Significant challenges and opportunities have marked the transformation of foreign direct investment in Colombia. By the end of 2024, the foreign direct investment (FDI) landscape reflected global economic headwinds, geopolitical tensions, and elevated interest rates. These factors contributed to a notable contraction of 18.32% in FDI inflows, with Colombia receiving USD 9.979 billion compared to USD 12.217 billion in 2023. Despite this downturn, Colombia remains an attractive destination for investors in Latin America, ranking fifth in the region according to the OECD. Emerging opportunities in 2025 and strategic actions are poised to position Colombia as a regional leader in attracting foreign capital.

Resilient Sectors and Emerging Opportunities

While 2024 saw an overall decline in FDI, specific sectors demonstrated remarkable resilience. The mining and energy sector accounted for 71.8% of total investment, amounting to USD 7.143 billion. However, regulatory uncertainty and declining natural gas production impacted investor confidence. With improved regulatory clarity, this sector is expected to regain its appeal. Additionally, emerging industries such as technology, sustainable manufacturing, and strategic minerals for the energy transition present significant growth prospects for the future.

These evolving dynamics heavily influence the transformation of foreign direct investment in Colombia. Ricardo Triana, the Executive Director of the Council of American Enterprises (CEA), emphasized the critical need for legal security, removing bureaucratic barriers, and fostering effective dialogue between the government and the private sector. These measures are indispensable for enhancing Colombia’s attractiveness, especially in the context of nearshoring—a regional trend gaining traction across Latin America.

Nearshoring: A Key Strategy for Growth

Nearshoring represents a unique and transformative opportunity for Colombia. This strategy, which involves relocating operations closer to primary markets such as the United States, positions the country as an ideal destination. Colombia’s strategic location, with access to the Atlantic and Pacific Oceans and its youthful, skilled workforce, makes it a preferred choice for investors. Cities like Bogotá and Medellín are already emerging as leaders in competitive logistics infrastructure, creating favorable conditions for the arrival of new investments.

Technology is another sector with immense potential. International investors are increasingly drawn to Colombia’s tech hubs and burgeoning startup ecosystem, recognizing the country as a rising center of digital innovation in the region. These developments complement the expansion of renewable energy projects and advanced manufacturing initiatives, aligning Colombia with global sustainability goals.

The growing interest in these forward-looking sectors further underscores the transformation of foreign direct investment in Colombia. With the right strategies and infrastructure, the country is well-positioned to leverage these opportunities and achieve long-term economic growth.

Challenges and Strategies for a Competitive Environment

Despite its advantages, Colombia faces significant challenges that could hinder its ability to attract foreign investment. Political and economic uncertainties and excessive bureaucracy continue to deter potential investors. The Colombian government is implementing initiatives to improve infrastructure, strengthen the judicial system, and simplify regulatory processes. These measures are designed not only to increase capital inflows but also to solidify international investor confidence.

Economic projections for 2025 provide further reasons for optimism. Colombia’s GDP is expected to grow between 2.4% and 3%, driven by a recovery in private consumption and increased investment in infrastructure projects. These factors could stimulate significant growth in traditional and emerging sectors, reinforcing the transformation of foreign direct investment in Colombia.

Collaboration between the public and private sectors is essential to sustain this momentum. By working together, these stakeholders can address persistent barriers and ensure Colombia remains competitive globally.

Collaboration and a Sustainable Future

The Council of American Enterprises (CEA) stresses the importance of close collaboration between public and private entities in fostering a favorable investment climate. Ricardo Triana highlighted that regulatory clarity and a renewed focus on innovation are critical to turning challenges into opportunities. Nearshoring, digital transformation, and sustainability initiatives offer a clear pathway to attract high-impact investments.

Moreover, the transformation of foreign direct investment in Colombia depends on creating a balanced approach that leverages the country’s natural resources, strategic location, and emerging industries. By embracing these strengths, Colombia can solidify its position as a regional leader in FDI attraction.

Although 2024 was a challenging year for foreign direct investment in Colombia, the country remains a top choice for investors due to its geographic advantages, abundant natural resources, and high potential emerging sectors. With targeted strategies and enhanced collaboration among key stakeholders, Colombia has the potential to achieve a prosperous and competitive future, becoming a benchmark for foreign investment in Latin America.

