Uruguay is a success story that stands out in Latin America. Supported by solid democratic institutions, very low levels of corruption, and sustained investment in human capital and education, it has successfully pivoted from a traditionally agro-export-based economy to a modern and more diversified knowledge-based economy with a strong emphasis on technology and innovation. Today, Uruguay is a regional hub for software development and information technology that attracts companies, talent, and investment from around the world.

Democratic stability and institutions

The Republic of Uruguay is an independent, democratic, decentralized, and presidential state with long-standing political stability, internationally recognized as such. The Economist ranks Uruguay as the most fully democratic country in South America, placing it 15th in the world among 167 countries. In Transparency International’s Corruption Perceptions Index, Uruguay is the second most transparent country in the Americas, outperforming the United States and only surpassed by Canada.

This level of stability is a necessary, if not sufficient, condition for the long-term investment and innovation required to build a software industry.

Structure and composition of the economy

Uruguay’s economy is based on a solid combination of natural resources, human capital, and a diversified productive structure. The most important traditional productive sectors have been agriculture and livestock, which together account for the bulk of the country’s exports. Cultivated crops include rice, wheat, corn, soybeans, and sugarcane. Uruguay is also one of the world’s leading exporters of beef, as well as of milk and wool from sheep farming. Industrially, the most important sectors have been related to meat processing, dairy, textiles, paper and cardboard, fertilizers, cement, and hydrocarbons refining.

Over the years, the country has been able to diversify its productive matrix. Although primary and industrial sectors remain important, today services and high-value industries account for a growing share of the country’s economic output.

The emergence of the software and technology sector

In recent decades, Uruguay has been able to position itself in new productive sectors, with information technology and software development being the most important. Over the past decade, it has been a regional leader in the export of software and technology services, expanding into more than 50 international markets.

Uruguay’s software exports are the largest in the region, outperforming other larger economies, such as Brazil (six times larger) and outpacing the exports of Argentina and Chile three to one. This performance has attracted international attention, with Uruguay being named as the leading software exporter in Latin America in a Latin Trade publication, which has helped further consolidate the country’s position  as a regional hub for software development and information technology, with clients across the Americas and beyond.

Education, talent, and digital infrastructure

Human capital is the most important driver of Uruguay’s success in the software and technology sectors. In total, 20% of university students are in technology-related careers, which helps to guarantee the constant supply of qualified professionals in a context in which IT unemployment is close to zero, and the demand for talent is high and stable.

In turn, this talent pool is supported by one of the best digital infrastructures in the world. Uruguay is one of the very few countries that has a fully digital telecommunications network, and it is also the country that has always ranked first in Latin America in terms of access to and connectivity on the internet. All of these elements together create the ideal environment for software development, nearshoring, and the delivery of services remotely.

Digital inclusion and long-term vision

Uruguay’s drive towards technology and innovation has also been marked by a policy of long-term vision and investment. In this sense, Uruguay is internationally recognized for its plan of digital inclusion, implemented under the Plan Ceibal, which put a laptop in the hands of every school-age child. In fact, Uruguay was the first country in the world to completely implement the One Laptop per Child program, a process that was even applauded by the founder of the initiative, Nicholas Negroponte.

This long-term vision, which dates back to 1968 when Uruguay began to implement computer science careers only two years after MIT, has matured in recent decades in the international arena with a number of success stories, such as dLocal, the country’s first technology unicorn, with a valuation of USD 5 billion, present and operating in markets around the world.

Export platform

Today, Uruguay has more than 1,000 software companies and close to USD 1 billion in software exports annually, most of them destined for the United States. On a per-capita basis, Uruguay is the leader in Latin America in exports of software and IT services, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

Uruguayan companies provide the most diverse solutions: financial technology, logistics platforms, agribusiness software, e-government, e-learning systems, entertainment technologies, automation of processes for all kinds of industries, among many others.

Multinationals, nearshoring and alliances

Global leaders in technology, such as Tata Consultancy Services (TCS), have chosen Uruguay as a nearshoring platform to house their regional operations. Multinational companies, such as IBM and Microsoft, have also established a presence in Uruguay and employ several thousand professionals. In turn, local companies have formed alliances with global players such as Oracle and Adobe, and are integrating Uruguay into the innovation ecosystems of these giants.

