant Non-Refundable Contributions (ANR) for  US $36 million per individual project and US $81 million for collaborative works.

Newspace: a growing market that demands new technologies

“Let’s make an analogy that a rocket is a ferry that takes satellites to a certain orbit in space, but some need to go to another planet, the Moon, or even move from orbit. For that, we develop propulsion systems, which are larger engines that are comprehensive and complex that allow them to move from the place where they are released by the rocket to the final destination,” said Dan Eterberg, CEO of LIA Aerospace.

Initially, the company, located in the City of Buenos Aires, was born in 2019 with the idea of making space launch rockets such as the Zonda 1.0, the first biofuel rocket manufactured by a private company in the Argentine satellite and aerospace industry.

However, they soon realized this was a difficult market and decided to use the core technology already developed to create a system and a product.

“It is a completely global market. The large companies that make these systems are international corporations with much experience. Still, a company with a smaller satellite cannot spend the same amount or more on a propulsion system. That is Newspace, a company doing disruptive things that manage to lower costs with greater risk. That’s why they can hire a start-up like ours at an affordable price,” said Eterberg.

As the CEO of LIA Aerospace explained, the company is already holding conversations with clients from different parts of the world, such as the United States, England, and continental Europe. “What we see is a market that is growing and that will demand our technology in the coming years; in a short time, we will access an international market with a lot of added and strategic value, such as the space market,” he concluded.

The Argentine satellite and aerospace industry takes on the world

From Santa Fe de la Vera Cruz, Ingeap began developing a very little-known technique that works with satellite images to determine movements over large areas and remotely with great precision. The company uses external satellites from the European Space Agency to obtain the information it captures and, thus, provides services to Argentine national and international oil and mining companies.

“Being part of the Satellite and Aerospace Enhancement effort was a great opportunity that allowed us to incorporate equipment and broaden our perspectives. For small companies like ours, it is a critical point of leverage because it gives us the necessary support to innovate in techniques and to develop innovative products; without “that support, it would be much more difficult to be able to dedicate this time and these resources to a research and development idea,” commented the Executive Director of Ingeap, Francisco Tibaldo.

These types of technological developments, such as those of Aerorigging, LIA Aerospace, and Ingeap, set a precedent in the Argentine satellite and aerospace industry, which, in turn, enables the nation to be competitive in the international market and position itself as a regional and global leader in the sector.

In its eighth edition, the Colombia Investment Summit 2023 will highlight the potential of various regions in the country as destinations for foreign investment.

The annual event that will take place from November 20 to November 28^, 2023, is being organized by the Ministry of Commerce, Industry, and Tourism through ProColombia. ProColombia is the country’s national agency that promotes exports and foreign direct investment in the country.

Germán Umaña Mendoza, Minister of Commerce, Industry, and Tourism, emphasized, “In President Gustavo Petro’s government, we aim to attract and materialize productive and sustainable investment projects that reach all our regions and foster development. For this four-year term, we have set an ambitious goal of attracting non-mining foreign direct investment exceeding $13 billion, enabling us to create jobs and prosperity across the country.”

Informational Programs are Planned

The Summit includes an academic agenda and comprehensive information on regional and sectoral offerings for entrepreneurs from around the world who will be in attendance.

The priority sectors for attracting foreign direct investment to Colombia align with the National Government’s strategy, which seeks to promote sustainable investment and contribute to a just energy transition, competitiveness, and integrated territorial development. These sectors include technology-based services, agribusiness, auto parts, infrastructure, shipbuilding, tourism, renewable energy, hydrogen, and light manufacturing.

“In this edition of the Colombia Investment Summit, the first under the ‘Change’ government, the focus will be on Colombian regions. During the event, strategic regions of the country such as Antioquia, Valle del Cauca, Santander, Córdoba, Coffee Cultural Landscape, Magdalena, Atlántico, Bolívar, Meta, Cundinamarca, and Bogotá will host sectoral tours. These will enable investors to immerse themselves in the richness and diversity that ‘Colombia, the country of beauty,’ has to offer,” said Carmen Caballero, President of ProColombia.

