Juan Esteban Sanchez
Director 
Invest Guatemala
esanchez@investguatemala.org

LATAM FDI:  Today, Juan Esteban Sánchez, the executive director of Invest Guatemala, is with us. First, I want to welcome you to the podcast. Could you please tell us a little bit about yourself and your organization for our audience?

Juan Esteban Sanchez: Oh, hello, Steve. Thank you very much for this kind invitation. Yes, my name is Juan Esteban Sánchez. I am a Colombian guy just working to attract investment in  Guatemala. I’m an economist, but I also have almost four degrees in financial valuation. I worked in investment banking for nearly 10 to 15 years in Colombia. Then after, I became involved in the investment promotion agencies I was working for ProColumbia as a director of the offices of ProColumbia, the Commercial and Investment Bureau of Colombia in Guatemala, dealing with the bilateral relations between Colombia, El Salvador, Honduras, and Guatemala, but also Belize. Then after, I managed the ProColumbia office in Mexico for two years, one really important market. My last work in ProColumbia was working in India for almost five years, in the business relationship between Colombia, India, and the MENA region, the Arabic countries. After that, I came back to Guatemala, where I married a beautiful lady, and I’m now working as the executive director of the country’s private investment promotional agency, Invest Guatemala.

LATAM FDI: Well, let’s get into some information about investment in Guatemala from the perspective of foreign investors. What are the key advantages of Guatemala compared to the other countries in the region?

Juan Esteban Sanchez: To answer your first question, Invest Guatemala is a private institution that is the umbrella of an initiative that you can call the 2032 vision of Guatemala. It was created by the private sector and is called Guatemala Moving Forward. We, Steve, work at six working tables that try to improve the conditions for foreign companies just to come here to invest in Guatemala. Then, after these six working tables, they are related to human capital conditions, infrastructure, tourism, and agroimpact. It’s named after it. And the more important one is legal certainty. So, in this regard, I aim to create more good quality jobs here. Guatemala has excellent conditions for foreign investors at these levels. The first one is macroeconomic stability. I’ve been working in a promotional agency in the past; you can say that all the countries, Steve, many say that their government has real macroeconomic stability. But Guatemala, for sure, is one of them. The growth in Guatemala has been going on for almost 10 years in a row. We’ve been just growing at nearly 3.5 % in real terms.

The second one is that the exchange rate in Guatemala has been stable for almost 20 years, at around 7.5 quetzales per dollar. It is important to do business with that country for exportation, importation, and even domestic sales. The other one is that Guatemala has been working to create good conditions economic relations other countries. Guatemala has around 15 free trade agreements and 19 reciprocal investment agreements with some interesting countries. Guatemala must be one of the only countries with good diplomatic and commercial relations with Taiwan. And this is important for some companies in the world. The other thing is that Guatemala is just going down the path to get the investment grade. Fitch, Moodys, and Standard & Poor say that Guatemala has the macroeconomic condition to get the investment rate. Still, we have to work on the institutional side of the business to motivate companies to invest in Guatemala. Reinforcement of the law, an investment law, etc. It’s important to highlight that the average age of the population in Guatemala is around 26 years.

This is important because we have a demographic bonus that we need to take advantage of to get companies to invest in Guatemala. It is important for the company that wants to do business here. Why? Because there is a loyal workforce, we also have a population that, in the future, will have new families, buy new homes, and ask for public services. And this is an excellent opportunity for companies that provide services to a population, especially here in Guatemala. The other thing is that it is attractive to invest in Guatemala because it is the northernmost country in Latin America before Mexico. And this is important. Why? Because of the nearshoring strategy that I believe you have been hearing about for the last 20 years, Steven. But what about the conditions to invest in Guatemala? We can create some excellent prospects regarding nearshoring to North America, including Mexico. Okay. Then, there is an interesting point: Guatemala has a significant power generation matrix from renewable sources. Guatemala’s generation power matrix currently generates 60 % of its power from renewable sources.

We have great opportunities for companies that want to invest in Guatemala to pursue excellent business ideas in solar, electric, and hydropower generation.

LATAM FDI: You mentioned Guatemala’s demographic advantages and geography. But what support does Guatemala give to foreign investors in terms of any tax incentives that may exist to create regulatory ease? What investment protection is there to invest in Guatemala?

Juan Esteban Sanchez: This depends on the sector you are in. But Generally, Guatemala has one of the most flexible tax systems in Latin America, Steve. If you want to create a company, that is relatively easy; maybe in one to two weeks, you can create your own company, even for a foreign investor seeking to invest in Guatemala. You can choose if you want to pay, for example, income tax or ISR. It’s ISR in the United States. But you can pay 7% over the total income or select 25 % over your operational gross profit. And this is important because you can choose, and you can play with the costs. But depending on the sector, we have a special regime where you can be a company and settle a plant. You can be in an economic free trade zone. We can say that, yes. You can import, process, and export your product without paying taxes here. So, if you are in a free trade zone here, you can import without paying any tariff from some countries, but also you can export, and then you are not obligated to pay the tax here.

But if you want to sell your product, I’m sorry for the name. For example, you have some excellent conditions for optimizing the VAT in the free trade zone. But again, it depends on the sector you are just working in when you invest in Guatemala. From some country, from some industry, Steve, I would like to tell you that I used to work in investment banking. I was evaluating some energy projects here. If you want to invest in a power generation company that produces less than 5 megawatts, You have zero tax for 10 years. And this is important.

LATAM FDI: That’s significant. You mentioned the demographics again. I’m going to go back to that.

Juan Estaban Sanchez: Yes, go ahead.

LATAM FDI: What does that mean regarding the workforce capabilities and the availability of skilled labor? What workforce can a foreign investor expect to find when seeking to invest in Guatemala?

Juan Esteban Sanchez: I say, Steve, that it’s always important to be optimistic but realistic. We have a challenge because we have tremendous competition from migration. The United States consumes a significant part of Guatemala’s workforce. We have a private and public institution called INTECAP. It’s imperative to have this, Steve. They prepare the people, the young generation, regarding technological skills. If you want to be a carpenter, you can receive training for ITECAP. It’s the base for our workforce. If you get a title from INTECAP, it may require a three-month educational period. In the United States, they are pleased to get these people because they know that people from INTECAP are a quality workforce. So, we have a competition there. We have a challenge in that through INTECAP and universities. We have to prepare the young generation to have the skills for the future needs of international companies that want to invest in Guatemala, and it could be a little bit romantic, Steve, that something important here in terms of the workforce is that these people do outstanding hard work.

They are also really loyal and believe in family. So, we can offer companies looking to invest in Guatemala some excellent conditions in terms of skill. They can stay here and transfer that to the company that is coming here. The other thing is that we may be a country of around 18.4 million people, and around 11 million people can work. So, we can bring many people to the companies there.

LATAM FDI: Well, that’s the human infrastructure. Physical infrastructure is essential to foreign investors as well. What infrastructure developments or improvements are currently happening in Guatemala that would interest foreign direct investors?

Esteban Sanchez: Yes. A month ago, Congress approved a new law on infrastructure. This allows us to create some excellent opportunities for foreign companies to invest in Guatemala to improve the roads, not only the main but also the rural ones. There will be plenty of opportunities for investors and sovereign or private equity funds next year. They can come here to finance new road projects. The other one is that we are trying to help the government create the conditions for the modernization of the airports. In Guatemala, there are only two international airports, one in the capital city and the other in Petén, which is in the far north and close to one of the more important tourist attractions, called Tical. It will be vital if we can work to modernize the small airports, even for local or domestic trips. And I believe there will be outstanding opportunities for the companies abroad to invest in Guatemala.

The other one is between this year and the following year, and we are talking about weeks of difference; we will have two main competitions to increase the power generation metrics here in Guatemala. And the other one is to improve the power transmission system. As a small number here, Steve, Guatemala needs around four 4,500 new kilometers of network to consume or transport the energy we will generate in the next five years. The other one, and I believe there will be some information shortly, is that we will open excellent ports opportunities. Remember that because we have an excellent relationship with Taiwan, we need an investor different from the Chinese. So, it’s a geopolitical opportunity to invest in Guatemala. This is important to know for the companies listening to this podcast.

LATAM FDI: Well, we’ve talked about human infrastructure; we just got through talking about physical infrastructure. Let’s talk about trade infrastructure. How is Guatemala positioned within the Central American region regarding trade agreements, access to regional markets, and logistics networks?

Juan Esteban Sanchez: Sure. Okay. Then again, you can hear Steve for all the investment promotion agencies (IPAs) in the world that my country has the best location. You can listen to that. But it is challenging to sell that point. Because of its proximity to global markets, Guatemala is on the border with Mexico. We are also the biggest economy in Central America, but we have a free trade agreement with all the Central American countries. However, we are also the main gate to some countries in the Caribbean. So, for a company that wants to invest in Guatemala, it is a huge opportunity because of location, tariffs, and proximity to the markets. Talking about our 15 free trade agreements, we can approach almost all the countries in the world. But seriously, the opportunity in terms of commerce is how you can create your company here in order not just to produce but to export to Mexico, the United States, and Canada. And we are working on that. When talking about the new administration of the United States, companies will have a massive opportunity to invest in Guatemala to change the supply from China to Asia, especially to give American companies a chance to have a close source.

To highlight, Steve, if you establish a company in Guatemala, your transit times in Miami may be around three days. But also, if you want to bring some products to Los Angeles, for example, that is excellent marketing here, there’s just seven days. Now, consider that you can export your products and then transport them by road because of the border with Mexico. Significant projects from the Pacific and the Atlantic will bring some train systems that can connect the train system of Mexico. It will be an excellent signal for the investor.

LATAM FDI: Well, as with most podcasts, I have the pleasure of speaking to very interesting and informative people; we’ve covered a lot of information in a relatively short time. Experience has shown in the past that listeners to the podcast often have questions that are related to what they’ve heard. I want to ask participants in the podcast if they would make themselves available to any listeners for questions they might have. Could you share your email address? Could you have their LinkedIn profile on the web page on which the podcast sits? Can people with a desire for more information get in contact with you?

Juan Esteban Sanchez: Absolutely. It would be great to hear what the people are looking for about investing in Guatemala. Remember that, Steve, that through the free trade agreement, we are just capable of bringing some products to almost 1.5 billion consumers in the world. Especially if anyone is interested looking to invest in Guatemala, we are working to increase the opportunities in agribusiness, packaging, BPOs, and pharmaceuticals. Well, pharmaceuticals are very difficult. We will be more than interested in answering and giving the information to any investor who wants us to see Guatemala as a big opportunity. I don’t know if you want me to bring some information about my email or something.