These facts further consolidate Uruguay as a regional hub for software development and information technology and enable the country to offer globally competitive conditions for cost, talent availability, and operational stability.

Incentives and technology parks

The Uruguayan government has also played a key role, offering tax incentives and a regulatory framework oriented to promote and support the IT sector. Software exports are exempt from both corporate income tax and value-added tax. Technology parks that operate under special regimes also have a complete tax exemption regime.

Uruguay’s flagship business and technology park is Zonamerica, a benchmark institution in the region, with hundreds of companies and thousands of professionals in operation. Zonamerica stands out for its infrastructure and innovation ecosystem, and is currently the epicenter of software exports and other high-value services.

Globally competitive talent

The most important competitive advantage, in the final analysis, is Uruguay’s highly educated and digitally literate workforce, with a reputation for its technical knowledge, adaptability, and capacity for innovation. IT professionals in Uruguay can respond flexibly and efficiently to global demands, delivering high-value-added solutions and positioning the country as a trusted partner in the global digital economy.

Colombia, as a strategic hub for data centers and artificial intelligence, is no longer a promise for the future but a present reality with already operating world-class infrastructure, international certifications, and a rapidly maturing digital economy. As demand for sovereign cloud services, high-availability data centers, and AI-ready infrastructure accelerates throughout Latin America, Colombia is fast becoming the region’s natural epicenter.

The latest milestone in Colombia’s ascent was achieved just this past December 2025 by global sovereign technology infrastructure provider, Ilkari. Ilkari recently became the first operator in Colombia to receive ICREA Level IV certification for its data center in the Tocancipá Free Trade Zone. This distinction puts Colombia on a short list of countries that can now support mission-critical workloads and artificial intelligence according to the highest global standards.

Colombia as a strategic hub for data centers and Artificial Intelligence: Why it matters

Colombia is rising as a strategic hub for data centers and artificial intelligence deployment for several reasons, including technology infrastructure readiness, stable regulatory frameworks, geographic advantages, and available talent. The ICREA Level IV certification proves that Colombia’s data center infrastructure offers sufficient capacity for continuous operations, extreme resilience, and sustained performance in adverse events.

These features make it particularly attractive for financial services, healthcare, and government platforms, as well as hyperscale cloud computing and critical AI workloads. As international enterprises look for new and trustworthy places to host sensitive digital workloads, Colombia is solidifying itself as a credible and competitive alternative to the most established data center markets.

ICREA Level IV: A milestone for Colombia’s data center and critical infrastructure

The International Computer Room Experts Association (ICREA) uses a set of stringent metrics to assess data centers, covering areas from advanced engineering to operational maturity and emergency preparedness. At its highest, Level IV, ICREA certification confirms full redundancy for four key areas: power, cooling, connectivity, and security. This highest level of certification confirms that a data center’s equipment is fully redundant, ensuring that a single failure will not result in downtime.

Colombia is the latest nation to achieve Level IV, with Ilkari’s facility in Tocancipá earning the highest ICREA Certification globally and paving the way for new use cases in Artificial Intelligence (AI). “Artificial intelligence is a workhorse of this new internet, and resilient infrastructure is a prerequisite for this technology to grow,” Ilkari CEO Shane Paterson said. “Countries that can’t give that promise of continuity will be left behind.”

Colombia as a strategic hub for data centers and AI: Infrastructure fit for the future

Ilkari’s facility in Tocancipá, Colombia, is particularly well-suited to consolidate the country as a strategic hub for data centers and AI. The data center hosts 308 active racks of IT equipment with expansion underway to reach 548. It offers a total installed power capacity of 3.6 MW, expandable to 7 MW. On the non-technical side, it features 800 square meters of technical space, with room to grow to 1,500 square meters as the company’s modular architecture allows.

Critical data center resources like energy and cooling are typically among the most intensive and expensive in AI deployments. Flexible architectures like the one Ilkari is building out in Colombia with its Tocancipá data center allow these data centers to scale to meet demand with unrivaled density.

