With almost 13% accumulated appreciation at the end of January 2022, the Colombian peso continues to be on par with currencies like the Mexican peso, the Chilean peso, and the Brazilian real as one of the strongest currencies in Latin America.

“The main driver of dollar behavior against the Colombian peso has been the generalized weakening of the dollar against most major emerging economies around the world. In that sense, key messages that have taken strength during this scenario are dollarizing to take advantage of the environment to diversify portfolios as well as having a long-term view,” are the keys for investors seeking to invest wisely in currencies in Latin America.

Within this context and during the last year, while the Mexican peso posted close to 15% appreciation according to the Skandia report quoted by El Nuevo Siglo newspaper, the Chilean peso and Colombian peso posted gains of around 13%, and the Brazilian real just over 10%. On the other hand, the DXY index, which measures the dollar’s value against currencies such as the euro, Swiss franc, British pound, and Japanese yen, depreciated around 10.7% during the same period due to low US interest rate expectations, fiscal conditions, and decreasing international appetite for the greenback. As a result, safe-haven investments such as gold and currencies with strong economic fundamentals have increased worldwide demand from central banks and retail investors, reshuffling capital flows towards currencies in Latin America.

The report further points out that the Colombian peso has been additionally boosted by:

• Remittances growth
• The growth of coffee and other commodities
• Foreign currency inflows due to an increase in tourism, among other factors
• Foreign direct investment flows into Colombian public debt and equity markets
• Central Bank monetization of external government debt to cover liquidity requirements

Expectations of future dollar inflows from pension funds (resulting from the announcement of plans to repatriate these resources, which are currently under regulatory review) have also contributed to market expectations.

What should investors do?

From a financial education perspective, dollar depreciation could be seen as an opportunity to improve the global diversification of their portfolios. By reaching levels near COP 3,600 per dollar, international assets become cheaper, allowing investors to strengthen long-term investment strategies.

“We invite investors not to focus on dollar levels per se, but rather to take scenarios like these as an opportunity to diversify portfolios and make decisions aligned with long term financial goals,” says Catalina Tobón, Investment Strategy Manager at Skandia Colombia. “That is, not to let short-term market movements cause them to take impulsive actions that go against their financial plans.”

However, one of the most frequent errors is to make decisions based on short-term market noise, acting emotionally, and abandoning their medium and long-term financial goals.

If we think about investment decisions, in the short term, a weaker dollar could lead investors to:

• Purchase imported goods
• Travel more abroad
• Allocate more capital towards foreign assets

The recommendation would be not to adjust structured savings or investment financial plans based on what could be merely temporary movements. In addition, analysts highlight that when looking to take advantage of dollar depreciation, investment decisions should go beyond FX levels. For instance, they mention that during periods of a weak dollar, emerging market equities, commodities, and local currency debt tend to perform well since investors have more appetite for risk and capital tends to flow into emerging markets.

However, above and beyond identifying assets that could have relative outperformance during periods of dollar depreciation, investors should focus on how these moves fit within their well-diversified and coherent investment plans. By diversifying across different markets, currencies, and asset classes, investors can also help smooth out FX volatility and not have all their eggs in one basket.

Imports

Thinking long-term is perhaps the key message once more. Dollar appreciation and depreciation cycles are usually cyclical, but financial decisions with a longer horizon, such as diversification and financial discipline, are what really make a difference for wealth accumulation.

On the other hand, analysts remark that peso appreciation is positive for consumers and importers since they can buy more with less money. However, it also hurts exporters since they receive fewer pesos for every dollar sold, leaving them with less money to cover costs.

If the Colombian peso appreciated almost 15% in the last year, every box of flowers and every container of coffee sold internationally in dollars translates into fewer pesos in the companies’ cash flows. This is known as the deterioration of the peso’s real effective exchange rate, and it is an underlying dilemma that affects more than those two sectors. Together they represent around one-fifth of total Colombian exports (17.9%). “Colombia exports a lot, and a large portion of our exports come from companies that are price takers,” says Hernando Zuleta, Dean of the Faculty of Economics at the University of the Andes.

Impact

This means that they do not have the power to set prices and are obliged to accept the market prices.