Conclusion

The transformation of foreign direct investment in Colombia is a multifaceted journey shaped by resilience, innovation, and strategic planning. By addressing existing challenges and capitalizing on emerging opportunities, Colombia can unlock its full potential as a regional leader in attracting foreign capital. As the country looks ahead to 2025, the foundation for sustained growth and competitiveness is firmly within reach, ensuring a brighter future for domestic and international stakeholders.

According to data from the country’s Investment and Export Promotion Agency (Invest in El Salvador), eight out of ten investors interested in El Salvador during the first nine months of 2024 represented new capital. These figures highlight the growing international interest in exploring opportunities in this Central American nation, driven by governmental strategies and the promotion of key sectors.

Growth in Interest in El Salvador

According to statistics from Invest El Salvador, 161 investment opportunities were generated from January to September 2024. Of these, 80.7% corresponded to new capital, 15.5% were aimed at expanding existing businesses, and 3.7% focused on diversifying production. This landscape reflects significant efforts to attract new projects, positioning El Salvador as an attractive destination for foreign investment.

Companies from countries such as Spain, France, Honduras, Uruguay, Singapore, South Korea, and Japan expressed interest in exploring the country’s competitive advantages. These include tax incentives, improvements in infrastructure, and a favorable regulatory environment in key sectors such as technology, tourism, and manufacturing.

The Diaspora as a Driver of Investment

A notable aspect of the data from Invest in El Salvador is the contribution of the Salvadoran diaspora, particularly in strategic sectors like aeronautics and technology. Between January and September 2024, 72 investment opportunities were channeled through Salvadorans abroad. This phenomenon strengthens the economic ties between the diaspora and their home country and expands El Salvador’s economic diversification.

Within these opportunities, the tourism sector occupied a prominent position, attracting 27.8% of the investments proposed by the diaspora. Infrastructure and construction represented 23.6%, while commerce captured 18.1%. Additionally, 11.1% of these initiatives focused on emerging areas such as Bitcoin, technology, and services.

This focus on diverse sectors demonstrates how Invest in El Salvador is working to attract interest in areas that can offer high-added value, leveraging the diaspora’s experience and resources.

Key Sectors for Investment

Beyond tourism and technology, El Salvador has successfully attracted investment in a wide range of economic sectors. These include agro-industry, logistics, manufacturing, energy, real estate, and healthcare. This comprehensive approach enables the country to diversify its economy and create opportunities across multiple areas.

For instance, the agro-industry has gained prominence due to the growing demand for high-quality agricultural products in international markets. Meanwhile, El Salvador’s strategic location has boosted the logistics sector as a bridge between North and South America and improved port and transportation infrastructure.

The energy sector is also receiving attention thanks to the country’s efforts to implement renewable and sustainable solutions. This reinforces El Salvador’s image as a destination committed to environmental preservation and opens new doors for investors interested in clean energy.

Challenges and Opportunities

Despite the notable interest in these sectors, Invest in El Salvador has not provided details on how many generated opportunities materialized. Specific figures regarding the funds ultimately allocated or the physical progress of the projects have also not been disclosed. This presents a challenge, as the practical realization of investments is crucial for measuring the success of the promoted initiatives.

According to the Central Reserve Bank (BCR), net foreign direct investment (FDI) registered during the first three quarters of 2024 reached $387.44 million. However, this figure represented a 27.2% decrease compared to the same period in 2023. More than $390.9 million of these investment flows came from Europe, with the remainder originating from capital in Central America, the rest of the Americas, Asia, and other countries.

This decline in FDI underscores the need for El Salvador to continue improving its business environment to attract and retain significant investments. Invest in El Salvador plays a fundamental role in this process by strengthening investor confidence and maximizing the impact of the identified projects.

Future Projections

In the medium and long term, El Salvador has a unique opportunity to solidify its position as an attractive destination for international investment. Emerging sectors such as Bitcoin and technology, which have already captured considerable interest, could catalyze sustained growth. At the same time, the Salvadoran diaspora will continue to play a key role, not only as a source of capital but also as a promoter of innovative projects.