Tocancipá: A geostrategically optimal position in Colombia

The Tocancipá Free Trade Zone further fortifies Colombia as a strategic hub for data centers and AI. Proximity to the central economic and connectivity hub of Bogotá, along with investment incentives, logistical efficiencies, and expedited import processes for specialized hardware and equipment, are all important characteristics that make this location a perfect fit to operate high-availability facilities.

Hosting data inside Colombian territory also benefits businesses around data sovereignty, regulatory compliance, cybersecurity, and low-latency operations. In the case of artificial intelligence and high-performance computing, this value-add is even more important.

Colombia as a strategic hub for data centers and AI: Infrastructure, talent, and skills

A key reason Colombia is a strategic hub for data centers and AI is the rare combination of world-class infrastructure and specialized talent. Infrastructure, as is the case with technology certifications like ICREA, is only half the story, with operational maturity and people being decisive elements.

Ilkari in Colombia currently has a team of 32 specialized professionals backed up by global teams and is operating its infrastructure with a multidisciplinary engineering staff that directly manages the data center, offering a higher degree of direct control and reliability over heavily outsourced operations. Colombia is also the location of Ilkari’s Global Technical Operations Center, or GTOC, from which infrastructure operations in other regions are monitored, acting as a regional knowledge center and accelerating the growth of local talent.

Colombia as a strategic hub for data centers and AI: The future is artificial intelligence

AI, in particular, is a foundational element in the evolution of Colombia as a strategic hub for data centers and AI. Artificial intelligence workloads, specifically those tied to machine learning and neural networks, are well-known for requiring high energy density, advanced cooling, and particularly GPU-based servers. Ilkari already has GPU servers installed and operating in its Colombian facility, enabling the development of AI workloads for local customers.

Future phases will expand the data center’s power capacity in alignment with technology development to continue increasing energy density. R&D and validation will also be supported by Ilkari’s innovation lab in Málaga, Spain, where new architectures are prototyped and developed for deployment to meet specific requirements of clients.

Colombia as a strategic hub for data centers: A growing sector

Colombia’s data center market dynamics are a key part of the story. This is a market that, according to market research, will grow from USD 81 million in 2024 to over USD 300 million in 2030, with compound annual growth of nearly 28% over this period. This growth will be led by accelerating cloud adoption, artificial intelligence development, and national digital transformation strategies.

Ilkari aims to grow along with the sector, playing a supporting role for not only end users but also for system integrators and other partners with whom the company can adapt its services to the requirements of an ever-changing market.

Colombia as a strategic hub for data centers: Beyond ICREA

Level IV is only the most recent of certifications acquired by Ilkari to reinforce its presence as a benchmark for Colombia and Latin America as a strategic hub for data centers and mission-critical workloads. In this regard, Ilkari has recently earned certifications like DCOS Maturity Level 4, TIA-942-C Rated 3, and SS 564 Green Data Centre as part of its commitment to world-class, sustainable, and efficient infrastructure.

Colombia is a digital export hub for Latin America

Colombia is a strategic hub for data centers, critical infrastructure, and Artificial Intelligence, which are key trends in this industry. With world-class and sovereign technology infrastructure, skilled talent, and a rapidly accelerating investment cycle, Colombia as a strategic hub for data centers and artificial intelligence is no longer a slogan for the future but a present and growing reality that Colombia is fast defining as part of its own economic narrative.

Brazilian Foreign Direct Investment Hits BRL 84.1 Billion in January–November 2025, Best in 11 Years

Brazil attracted BRL 84.1 billion in foreign direct investment (FDI) between January and November 2025, the best result in more than a decade. As per data published on Friday by the Ministry of Industry and Foreign Trade, the capital inflows of this year put the country on track to end 2025 with a new record if December follows the trend.

The Brazilian government stated that this result marks a new cycle of foreign investor confidence and places the country among the most favored destinations for productive capital in emerging markets. After several years of low inflows, the recovery of foreign direct investment in Brazil is a vote of confidence in the country’s macroeconomic outlook and institutional framework.