LATAM FDI: Well, what I can do, which I’ll do for expedience, is put a link to your LinkedIn profile on the podcast page in the transcript section.

Juan Esteban Sanchez: Great.

LATAM FDI: I’ll include your email address and a link to Invest Guatemala. Would that be okay?

Juan Esteban Sanchez: It would be great, please.

LATAM FDI: Well, speaking with you today has been a great pleasure. I’ve learned a lot, and I’m sure that people who listen to this podcast will also learn a lot. Thank you for taking part in this discussion.

Juan Esteban Sanchez: Thank you very much, Steve. I’m looking forward to another opportunity to discuss this in the future.

LATAM FDI: Of course. Thank you.

Juan Esteban Sanchez: Thank you very much.

LATAM FDI: In this episode, Mauricio Claver-Carone joins us. Mauricio is the managing partner of an organization called the Lara Fund, and he is a former advisor to the First Trump Administration for the Americas. Welcome, Mauricio. You could expand on your biography. Tell us a little bit about yourself.

Mauricio Claver-Carone: Thank you so much. Thanks again for the opportunity. It’s always a pleasure to be with you. Thank you for your great work, particularly regarding foreign direct investment in Latin America. As you mentioned, I’m the managing partner of the Lara Fund, a private equity fund we set up about a year ago. It is the first and only US private equity fund focused on the middle markets of Latin America and the Caribbean. And then the last time we spoke, we spoke about those targets where the countries we look at, the high growth markets, pro-American countries in the region, moving away from Mexico, Brazil, which has been usually the biggest target for a lot of the global investors in the region. I am not saying that there are no opportunities there. Still, we’re focused on Panama, Costa Rica, Bahamas, Ecuador, Paraguay, Uruguay, Dominican Republic, and El Salvador, the countries showing great promise and a great opportunity and are fully undercapitalized. So, it’s been a great adventure. Indeed, in my previous role, I stemmed from the Treasury Department, began my career there as a lawyer, and then was eventually the Senior Director of the Western hemisphere at the National Security Council, where I was the President, President Trump’s advisor during his first term for the Americas.

We covered everything from Canada to Argentina. It was an action-packed time with great stories and anecdotes. It was a great experience.

LATAM FDI: Today, one of the things I want to touch upon was something devised during the first Trump administration. It’s called América Crece. Can you explain to the listeners what that is?

Mauricio Claver-Carone: Yeah, I’m happy that you mentioned that and that we had the opportunity to discuss América Crece because it was such a great initiative that, as everything with the government took way too long to start, it was something that was conceived as an idea when I was a senior advisor at the Department of Treasury with Secretary Mnuchin back in 2017. At that time, we were thinking about it, and I mentioned this during our last conversation: the US has an excellent toolbox for punishing bad guys, sanctions, et cetera. But we had a limited toolbox regarding economic statecraft. Basically, how do we promote or how do we unlock the comparative advantage that the United States has, which is our investors, our capital markets, really the opportunities and the knowledge and know-how of our investors, particularly in the Western hemisphere of the Americas, which is the neighborhood we live in, which is extraordinarily important and strategic to the United States across a whole different variety of factors. So, we created this concept called the América Crece, which was essentially, and people always talk about it as a counter-BRI, the Chinese Belt and Road Initiative, but an initiative for how we unlock private investment in Latin America, particularly in energy and infrastructure, in really our allies in the Americas.

Because what we’ve seen and what the most significant need is, is the reality is that Latin America and the Caribbean have the most significant infrastructure finance gap in the world, despite all these multilateral and everything that loan money to the region and projects that you see on these glossy press releases. It is by far the most significant infrastructure finance gap in the world. Okay, great. So how do you help the region find these bankable deals and opportunities across markets, which are wholly different in every country in Latin America and the Caribbean is different from each other? Even in Central America, I banned using the term Northern Triangle because El Salvador, Guatemala, and Honduras are very different. But things get bunched up because it’s just a lazy approach. But then how do we take each of these countries, find what their comparative advantages are, find what the bankable deals in those countries are, the incredible opportunities they are, and help them, put these deals together, and almost hand them off on a silver plate to investors here in the United States and in other allied countries throughout the world that are global investors as well, but mostly, obviously, here in the United States.

And so, we created this concept. It was an idea. And it just took a long time to develop. Eventually, we launched it as a treasury initiative. It began with Panama, and it took a while to set the frameworks. Okay, what are the opportunities in Panama? The energy was important. Natural gas is our huge comparative advantage from an energy perspective. How do we help lock in these deals for storage and the logistical side of the natural gas trade and supply chain? How do we unlock those opportunities? How do we unlock the opportunities for microgrids in the region? How does Panama become that center for microgrids, which can then be scaled and have these vast opportunities in the Caribbean, et cetera? And it was fascinating just how fast it started growing. For the first treasury, I may dig into a credit initiative we did with Panama and start unlocking deals there. Well, anyway, like everything in government, things take a long time. Two years later, when I was a senior director at the National Security Council of the White House, we turned this treasury initiative into a whole government initiative.

That was in December of 2019. It took two years. But ultimately, that’s when you finally get buy-in from all departments. Then the question was, how do we use financial advancing tools, etc.? Now, OPIC has long become somewhat irrelevant, if not wholly unrelated. Then, we had the idea of creating the Development Finance Corporation. Within those two years, the new International Development Finance Corporation operation, known as the DFC, was created to try to increase the ability of domestic finance. As a domestic finance institution, as a DFI from the United States for investors and deals and strategic deals outside of the United States, but to be nimbler, et cetera. We could discuss whether that worked, if it didn’t work, where we stand now, and where we’re headed, but that was the idea. Then, ultimately, when it was launched as a whole government initiative with the DFC, we started after Panama. I went to Panama, Salvador, and Ecuador, and it grew. And before you know it, between December of 2019 and the end of the first Trump administration in 2020, we had done 17 América Crece agreements throughout the region.

That’s half of the region. And by the way, we ran the scoreboard from seventeen to zero regarding the BRI. And we saw billions of dollars in deals, particularly in Panama and Ecuador. We saw Salvador and were starting to move on to the Dominican Republic. And it was a process that was very time-consuming. But that year, you started seeing that tremendous momentum, per se. And the reality And it’s that even in the transition into the Biden administration, a lot of the career staff across the agencies, state, treasury, DFC, et cetera, urged the Biden administration not to get rid of the America Crece Initiative because there was significant momentum taking place. Unfortunately, they got into this whole; if it was a Trump initiative, get rid of it. They eliminated it. Then, it took years for them to produce their initiative, which became America’s partnership, which, unfortunately, was nice. It’s excellent public relations and a nice marketing tool, but it was nothing more than photo ops rather than seeking deals. Now, can we talk about… So that’s what América Crece was, where it was headed, and obviously, we can talk about what worked, what didn’t work, what was working, what wasn’t working, and where we could be headed.

LATAM FDI: Just for the people that aren’t Spanish speakers, the translation of the America Crece Initiative is America Grows. Well, let’s look at something happening in the hemisphere that some people look at with a certain degree of preoccupation. I want to ask you for your take on Chinese investment activity in Latin America.

Mauricio Claver-Carone: Well, it’s very different than it was from, for example, when we first went, the first Trump administration started in 2017. Beginning in 2005, you started seeing a big boom in Chinese investment in the region. It reached a point in 2010 and 2012 when it was $200 billion annually. That’s decreased substantially, but the Chinese are more strategic in their investments. So, I understand that they’re in critical mineral space, logistics space, and ports in particular; they’re being very strategic about big splashy projects where they can, through perception, show that they are really like… We have a territorial staple in the region and the neighborhood where we all live. So, you’ve seen that shift per se. Are these projects particularly effective? What do we see? No. As a private investor now, one of the things that I see a lot of throughout the region is distressed Chinese assets. So many of those deals that they had invested in the energy space, et cetera, in 2010, 2012, 2014, 2016, they distress, they leave them. Then they hope nobody gets them because they prefer to see it there distressed, immobile, versus having a US investor or someone else come in and take them.

Regarding the splashy projects, it’s open to debate how effective or not they are. There’s been a lot of news lately regarding, for example, the Port of Chancay in Peru. That’s an extensive port facility in Peru. They’ve invested over $2 billion in it. Then, what I find laughable about it is the notion that what’s been marketed out there is that this will be a massive opportunity for Brazilian agricultural exports. This is the only export from the region that goes towards China. There’s not a US play there. Now, anybody who knows about intraregional commerce knows that that’s false. There is no intraregional infrastructure for Brazil, let alone any other country in the region, to be land-transporting their products over to the Port of Shanghai, which, by the way, even if you’re in Lima, to get to the Port of Shanghai is two and a half hours in a dirt road with no infrastructure, and that’s with a police escort. So this whole notion that somehow it’s going to be cheaper or even feasible to be bringing, transporting goods across the over to Shanghai to export it to China then and that it’s going to be substantially more affordable than just literally doing it through existing infrastructure in like Santos, in the Port of Santos, in Brazil, et cetera, is nonsense because anybody that knows and is involved in shipping and is done in the region knows that one of the biggest frustrations. After all, it shouldn’t be that way, but one of the biggest frustrations is that the intraregional infrastructure does not exist.

It’s not there. And in many cases, I used to use this talking point in Argentina. It’s much more expensive to transport goods domestically from the point of extraction or the end of production to the port in Argentina than it is to ship it from the Port of Buenos Aires to, let’s say, Asia to the US, et cetera. So that’s the biggest frustration. That’s not going to happen in the short term. So, what, then, is the Port of Chancay for? It’s strategic. And then one of the Chinese ministers let it slip himself. It’s for e-commerce, and he wanted to make it to an e-commerce hub. Okay, that is then for a re-export, mainly to the United States, to have some capacity. That’s what we are seeing there now with Chinese investment. Everything now, including Chinese investment in the region, is critical minerals that will continue monopolizing the alternative energy space. Yes, these logistics, but the logistics are all for re-export to the United States. That’s the big thing we’re seeing in Mexico right now. If you ask me, what concerns do I have right now?

Well, look at foreign direct investment in Mexico. For Mexico right now, a third of all foreign direct investment in the last year was from Chinese companies. It’s even higher because if you calculate new investment, the only new investment that’s going in that’s not reinvestment is mostly from Chinese investors. And why that’s? Transshipment to the United States to try to avoid duties, et cetera. The new Trump administration will focus on closing out those loopholes. But if you see one trend in Chinese investment, that is the most concerning other than this Porta Chancay, which is really for, like they said, the re-export. And also, by the way, you’ve seen it, I think there should be some issues or concerns about how it could be used by a state Chinese interest in the military, et cetera. Put that aside. But from a commercial perspective, I think the biggest issue concerning Chinese investment is the investment in Mexico to be then able to re-export transfer into the United States and circumvent, obviously, the higher tax rates that China has and will have, obviously on the Trump administration.