Finally, for the country to fully capitalize on these opportunities, Invest in El Salvador must implement mechanisms to track and measure the impact of investments. This will ensure that initiatives are announced and become real economic and social development engines.

In summary, the 2024 report from Invest in El Salvador highlights the growing interest in investing in the country, emphasizing new capital and strategic sectors. Although challenges remain in project realization and increasing FDI, the outlook remains optimistic for the country’s future as a competitive investment destination in the region.

Costa Rica has emerged as a hub for manufacturing in Central America, offering an ideal combination of strategic location, skilled workforce, and business-friendly incentives. Manufacturing in Costa Rica has become attractive for companies across various industries seeking operational efficiency and access to global markets. This blog post explores why Costa Rica is well-suited for manufacturing, the primary industries and companies operating there, the country’s infrastructure, and the incentives available to manufacturers.

Why Choose Costa Rica for Manufacturing?

Costa Rica’s stability, strategic location, and commitment to sustainability make it a prime destination for manufacturers. Here are some of the key factors contributing to its appeal:

Strategic Location

In the heart of the Americas, Costa Rica provides easy access to North and South American markets. Thanks to its well-developed ports, such as Puerto Limon and Caldera, the country is well-positioned to ship goods to Europe and Asia through the Atlantic and Pacific Oceans.

Political and Economic Stability

Costa Rica is known for its stable political environment and robust economy. As one of the most democratic nations in Latin America, it provides businesses with a predictable and secure operating environment.

Commitment to Sustainability

Costa Rica’s focus on environmental sustainability aligns with global trends in responsible manufacturing. Many companies are drawn to the country’s commitment to renewable energy, eco-friendly practices, and biodiversity preservation.

Highly Skilled Workforce

Costa Rica boasts a well-educated and skilled workforce. The country’s emphasis on education, particularly in STEM fields, ensures manufacturers can access talent capable of supporting advanced manufacturing processes.

Key Industries and Major Companies in Costa Rica

Manufacturing in Costa Rica spans several high-value industries, including medical devices, electronics, automotive parts, and food processing. Below, we highlight some of the most prominent sectors:

1. Medical Devices

Costa Rica is a global leader in the production of medical devices. With over 90 medical device companies operating in the country, this sector accounts for a significant portion of Costa Rica’s exports.

Major Players: Companies like Medtronic, Boston Scientific, and Abbott have operated in Costa Rica.

Locations: Most of these companies are located in free trade zones such as the Green Park Free Zone and Zona Franca Metropolitana, both situated near the capital, San José.

2. Electronics and High-Tech Manufacturing

Costa Rica’s focus on innovation and technology benefits the electronics sector. Intel’s decision to reopen its semiconductor assembly and testing facility in Costa Rica in 2020 underscores the country’s capabilities.

Major Players: Intel, Zollner, and Establishment Labs.

Locations: High-tech manufacturing hubs are concentrated around the Greater Metropolitan Area (GAM), which includes San José, Heredia, and Alajuela.

3. Automotive Parts and Advanced Manufacturing

Costa Rica has a growing automotive manufacturing sector that focuses on producing specialized components and advanced materials.

Major Players: Adient, Panduit, and Bridgestone.

Locations: Many companies operate in Alajuela and Cartago, benefiting from proximity to major logistics centers.

4. Food and Beverage Processing

Costa Rica’s agricultural abundance supports a thriving food and beverage processing industry. Companies produce and export coffee, pineapples, bananas, and packaged food products.

Major Players: Dole, Chiquita, and local companies such as Café Britt.

Locations: Processing plants are distributed across rural areas, particularly in Puntarenas and Guanacaste.

Physical and Human Infrastructure Supporting Manufacturing in Costa Rica

1. Transportation and Logistics

Costa Rica’s infrastructure is well-developed to facilitate manufacturing operations:

Ports: Key ports such as Puerto Limon on the Caribbean coast and Puerto Caldera on the Pacific coast provide efficient routes for international shipping.

Airports: Juan Santamaría International Airport in Alajuela and Daniel Oduber Quirós International Airport in Liberia offer cargo handling capabilities.

Road Network: While improvements are ongoing, Costa Rica’s road network connects manufacturing hubs to major ports and border crossings.