Record Performance in 11 Years

In 2025, Brazil already records the largest volume of foreign direct investment in more than ten years, according to official data from the Ministry of Industry and Foreign Trade. The authorities also pointed out that, if the capital inflows of December match the data until then, Brazil can even overtake the all-time record set in 2011.

This fact reinforces Brazil’s relevance to global investment flows, especially in a period when multinational companies are reviewing their supply chains, diversifying their production locations, and looking for large domestic markets with long-term growth potential. The recovery of Brazilian foreign direct investment also mirrors global trends in nearshoring and diversification in the Americas.

Brazilian Foreign Direct Investment Grew to BRL 84.1 Billion in 11 Months

Brazil received BRL 84.1 billion – equivalent to approximately USD 15.2 billion – in foreign direct investment between January and November 2025. As per the official press release by the ministry, this would be the best annual result since 2014, when FDI flows ended a previous investment boom in the country.

The government also noted that, if the current level of capital inflows is maintained in December, Brazil would overtake the historical record of 2011 when FDI reached BRL 102.4 billion, or USD 18.5 billion at the time. This number was long used by policymakers as a reference mark, and approaching it again shows a significant recovery in sentiment.

Historical Comparison of Foreign Direct Investment in Brazil

For context, below is a brief historical comparison of foreign direct investment in Brazil over the last decade. In this time, the country has seen significant ups and downs in FDI, mainly driven by external and internal shocks that often present as recurring cycles.

• 2011: BRL 102.4 billion in FDI (all-time high)
• 2014: Last significant inflow before an extended downturn
• 2025 (Jan.–Nov. ): BRL 84.1 billion (provisional data)

The data above illustrates the size of the turnaround taking place in 2025, and how the current Brazilian foreign direct investment levels are close to matching those experienced during the boom years. The ongoing return of FDI is perceived as recognition of Brazil’s long-term fundamentals.

Government Comments on the Surge

Vice President and Minister of Industry and Trade, Geraldo Alckmin, said the data was “excellent news” for the Brazilian economy. He also noted that President Luiz Inácio Lula da Silva had previously announced that 2025 would be “the year of the harvest” after a series of reforms and policies implemented in prior years.

According to Alckmin, the growth in foreign investment is the result of a more business-friendly environment with more legal certainty, which has fostered renewed international confidence in Brazil’s economic policy. He further added that foreign capital was important not only for funding growth but also for bringing technology, improving productivity, and generating higher-quality employment.

Main Drivers of Investor Confidence in Brazil

The minister pointed to a few initiatives that have been particularly important for making Brazil more attractive to foreign investors. In this line, he highlighted the Nova Indústria Brasil program, which aims to modernize and upgrade the country’s industrial sector, focusing on innovation, sustainability, and higher-value-added production.

In this sense, an important change was the recently approved tax reform by the National Congress, which aims to simplify and streamline Brazil’s notoriously complex tax system while reducing distortions and increasing transparency. The reform is expected to increase predictability and lower compliance costs for companies. It addressed one of the foreign investors’ most long-standing concerns.

In short, government officials claim that these initiatives and a handful of others have eased regulatory uncertainty and given Brazil more institutional credibility as a stable and reliable market for long-term capital. In turn, this contributed to strengthening Brazilian foreign direct investment.

Sectors and Medium-Term Prospects

Brazilian foreign direct investment is distributed across a variety of sectors, including manufacturing, agribusiness, energy, infrastructure, logistics, and information technology. In this way, its large consumer market, natural resources, and renewed emphasis on renewable energy have made it particularly appealing for investors looking for both size and sustainability.

In terms of medium-term prospects, government officials anticipate further acceleration in 2026 in the wake of infrastructure concessions, public–private partnerships, and industrial development linked to global decarbonization. If the reform agenda progresses and macroeconomic stability is maintained, Brazil should continue to be one of the most favored destinations for FDI in Latin America.

In that perspective, the robust numbers for 2025 are not expected to be a one-off phenomenon but rather the basis for a new cycle of sustained international investment and economic modernization in Brazil.