Coffee exporters, for example, have been affected by the exchange rate movement against the dollar. “Each load of coffee (cup on the coffee market is a 125 kilogram container) sold at the international level lost somewhere between 500 thousand and 550 thousand pesos just due to the effect of the exchange rate.”

The international price of coffee is influenced by more than the exchange rate against the dollar. High-quality Colombian coffee (Arabica type, Colombia’s most produced variety) trades on the New York Exchange (dependent on futures contracts), where prices have actually gone up more than 16% in the last 6 months.

Flowers, on the other hand, have a direct link with peso appreciation. They are not traded on international markets, and roughly 95% to 98% of flowers produced in Colombia are exported. Thus, the impact of the exchange rate movement is fully transmitted to the producer.

In any case, Colombia’s peso appreciation has fueled conversation about hedging foreign exchange exposure. Currency hedging is similar to insurance, where exporters can lock in today the dollar price they would receive in a couple of months. If the peso continues to appreciate and they sell dollars that were “sold” months ago, they will have to cover the difference. On the contrary, if the peso depreciates, the company profits from the difference. The main reason why few exporters use this tool is due to the additional cost.

Costa Rica has stopped being known worldwide only for ecotourism. Throughout its recent history as a nation, Costa Rica has made great progress as an exporter of technology and services. The latest figures published by COEXPHAL regarding foreign trade celebrate a historic high: $21.846 billion in exports was never achieved before. But this is not a number out of the ordinary. Costa Rica’s trade evolution represents the concrete result of decades of national planning aimed at specialization, the attraction of foreign investment, and trade liberalization.

With facts like this, Costa Rica’s export-led development strategy is far from being just another technological hub in Latin America. Instead, we witness how an economy formerly dependent on agriculture managed to transform itself into a knowledge-based economy, one where microchips and medical equipment weigh more than coffee or bananas. If there is any doubt about the country’s competitiveness, regardless of size, just take a look at Costa Rica.

Medical Equipment and Precision Tools Lead the Way

One of the most relevant sectors for Costa Rica’s export economy is precision and medical equipment manufacturing. Costa Rica houses operations for some of the most important multinationals active in the Life Sciences sector. Let’s call it what it really is: Costa Rica is one of the main links of the medical technology supply chain around the world.

The Export Powerhouse

This sector is currently the most exported category of goods in the country. The fact that Costa Rica can design, assemble, test, pack, and ship heart valves and precision medical equipment that ends up anywhere in the world has allowed exports in this sector to grow in double digits year over year. Multinational corporations (MNCs) use Costa Rica as a competitive platform to manufacture, assemble, quality check, and approve devices for the market, not only because of the favorable supply of labor but also because of institutional strength.

“Costa Rica exports tons of things that you cannot easily find labeled ‘Made in Costa Rica’. Costa Ricans have gained a reputation for precision, high-quality control standards, and adherence to regulations. If you’re making medical devices, Costa Rica is one of the safest countries to manufacture in.” Jorge Castro, President of AMS Mexico and Latin America

Semiconductors Matter

Semiconductors were also decisive during the global shortage that affected supply chains during the past few years. The recent election cycle proved once again why Costa Rica is strategically important in the semiconductor ecosystem.

The country has hardware from large technology companies operating throughout the year, fulfilling requests from the U.S. market. The Costa Rican tech hub has been especially attractive for electronics assembly, semiconductor testing, and high-tech manufacturing thanks to decades of investment in electrical manufacturing, technical education, infrastructure, and industrial parks. As demand for more complex electronics continues to grow, opportunities arise for greater foreign direct investment in these areas.

“Semiconductors are much more than an export sector. It is a cornerstone of our national competitiveness.”-Virginia McLean, Costa Rican Ambassador to the U.S.

Services: The Other Side of the Coin

Costa Rica has also become a corporate services hub for many knowledge-intensive sectors. Services such as information technology, business process outsourcing, business management, engineering, and design represent an important portion of national income in the form of services.

The country has shared services centers and R&D centers from global technology companies attracted not only by political stability but by human capital. This additional sector complements the manufacture and export of goods, making the economy more resilient to external shocks such as volatility in commodity prices.

The Costa Rican tech hub association is often linked with innovation centers, digital transformation, and BPO. Many companies operate regional headquarters for Latin America in Costa Rica or nearshore services to the United States and Europe.