2. Utilities and Energy

Costa Rica is a leader in renewable energy, with over 99% of its electricity generated from renewable sources. This ensures manufacturers have access to clean and reliable energy at competitive rates.

3. Education and Training

The country’s investment in education supports its manufacturing sector:

Universities: Institutions such as the University of Costa Rica (UCR) and the Costa Rica Institute of Technology (TEC) produce graduates skilled in engineering, technology, and manufacturing.

Technical Training: The National Institute of Learning (INA) offers programs specializing in training manufacturing workers.

Incentives for Manufacturing in Costa Rica

Costa Rica offers an array of incentives to attract and retain manufacturers. These incentives include tax breaks, special customs regimes, and access to free trade zones:

1. Free Trade Zones (FTZs)

The Free Trade Zone Regime is one of the most significant incentives for manufacturing in Costa Rica. Companies operating within these zones benefit from the following:

Tax Exemptions: Exemption from import taxes, export taxes, and corporate income taxes for a set period.

Customs Benefits: Streamlined customs procedures and reduced import/export costs.

Infrastructure: Access to world-class facilities and logistics support.

2. Special Customs Regimes

Costa Rica offers manufacturers customs incentives to facilitate the import of raw materials and the export of finished goods. These include duty-free import of machinery and equipment necessary for manufacturing operations.

3. Government Grants and Support

The Costa Rican Foreign Trade Promotion Agency (PROCOMER) and the Costa Rican Investment Promotion Agency (CINDE) work closely with manufacturers to provide:

Site Selection Assistance: Helping companies find the best locations for their operations.

Workforce Recruitment: Support in identifying and hiring skilled labor.

Regulatory Guidance: Assistance in navigating local regulations and obtaining necessary permits.

Challenges and Opportunities

While manufacturing in Costa Rica offers numerous benefits, companies may face challenges such as high labor costs relative to other Central American nations and ongoing infrastructure upgrades. However, these are outweighed by opportunities to leverage the country’s skilled workforce, strategic location, and robust incentives.

Conclusion

Costa Rica’s reputation as a manufacturing destination is well-earned. With a strong focus on sustainability, a skilled workforce, and a supportive business environment, the country offers unparalleled advantages for companies seeking to establish or expand manufacturing operations. From medical devices and electronics to food processing and automotive components, manufacturing in Costa Rica continues to grow, driving economic development and innovation.

Whether you are a multinational corporation or a mid-sized enterprise, Costa Rica provides the tools, resources, and incentives to thrive in today’s competitive global market.

Guatemala, the largest economy in Central America, blends tradition and modernity in its primary industrial sectors. With a diversified and constantly evolving Gross Domestic Product (GDP), the country stands out for its focus on agro-exportation, manufacturing, emerging technologies, renewable energies, and tourism. These industries contribute significantly to economic growth while generating a wide range of job opportunities across skill levels and sectors.

Education is always the right path for those seeking to capitalize on these opportunities. Higher education programs in Guatemala offer a variety of courses tailored to the demands of the country’s growing industries. These programs can provide a competitive edge from agricultural sciences to engineering and international trade. Below, we explore the principal industries in Guatemala and the job opportunities they offer:

Agricultural and Agro-Export Industry

Agriculture remains one of the principal industries in Guatemala and an essential economic foundation, representing approximately 12% of GDP and employing over 30% of the active workforce. Products like coffee, bananas, sugarcane, and cardamom lead exports, strengthening the country’s presence in international markets.

This sector offers diverse employment opportunities for farmers, laborers, and highly skilled professionals such as agricultural engineers and crop management technicians. The growing emphasis on sustainable agriculture and precision technology creates new demands for biotechnology and water resource management expertise.

The agricultural sector is expected to diversify its crop production further and integrate advanced technologies, expanding opportunities for resource management experts, export logistics professionals, and those with a strong understanding of global trade.

Manufacturing and Export Sector

Manufacturing is another of Guatemala’s principal industries and a crucial pillar of the national economy. In 2024 alone, this sector generated more than 305,000 jobs and achieved export revenues of USD 8.2 billion. Key manufactured products include food and beverages, pharmaceuticals, paper and cardboard, and various industrial goods.