Project Overview and Key Details

Location: San Salvador metropolitan area and San Óscar Arnulfo Romero International Airport, El Salvador

Development Name: AirCity

Developer: Aristos Inmobiliaria

Estimated Value: US$250 million

Area: 532,000 square meters

Infrastructure Highlights: Airport free trade zone in El Salvador, logistics park, aviation facilities, multimodal connectivity

Key Investors: Aristos Inmobiliaria (Grupo Aristos)

Status: Groundbreaking announced in December 2025; construction to begin in 2026, with initial phases operational in 2027

Investment Scope and Development Phases

AirCity will be located on an area of 532,000 square meters within El Salvador International Airport, San Óscar Arnulfo Romero. The investment in the airport free trade zone in El Salvador will total US$250 million, and the developer has proposed multiple phases to increase scalability and allow tenants to come online while future expansions are in process.

Government Support and Strategic Vision

Senior government officials and President Nayib Bukele attended the groundbreaking ceremony in the last days of December 2025. “AirCity is an example of the type of quality investment that will turn El Salvador into a regional logistics, commercial, and innovation hub,” Escobar, the CEO of Aristos Inmobiliaria, said in a press release.

Free Trade Zone Framework and Investor Incentives

“This development is a real-time example of the confidence that we have in the future of the Salvadoran economy and its potential to generate the highest quality employment for our people,” Escobar continued. The AirCity project will span an area of 532,000 square meters and operate as an airport free trade zone under the framework of El Salvador’s Free Trade Zone Law. The project will provide an array of incentives to foreign investors, including tax breaks, accelerated customs procedures, and a predictable regulatory environment.

A First-of-Its-Kind Development in Central America

AirCity is being marketed as the first airport free trade zone in El Salvador and the Central American isthmus, which places it in a novel category of real estate developments. The space in which AirCity will be built has direct connectivity to air cargo infrastructure, high-frequency regional and international flight networks, and an expanding logistics and industrial services ecosystem.

Regional and International Comparisons

The incorporation of aviation-related industrial real estate within El Salvador marks the country’s ascendance in this specialized market. The U.S. has a significant lead in airport free trade zones, with substantial developments in states like California, Texas, and Florida. Mexico has been rapidly developing this sector with new projects like Mexipark Logistics City, with two future airport logistics parks planned for Guadalajara and Tijuana, and an established presence with Aeropuerto Industrial Rosarito. In Central America, Panama is a close competitor, with ongoing construction of parks such as Logistica Tocumen and Aerofibra Panamá within its international airport.

Specialized Aviation Infrastructure and Operations

AirCity developers have also emphasized that tenants will be able to leverage the availability of specialized aviation infrastructure for facilities and operations. An on-site taxiway that links directly with the runway will give aircraft access to hangars or logistics facilities without operational delays. Large aircraft operating at El Salvador International Airport will therefore be able to drive or taxi directly from the runway to a hangar or logistics facility without operational interruptions. This flexibility is especially valuable for aviation maintenance, repair, and overhaul (MRO) operations and fast-moving cargo handling.

Multimodal Platform and Logistics Integration

The development will also have a platform of over 124,000 square meters on which aircraft can park, remain overnight, or stage prior to commencing maintenance or logistics operations. Warehouse, hangar, and support facilities are being designed to international specifications. When completed, the AirCity megaproject will combine airside and landside operations to function as a true multimodal platform and will connect logistics services with digital trade infrastructure, road transport networks, and e-commerce ecosystems.

Construction Timeline and Presidential Remarks

AirCity is located about 40 kilometers south of San Salvador, and building construction is set to start in 2026 with early phases expected to be operational by 2027. “The government is building a country that’s pro-business, pro-investment, and pro-technology,” President Bukele said on Twitter, commenting on the start of construction at AirCity. “Projects like these are what El Salvador needs, and we’re going to keep working for all Salvadorans and to transform our country, which is possible because all the sectors are joining forces.”

Job Creation and Workforce Development

The first phase of AirCity is expected to create over 500 direct jobs and 1,000 indirect jobs, and the Aristos Inmobiliaria website says that “upon full operation, we expect to generate approximately 5,000 direct jobs and 10,000 indirect jobs, especially in aeronautical maintenance and logistics, engineering, and other specialized technical services.” Aeronautical maintenance has significant long-term employment potential. The sector is rapidly growing, but demand for certified technicians, inspectors, maintenance engineers, and other specialists has been outstripping supply, creating a major opportunity for training programs and higher education across Latin America.