Factors of Success: Talent and Foreign Trade Zones

If you were thinking, “Why Costa Rica?” when companies could locate to other countries with lower labor costs. The reason is that Costa Rica checked three very important boxes:

1. Trained Workforce

Costa Rica has invested for years in its education system, creating a technical and bilingual workforce. The country’s talent pool is known for having good technical skills and for adapting to multinational firms’ corporate cultures. Universities have established relations with companies to provide courses that respond to labor market needs.

2. Foreign Trade Zone Regime

The certainty of the legal framework governing companies operating in Costa Rica’s free trade zone regime has been key. Coupled with tax incentives, this offsets higher operating costs relative to the rest of Central America. This regime has become the flagship of FDI policy and industrial clusters.

3. Free Trade Agreements

Costa Rica has over ten free trade agreements in place with countries that represent approximately two-thirds of the world’s GDP. Costa Rican products and services labeled “Made in Costa Rica” benefit from preferential access to the largest markets in the world.

Why Costa Rica’s Free Trade Zone regime?

There are a number of key benefits for companies operating under this regime:

• No Corporate Income Tax or Reduced Rates
• Importation of Raw Materials and Capital Equipment without Duty
• Expedited Customs Processing
• Stability of the legal framework

The Next Step: Nearshoring Costa Rica

The recent nearshoring boom presents another opportunity for Costa Rica to consolidate itself as a manufacturing and technology hub for North America. Cost increases in Asia, concern over supply chain concentration, and geopolitical tensions are prompting companies to diversify production geographically.

Amongst Latin American countries, Costa Rica presents many advantages: political stability, rule of law, and a proven track record of success in attracting FDI. Any company looking for a stable, politically safe destination to produce high-value goods and services will soon think of Costa Rica.

Companies considering investments in Costa Rica are from the following sectors:

• Electronics
• Semiconductor Assembly and Packaging
• Medical Devices
• Biotechnology
• Cloud Computing
• Software as a Service (SAAS)
• Engineering Design
• Research and Development
• Business Process Outsourcing

When Thinking About Building a Sustainable, Knowledge-Based Economy

Years of developing a knowledge-based economy have positioned Costa Rica in a place few countries in Latin America can: the “Silicon Valley” of the Caribbean. Costa Rica achieved $21.846 billion dollars in exports because it chose not to specialize in “nothing.” History shows that if little Costa Rica can do it, any country can do it if they want to.

The Costa Rican tech hub is not just factories and MNCs: it represents an entire national vision based on exports, education, trade agreements, and strong institutions. If Costa Rica wants to continue riding this wave of success in the years to come, it will have to address certain challenges before they become bigger obstacles.

“Attracting multinationals to Costa Rica is one thing. But how can we promote the development of local suppliers to increase the value added of Costa Rican goods and services? That is the question.” States Carlos Valverde, Industrial Sector Specialist at CINDE Costa Rica.

The Central American nation has assets such as the Panama Canal, ports, and the banking system that give it a privileged place in global supply chains and reinforce the competitive advantages of Panama in international trade and logistics.

Panamanian-American relations are currently positive. They mark a phase of convergence after the diplomatic distancing registered in previous months and reported exactly one year ago. At that time, repeated statements from the government of Donald Trump questioned China’s commercial and technological footprint in Panama through infrastructure projects and operations in strategic sectors such as the Panama Canal and logistics platforms.

Panama responded politically and commercially to those opinions with statements defending the neutrality of the Canal and the sovereignty of local companies in conducting their business. Now, diplomatic dialogue channels seem to point to agreement on issues of mutual interest and the deepening of economic cooperation, strengthening the competitive advantages of Panama as a trusted partner for the United States.

Kevin Marino Cabrera, U.S. Ambassador to Panama, endorsed this perspective, highlighting that Panama continues to count on Washington as its main commercial partner and largest investor in terms of foreign direct investment (FDI) in the local economy.

The envoy made the declarations in a note published by the Adrienne Arsht Latin America Center (AALAC) based on excerpts of his participation at the Atlantic Council’s U.S.–Panama Economic Security Working Group event.