Notable examples of success in this industry include pharmaceutical companies exporting to over 85 countries and producers of rubber and plastics serving markets in North America and Europe. Job opportunities range from technical roles, such as machinists and quality control technicians, to higher-level positions, such as process engineers, logistics specialists, and administrative professionals with expertise in international trade.

Trends toward automation and artificial intelligence drive further innovation, opening doors for professionals skilled in robotics, systems integration, and data-driven manufacturing processes.

Technology and Business Process Outsourcing (BPO)

The technology sector is rapidly becoming one of the principal industries in Guatemala, fueled by global digitalization and the increasing demand for business process outsourcing (BPO) services. This includes areas like technical support, software development, and data analysis. With more than 100,000 available jobs, this sector is a key driver of employment for young, tech-savvy professionals.

In-demand roles include programmers proficient in languages like Python and JavaScript, technical support specialists, and data analysts. These highly specialized careers are often among the best-paying in Guatemala and offer significant opportunities for career advancement.

The sector’s future lies in advancements in artificial intelligence, machine learning, and the implementation of advanced cybersecurity systems. This positions Guatemala as a competitive global technology and services market player.

Renewable Energy and Sustainability

Renewable energy is emerging as one of Guatemala’s most promising principal industries. With significant solar, wind, and hydropower development potential, the sector supports energy independence while addressing climate change.

Job opportunities in renewable energy are extensive, spanning roles such as clean energy engineers, environmental managers, and sustainability consultants. As Guatemala increases investment in green infrastructure and eco-friendly technologies, the demand for skilled professionals in this field will continue to grow.

Tourism and Hospitality Sector

Tourism accounts for approximately 11% of Guatemala’s GDP, making it one of its principal industries. This vibrant sector generates more than one million direct and indirect jobs, particularly in destination management, hospitality services, and tourism marketing.

Guatemala’s iconic destinations, including Antigua, Tikal, and Lake Atitlán, attract millions of visitors annually. The industry is increasingly focused on cultural and sustainable tourism, creating opportunities for professionals who specialize in promoting unique and environmentally conscious travel experiences.

Conclusion and Outlook for Industries in Guatemala

The principal industries in Guatemala are poised for continued growth as technological development, sustainable initiatives, and integration into international markets gain momentum.

In agriculture, increased adoption of technologies to optimize resources and diversify crops is expected, fostering specialized jobs. In manufacturing, automation promises to enhance efficiency and competitiveness in global markets. Meanwhile, tourism will emphasize sustainable and cultural experiences, strengthening local economies and creating new opportunities for entrepreneurs and professionals.

Fortunately, education trends show that many young Guatemalans are pursuing careers in engineering and technical fields. However, fewer students are entering careers in international trade, tourism, biotechnology, or resource management—fields where demand is projected to grow significantly. The challenge for Guatemala lies in aligning its educational programs with the evolving needs of its industries to ensure a well-trained workforce capable of sustaining economic growth in the decades to come.

Adopted on January 9, 2000, amidst a severe financial and economic crisis, dollarization in Ecuador has survived left-wing governments and even the economic effects of COVID-19.

On March 8, 1999, Ecuadorians found bank doors closed. They couldn’t withdraw their savings. Then-President Jamil Mahuad had declared a bank holiday that plunged thousands of savers into despair. It was announced that the measure would last 24 hours but lasted months. This was the prelude to dollarization, which marks its 25th anniversary on January 9.

The bank holiday was a desperate measure to avoid what was already evident: the financial system’s collapse. Customers had rushed to withdraw their deposits, an effect generated by the capital circulation tax that replaced the Income Tax. The new tax, which was 1%, taxed financial transactions, which also caused a capital flight from the country of USD 2.6 billion, equivalent to 18.7% of GDP, aggravating the liquidity crisis the economy was experiencing.

The freezing of bank accounts accelerated Ecuadorians’ distrust in their currency, the Sucre. The Sucre was losing value, and salaries were becoming increasingly worthless. The Sucre was experiencing one of the worst devaluations in its history: it went from 4,493 sucres per dollar in January 1998 to 7,119 in January 1999, and by December of that same year, the exchange rate had climbed to 18,287 sucres per dollar, a devaluation of 276% in 1999 alone.