Impact on Airport Operations and National Economy

Direct employment at El Salvador International Airport is also going to increase significantly. “This is not only a point of origin and destination (POD); it is already a connected airport with great infrastructure in logistics, cargo, air and ocean connectivity and having nearby companies that complement the airport services in which we specialize and have always been distinguished,” Juan Carlos Schaff, head of aeronautical and industrial park development at Aristos, was quoted as saying. “The impact that this [AirCity] project will have will be very important to increase jobs, not only in the airport but also throughout the country.”

El Salvador International Airport as an MRO Hub

El Salvador International Airport, sometimes called “Monseñor Oscar Arnulfo Romero International Airport,” is currently a focus point for MRO businesses. The airport connects San Salvador to central, south, and southeast Asia and operates as a focus city for Avianca and Volaris El Salvador, which has its hub there. A maintenance, repair, and overhaul (MRO) specialist, MRO Holdings, also has an operations facility on the western side of El Salvador International Airport that is the largest aeronautical maintenance facility in Latin America.

Strategic Location and Nearshoring Potential

The airport’s location is also a major selling point. Passengers can fly from San Salvador to southern destinations in the U.S. in under three hours, and flights to destinations in both North and South America are efficient, making it an attractive nearshoring option for companies. AirCity appears to be a major opportunity for real estate developers, multinational companies, and investors in many different industries.

Real Wages, Working Hours, Benefits, and Labor Conditions in Mexico vs. The United States, Spain, and Other OECD Countries

Maquiladora work is an economic engine behind global manufacturing supply chains. Multinational firms manufacture products at scale and at low enough costs to satisfy investors and shareholders worldwide. Wages, working hours, and labor protections for maquila operators, however, differ from country to country in significant and consequential ways. This brief guide compares and explains how much maquila operators are paid, how many hours they work, and why there is a structural wage gap between Mexico and developed economies today.

Mexico’s National Institute of Statistics and Geography (INEGI), the OECD, and international labor agencies all show maquila operators in Mexico earn far less, work more hours, and have fewer protections than in the U.S. or Europe. What Is a Maquila Operator?

A maquila operator is a factory worker who performs repetitive tasks on a production line or within export processing facilities. The work is common to the following industrial sectors:

• Automotive manufacturing
• Electronics
• Medical devices
• Textile and garment manufacturing
• Auto parts and components

Typical duties include operating equipment, assembling parts, visual inspection of components, packaging of finished products, and performing basic quality control and assurance checks. Maquila work is not considered highly skilled. Labor force participation rates are high, but there is a structural difference in wages between skilled and unskilled labor, and this divide has an outsized impact on maquiladoras in Mexico.

How Much Does a Maquila Operator in Mexico Earn in 2025?

The average maquila operator in Mexico in 2025 makes between:

• MXN $7,500 and $11,000 per month, depending on the region and industry
• MXN $42 to $65 estimated hourly pay
• 48-hour work week
• Overtime (night or rotating shifts) is common.

INEGI’s publicly available data also shows that over 60% of maquila workers are still making one to two minimum wages, even within top export-driven industries like automotive and electronics. After decades of productivity gains and export record-breaking years, wages in Mexican maquiladoras have not kept pace with international averages.

Mexico vs. OECD Countries International Comparison

The United States

• USD $2,800 to $3,800 per month
• USD $16–22 per hour
• 40-hour standard work week
• Access to employer-sponsored health insurance, paid vacation, paid overtime, and legal protections against unsafe working conditions

Labor unions in the U.S. have less of a presence within export-oriented industries than in Spain, but manufacturing operators often do the same work as in Mexico for many more dollars.

Spain

• EUR €1,400–€1,800 per month
• EUR €9–12 per hour
• 40-hour legal work week
• Production work is often protected by strong collective bargaining agreements with a robust union presence and extensive worker protections under EU labor standards.