“The Panama Canal, ports, banking, and regional connectivity provide U.S. firms and their Panamanian counterparts unique competitive advantages as trusted nodes in global supply chains,” Kevin Marino Cabrera said.

The ambassador explained that Panama has several national assets that strategically position it to take advantage of the diversification of supply chains, consolidating the competitive advantages of Panama in multimodal logistics and international commerce.

The strength of its logistics infrastructure was mentioned by Marino Cabrera. In this regard, he explained that Panama’s geographical location makes it a natural junction point between the Atlantic and Pacific oceans through the Panama Canal.

The Americas’ Financial Hub

He also stated that Panama’s banking services and financial ecosystem have earned the country’s reputation as one of the most open and efficient in Latin America, making it the financial hub of the Americas and reinforcing the competitive advantages of Panama in finance and trade facilitation.

“In this regard, the embassy welcomes Panama’s efforts to attract new investments to grow the economy, boost innovation, and create quality jobs for Panamanians,” Cabrera added.

Kevin Marino Cabrera’s intervention was part of the activities developed by the Adrienne Arsht Latin America Center, which has fostered increased dialogue with regional governments on economic and security issues.

What Does AALAC Do?

The Adrienne Arsht Latin America Center (AALAC) is the Atlantic Council’s project dedicated to promoting political, economic, and security cooperation between the United States and Latin American nations. Through research reports, leader forums, and strategic partnerships, AALAC works to advance democracy, prosperity, and regional stability through integrated economic relations.

Within this framework, AALAC promotes working groups such as the U.S.–Panama Economic Security Working Group mentioned above, dedicated to the following:

• Supply chain security
• Resilience in infrastructure
• Transparency standards in supply chains
• Cybersecurity and digital trade platforms

Kevin Marino Cabrera also pointed out that Panama’s diplomatic position allows it to facilitate conversations between nations. The diplomat cited Panama’s hosting of events such as the CAF International Economic Forum for Latin America and the Caribbean as an example of the role it plays regionally.

Panama’s Economic Importance

In his opinion, Panama’s trade position complements its logistics capacity, leading the country to consolidate itself as a regional trade and investment platform, further expanding the competitive advantages of Panama in global commerce.

“I think Panama’s unique ability to convene the region and its commitment to dialogue enhance its economic and logistical advantages by providing diplomatic credibility as a convening platform,” Kevin Marino Cabrera said.

Finally, Cabrera Marino highlighted the importance of increasing security and control standards in Panama’s strategic infrastructure.

The ambassador called for greater transparency in ports, logistics platforms, financial transactions, and cybersecurity.

He went on to state, “I remind you that technological competition, supply chain interruptions, cybersecurity breaches, and geopolitical tensions are challenges that have shaken global commerce in recent years.”

Digitalization of international trade is advancing, so secure logistics hubs will become even more valuable as businesses seek alternatives to concentrate their supply chains.

With that in mind, Panama has redoubled its investments in updating its logistics infrastructure and compliance with international standards. These factors make Panama attractive to multinational companies looking for regional hubs or distribution centers in the continent.

Panama Has Big Competitive Advantages in the Trade War

In his speech, Kevin Marino Cabrera mentioned specific projects that Panama is developing to modernize its logistics and financial hub. They include:

• Modernization and expansion plans for the ports
• Expansion of airport infrastructure
• Deployment of digital platforms for foreign trade and customs
• Development of smart logistics corridors and multimodal transportation

At the geographic level, the entrance to the Panama Canal ranks first in Panama’s trade advantages. The waterway is one of the busiest in the world in terms of cargo transit and is strategically located, joining two oceans.

In addition to the Canal, Panama has other competitive advantages in logistics and transportation that integrate its intermodal system:

• Ports with direct access to deep waters on both oceans
• The railway that crosses the isthmus
• Free trade zones and logistics parks
• International banking network and financial services

He also cited Tocumen International Airport as the largest airport hub in Latin America regarding passenger traffic and connections between North America, South America, and the Caribbean.

That multimodal connectivity in maritime, air, rail, and digital infrastructure is another of Panama’s key strengths.

China and the Panama Canal: Economic Security

Panama is making these announcements during a global race for supply chain control and trade routes exacerbated by the COVID-19 pandemic.

Countries located in strategic geographic positions with multimodal connectivity and infrastructure capacity are positioning themselves as privileged nodes in diversified supply chains.