And nothing seemed to stop it. Newspapers of the time report that on January 8, 2000, a day before Ecuador decreed official dollarization, the exchange rate was dangerously approaching 30,000 sucres per dollar.

The crisis was more than palpable in Ecuadorians’ daily lives as they saw their purchasing power plummet. Thus, in January 1999, the monthly minimum wage was USD 134.18, but by October of that same year, it was equivalent to only USD 64.12, and in December of that year, it was barely USD 50.

An inflationary process with chronic rates compounded this. At the end of 1999, a baguette cost 5,000 sucres, and a bus fare was 1,000 sucres. Ecuador even issued a 50,000 sucre bill in October 1999.

The crisis was such that the vital forces of the province of El Oro, in southern Ecuador, openly spoke of federalism to separate from Ecuador, as did Guayaquil, says economist Marco Naranjo, who was an advisor to the Central Bank at the time and a defender of the system.

Official Dollarization

Finally, on January 9, 2000, then-President Jamil Mahuad took the most radical monetary measure: eliminating the Sucre and switching to the dollar.

Economist Marco Naranjo says Mahuad officially made a “decision that Ecuadorians had already made.” Dollar deposits in the financial system represented 60% of the total, both in local accounts and in offshore banks (accounts abroad), and that’s without counting the dollars kept in homes and safe deposit boxes, says Naranjo. Moreover, businesses had already replaced the Sucre with the dollar as a means of payment. The prices displayed in commercial establishments were already in dollars.

Dollarization in Ecuador was decreed at 25,000 sucres per dollar, which covered the entire monetary base: the money in circulation, bank deposits, and current accounts.

Economist Pablo Lucio Paredes says that the crisis was so intense at that moment that there was awareness of the need for an essential change of direction, and any of the proposed alternatives would have failed. “People had already shown in daily life their preference for the dollar over the sucre,” he recalls.

The measure had devastating consequences, a cost paid by Ecuadorians who saw their life savings melt away. If a person had savings of 100 million sucres in a bank account at the beginning of January 1998, they were equivalent to about USD 25,000. By January 2000, just two years later, when the economy was dollarized, they were only equivalent to USD 4,000. The social discontent led to an indigenous uprising that ended in Jamil Mahuad’s removal from power on January 22, 2000.

The Dollar Today Enjoys Great Acceptance

But 25 years later, there is little consensus in Ecuador, one of which is that dollarization in Ecuador should continue, says Naranjo.

Economist Marco Naranjo explains that Ecuador’s single-digit inflation rate in the last 25 years is the system’s greatest success. Indeed, in November 2024, Ecuador’s annual inflation was 1.51%, the lowest in Latin America.

Moreover, the amount of money in Ecuador has multiplied healthily, thanks to economic activity, not by discretionary decisions of the Central Bank, as occurred before 1999, which led to devaluations and a chronic increase in inflation.

7.3 million Ecuadorians have only lived with the dollar

Magdalena Barreiro, professor at the Universidad San Francisco de Quito and former Minister of Finance, believes that young people born during dollarization in Ecuador cannot comprehend what it was like for people who knew the Sucre to live in that inflationary era.

7.3 million Ecuadorians, or 43% of the population, are under 25 years old, meaning they were born and have lived with the dollar, a hard currency that does not devalue.

Barreiro says that for the remaining 57% of the population who did know the Sucre, it is a memory of a severe crisis to which they do not want to return.

To illustrate this, she talks about what she herself experienced in that era when the loss of purchasing power for consumers was brutal.

She recounts that she needed a loan to build her house, but in the late nineties, most banks did not lend in sucres, only dollars, making costs very high and unpayable.

The few banks that offered loans in sucres at that time adjusted the rate to inflation to cover exchange rate risk. So, she acquired a loan of 80 million sucres. “By the time I had paid 100 million sucres to the bank, it turned out that I owed 200 million sucres. That’s how brutal it was.”

“We had no purchasing power; salaries were devalued every week. We couldn’t access credit, and what little there was became unpayable. The economic situation was terrible,” says Barreiro.