So that’s going to be a big issue there.

LATAM FDI: Given the present panorama, what are the principal roadblocks to attracting investment to the region right now?

Mauricio Claver-Carone: Bankable deals. Bankable deals. And I said this recently: Costa Rica, which in a lot of the indexes for most attractive places for foreign direct investment, had the number one spot. Recently, this last year went down to the number three spot. Understandably, the Emirates now has the number one spot. But why did Costa Rica go down? Is it because they’ve done something wrong on the fiscal or macro side, or have the rules changed? No, they haven’t. It’s been the current government, President Chávez, with an S. I call him Chávez the Good. President Chávez has done a great job and has continued to feed that pro-business friendly environment, and investment is still very attractive there. The reason it went down two slots is because of bankable deals. There’s not that many good bankable deals. So, what is the biggest challenge? It’s a capacity issue. It’s really about putting these good bankable deals together for investors to look at and do so. And that’s true. As I look at this, I think about América Grecia because it’s full circle here. That’s the problem that we’ve seen in the region. Because of the lack of global private investors on the US side and a private equity culture in areas other than Brazil, these bankable deals are hard to come across notionally, I mean, fully packaged.

Notionally, they’re there, but you have to package them. The reason is that it’s become a region that has become so dependent on multilateral state-pushed political lending with antiquated instruments that there’s been a setback regarding how to originate and put these deals together that will be attractive to private investors. Then that goes to the notion of, Okay, what was América Crece, and what was the comparative advantage? Okay, the capacity building to put these deals together, pass them off, etc., and the private sector. There’s nothing like private-sector financing. It ensures that deals are agile and that they get done. When I was President of the Inter-American Development Bank, the number one, the largest lender in the region by far, unfortunately, the number one thing US investors would ask me is, Can the bank get out of this deal? Why? Because the lending instruments are wholly antiquated. They do 10-year plus loans and long-term loans. The derisking is wholly not thoughtful because it hurts returns in that sense. It has a whole bunch of contingencies. It’s all lending. There’s no culture of equity to it.

It hurts the agility of creative financing or projects not only to get done but also to get done and add value—so, value-producing, value-added, value creation, and then bringing in other investors. The only people that can do that are private investors. That’s why one of the things we’re trying to do through the Lara fund is also introduced, other than Brazil, where it exists, this whole notion of private equity exists. The region is used to traditional debt financing. Debt financing is excellent, but the incentive for value creation diminishes. The culture that exists is mostly these family office structures throughout the region. Then they’ll invest in deals, and they do so. However, the notion of private equity investors coming in, taking a piece of the business, helping create value, and then bringing in other investors is part of the motor of the US economy. That’s what the region needs and needs to see more of. We’re now Lara Fund, a pioneer of this. América Crece was an initiative to incentivize private investment from the US and the region. Multilaterals, and I hear it a lot. When I was in government, I thought maybe the DFC or the multilaterals could do so and incentivize these private sector investors and private investors to come in and do so.

It is the opposite. They tend to crowd them out because they kill a lot of the incentives and then because they kill the returns. It would help if you had bankable deals with healthy returns so that these investors come in, do essentially creative financing to create value, then for the new investors to come in and then wash, rinse, repeat; that’s how investment works, and that’s how economies grow. That’s what we’re trying to innovate. If the America Crece Initiative 2.0 comes down, Lara Fund will be in a perfect place to take action. People ask me all the time, Hey, government versus private sector. Look, I’ve done it in government. I’ve had the privilege of serving in the Treasury Department. I had the privilege of serving in the White House. I was a US Representative to the IMF. I then became President of the Inter-American Development Bank. I’ve done that. I’ve talked the talk. I’ve talked about investment in the region. You put out a glossy brochure and a nice press release, you do the handshake, and the politicians love it. Oh, this bank is going to loan so much to this country. Great. But guess what? You’re not producing value in the country per se.

Now, through Lara Fund, I’m walking the walk. We’re doing everything we discussed in the countries where opportunities exist. That’s what we seek. And guess what? The goal for the other global investors is for them to come in and follow because we know how to get this done.

For the immediate future, given all that you’ve just said, what do you see in Latin America in 2025?

2025 is going to be an exciting transition year. I told you already, from the challenges part, what I see from a foreign direct investment perspective, if you look at Mexico right now, I have concerns because where you’re seeing, Mexico has done everything in the last six, seven years, has done everything to disincentivize foreign direct investors. And yet, the US investors that have gone into Mexico have done so because of proximity. Most global investors and companies have gone in because of the supply chain, proximity, etc. China has taken that in the last four years and tried to exploit it, and it’s now becoming systemic, where I think that’s a big issue that we’re going. That’s what I have to deal with, and obviously, the new Trump administration will have to deal with it. But that trend there doesn’t necessarily then people think, and this is a question I get a lot, but then I talk to a lot in regards with the institutional investors, It’s like, okay, well, if they don’t invest in Mexico, are they going to look then at another country in the region?

Are they going to look at El Salvador? Are they going to look at Costa Rica, et cetera? The answer is no. The answer is they will look right here in the United States. They’re going to go where you are, Steven, in Arizona. But they’re going to go right here in the United States. Look, in 2020, when I ran for president of the IDB, I did so on a nearshoring platform. When COVID hit, China was an irresponsible actor during that phase. Economically, they were struggling, and they still are struggling. It was an excellent opportunity to promote the whole concept of nearshoring. And instead of embracing it, they fought me on it. Mexico, the Mexican government fought me on nearshoring. The Argentine government fought me on nearshoring. They said it was geopolitics. I was carrying the US flag. It was all politics, et cetera. Now, the story I see is all these countries in the region complaining that they haven’t seen the benefits. They have yet to take advantage of the benefits of nearshoring. And guess what? They had the opportunity. And now the clock has ticked.

But what’s happening? The alternative is not nearshoring to another country. The alternative is reshoring to the United States and doing so right here. And look, that’s going to be a priority for President Trump. That just is. We want to invest right here in the United States. There are great opportunities throughout. Still, I do not believe that if an investor does not go into Mexico, they’re going to go to Costa Rica, or they’re going to go to Guatemala, or they’re going to go to El Salvador. They’re going to come right here to the United States. Each country has to figure out its comparative advantage and what those opportunities are within and not think that this is just like, ” Oh, someone has allocated so much for this emerging market, and it will flip off. The difference for 2025 is that countries compete with the United States for investment.

LATAM FDI: That’s good to hear from an American perspective.

Mauricio Claver-Carone: Absolutely. But that’s also an opportunity. That’s also an opportunity. This is why I advocate modernizing trade agreements. This is an opportunity for countries in Central America to avoid getting comfortable with their economy being based on exporting a limited number of product lines to the United States. You have to diversify. You have to seek how to create. Look, it’s no secret that the big… Look at the big growth companies in the region. Some of the largest companies in the world, public-wise, et cetera, and growing-wise, are coming from the region. But what are they? Fintech, e-commerce. Why? Because they’re skirting the government. They’re just creative. They’re innovating and creating value through the digital ecosystem. That’s great. Now, you need an infrastructure to support that, which is where, for example, our fund is and where we focus. We focus on industrial assets, we focus on data centers, and, obviously, on the energy side that is needed to power that whole ecosystem. But finding what the comparative advantages are per country, the opportunities there are not only going to make those countries stronger, but they’re going to make the commerce between those countries in the United States even stronger per se, and not rest on your laurels, not think like this is.

Real competition and competition in a free market world makes people better. So that will be the challenge, but that brings a great opportunity. In so doing, do not think that people will pour into your country, considering that this is a privilege. I will invest billions of dollars in this deal because the government tells me it’s good. No, they want to find bankable deals that are well put together, have good terms, have good partners and sponsors, and check all the boxes. You’re now competing for investment with Arizona, the state of Florida, etc. You’re now competing with investment in steep deals. For that, you have to be sharper. And that exists because I always see those deals and those things in the region. And they’re hard to find, but they exist. And when you find them, they’re great opportunities. The returns are great. You can’t deny that. That’s important. Returns are essential for investors. That’s the comparative advantage that the region has, as opposed to the greater returns in the area than they’re going to be here in the United States.

Use that to your advantage. Don’t look at, Oh, How do we derisk everything so no one wants to take risks? Well, then that’s how then you get stuck with the crappy multilateral 10-year debt financing arrangement, which crowds out any other investors—got to get out of that mindset. Innovate, create, and find those opportunities. Frankly, that’s what we’re doing. If it didn’t exist, we wouldn’t be doing it.

LATAM FDI: Given that statement, you’ve got public sector experience. You’ve alluded to your company, the Lara Fund, on several occasions in this conversation. Can you give us an overview of your company, its length, and what you’re looking to achieve ultimately?

Mauricio Claver-Carone: Yes. As I mentioned, We’re the first and only US private equity fund focused on those middle markets in the region. We see those opportunities out there, particularly in these industrial assets throughout the region, the data center field, the digital asset field, and the energy, right? That’s the key. These countries have great opportunities. They have great business environments. We’re trying to help them shine amongst the competition in emerging markets, per se, but also for the comparative advantage for US investors looking for good returns in safer countries per se. What we don’t and are trying to do in these countries differs from the Lara Fund. Lara Fund is learning from the experience of institutional investors in the region, which, if you ask them, most of it is in Mexico and Brazil. If you ask them how they lost money, they mostly have lost based on the currency, which is a considerable challenge and currency risk. We don’t take currency risk. We do dollar deals. We do them. We prioritize dollarized or pegged countries where you don’t have to take that currency risk or in countries that do dollar deals.