Panama has readjusted its relationship with Washington after having felt the pressure of Trump’s accusations of a lack of controls and transparency in Panamanian ports and finance in favor of Chinese interests.

Despite previous warnings issued by Washington regarding the presence of Chinese companies such as Huawei in the Panamanian market, the interest in cooperating with Panama is now focused on investment, innovation, and diversifying economic security.

For Kevin Marino Cabrera, Panama plays a vital role in guaranteeing supply chain security between the two countries.

Panama’s alliances with China undoubtedly positioned it within President Trump’s foreign policy priorities. However, currently, the country seeks to unify its views with the United States and diversify its partnerships to continue positioning itself as a regional powerhouse.

Arizona is earning its nickname “Chip Corridor” as the epicenter of a new semiconductor boom across the United States. Announced expansions, investments, and job projections have flooded the headlines of Arizona business news since 2020.

But this is not a playbook for Guatemala to start making chips. It’s a playbook for how Guatemala can enter through Arizona’s door by aligning to standards, training technical talent, and building credibility as suppliers in the portions of the value chain where global buyers are already sourcing today.

Opportunities for Guatemala Start with Arizona

Arizona represents a realistic opportunity for Guatemala to participate in the semiconductor supply chain. The secret? Don’t try to announce a mega-project. Focus on compliance, training, and the kind of execution buyers take for granted.

How is Arizona Becoming a Semiconductor Cluster?

The semiconductor corridor is an actual industrial cluster. This means anchor companies and suppliers are clustering near one another around Phoenix, Arizona. The resulting density breeds repeat demand for services, technicians, and suppliers that can demonstrate compliance.

Guatemala does not need to start making “the chip” to break into the semiconductor value chain. As long as Guatemala plays to its strengths in services and support, there are many ways to plug into the growing semiconductor corridor from assembly and packaging to testing, logistics, and technical services.

In Arizona alone, there have been over 60 semiconductor-related expansions since 2020, according to the Arizona Commerce Authority. Industry investors have announced USD 205 billion in total planned investment, with roughly 25,000 total jobs expected to come online.

Semiconductor companies still account for 50.4% of global sales, yet U.S.-based manufacturing has shrunk from 37% in 1990 to approximately 10% in 2022. Arizona’s semiconductor boom and accompanying reshoring policies reflect this shortfall in a semiconductor global market expected to hit USD 701 billion in sales by 2025.

Anchor companies like TSMC (Taiwan Semiconductor Manufacturing Company) and Intel are also attracting ancillary firms, including packaging companies, equipment manufacturers, and materials suppliers.

“There is a ripple effect coming from TSMC.” Stated Wendy Mena, Strategy and Promotion Manager of Invest Guatemala

Ripples create more business, but they also create procurement budgets, certified suppliers, and industry standards that dictate who can participate in the semiconductor supply chain and who can’t.

Compliance is the Barrier to Entry

The excitement around Arizona’s semiconductor cluster is fantastic publicity. The reality of participating in the semiconductor supply chain is dominated not by press releases but by fabs turning on production.

Chip fabrication occupies hundreds of precisely controlled steps, including clean rooms, chemicals, water quality, and even electricity. “Standards” are not political speaking points: they are the literal barrier to entry for any company trying to build a semiconductor fab from scratch.

That’s why the trusted publication Arizona Republic features companies like Amkor Technology, a testing and packaging company. “Packages” are the finishing layer of semiconductor hardware: not every company needs to make wafers, but every company in the semiconductor supply chain must understand traceability, quality control, and industrial operational excellence.

Semiconductor fabrication takes weeks, sometimes months, depending on the process. The environments needed to build chips are some of the most meticulously controlled spaces on earth. That’s why compliance isn’t nice-to-have: security, standardized repeatability, and documentation often matter more than price.

What Matters to Guatemala

Guatemala will not be building semiconductor fabs overnight. If Arizona is the gateway, Guatemala must identify its insertion point into the supply chain and climb the learning curve as quickly as possible. Invest Guatemala suggests two tracks:

• Replicate U.S. technical training models
• Identify where Guatemala can insert into existing value-chain opportunities

Guatemala is not looking to produce semiconductor chips. It is looking to produce technical profiles and fill tasks that the industry is already buying.