Professor Marco Naranjo adds that countries like Venezuela and Argentina are the closest examples of what would have happened to Ecuador if it had not dollarized its economy. These countries live in scenarios of hyperinflation, aggressive devaluations, and severe economic crises.

Not a “Magic Potion”

However, despite the system’s benefits, Ecuador is far from reaching the expected levels of economic growth.

For example, the World Bank estimated that the Ecuadorian economy would close in 2024 with a growth of 0.3% for the Gross Domestic Product (GDP), the lowest in the region, according to its latest October perspectives.

While Naranjo considers dollarization the best economic policy in Ecuador, he recognizes that legal reforms to consolidate the system were never completed. The main ones would allow Ecuador to become an international financial center with free entry and exit of capital.

On the contrary, he says Ecuador has put restrictions in place to move towards that goal, such as a 5% tax on the exit of foreign currency. “It’s as if a citizen were told that entering the cinema costs nothing, but leaving costs USD 50, so the result is that people don’t go to the cinema,” he says.

He says we will continue to depend on oil, exports, and external debt if this doesn’t happen.

Barreiro adds that although dollarization in Ecuador corrected many severe imbalances in the country’s economy, “it is not a miraculous potion,” which is why the country has been experiencing ups and downs in its growth.

She adds that several factors explain these results, including an unstable economic policy, excessive public spending that has led to indebtedness, and the lack of legal security that prevents sufficient foreign direct investment from arriving.

The country’s wealth has been based mainly on the oil sector, which has turned the country into a rentier state, where pressure groups increase public spending and leave aside the vulnerable population, says Barreiro.

What Awaits Dollarization

Naranjo highlights that the system has survived eight governments of different tendencies, from right to left. Moreover, it has resisted external shocks such as the 2008 global financial crisis and even overcame the economic effects of the Covid-19 pandemic. “They haven’t cracked it,” he concludes.

Then, President Rafael Correa, one of the system’s detractors and a great critic, maintained the model during the 10 years he governed the country (2007-2017).

Naranjo said that the 2007-2008 Constituent Assembly, which had broad powers, could have been the opportunity to change the system, but it wasn’t done. It would have been a decision with catastrophic consequences; that was known, and, therefore, it wasn’t touched, says Naranjo.

This was acknowledged in 2015 by then-Minister of Economic Policy Patricio Rivera. Then, Correa officials said that dollarization was irresponsible and forced the country to take tariff restriction measures, for example, but that dollarization “is here and we can’t leave. Dollarization is here to stay.”

More Popular than the President

And its popularity was not in doubt. In 2015, dollarization in Ecuador had the support of 85% of Ecuadorians, according to a survey by the consulting firm Cedatos, while the president at that time, Rafael Correa, had the support of 79%, according to data from the government of the time.

However, in its need to finance growing public spending, the government weakened dollarization in Ecuador by requesting loans from the Central Bank starting in March 2015, which expanded its balance sheet.

“That gluttonous appetite that the State has had has its limit in dollarization, and that makes many believe that it should disappear,” when what needs to be done is to have a rational spending policy.

Is dollarization in Ecuador at risk? Economist Pablo Lucio Paredes says that the only risk is the temptation to issue ” eucadollars,” that is, to return to the money machine that doesn’t solve problems but makes them worse.

“For this, the best antidote is to eliminate the Central Bank,” he says, as there would no longer be the temptation to reissue a currency.

Naranjo thinks that the Central Bank could be reformed to be more like a public bank, in charge of giving loans and competing with private banks.

Located on the Uruguayan coast, Punta del Este has been a luxury retreat for South America’s elite for decades. Known for its exclusive atmosphere and blend of high-rise buildings and paradisiacal beaches, this seaside city has become more than just a vacation destination. Since the pandemic, the transformation of Punta del Este into a strategic hub for wealth management has attracted investors and affluent individuals worldwide, including the United States and Europe.

The combination of political stability, tax incentives, and a high quality of life has made Uruguay an appealing option for those looking to protect their assets and diversify investments in a secure environment. This surge has created a domino effect on the local economy, driving the development of luxury infrastructure, real estate projects, and exclusive services and transforming the region’s profile. The transformation of Punta del Este into a financial and investment hub represents a significant shift in its traditional identity as a seasonal luxury retreat.