That’s big. That’s important because hedging currency is expensive. It’s doable, but it’s costly. As history shows, that’s usually where investors take a hit. We’re taking that off the table to reduce the risk in the countries we seek to invest in. The institutional risk is low, particularly compared to other emerging markets. Then, it’s really about operational risk. If you have a good deal, good sponsors, and good partners like Lara Fund, the opportunities exist, and they’re there. There. So, we’re focused on that, and we’ve been off to a year of growth, and it’s been fantastic. We saw that our thesis was correct. We’ve seen over $2 billion worth of deals in the region, most of which are good, and you have to decipher, but there’s a lot more. And that’s just been in a starting phase. Now, there’s a lot of momentum taking place and a lot of excitement regarding new investments. We’ve been talking a lot about the America Crece Initiative. If there is an America Crece 2.0, I would highly advocate for it. Many people who served in the first term would highly advocate for it because it was extraordinarily successful. It did give the United States a comparative advantage over the Chinese

We’re extraordinarily well-positioned to walk the walk. We’ve talked to talk. We know what works. We know what doesn’t work. We know that doing it through DFC has its limitations. There’s going to be a battle for reauthorization of the DFC now. It’s already capped. There’s going to be a battle for reauthorization. It will take a long time to fix much of the damage currently done to the DFC, where it’s become a mini USAID, and that’s no offense to USAID. It’s just that the role of DFC was never supposed to be that of USAID. So, there’s a lot of fixing that’s going to take place. That’s going to take time. The multilaterals need to be updated. Their instruments have perverse incentives and are relics of the 20th century. There, That’s limited as well. You have to walk the walk with the private sector, and we’re leading the way in that regard. I’m proud of the work we’ve done. I think we’re starting January. We’ve been in a growth phase, a high growth phase. We’re going to be in for a higher growth phase.

This is to redefine global investment in Latin America and the Caribbean and to show international investors that high-quality bankable deals with great returns and limited risk exist in these regions, and we’re leading the way.

LATAM FDI: We’ve covered a wide range of information during this short period and found that listeners who listen to our podcasts have questions after hearing them. They asked how to contact the people joining us in these sessions. Mauricio, if somebody wants to contact you to ask you a question that may have come up due to what you’ve just spoken about, how do they go about doing that?

Mauricio Claver-Carone: Our website is www.larafund.com, so L-A-R-A stands for Latin American Real Assets.

LATAM FDI: If it’s okay with you, I’ll do the same for all the other guests. If you have a LinkedIn page, I’ll link it to it on the transcript portion of the page hosting this podcast.

Mauricio Claver-Carone: Thanks, Steven. And thanks again for everything you do regarding FDI and LATAM. You’re a key voice, so we appreciate and follow you.

LATAM FDI: I appreciate the compliment. I hope you have a wonderful day. Take care of yourself, and hopefully, we’ll have you back for another conversation soon.

Mauricio Claver-Carone: I look forward to it.

Katherine Caicedo
Investment Attraction Manager
Invest Pacific
Cali, Colombia

LATAM FDI: Hello, welcome to another installation of the LATAM FDI podcast. These are conversations in which we speak to individuals throughout the region of Latin America on topics related to foreign direct investment. Today, we have Katherine Caicedo with us. She’s an Investment Attraction Manager with Invest Pacific, primarily focused on attracting foreign direct investment to Cali in Colombia and its surrounding areas. Hello, Katherine. Katherine, how are you today? Please tell us briefly about yourself and your organization and why businesses should invest in Cali.

Katherine Caicedo: Thank you very much for having me on this podcast. We’re excited to share more about what we do and our region with you. As you mentioned, my name is Katherine Caicedo. I am the Foreign Investment Attraction Manager at Imbus Pacific for the services sector. I’m passionate about economic development, bringing economic development to my country, and encouraging companies to invest in Cali. So, I worked previously in organizations such as Procolombia. Right now, I’m working at Invest Pacific. I’ve been working here for ten months. What we do is help foreign companies establish their operations in our city and in the towns that surround Cali. We offer free-of-charge services, including connections with both the public and the private sector in our region, to ensure they can start their operations as smoothly as possible. What we aim to do is to create new jobs and new opportunities for our people through companies that invest in Cali.

LATAM FDI: Some people listening may know that Colombia is in the northern part of South America, but they might not know where Cali is in relation to Colombia’s other cities. Please give us some background information on that and let us know the population of Cali and the surrounding area and why it is a good idea for companies to invest in Cali.

Katherine Caicedo: The Valle de Cauca, the state from which Cali is the capital, is located in the southwest of Colombia, on the Pacific shore of our country. It’s the third largest city in Colombia. Cali has over three million inhabitants in its Metropolitan area, and Valle del Cauca, as a region, has over 4.5 million inhabitants. It’s strategically located within Colombia because it has access to the Pacific shore, making it a critical economic region. We have the main port of Colombia in the Pacific Ocean, further enhancing our strategic importance and making it an excellent option to invest in Cali.

LATAM FDI: One thing that I’m aware of is that the US is one of Columbia’s primary commercial partners. How many American companies specifically operate in Cali, and in what types of sectors and activities?

Katherine Caicedo: Sure. One of our strategies to encourage companies to invest in Cali as a business destination is that we are very close to the US, and over 146 companies from the US have already established their operations in Cali. We have companies from the BPO, IT and software, pharmaceutical, wood, plastic, cardboard, and so on sectors within our region. What is very important for the US is that these companies have generated over 11,000 jobs in the area.

LATAM FDI: I understand that Cali’s tech industry is increasing. What makes Cali attractive for technology-based operations? Why should they invest in Cali?

Katherine Caicedo: Several factors should motivate companies to invest in Cali, not just one. As I mentioned, we’re strategically located in the southwest of Colombia, giving us the same time zone as North American and Latin American markets. This also allows companies to be closer to their clients in these countries. Also, we have a top-tier university cluster where human talent is trained in technical and university careers relevant to the sector under high-quality standards, so we are a very cost-efficient city. So, Colombia is already a very cost-efficient country compared to North America and other Latin countries. However, to invest in Cali is even more cost-efficient than other main cities in Colombia. So, living in Cali costs 9 % less than living in Bogotá or Medellín. And in terms of salaries, we can be up to 40 % more competitive wages for the tech sector compared to these other main cities in Colombia. We also have a very robust infrastructure in terms of connectivity. The city has technological parks, and it also has the second tier four data center in Colombia. And we are connected directly to the Pacific undersea cable. As a result, we have fiber optic internet.

We also recently invested in a US company called Speedcast, which installed satellite antennas for satellite Internet in Cali. So, we have a very robust infrastructure that can also support the growth of tech operations in our region.

LATAM FDI: You have a good infrastructure, but how is Cali integrating itself into the global tech ecosystem? And what role does the Center for Art, Science, and Technology, which is new, play?

Katherine Caicedo: Yes. Right now, Cali is going through a perfect moment because both our mayor’s office, our governor’s office, and the private sector are working jointly to make Cali a more competitive city in terms of technology. We have recently opened the doors of a new technological park called Yawa in Cali, which has the purpose of landing modern technology companies but also has opened the doors to everyone that lives in Cali so that everyone can interact with technology with science. In this way, our talent, from the youngest to the oldest, can experience and access world-level technologies within our city. Making our citizens more technologically adept makes it attractive for companies to invest in Cali.

This park has a planetarium and several other initiatives that merge arts, creativity, and technology.

LATAM FDI: From what I understand, you will soon attend an event in Florida. Can you tell us what that event is and why it’s significant?

Katherine Caicedo: Well, we do a lot of events, or we attend a lot of events in the United States because, as I mentioned, it’s one of our main partners in attracting companies to invest in Cali. Now, next week, we’ll be in Orlando. We will talk to the diaspora of Colombians in Orlando so they know about our city’s opportunities and improvements. Then we will also go by the end of October, we’ll be participating in the event Tech in California, and we’re also aiming to connect with tech-based companies so that we can show them all the opportunities our city has for them to expand their operations, both for serving US clients as a nearshore destination, but also for entering the LATAM market.

LATAM FDI: When you go as Invest Pacific to events like the one you just described, do you use any particular strategies to attract business to your city? Or what do you do to make Cali attractive to companies attending these events?

Katherine Caicedo: We do a previous search of what types of companies we’re in contact with, the ones that we see from our market intelligence department that have the potential and may already have the intent to come to the Latin American market. And we target particular companies. However, we also have the support of ProColumbia, which has a broader range of offices worldwide and in the United States. They have already contacted several companies interested in exploring the Colombian markets. Our strategy is simple: pitch to companies to invest in Cali to sell them all these points of what our city has and how this can positively impact their operations, mainly because it’s a more cost-efficient but high-quality place to have tech-based operations.

LATAM FDI: Well, you go to events outside of Colombia. I know that Cali will host the CoP16 World Biodiversity Summit. How’s the city preparing?

Katherine Caicedo: Well, our city has prepared a lot for this event because usually, this is an event that you prepare two years in advance. But we had this event, and let’s say we have the news that we will be hosting it just this year. So, we had a little or less time. But there is a significant effort our city is making to have this big event that will take place in the last two weeks of October. At that event, we will be hosting the Green Business Forum. This is a business event promoting investment and green business initiatives and encouraging businesses to invest in Cali. We will have over forty high-level speakers from a lot of different countries. This will occur on October 25th in the Chamber of Commerce auditorium in Cali from 07:30 AM to 04:30 PM.

LATAM FDI: Well, you’ve made a lot of good points about why companies should invest in Cali and why it’s an excellent place to invest. Are there any other details you’d like to share with us about the city that might be pertinent?

Katherine Caicedo: Our city has an excellent quality of life. It’s a city, and we’re hosting the COP6 event because we’re surrounded by biodiversity. We are a city that lives within nature, but it’s also a city where you have a lot of cultural heritage. For example, salsa is a rhythm you may know from Latin America. Cali is known as the world capital of salsa. We have several things happening all around, such as salsa dancing and salsa music. So, it’s a city that vibrates with nature, culture, and creativity and is a beautiful place to live. We have great weather throughout the entire year. It’s a city where you will always find summer and breeze, but also a very green territory with many birds and nature around.

LATAM FDI: In a brief period, we’ve reviewed much information on why businesses should invest in Cali. Our experience is that after hearing speakers share information, listeners have questions that they’d like to follow up with. We create avenues by which listeners can contact our speakers. If somebody wants to contact you with a question, how would they do that?

Katherine Caicedo: You can email me directly. My email is kcaicedo@investpacific.org.

LATAM FDI: We also often include a link to our guests’ LinkedIn profiles in the transcript section of the podcast page. You probably have a LinkedIn page.

Katherine Caicedo: Sure. I’m on LinkedIn as Katherine Caicedo Tapasco.

LATAM FDI: Okay, we’ll have a link so people can go to you directly through your LinkedIn page. Thank you for joining us today. It’s exciting to hear about Cali. It’s a place some of our listeners have heard about, and maybe some haven’t. But in any event, you’ve given us something to think about, and we thank you for participating today.

Katherine Caicedo: Thank you very much, Steven, for having us and for allowing us to share a little bit about our city, all the opportunities that we have, and how we’re becoming a home to tech.

Manuel Tovar
Minister of Foreign Trade of Costa Rica
San Jose, Costa Rica
www.comex.go.cr
www.procomer.com

LATAM FDI: Today’s discussion is with the Costa Rican Minister of Foreign Trade, Manuel Tovar. His country has had impressive success in attracting FDI over the last decade. Hello Minister Tovar.  Can you please tell us a bit about yourself and your organization?