Labor standards enforced by the EU and the Spanish state, such as working hour caps, paid leave, sick time, and severance, often result in overall lower wages but significantly better social and health outcomes for workers.

OECD Average

• USD $15–20 per industrial hour worked
• Shorter working hours and a higher level of automation in the most advanced manufacturing nations
• Lower labor turnover rates result in less precarious working conditions and better job stability

As an important global manufacturing hub, Mexico is among the lowest-paid industrial labor markets within the OECD. The low-cost labor environment, which has attracted enormous foreign investment over the past several decades, has made it difficult for wages in maquiladoras in Mexico to improve significantly.

Working Hours and Conditions

In Mexico’s maquila plants:

• Shifts can last from 8 to 12 hours or more.
• Night work and rotating schedules are common.
• Production rhythms can be very intense, especially as export deadlines approach.
• Worker turnover can be high, and there is significant physical demand on workers.

OECD countries enforce strict limits on overtime and short daily work hours, and mandate that employers respect ergonomic standards and safe working conditions. These fundamental differences in working conditions not only lead to higher wages in other countries but also to better long-term health for workers.

Benefits and Social Protections: Mexico and the OECD

In Mexico

• Mandatory IMSS (Social Security) enrollment, with limited benefits and coverage
• Legally required vacation days are minimal, and most workers are not provided with any vacation at all
• Productivity and results-based bonuses are not mandated or guaranteed
• Unions are not strong across the board, and in some export plants, they have very little bargaining power

In OECD Countries

• Health insurance, often covering the whole family, is standard and legally mandated
• Paid parental and sick leave are often provided.
• Collective bargaining is strong, and legal protections exist against arbitrary dismissal and other unfair labor practices.

It is not only wages that matter, but also the overall quality of employment that maquiladoras in Mexico offer compared to other developed countries.

Why Is There a Wage Gap?

Labor economists point out four major structural factors behind the sustained wage gap:

1. An economic development model built around low labor costs to attract foreign investment
2. Weak and fragmented union representation
3. Competition among developing countries for international manufacturing contracts
4. Less strict enforcement of labor law and regulations

Minimum wage increases in recent years have helped to improve the baseline incomes of maquila workers, but have not shifted Mexico’s underlying position within the global manufacturing value chain.

Can Wages Improve for Maquila Operators?

There is a broad consensus among labor experts, economists, and stakeholders that there are steps the Mexican government and private sector can take to improve wages for maquila operators. These include:

• Salary increases linked to productivity increases
• Stronger labor inspections and enforcement
• Real union empowerment
• Transition toward higher value-added manufacturing

Without significant changes across all areas, maquiladoras in Mexico will continue to be attractive to foreign investors for their low labor costs, not because of their commitment to workers or long-term income mobility.

Conclusion

Maquila operators in Mexico are an essential part of global production chains, and yet they earn less than what factory workers make in the United States, Spain, and other OECD countries. The gap is not the result of worker effort or skill level, but is the product of economic and regulatory choices. So long as this status quo remains unchanged, Mexico’s maquila sector will continue to focus on cost-driven competitiveness rather than shared prosperity for the workers who keep factories operational.

New Foreign Investment Signals Sector Growth

The Paraguayan auto parts segment is poised for growth with new investment from India’s Motherson Group. Paraguay is witnessing a renaissance in the auto parts industry that is taking shape through both Paraguayan and foreign investment. The news that the Indian multinational company Motherson Group is preparing to invest USD 15 million in Paraguay was recently announced. In addition, over the last few years, the auto parts segment has been one of the few industries to steadily expand. The establishment of new companies has not only increased dynamism in the sector but has also contributed to diversification in the maquila sector in Paraguay, highlighting its potential as a competitive destination for high-value manufacturing and export-oriented production.

Export Performance and Industry Composition

The National Council of Export Industries (CNIME) reports that the Paraguayan auto parts sector is represented by 10 companies under the maquila regime, producing various components, including electrical harnesses, leather seats, valve covers, radiator caps, and articulated impact-absorption systems. From January to October 2025, the sector’s exports reached USD 362 million, marking a 55% increase since 2023, said Diego Peyrat, Dispatch Manager of CNIME. Peyrat points out that Paraguay’s auto parts maquilas are still a relatively small portion of the entire industry, which in 2025 had over 400 companies. Nevertheless, the numbers show growth and an increasing presence of these higher-value components in the overall mix of Paraguay’s industry.