Punta del Este’s Appeal to Investors

The recent growth of Punta del Este as a financial center stems from Uruguay’s reputation as a reliable country in an unstable region. The tax benefits offered by the Uruguayan government have been a significant incentive for high-net-worth families and foreign investors to purchase property in the area.

Nicolás Cristiani, the local head of wealth management at the firm Puente, explained that “clients now value having a physical office where they can hold face-to-face meetings and enjoy a coffee much more than they did two or three years ago.”

The pandemic not only reshaped personal priorities but also redefined financial strategies. The massive influx of wealthy foreigners and their growing interest in establishing permanent residences have driven unprecedented growth in Punta del Este’s real estate market. This phenomenon underscores the transformation of Punta del Este into a permanent hub for high-net-worth individuals.

This transformation has prompted several wealth management firms to establish or expand their regional presence. Among them are Latin Securities, which arrived in 2022, and Gletir Corredor de Bolsa, which opened an office with a two-person team in 2023.

An Expanding Financial Ecosystem

Uruguay has experienced a revival in its wealth management sector, which had declined during the 2010s due to cost-cutting measures and increased regulations. According to the Central Bank of Uruguay, wealth management firms grew from 155 in 2020 to 174 in 2023. During the same period, the number of clients rose by 80%, reaching nearly 49,400, while assets under management increased by 29% to USD 37.2 billion.

One of the most ambitious initiatives is Balanz Capital’s plan to establish itself in Punta del Este within the next three years, focusing on attracting clients from Argentina, Brazil, and Europe. Juan José Varela, the firm’s Uruguay manager, stated, “When we commit to a location, we go all in.” This commitment reflects the broader transformation of Punta del Este into a thriving financial ecosystem.

Luxury Real Estate and Infrastructure Projects

The steady influx of capital has spurred the construction of significant luxury projects designed to cater to the demands of this new financial elite. One of the most emblematic developments is the Cipriani Resort, Residences, and Casino. This USD 500 million investment includes restoring the iconic Hotel San Rafael and three residential towers priced between USD 1.7 million and USD 17 million.

Another notable project is El Nido Beach & Surf Homes, a USD 80 million gated community featuring a 6.5-hectare pool and an artificial wave generator for surfing. This 72-hectare development is expected to be completed by 2026.

Additionally, the city is witnessing significant improvements in services. The British Hospital inaugurated its first clinic in the exclusive Beverly Hills area in 2024. Meanwhile, Punta del Este Airport unveiled an expanded terminal for private jets in December, reflecting an increase in year-round high-level air traffic. These developments further illustrate the transformation of Punta del Este into a city that blends luxury living with cutting-edge infrastructure. 

A Unique Environment for Business and Lifestyle

Punta del Este has distinguished itself not only as an investment destination but also as a place that offers a lifestyle combining luxury, comfort, and access to exclusive services. This environment has redefined business interactions in the region, extending beyond traditional office meetings. According to Nicolás Cristiani, client meetings often occur at ranches, on yachts, or the tennis court.

This burgeoning interest has led to greater economic diversification, complementing the traditional tourism focus with a booming financial market. The expansion of high-end services, such as luxury clinics and private airport terminals, underscores efforts to cater to an international community of entrepreneurs and wealthy families. The transformation of Punta del Este has been pivotal in attracting a global audience seeking stability and a premium lifestyle.

Urban and Cultural Transformation

The arrival of new residents and the development of services have turned Punta del Este into an increasingly active city year-round. With a population growth of 41,000 over the past 12 years, the area is shifting from a seasonal resort town to a bustling urban center.

Real estate developers continue to pursue elite residential projects, though some have sparked controversy among locals. One proposal to build apartment complexes in the scenic rocky area of Punta Ballena faced strong opposition from residents and public figures who advocated for the area to be designated a protected zone.

In addition to financial investors, tech giants like Google have chosen Uruguay for strategic projects, such as installing a major data center. Billionaires’ property acquisitions in Montevideo and Punta del Este reinforce the region’s appeal to those seeking stability and a conducive investment environment. Punta del Este’s transformation has elevated its global standing, making it a key player in both finance and technology in Latin America.