Manuel Tovar: Good morning, Steve. I’m delighted to share information on foreign direct investment in Costa Rica with you this morning and exchange views on what we have in our hands and our efforts to continue positioning Costa Rica in the international markets.

LATAM FDI: Please provide information about yourself, your biography, and your organization.

Manuel Tovar: I am the Costa Rican Minister of Foreign Trade. I’m also the chairman of the Board of Procomer, our official investment, IPA, Investment Promotion Agency, and Export Promotion Agency. I am a lawyer by education. I specialize in international law and international trade law.

Previously, before becoming the Costa Rican Minister of Foreign Trade, I represented my country before the OECD, first as a negotiator of the accession process for Costa Rica to become a member of the organization and then as a representative as an ambassador of Costa Rica to the organization. I also exercised previous roles in public office during our mission to the European Union in Brussels as the deputy when we negotiated our bilateral trade agreement with the EU. Indeed, before that, I was also a negotiator at the Ministry of Foreign Trade and dealt with dispute settlement issues. I represented the government in state-to-state and investor-state disputes. That’s my background when it comes to public office. However, I also practiced the legal profession in my law firm before jumping to public office.

LATAM FDI: Thank you for that information. Costa Rica has had incredible success attracting foreign direct investment over the last decade, and many people use the term punching above its weight to attract foreign direct investment. What are the current strategies and policies that the government of Costa Rica is implementing to attract FDI?

Manuel Tovar: That’s an excellent question, and I appreciate your interest in addressing the topic of foreign direct investment in Costa Rica that has undoubtedly become increasingly popular over the last years, not only here but also in international markets, where a small, small economy, a small scale economy as Costa Rica has drawn the attention of essential multinationals leading Fortune 500 companies that have chosen us as a partner for doing business. To address your question, I have to go back in time and refer to some specific policy achievements that my country has undertaken over the last 60 to 70 years when we decided to abolish the army back in the day, at the end of the ’40s, the decade of the ’40s. And that allowed us not only to eradicate the appetite for authoritarian and military regimes, as has been the case in many of the countries in Latin America. But we decided to allocate taxpayers’ money to buy pencils, not weapons. To hire teachers and not to hire colonels. So that made Costa Rica a special place where we started investing in people, health care, and education; coupled with that, we had a strong vision for environmental protection.

Manuel Tovar: We only have one planet. There’s nothing more. Planet Earth. There is only one planet to live on so far. And we have to take care of it. We understand that no matter how small it comes to the surface our country is, all the efforts we can undertake to protect biodiversity, tackle climate change, and reduce the carbon footprint have a substantial global impact on mankind. In a small territory of 51,000 square kilometers, we host around 6 % of the world’s biodiversity. That is just a dramatic number for such a country. So, we understood early on that we must play a strong game in attracting foreign direct investment in Costa Rica. We have a significant share of international responsibility for promoting and reverting deforestation, promoting biodiversity protection, and pursuing policies that will go hand in hand with sustainability and a sustainable environment. At the same time, moving ahead, in the mid-’80s, we started to shift from import substitution policies and industrial policy to an open market economy. First, by liberalizing trade unilaterally, then within the framework of the WTO as an active member. As you mentioned, we have been active and punching above our weight when it comes to attracting foreign direct investment in Costa Rica, leading essential discussions within the WTO in Geneva.

At the same time, we embark on a very ambitious trade agenda by negotiating agreements with Mexico and the United States under CAFTA; they are with the Caribbean countries, Chile, Peru, European Union, EFTA countries, the UK, China, Singapore, and Korea. But our government has implemented, adopted, or renewed the vows with this model that has produced and spurred investment into a country. Because excellent and investment policies go together, they work together. We cannot attract the same investment to Costa Rica over the last decades if we don’t embrace open and free trade. So, our government, after eight years of a conservative trade agenda under the leadership of President Chávez, has enacted maybe the most ambitious trade agenda that we have embarked on over the last years, with negotiations with FTA with Ecuador already in place. A couple of months ago, we concluded a free trade agreement with the United Arab Emirates, expanding our footprint in such a sophisticated and vital market with a very high, significant purchase power. We have announced the launch of negotiations with Israel as our next move to promote foreign direct investment in Costa Rica.

Unfortunately, these have been delayed due to the Hamas attack back in October and now the current conflict of COVID in the region. We have reaffirmed our commitment to advance under the Pacific Alliance and become members of the Pacific Alliance. We have also sought membership to the CPTPP, the Transpacific Partnership Agreement, which the United States went through a few years ago, but for us, that continues to be a very important block of nations. Indeed, Japan is the only G7 economy with whom Costa Rica has no free trade agreement. Of course, we have also engaged with a very interesting set of countries like Chile, South Korea, Singapore, and New Zealand under the DPA, Digital Economy Partnership Agreement, which is a very pioneering, innovative agreement that seeks to advance the digital economy across all the disciplines, the digital economy. We recently concluded the Agreement on Climate Change, Trade, and Sustainability with Switzerland, Iceland, and New Zealand, which seeks to harmonize the trade and environmental agenda with the globalization of ecological goods and services. And, of course, we haven’t been shy in raising our hand and expressing our interest to, when the time comes, become part of the USMCA family because we have evolved from the times that we negotiated CAFTA over 20 years ago since we negotiated that agreement which has been of great importance of increasing foreign direct investment in Costa Rica.

We became an OECD partner like Canada, Mexico, and the US. We have shifted our economy from a few agricultural commodities to advanced manufacturing and services, where we now have medical devices representing more than 40 % of our export goods to the world. So, we have changed as a country, as an economy, and as a society. And indeed, our trade platform is linked to those partners in North America. So, we see the Americas Act with great enthusiasm; this legislation introduced bipartisan, bicameral, which speaks about opening up USMCA to partners such as Costa Rica. We know that elections are now coming on in the US, and trade is never a sexy topic to discuss or advance in the middle of a campaign. However, we have seen interesting moves in Washington, seeking to pay more attention and seek further economic integration with the Western hemisphere. America’s Party for Economic Prosperity is another element around the table. So, throughout our visits to Washington, we have seen an increasing appetite to further engage with countries like Costa Rica. Another one, of course, from our strategy is investing in human capital. That is the main factor that has upgraded foreign direct investment in Costa Rica. That has allowed us to attract companies such as Intel. That has allowed us to become a strategic partner for the United States under the Chips and Science Act on Semiconductors. As I mentioned, that has allowed us to position Costa Rica as a regional leader in medical devices. We just recently announced the arrival of Johnson & Johnson to Costa Rica, which would create around 6,500 jobs. So, all of these investments require human capital, and we recognize that we have to meet the needs of industry. This is a global challenge. There is a worldwide need for talent. We’re confident in pursuing policies that would allow us to increase the source of human capital further. And, of course, as I mentioned, we renew our vows and refer our commitment to the type of country we are. Our country pursues sustainable and robust environmental obligations and ensures the rule of law. International companies, multinationals, and investors will only place their money where they feel safe. You wouldn’t put your savings in a bank that doesn’t grant you the certainty you need.

Of course, we must reform Costa Rica’s commitment to the free trade zone regime and the schemes and incentives we provide, including tax incentives. We must also reform the type of country we are, especially in times of unrest, not only globally but regionally, as you have seen, unfortunately, in Venezuela and other countries in the region.

LATAM FDI: You mentioned medical devices as a success story in foreign direct investment in Costa Rica over the past decade and referred to upcoming opportunities for semiconductors in the country.

Typically, most investment in Costa Rica has centered around the Greater Metropolitan area, which is the San Jose environment. I know you have a program now in which you’re seeking to diversify the geographic location of companies that invest in Costa Rica to areas that you refer to as outside of the Greater Metropolitan area. Please tell us a little about that initiative to promote further foreign direct investment in Costa Rica, what progress you’re making, and how you see that as a benefit to Costa Rica and its population in general.

Manuel Tovar: Absolutely. Since the very beginning, early on in our administration, back in May 2022, the President, from the very first day, instructed policymakers and ministers to address the challenges of the most vulnerable regions in Costa Rica, where you find the most vulnerable populations, the coasts, the rural areas. So, we must bring about progress and well-being to those in need of better living conditions and those whose livelihoods are not similar to those of the greater Metropolitan area. So, we understand that we must level the playing field nationwide for foreign direct investment in Costa Rica. That’s why we pursued a very interesting reform regarding FDI, among many other public policies that seek to improve the lives and livelihoods of the people regarding access to water when it comes to infrastructure, education, and other critical domains. Also, we have pursued a very ambitious reform that grants further tax incentives to companies located beyond the Greater Metropolitan Area. This describes the limits of what the Greater Metropolitan Area is and what is not. The jurisdictions are very well-described in a robust legislation that we passed early on in our government.

From extending the periods to which we grant the free trade zone status to lowering labor costs by reducing the fees companies’ employers should pay to the healthcare system, La Caja, Costa Resistencia Seguro Social. So, we understood that we needed to, at the same time, advance in digital infrastructure to provide fiber optic and provide further access to water to improve the ports, the airports, and the roads. We also understood that we had to develop other innovative approaches to make foreign direct investment in Costa Rica in these places more attractive. So now we’ve seen the efforts under these new schemes that we have provided. We have more than doubled but tripled the arrival of investment projects beyond the greater Metropolitan area over the last year. That’s one of the reasons we had to shift from an And adopt and design a new FDI strategy that we launched about a year ago under the execution of Procomer. So, we have also identified every region’s needs, challenges, and opportunities. We cannot apply a one-size-fits-all solution for all of the regions. We have to map them.

We have to see that it’s different to invest in the opportunities that we have or the challenges that we may find in the coastal area, close to ports, and then somewhere deep inside the mountains. So, we have mapped all the different regions outside of the Greater Metropolitan Area and identified the challenges and the opportunities so that our promoters, our economic development staff, can comment when they go and companies to offer them a value proposition according to their needs and expectations. So having said this, we have seen how, for example, the development of second-tier cities is growing around Liberia in the northern Plains in San Carlos or in the Southern region of Pérezolidón, where we see exciting clusters of further foreign direct investment in Costa Rica, for example, on technology and communications services. We see Liberia in advanced manufacturing with Coca-Cola’s newest and most modern factory in Latin America. So, on semiconductors, I think we find a lot of potential in services when it comes to positioning these second-tier cities, which are located outside the Greater Metropolitan Area, as attractive hubs for investment. At the same time, other regions that have a lot of potential in agro, where they have the conditions, the weather, where they have the plantations, to bring investment in an agro-industry that can undoubtedly provide jobs, especially to women, which we have seen evidence that many of them have had the opportunity to jump into the labor market and to work in important companies located, for example, in Guanacaste, in the province of Limón, to say so.