Sustained Growth and Positive Outlook

Paraguay’s auto parts sector has experienced remarkable growth over the past three years. “We have recorded spectacular growth in this segment in the last three years. Between the beginning of 2025 and October, this has been one of Paraguay’s biggest years and has already registered exports worth USD 362 million. We are witnessing a very interesting pace of growth. The forecast for 2026 is also very positive, with the sector again likely to break records,” Peyrat said to La Nación/Nación Media.

Motherson Group and the Ripple Effect of Investment

The growing confidence of international investors is reflected in the entry of India’s Motherson Group into the country. Although still little is known about the operation of the Indian company, Peyrat assures that this new investment will have a ripple effect in the Paraguayan industry, attracting new international companies. In this case, it is about the auto parts sector, but there will likely be many other firms that also come to invest in Paraguay in 2026 and beyond. “The first companies to enter saw the potential, and we now have the confidence of other companies from abroad, and I think we will also see that with the auto parts sector,” said Peyrat.

Maquila Projects and Sector Diversification

In 2025, Paraguay approved 22 maquila projects, while another seven are under analysis. These projects are spread out over a number of industries, including clothing manufacturing, furniture assembly, and food production. Companies in clothing manufacturing and services are still the most common, even as there is a clear intent to push more diversity in the types of companies that make up the maquila sector in Paraguay.

Move Toward Higher Value-Added Components

Diversification is one of the main topics in the development of the auto parts sector. As one of the largest by volume produced in the maquila regime in Paraguay, wiring harnesses and electrical parts, in particular, are the most common. Nevertheless, an increasing number of companies are seeking to expand into other, more sophisticated components with higher added value. This strengthens the competitiveness of the sector, increasing its international positioning and contributing to its long-term sustainability.

Employment Growth and Regional Concentration

Motherson’s decision to enter the country is expected to expand that dynamic, allowing Paraguayan companies to occupy larger and more strategic portions of global supply chains, not only making the maquila sector in Paraguay more attractive to foreign investors but also increasing export revenues. By October of 2025, the auto parts sector had registered 7,963 direct jobs. In terms of geographic distribution, 91% of approved maquila companies are concentrated in just four Paraguayan regions: Alto Paraná, Central, the capital, and Amambay. Alto Paraná has by far the largest share, with 47% of all firms, due in part to its logistical advantage of being closest to Brazil, the largest market for Paraguayan exports.

Policy Support and Investment Climate

Employment, regional concentration, diversification, increasing export performance, and international investments are just some of the elements shaping the maquila sector in Paraguay. The strong showing by the auto parts sector is the result of a complex interaction between the government’s strategic approach to generating FDI and the support of private sector companies, both foreign and Paraguayan, seeking to take advantage of Paraguay’s business-friendly environment. Paraguay has, for some time, provided strong incentives for export-oriented production and invested in the infrastructure necessary for industrial companies to set up shop and thrive. The entry of Motherson and the approval of various other maquila projects show that Paraguay has positioned itself as a desirable location for such firms.

A Bright Future for the Auto Parts Sector in Paraguay

Looking ahead, the auto parts sector is expected to continue growing and increase its share of the maquila sector in Paraguay. Diversification remains central, as companies expand into higher-value components and projects are approved across multiple industries. Strategic regional placement supports logistical efficiency and proximity to export markets, while new foreign entrants bring advanced technologies and deeper integration into global supply chains. These factors are set to boost exports, generate employment, and stimulate related industries such as logistics, materials supply, and engineering services.

In short, the maquila sector in Paraguay—particularly the auto parts segment—is undergoing expansion and diversification. Motherson Group’s investment, combined with strong export growth and rising employment, underscores the sector’s growing economic importance. With a solid foundation of incentives, infrastructure, and strategic geography, Paraguay is well-positioned to strengthen its role in global manufacturing and export markets in the years ahead.