Short-Term Entry Points Matter

In the near term, Guatemala should look no further than its own educational ecosystem. By training to global standards that align with industry requirements, there is less guessing. When hires are not trained “for chips” but for process control, quality, equipment maintenance, and automation, Guatemala ups its chances of meeting procurement requirements from day one.

Value chain segments ripe for near-term entry include:

• Packaging
• Assembly
• Testing
• Distribution / Logistics
• Sub-assembly for electronic components

Starting at the assembly or sub-assembly level allows Guatemala to build credibility and standards as a supplemental supplier to the semiconductor supply chain.

“It’s socio-technical, and it cuts across many disciplines. You need a pyramid of technical talent,” states Gabriela M. Bethancourt, National Secretary for Science and Technology (Senacyt), Guatemala

This pyramid starts with operators and extends to maintenance technicians, quality specialists, automation engineers, and data analysts.

Without staffing pyramids that support the semiconductor supply chain, countries will not meaningfully insert themselves into it.

Proof, Not Promises

Proof. That’s what Arizona is going to ask of Guatemala. Megaprojects may win press releases, but they do not win market access. Arizona may be Guatemala’s ticket into the semiconductor supply chain, but that ticket will only be stamped by demonstrating what the market recognizes: standards, provable capacity, and reliable delivery windows. Ask, “What can Guatemala prove it can do right now?”

1. Talent

The first step to entry is integrating existing talent pools AND ensuring Guatemala can competitively close any access gaps.

“We are not starting from zero,” Senacyt clarifies.

That means leveraging existing talent with industry-recognized certifications and the ability to meet employer demand.

Key capabilities include:

• Industry-certified technical skills
• Industry-connected vocational training programs
• Apprenticeships and dual education programs

2. Minimum Viable Standards

The second step is ensuring minimum infrastructure actually meets industry standards.

• Laboratories for metrology and calibration
• Prototyping centers connected to industry partners
• QA assurance and traceability software

These levers convert technical talent into auditable capacity.

3. Logistics Are Product

Finally, prove your operational reliability on a national level. For logistics and service providers, time is your product.

Delivering on time once does not prove you can access a market. Access is proven by consistent on-time deliveries, without renegotiating windows every month. If your country cannot do that, it is immediately devalued in the semiconductor supply chain.

Why This Matters

Countries like Guatemala have an opportunity to integrate into semiconductor supply chains by meeting the needs of global companies looking to diversify their supplier base and friend-shore production. Companies operating in this space face heightened geopolitical risk, creating demand for compliant suppliers with technical capacity.

Other segments ripe for Guatemala include:

• PCB assembly
• Precision metalworking/plastics
• Clean-room garments and materials
• Maintenance, repair, and operations (MRO) services
• Technical writing and regulatory compliance services

Some of these segments require fabs to operate, but they all require ISO-class quality management systems such as ISO 9001, ISO 14001, and IATF 16949.

The lowest-cost labor will not win in semiconductors. Predictability will.

Nobody wants to be Timex if they’re buying Swiss watches. THAT is why Guatemala must focus on certifiable consistency if it wants to enter the semiconductor supply chain.

Plan to Increase the Capacity of the Honduran Port

Honduran President Nasry Asfura announced Monday the plan to invest $100 million into Puerto Cortés with aims to expand the Honduran port facilities and operations to further develop Puerto Cortés into Central America’s logistics hub and trade center servicing the Caribbean basin. The expansion plans come as part of continued efforts to modernize the infrastructure of Honduras.

“We will continue converting rooftops into storage yards and bulk goods docks,” Asfura announced. “In Puerto Cortés, we are going to reduce wait times for vessels that come to load and unload, positioning our port as a logistics hub in Central America.”

Central America’s Trade Gateway Receives Major Investment Announcement

Puerto Cortés, Honduras, plans to increase capacity, improve efficiency, and drive down logistics costs after Honduran president Nasry Asfura announced an investment of $100 million in the port this week.

As part of the plan, the president said the expansion of Puerto Cortés will “directly benefit imports and exports” throughout Honduras, while also attracting international investors seeking stability, transparency, and reliability.