LATAM FDI: You alluded to Procomer, the organization that represents foreign direct investment in Costa Rica. Since your time is limited today, I’d like you to explain to our listeners what support structures are in place for foreign investors once they are established in Costa Rica and what role Procomer plays in delivering that support.

Manuel Tovar: Procomer is a well-known institution globally known for its excellence and outstanding workforce. We have provided Procomer with more resources. We have provided Procomer with an interesting network of offices around the world. Procomer has offices in Dubai, Tel Aviv, Seoul, Tokyo, London, Madrid, Rotterdam, Texas, California, New York, Washington, and Mexico, to name a few. We have 27 locations, 27 countries, and different countries, and we continue to expand our footprint worldwide. But at the same time, when companies choose us as partners, as destiny, the role of Procomer is to walk them through, grab on your hand, walk them through the whole process, from the soft landing to the granting of the free trade stream regime. Procomer is the institution that grants the free trade stream regime status to companies that certainly meet the criteria under the law to operate as such. But we also have a strong team that provides after-care service that is ready to assist companies not only in their soft landing but also throughout the whole operations; whether they face a speed bump along the way, they will be ready to assist in coordinating with the relevant institutions and get things smooth and done.

Also, we run the VUI, the single investment window to facilitate foreign direct investment in Costa Rica, where we streamline and digitalize most of the procedures. We’re bringing more and more institutions and procedures under this single window. Indeed, this is something that has had a significant impact on investment. It reduces costs and time. And, of course, we have a team that supports companies throughout the registration of permits, health permits, and environmental permits. Procomers support, assist, and walk hand in hand throughout the entire process, from self-landing throughout the operations to our after-career service.

LATAM FDI: To keep you on your busy schedule today, we find that listeners often have questions after absorbing our speakers’ information. I know that you have a profile on LinkedIn. Please include your profile in the transcript section of the page that hosts this podcast so that anybody with a question can go directly to you.

Manuel Tovar: Absolutely. Absolutely. Feel free to do that. We’re always open to business and to respond to people’s inquiries. So part of our success is precisely that, being open markets, being small. And small is beautiful, Steven. Small is attractive because those who know Costa Rica know each other in Costa Rica, for good and bad. And it has its process and cons. But I will stay positive in the sense that here, with just having a phone call away, playing with the rules, with the legal framework under the rules of the game, with a simple phone call, We get things done. Procomer has a very successful rate of after-care and a very successful rate during the soft landing. Significantly, there was a very successful rate when granting the free trade stream regime. However, it could be a very complex situation that requires the attention of a minister. Thankfully, their success rate is very high, but if that is the case, I don’t hesitate to support Procomer by grabbing a call from my peers at the Ministry of Health or Environment and getting things done.

If I can’t manage right and succeed in sorting out a specific speed bump, then the President of the Republic will jump ahead, make that call, and sort things out. We always follow the game’s rules because our country’s legal framework is critical. It’s part of our DNA. But we walk the talk when we say international investors will use it without a red carpet-based red tape. Our government has a strong sense of allergy to red tape. We have deregulated many absurd regulations that have existed in the air for years and decades. We have embarked on a very frank dialog with the industry, the multinationals, investors, the chambers, the AmCham, and the It’s shown with the software as the different chambers operating in Costa Rica. And we sat down with them at the very beginning and said, Listen, why does it hurt you? What can we do better for you to ease business? We’ve seen how Costa Rica has made substantive progress in the doing business ranking. We’re not satisfied. We always continue to see what we can do better.

This is an open discussion, open dialog, and permanent dialog that we have with the industry and the stakeholders to continue deregulating absurd degrees or regulations that, in a way, in the past, have represented some obstacles for business. So that’s our pragmatic way of doing business. We’re open to trade. We’re open. We’re convinced that for a country like Costa Rica, since our very foundations as a Republic, we started exporting coffee for such a small market, and with a very diverse value proposition, Open Trade has been a cornerstone of our development and a pillar for FDI. So that’s what we’re trying to continue pursuing, Steven, the type of Costa Rica that we were, but trying to become a better version of ourselves.

LATAM FDI: Well, that’s great to hear. It’s great to see your success. Thank you for being with me. I know you’re very busy, and I appreciate your dedicated time to our conversation today.

Manuel Tovar: Thank you very much, Steve. We are delighted to continue talking to you and discussing foreign direct investment in Cosa Rica further. We’re conducting exciting things on semiconductors. As you know, Secretary Ramando is busy in Costa Rica and has endorsed our accession roadmap to our semiconductor roadmap. And, of course, the declaration by the President of this industry as of national interest has us as a fundamental and critical stakeholder in the hemisphere. And where we will come is the Silicon rainforest of America. I am willing and delighted to continue engaging with you, Steve.

LATAM FDI: Well, thank you, and have a wonderful day.

Manuel Tovar: Likewise. Have a great day.

Juan Carlos Mathews
Economist and Former Minster of Foreign Trade and Tourism of Peru
Lima, Peru
juancarlosmathews@gmail.com

LATAM FDI: Hello. We’re honored to have Juan Carlos Mathews, a distinguished economist and former Minister of Foreign Trade and Tourism for Peru, with us today. Hello, Juan Carlos. Could you share your background before we delve into Peru’s foreign direct investment opportunities?

Juan Carlos Mathews: Thank you for your invitation, Steven. As you mentioned, I am an economist. I have mainly worked in the private sector in international trade. I was also the Peruvian government’s vice minister of SMEs and industry. Until recently, I was the Minister of Foreign Trade and Tourism. I have also been involved in academia, working for two private universities in Peru. My experience spans international trade and the private and public mining sectors.

LATAM FDI: That’s interesting. Given your knowledge, which is very broad, obviously, what sectors do you consider to be the most promising for foreign direct investment opportunities in Peru? Are there any emerging industries or markets that are particularly attractive?

Juan Carlos Mathews: The ones referred to are in the mining sector, mainly because 60% of Peru’s total exports are minerals and metals. We are still developing different projects, in most cases through joint ventures with some of the prominent investors in this field.

For example, Newman is an Anglo-American investing in Quellaveco, a big project here. But during the last decade, our agro exports have experienced exciting growth. I’m talking about fruit, not only fruits and vegetables, our superfoods, but also seafood products. We are increasing the production with excellent levels of quality, and in most cases, through foreign direct investment in some cases and joint ventures in others. That big area of agro-industry and seafood products is also an attractive sector in which to invest. Some small sectors are rolling very fast. We refer to, for example, the export of software. In Peru, we are developing different software for USA, Spain, and India companies. We are a very open economy. In most cases, we invite investors here in Peru. Through joint ventures, they are exporting the products to those countries where we have a free trade agreement.

For example, we have been negotiating a free trade agreement with India and the USA as a big market. They are thinking not of Peru; they are thinking of the USA. But by taking advantage of foreign direct investment opportunities in Peru, they are going to produce it, in some cases, at a lower price, and in all cases, at a lower rate from Peru to sell in the US. Almost all cases, there is no import tax due to our free trade agreements. For example, the mining, agribusiness, and software sectors are interesting areas where we have grown fast during the last few years.

LATAM FDI: In particular, regarding mining and agribusiness, before we started recording, we were talking about the Puerto de Chancay project.

Juan Carlos Mathews: Yes.

LATAM FDI: Can you briefly explain how that project will facilitate Peru’s overseas sale of mining and agricultural products?

Juan Carlos Mathews: Today, the main port in Peru is  Callao. Callao represents more than 80% of Peru’s total trade and imports. We have two big global players operating there: APM Terminals from Denmark and BP World from Emirates in the southern part of the port. They have invested a lot during the last few years, but we have discovered the advantages of developing this port, which is 76 km north of Lima and very close to Callao. Depth is one of the significant advantages and a positive for foreign direct investments in Peru. We can receive a vessel with a capacity of 21,000 containers. It’s a very, very big vessel. It means a reduction in terms of cost because of economic skills. However, the main advantage is that we can go directly to Asia, particularly China. That’s why the slogan from Chancay to Shanghai exists: the name of our port to Shanghai, the port in China. It represents a reduction in terms of rate of 10 days. Instead of 45 days, it will take 35 days to move from Chancay to China. In the case of products from Brazil, instead of going through the Panama Canal, there will be a reduction in the rate of 16 to 17 days, which is quite a lot. This is another positive for foreign direct investment opportunities in Peru.

It’s very, very important. The idea is to transform it into a hub for South America. We are considering the demand for Peruvian products and goods from different countries.

LATAM FDI: One of the most important things companies that want to invest in a country consider is the workforce. Could you describe the quality and availability of the Peruvian workforce? Are there particular skills in industries where Peruvians excel?

Juan Carlos Mathews: Yes, maybe you can find some differences because, in the mining sector, we have… Well, it is improving the labor in that sector in Peru.  In some cases, the investors also bring people from around the world. We have a lack of capacity in that field, specifically. But in the case of agribusiness, we are also teaching to some of our neighbor countries because we have developed a very strong agro-industry due to our climatic conditions, excellent position, and the possibility of exporting the product during the entire year. We have created a robust industry. In northern Peru, companies can be here, in California, or wherever because they have global standards. In that area, in the agro-industry, I think we have enough well-formed labor used in the supply chain. A difference with the mining sector is that we can find some areas where we need labor from overseas.

LATAM FDI: What’s the relationship between labor and business? For instance, have any recent labor market reforms taken place or may take place in the future that could affect foreign direct investment opportunities in Peru?

Juan Carlos Mathews: When I was in the government, I saw a complete reform of the labor system in Peru. But it is tough to implement because always when you have it ready, from the technical point of view, it is prepared. But from the political point of view, it’s a big issue. You don’t know when the right moment is. You will never find the proper time to do it. You have to do it because you have to do it, but you have to do it, considering that you will face some social problems. In some cases, for example, in Peru, you can start working in a company and immediately have one month of vacation. That’s too much. Everybody’s used to it. It’s a right that the people think they have and are unwilling to accept changes in that instance, to mention a specific point. However, if you compare the labor costs for an entrepreneur, it is usually higher than in all the other countries in Latin America. So that’s a weak point. That’s an essential question because facing that problem is necessary.

I think a new government will face the possibility because these reforms should usually be implemented at the beginning of a government, not at the end. In 2026, we are going to have elections. I think the new government will be able to look at Peru compared to other countries. According to the World Economic Forum, we are in an unfavorable position in education, health, infrastructure, science and technology, and the solidity of institutions. Within these five significant areas, you can identify some others, such as the one you mentioned and the labor related to this. I agree that it is a crucial point, a critical reform that has to be done. But as I mentioned before, it is tough to expect a reform like this to happen in the next one and a half years.