Colombia Investment Summit Event Schedule

The event will kick off with a high-level academic agenda in Bogotá on November 20, featuring the participation of President Gustavo Petro Urrego, Minister of Commerce, Industry, and Tourism Germán Umaña Mendoza, and several members of the presidential cabinet.

The Colombia Investment Summit will also feature contributions from the Bogotá Chamber of Commerce, the Mayor’s Office of Bogotá, and Carmen Caballero, President of ProColombia, as the event host. Experts and analysts from the country’s investment environment will share their perspectives and knowledge with those in attendance.

Caballero added, “A key element of this edition of the Colombia Investment Summit is the strategic collaboration with Investment Promotion Agencies (IPAs) in the regions, which will play a fundamental role in presenting a strong and consolidated investment offering for Colombia as a leading foreign investment destination in Latin America.”

Foreign investors can forge strategic alliances, explore investment projects, and connect with critical entities for their entry into Colombia, including national government bodies, free trade zones, local authorities, associations, and regional promotion agencies.

Foreign Direct Investment: A Pillar of the Government Agenda

The Colombian government has reaffirmed its commitment to attracting investment that contributes to peacebuilding and benefits sectors most affected by inequality, in line with the values of social, economic, and environmental justice the country seeks to achieve.

ProColombia, as the leading entity promoting foreign direct investment in Colombia, works to drive sustainable growth in the country by facilitating the arrival of foreign investment that encourages innovation and technology transfer, generates value-added exports, and fosters human capacity development.

During the first year of President Gustavo Petro’s administration, ProColombia and regional investment promotion agencies (APRIs) facilitated the arrival of 178 new investment projects that are expected to create over 79,900 new jobs in various regions of the country over the next two to three years.

Colombia is an Attractive Destination for Foreign Direct Investment

Attendees at the Colombia Investment Summit will learn that the country has emerged as an attractive destination for foreign direct investment (FDI) due to a combination of factors that make it a compelling choice for international businesses. First and foremost, Colombia’s strategic geographic location in South America offers easy access to markets in North and South America, making it a gateway for companies looking to expand their presence in the region. Additionally, the country has made significant strides in improving its business environment by implementing economic reforms, reducing bureaucratic barriers, and enhancing legal and regulatory frameworks. These efforts have boosted investor confidence and facilitated smoother FDI processes.

Furthermore, Colombia possesses abundant natural resources, including oil, minerals, and agricultural products, which continue to attract FDI in sectors like energy, mining, and agriculture. The nation’s economic stability and steady GDP growth have also bolstered its appeal to investors seeking long-term prospects. Colombia’s youthful and increasingly skilled workforce also offers a competitive advantage, particularly in the technology and services sectors. The government’s commitment to innovation and technology-driven industries, coupled with a burgeoning startup ecosystem, has created opportunities for foreign investors looking to tap into the country’s entrepreneurial spirit. Collectively, these factors underscore Colombia’s status as a promising destination for foreign direct investment, with ample potential for sustainable growth and profitability.

Visit the Colombia Investment Summit 2023 website.

At the end of the first half of 2023, the total investment in the maquiladora industry in Paraguay reached just over US$ 1 billion. After more than two decades of the regime being in effect, the maquiladora sector achieved the highest level of productive capacity in its entire history.

Cnime provides export statistics

The National Council of Export Maquiladora Industries (Cnime) of Paraguay highlights in its report that, in the breakdown of exported products, it is observed that “auto parts” reached 27% of the total and the second most important item produced is that of “clothing and textiles” with 20%.

Other important items correspond to “food products” with 15%, “aluminum and its manufactures” with 13%, and “plastics and its manufactures” with 6%.