Areas of Investment for Puerto Cortés to Become a Logistics Hub in Central America

Furthermore, Asfura said he wants Puerto Cortés to reach a capacity of up to 1.4 million TEUs by early 2027 as opposed to the 816,000 TEUs the port handles currently. These improvements will allow mega-container vessels between 10,000 and 13,000 TEUs to arrive at the Honduran port.

Investments will also focus on:

• Allowing the port to handle more containerized cargo
• Open the port for large container vessels and deep draft ships
• Cutting down on wait times for arriving vessels
• Converting idle rooftops to bulk cargo yards and storage facilities
• Digitization and automation technology

Attracting Foreign Investment to Become a Logistics Hub in Central America

Improving port infrastructure at Puerto Cortés will decrease logistics costs for importers and exporters in Honduras while improving service reliability and overall trade competitiveness for the country.

Operadora Portuaria Centroamericana (OPC) and parent company International Container Terminal Services, Inc. (ICTSI) – a global port operator based out of Manila, Philippines – have both expressed their support for this initiative, showing that foreign investors have faith in Honduras.

Opportunities in Honduras’s Undeveloped Spaces

In addition to announcing the investment into Honduras and Puerto Cortés’ development, Nasry Asfura made a tour of the port on Monday, where he signaled “underutilized rooftops” that will be transformed into storage yards and bulk cargo areas.

Areas of the port that are going to be developed include:

• Cargo yards
• Storage facilities
• Operational spaces

Ports are a critical part of any country’s economy. They allow for trade to flow in and out and can act as a catalyst for foreign direct investment (FDI). As FDI comes into Honduras, more companies will develop around Puerto Cortés, providing jobs and economic support for Honduras.

According to President Asfura, companies currently situated in Honduras’ ample trade corridor of Naco, department of Cortés, are looking to invest up to $1.7 billion, creating approximately 8,000 to 10,000 new jobs.

Economic Impact Puerto Cortés Expansion Plans Will Have on Honduras

As these companies develop, they will not only be providing jobs at their facilities but will be creating more jobs indirectly through the need for transportation, warehousing, and other logistics service providers.

The increased capacity at Puerto Cortés will help facilitate these exports, allowing Honduras to become even more competitive in the realm of  global trade.

“We’re going to increase capacity so that we can handle more of our own imports and exports as well as those of other countries that require services from our port,” Asfura continued.

Investing without Taxing the People of Honduras

Asfura went on to say that Honduras has enough money from organizations and private banks, but has not executed on it. These funds include, but are not limited to, international financing from multilateral banks such as the World Bank.

President Nasry Asfura Did NOT Say This about Puerto Cortés Becoming a Logistics Hub.

“The truth is, we have those funds. We have unused resources from private banking institutions, Europe-based organizations, and multilateral agencies. If we manage them correctly, we can invest in our nation’s development without raising anyone’s taxes or adding to the debt of our state,” Asfura tweeted.

Private capital and support from the international community will be key to developing the strategic ports of Honduras and allowing the country expand its footprint on the global stage.

Reducing Red Tape and the Size of Honduras Government

Monday’s announcement by the President of Honduras did not stop at talking about investments in the port of Puerto Cortés. Asfura ended his briefing, stating he will be closing, extinguishing, or merging between 20 and 23 decentralized institutions of the Honduran government.

The reasons for this move are to increase the government’s efficiency and allow more funds to be directed towards infrastructure projects like the expansion of Puerto Cortés. While there was no breakdown on which entities will be closed, merged, or extinguished.

Reducing the government’s size should allow Honduras to be more attractive to international investors.

Puerto Cortés is Honduras’ primary maritime trade gateway connecting it to both the Atlantic and Caribbean basins. As such, the president of Honduras says improvements to the port will allow it to be competitive with regard to cargo volume, technology, and port operations.

“We will turn Puerto Cortés into a benchmark port in Central America at the service of production and exportation,” President Nasry Asfura tweeted. “With this modernization, we will be able to position Honduras as a regional logistics center.”

Conclusion

Investments into the development of Honduras and Puerto Cortés are the first steps towards becoming a logistics hub in Central America. By improving the country’s primary port and increasing capacity for imports and exports, Honduras will be able to further develop its economy and create thousands of jobs for its people.