LATAM FDI: What incentives does Peru offer to attract foreign direct investment? Are there any tax breaks, grants, or other benefits from which foreign countries can benefit?

Juan Carlos Mathews: Yes. The foreign investor has the same conditions as a national investor. The same conditions. But maybe in two months or earlier, you will have a new law referring to the economic, special economic zones. We have had free zones here in Peru throughout history, but not exactly as they work in the USA and different parts of the world. I have been participating in the law, and the idea is to have clear incentives. The problem with incentives here in Peru includes tax incentives. The Ministry of Economy and Finance is sometimes unwilling to accept this incentive. Of course, we showed them the cost and benefit of those measures. You are taxing companies that are not in Peru. They are going to generate income for Peru. So, it is understandable that we have to give them incentives. You are competing with other countries at the same time. We have natural incentives. In some cases, I have been in different places in the UK, Australia, and Spain, talking with investors, and most of the questions referred to macroeconomic stability and legal security.

But there are more than incentives, tributary incentives, or financial incentives. But in some cases, it is a need. If you are working in the jungle of Peru or the highlands of Peru, in some cases, you need this incentive, or otherwise, you will not be competitive. Our advantage is that, in some cases, our resources are so vital that we can compete without offering some tax incentive. But I think if we have the opportunity to talk again in less than two months, we will have a clear idea of the law that will be launched soon.

LATAM FDI: That’s a good reason to have another conversation shortly. But what about political stability in Peru? How has Peru’s political stability recently affected the business environment and economic policy?

Juan Carlos Mathews: Yes. Our group is extraordinary for some people because you can see the macroeconomic indicators not during the last year but over the previous 20 years. You will see that our economy’s performance is better than the average in Latin America. In some cases, indicators like inflation are the best in Latin America. This is good for foreign direct investment opportunities in Peru. But at the same time, we have had six presidents in six years. How can we say we have political stability? We can say we have macroeconomic stability, but it does not sound logical because the economy and politics are linked. But mentioning this, I have to recognize that we are always in similar situations. You cannot be bored in Peru. You must read the news constantly because you will be aware of different things daily. I think that, yes, we are having a lot of discussions and uncertainty in terms of the political arena. But in the end, the entrepreneurs know how to deal with that. When I talk, for example, with Anglo-American, this is a massive company that is investing in Quellaveco in the mining sector.

I have been talking with them twice in the UK and the Emirates in the last six months with the CEO, and they were planning to expand the investment in Peru. All the questions refer to macroeconomic stability and legal security. Some questions refer to the political situation, but understanding that it is almost standard in Peru. So it is not affecting decisions too much. But I have to be frank. Of course, the entrepreneur’s expectations and trust in the system have been affected. So, it is recovering. Despite the situation in Peru, it is recovering slowly, unfortunately, because I think the flow of foreign and domestic investment would undoubtedly be higher in other conditions.

LATAM FDI: What advice would you give to parties looking for foreign direct investment opportunities in Peru for the first time?

Juan Carlos Mathews: My best advice is to believe in a joint venture. I am a believer in strategic alliances for both parties. I mean, for the Peruvian part, because it is going to receive know-how from the company that comes from the USA, for example, and through a USA company, because we know how Peru works better. If you look at the figures showing many high levels of corruption, some people do not trust the judicial system and prefer not to invest in Peru. But if you do it through the correct partner, you can understand that there are some routes to do it correctly, and the risk would be reduced significantly. The critical issue is to select the correct partner. Not any partner, but a correct one. But my advice would be in that sense because I have seen a lot of problems, even with Latin American companies. You can hear in Latin America that Latin America is only one. It’s not only one. There are some significant differences between Colombia and Peru, Peru and Argentina, et cetera. I have seen a lot of Peruvian investment in those countries, and investment from those countries in Peru can have many problems.

It is not so easy. You have to understand even the idiosyncrasies, the punctuality, and many other things that are characteristic. In some cases, it is good, and in some cases, not so good, but through a partner, you can do it better, I think, or at least a representative that can translate all you have, the reality of Peru.

LATAM FDI: You mentioned changes in government, but despite those changes, could you comment on how open the Peruvian government is to collaborating with foreign businesses and addressing their concerns? Did they work well with business?

Juan Carlos Mathews: Yes. For example, I was the Minister because I talked clearly with the President and the Prime Minister to understand if they favored the investment. If they told me I was not in favor of the investment, I would say, Thank you very much, I won’t participate. It’s as straightforward as that. I’m a professional, and I’m not a politician. I received support from the government during this year that I have been working for the government. The idea is that we have 22 free trade agreements. They include investment protection, and we are negotiating six additional ones with Hong Kong, the mobilization of the free trade agreement with China that will be ready in the next 15 days, and the negotiation with India, Indonesia, the Emirates, and Morocco. That reflects our belief that the open economy is essential for our development.

LATAM FDI: Given that and Peru’s openness to opportunities for foreign direct investment, how would you compare Peru to other regional countries in terms of its ability to attract foreign investment? What sets Peru apart?

Juan Carlos Mathews: Yes. In some cases, I have to say, unfortunately, that in some cases, the great advantage is the natural resources, location, and the free trade agreements we have. I said, unfortunately, because I think it is a need of what you mentioned before, specific incentives to move faster this investment in different sectors that we need to improve. But the location is critical. That’s why we were talking about Shanghai and ports, not only the port but also the airports. We will have a new airport at the end of the year in Lima, in Callao, and it will be ready at the end of December. We are improving the airport in Cusco, which will be prepared in two years. We have habilitated two more in the jungle and the highlands. We are investing in infrastructure, and that keeps considering the location of Peru with this investment in infrastructure is a crucial point. Natural resources, of course, we have to improve the specific promotion of some incentives. Still, with the conditions that we have, even the foreign investor, the same conditions as the national investor, I think we are an attractive place to do it.

As I mentioned, the investors are asking for macro-stability and legal security, but in some cases, they also ask about the political situation. I’m trying to say that in the short term, if we have a clear idea of what will happen in the coming five years for our country, there will be a very significant increase in investment. I have been, for example, when I was in, I think it was in New York, and I was taking a coffee after a conference, I’ve referred to a portfolio of investment. One of the investors was talking with another one, and they said that two countries should invest in Latin America: Peru and Colombia. We have to do it right now because we will have one or two years of advantage when the competition comes. After all, it is going to change for good. They mentioned this, not me, as a Peruvian, but the two investors participating in the forum. That’s the impression that, in some cases, some investors have when they evaluate the complete situation in Peru.

LATAM FDI: Well, we’ve covered quite a bit of the topic in this podcast for the past 20 or 25 minutes. We find that listeners to these recordings often have questions after they’ve absorbed the information that has been presented to them. We like to make our guests available to people with questions. How would somebody with a question from what they heard in this podcast contact you? Would that be something that you’d be willing to do?

Juan Carlos Mathews: Yes, I can give you… Well, you have my contact information, and you can transmit the questions to me. I would be glad to answer them.

LATAM FDI: Well, what we might do, and what we usually do for our guests, is put a link to their LinkedIn page in the transcript section of the podcast so that people can go directly to you. We’ll add your phone number and email address. Is there a website that you have?

Juan Carlos Mathews: Yes. I said yes because I was referring to the institution where I work, but I don’t have a personal one. However, I can put my phone number and my email.

LATAM FDI: Okay, we’ll do that. We’re happy you chose to speak with us today. We wish you a lot of luck in attracting foreign investment in Peru and look forward to having a future discussion with you when you know more about the special economic zone law being worked on in Peru.

Juan Carlos Mathews: No, thank you very much. It has been a pleasure, Steven, talking with you. Bye. Take care.

Carolina Rosales Gonzalez
Executive Director
Invest in Cartagena and Bolivar
Cartagena, Colombia
crosales@investincartagena.com

LATAM FDI: Hello. Welcome to this episode of the LATAM FDI podcast. Today, we have Carolina Rosales-González with us. Carolina is the executive director of an organization in Cartagena, Colombia, called Invest in Cartagena and Bolivar. Welcome Carolina. Please tell the audience a little bit about yourself and your organization.

Carolina Rosales-González: Thank you very much, Steven, for having me. As you were saying, my name is Carolina Rosales. I’m the Executive Director of Invest in Cartagena and Bolívar, the local Investment Promotion Agency of a beautiful region on Colombia’s Caribbean Coast. It’s been a year since I assumed the position. Believe me, Steven, working for a city and an area that is full of opportunities and with this enormous potential, is very gratifying. I’m sure we will talk about the opportunities to invest in Cartagena and Bolivar through this podcast. It is a pleasure. I’m thrilled to be here. I expect to give you all the highlights needed to invest in Cartagena and Bolivar. So, thank you very much for having me. Thank you very much for this opportunity to promote our territory.

LATAM FDI: Well, it’s a pleasure to have you here. Your region is fascinating, and I’m sure it’s beautiful there in Cartagena, being in the Caribbean. That being the case, how does its position in the Caribbean affect foreign direct investment that arrives in your region? And how do these activities contribute to the growth and development of investment in Cartagena and Bolivar?

Carolina Rosales-González: Well, I would like to give you a context about the Colombia FDI flows, and then we can get a more profound overview of investment in Cartagena and Bolivar. And, of course, we used the strategy to increase the number of investment projects in our territory. So, first of all, in Colombia, FDI flow has grown in the last eight years. This is very positive for our country compared to other situations in Latin America and worldwide. The main sectors where FDI has been focused in Colombia are financial business services, the oil and gas sector, which makes regarding our offer in Colombia, and then the transport, restoration, and communications sector, half the 10% of the share of the total of the FDI flows receiving in Colombia the past years. Regarding investment in Cartagena and Bolivar, according to the data report by Invest in Cartagena, the sector’s investment interest for the last years has been on infrastructure, followed by renewable energies, and 50% of the total has focused on software and IT services. The reason for the data is significantly related, Steve, and this information drives how we run the investment strategy from the agency’s perspective. 

As you said, Cartagena and Bolivar are strategically located on the Caribbean Sea. So this means that Cartagena and Bolivar have fluid, maritime, and river connectivity. We are just three days, for example, by boat from the Coast of Florida and five days from the East Coast of the United States, also our leading commercial partner. We are only a two-hour flight from Florida and one hour or maybe less to Panama. That is 45 minutes, if I’m not wrong. And we are only 265 nautical miles from the Panama Canal. For that reason, Cartagena and Bolivar are the most connected cities on the Colombian Caribbean Coast. Have you been to Cartagena before?