Among the main export destinations for Paraguayan maquiladora exports in the first half of 2023, Brazil stood out with 57%. Following Brazil was Argentina, 12%; USA, 7%; Netherlands, 6%; Chile, 5%; and Uruguay, 3%, according to the Ministry of Industry and Commerce (MIC) information.

Shipments corresponding to the year’s first half reached 492 million dollars, registering a slight decrease of 2% compared to the first half of 2022.

Imports of inputs destined for industrial transformation under the Maquila Regime reached a total of US$ 265 million, 14% less compared to the same period in 2022, With which the trade balance (export minus import) from January to June grew 16%, thus reaching a total of US$ 227 million.

Total employment in the maquiladora industry in Paraguay

The report highlights that the more than US$1 billion investment coincides with the highest employment levels generated in Paraguay’s history of the maquila industry. Direct employment (workers on companies’ payroll and in the Social Security Institute (IPS)) reached 22,319 workers, 6% more than the first half of 2022.

Regarding indirect employment (formal workers who provide services in companies that support the maquila industry), it is estimated that the maquiladora activity helped create 10,713 jobs.

The employment generated by the maquiladora industry in Paraguay has a “spillover effect” or “multiplier” (which is created when direct and indirect workers collect their salaries and go to markets to procure goods and services) and an estimated incidence of 32,867 workers.

The Paraguayan maquila regime has supported creating an estimated 65,899 jobs, either directly, indirectly, or through a spillover (multiplier) effect.

The largest sectors of job creation in the area of the maquila regime correspond to “auto parts” (30%), “confections” (27%), “intangible services” (11%), and “plastics and their manufacturers” ( 9%). Together, these four sectors are responsible for 77% of job creation in the maquiladora industry.

Currently, there are 278 maquiladora companies in Paraguay with approved programs, of which 48% are located in the Department of Alto Paraná. The second region that can attract maquiladora investments corresponds to the Central Department and Capital City, which comprise 36.3% of all maquiladora operations. Finally, the Department of Amambay encouraged the establishment of 6.8% of production facilities in the maquiladora industry in Paraguay.

Projections for the remainder of 2023

Referring to the projections for the remaining months in 2023, the report estimates a 9% growth in maquila exports this year, with a total of US$ 1.12 billion in shipments being achieved. These projections were based on conservative estimates, where the uncertainty of the elections in Brazil and Paraguay slowed down shipments in the first semester. However, assuming that in the remainder of the second, they will improve once the electoral uncertainty scenario is overcome.

Additionally, it is expected that this year, the goal of 23,000 direct jobs generated in the maquiladora industry in Paraguay will be reached, considering that in the first half of this year, a total of 21 new projects were approved, which contributed about US$ 40 million in new investments.

The importance of the maquiladora industry in Paraguay

The maquiladora industry in Paraguay plays a pivotal role in the country’s economic landscape, representing a cornerstone of the nation’s development and economic stability. Paraguay’s strategic location, low labor costs, and business-friendly policies have transformed it into a burgeoning hub for maquiladoras, attracting numerous foreign companies seeking cost-effective manufacturing solutions. This industry provides a significant source of employment for the Paraguayan workforce and contributes substantially to the nation’s export revenue. Maquiladoras have fostered technology transfer, skill development, and industrial diversification, elevating Paraguay’s competitiveness on the global stage.

Furthermore, the maquiladora industry bolsters Paraguay’s broader economic growth by attracting foreign direct investment, promoting the development of modern infrastructure, and fostering innovation within the manufacturing sector. The sector’s expansion has led to increased production capacities, which, in turn, have strengthened Paraguay’s position in regional and global supply chains. Moreover, the revenue generated from maquiladoras has enabled the government to invest in essential public services, education, and healthcare, ultimately improving the quality of life for its citizens. In conclusion, the maquiladora industry in Paraguay stands as a linchpin in the South American nation’s economic development, underlining its significance as a catalyst for job creation, foreign investment, and sustainable progress.