LATAM FDI: Unfortunately, I’ve never been to Cartagena.

Carolina Rosales-González: You have to. Cartagena and Bolivar are regions full of natural attractions. We have a natural bay, for example, and we have an authentic and magnificent historic center that anyone must have the opportunity to come to visit. We are the jewel of the crown in the tours offered in Colombia. Cartagena is a World Heritage site that was declared by UNESCO. We also have two additional World Heritage locations in the Department of Bolivar. They are Mompós, and Palenque. Those comparative advantages are related to our area, and I will mention many other reasons. From the agency Invest in Cartagena and Bolivar, we have prioritized seven sectors in which Cartagena and Bolivar represent an investment opportunity. The leading sectors in our investment include opportunities in terms of infrastructure; Cartagena, for example, is the first leisure and lovely destination in Colombia. We have a consolidated hospitality investment in Cartagena and Bolivar. We have important brands such as Accord, Hilton, Hyatt, Marriott, etc. So, indeed, Cartagena is the Jewel of the Crown. You have to visit one day. If you are in the United States, you are very close, as I said before. Another thing important about Cartagena’s investment opportunities related to our location is that Cartagena is the most efficient port area in the Caribbean.

We have sixteen different terminals with different vocations, but one of those terminals owned by Group Port of Cartagena has been working as the third most efficient port in the world. So, it is essential to highlight Cartagena’s logistic platform with this natural advantage. Also, we have to start expanding our local airport. And there is also a new airport project that will have all of our capacity now. It will also be the brand new cargo airport on the Caribbean Coast. This is why Cartagena is consolidating itself as an export platform for the manufacturing industry and a logistics hub. Regarding the manufacturing sector, I don’t know if you know about that, but we host the most critical and sophisticated refinery in Latin America. Have you heard about it?

LATAM FDI: No, I wasn’t aware of that.

Carolina Rosales-González: Okay. We have the most sophisticated refinery. And since then, we have developed a strong value chain with well-known international chemical brands. We are the most vital city in Colombia in the petrochemical sector. We have brands, for example, like Dow, Axalta, Yara, and Pasco Wave in Cabo. Cartagena and Bolivar are the cities after Bogotá, Colombia’s capital, with the country’s most free trade zones. You know that a free trade zone is a mechanism we use to attract investment in Cartagena and Bolivar. All those things improve critical manufacturing processes, such as construction materials, metalwork, and the working industry that uses our region to reach new international markets. So this is another reason why Cartagena has all the potential to attract new investment in Cartagena and Bolivar. In addition, this is very particular to our city; the country’s essential shipyards are located in Cartagena, of course. It is related to our location. The data shows that 85% of the naval repair workshops nationwide are focused on the Department of Bolivar. So, this is Cartagena, half a very Navy history or past. So, we developed the city’s past and built this strong shipyard industry.

We are very focused on or specialize in constructing Navy ships for the Colombian government and other international governments. Do you have any questions about why you have to choose to invest in Cartagena, Bolivar, and all the sectors I have mentioned?

LATAM FDI: Well, one of the first things that people ask about a location, besides the significant economic activities, is what educational infrastructure a place like Cartagena and Bolivar has. How does Cartagena and Bolivar support workforce development? Can you give us a little idea of how that happens?

Carolina Rosales-González: Yes. I will finish the idea if you want because I have mentioned two promising and trending sectors leading our investment in Cartagena and Bolivar: the IT industry and the energy transition. It would be best if you could talk about our skill labor because it’s very related. I’m going to finish this idea, and then I’m going to answer your new question. The IT industry is significant. We have another natural advantage: Cartagena has five transoceanic cables that allow an efficient wireless connection to the Internet. And about skilled labor, the city can now have a bit of difficulty compared to other important cities in Colombia or worldwide. Concerning energy transition, Cartagena is one of the four cities with the highest operational capacity and production of renewable energy. In the north of the Department, we also have the advantage, like in La Guajira, of having significant potential to generate wind energy. Cartagena also has two green hydrogen pilot plants in Colombia. So, the previous strategy I mentioned to invest in Cartagena and Bolivar contributes to our economic development in diverse ways, especially in employment generation.

So that’s why I wanted to finish that idea: attaching the employment generation to our education offer is essential. Also, the projects in Cartagena and Bolivar often focus on employment and opportunity generation in the area of influence where they develop. This also positively impacts the communities and Cartagena and Bolivar society. So that is important to mention. On the other hand, we are looking at those projects to invest in Cartagena and Bolivar; those projects integrate very, very accurately into the local productive chain so that the local providers can see the highest quality standard to meet the international companies’ demand. Those things prepare our skills, our specialty, and our educational offer. An important thing you must know about the Cartagena workforce is that according to the Ministry of National Education data, the labor force in Cartagena is mainly condensed at the university level. A little more of the 50 % are at the university level, all the way by technological level, and then we have the master’s degree level with the total participation on this part. The gender level is fundamental, and I like to mention it a lot because the gender level, 56 %, sorry, of the graduates of Cartagena and Bolivia are women, and the remaining percent are men.

Females dominate the workforce in Cartagena and Bolivar, and the principal areas of knowledge focus on economic science and urban engineering. This takes excellent value because it’s very focused on Cartagena’s industrial vocation, especially in sectors where growth and development have occurred—for example, renewable energy, the Navy, training, and the IT industries. So, as you can see, the workforce is very prepared to meet the needs of companies that seek to invest in Cartagena and Bolivar.

LATAM FDI: Can you provide examples of foreign companies that have chosen to invest in Cartagena y Bolivar? And what factors influence their decisions? What benefits have they derived from operating in the region?

Carolina Rosales-González: The benefits: Maybe we can talk a little bit later about the actions that our local governments are taking to improve the relocalization of companies because Cartagena and Bolívar have launched a tax incentive policy so we can talk about that before. But I don’t know if you want to hear about our natural advantage, and then we can discuss the tax incentive programs. Let me know, please.

LATAM FDI: That’d be great.

Carolina Rosales-González: Okay, so I think one of the main reasons why an investor could choose to invest in Cartagena and Bolivar is because our strategic location, as I was saying, Cartagena and Bolivar, is recognized by the container port performance index as the third more efficient port in the world. We can connect to more than 140 countries. We can reach more than 840 ports around the world. For any company that may be looking for an export platform or a site that could allow us to get another Cartagena, it is the best option for them in Latin America. Also, we were talking about skilled labor. There is a fact I like to mention a lot. All the investors must consider that because Colombians, not only Cartagena but also the Colombian workforce, are very special. A recent study has concluded that Colombian workers are satisfied with their work lives.

LATAM FDI: Maybe you could fill us in on what that means.

Carolina Rosales-González: Okay. It is a study that measures people’s happiness levels at work. In Colombia, 88% of the employees declare they are happy at work. Beyond the remuneration, they value the sense of belonging and the emotional side of employment. This is a crucial key driver in improving investment in Cartagena and Bolivar. For me, it’s valuable because you can have the people, but if they are not motivated, your project may not work. This is an essential fact about our happiness at work, not only in Cartagena and Bolívar but in Colombia.

LATAM FDI: How would you characterize issues beyond human resources and the industries in Cartegena and Bolivar? What about the region’s transportation, logistics, and connectivity infrastructure? How does it facilitate business operations, and how does it act to impact the companies that invest in Cartagena and Bolivar?

Carolina Rosales-González: As I was saying, Steven, we have the most efficient port in Colombia. We have the third most efficient port in the world. We also have a natural bay with, I don’t know, sixteen different terminals with various locations to move cargo. We have many free trade zones that, of course, are facilities to look for a site to operate with tax incentives and an excellent logistic infrastructure. We will soon have a brand new airport, allowing Cartagena to have the intermodal logistics. Yes, the intermodal logistics, because we are experienced in the maritime sector, but we must develop expertise in air cargo. This new airport will allow us to move oversized cargo through the sea and develop new sophisticated industries that use less volume to reach another market.

LATAM FDI: The final question I’d like to ask is, what has the government of Cartagena and Bolivar done in terms of initiatives and policies to support both foreign and domestic investors, and how effective have they been in creating a favorable business climate?

Carolina Rosales-González: Okay. Regarding the business climate, Steven, progress has been made for companies that invest in Cartagena and Bolivar in simplifying and making efficient the procedures that all the investors must perform when landing their operations in our territory. The achievement that we can stand out in this company is creating and implementing a business platform, a one-stop window called VUE, or Ventanilla Unica Empresarial. This mechanism allows all investors to conduct their procedures, consult benefits, news, and more about our city’s business creation. Also, we developed a technological tool, a one-stop window, but for the construction sector. So, this technological platform allows, for example, an investor to know the entities of control and the steps they have to take to fill out all the requirements on some services that, for example, you have to do to build a hotel or to create a property. That technological advantage or development makes the information and guidance an investor needs when arriving to invest in Cartagena and Bolivar easier. Fortunately, we can achieve that. Another significant technological development is the investor information system we developed with Invest in Cartagena and the mayor’s office.

The platform allows all the investors that wish to establish in our city to have a guide that completes step by step the regulation, the needs of business creation, all the requirements for it, for example, obtained permits, and all the things that you have to do to form an establishment here in Cartagena. Another important thing I mentioned before is Bolivar, as a department, launching nine municipalities of the Department, local incentives related to exemption on local industry and comfort tax, and the unified property tax. So, in the Department of Bolivar, we have forty-six municipalities, and in nine municipalities, we have those incentives. Recently, the mayor’s office presented a project also to improve the relocalization of companies seeking to invest in Cartagena and Bolivar, giving the same time tax exemptions on industry and commerce tax, and the unified property tax, and urban tax to those companies that are located in Cartagena, generate local employment, and do essential amounts of investment in our city. So now we are waiting for its approval.

LATAM FDI: Well, we got to the point where, in a very short period, we’ve covered many areas about investing in Cartagena and Bolivar. Our experience is that listeners to our podcast often have follow-up questions after hearing the information our speakers have presented. We like to create an environment where our listeners can converse with our presenters. That being said, is there any way that anyone who has a question about what you’ve said and perhaps a desire to invest in Cartagena and Bolivar, is there any way they can contact you?

Carolina Rosales-González: Yes, of course. Indeed, we have our social media contacts, but I don’t know if I can write you down my email or put it anywhere visible on the podcast platform, my contact email, or my number. So, anyone with a question interested in Cartagena would be received with the greatest happiness from me and my team. We hope that that occurs. We hope all the highlights we provide here give all the investors a valuable alternative to invest in Cartagena and Bolivar. We can continue generating value from the agency and betting on our region’s and country’s growth. For the entire audience, Steven, it is, please, a big greeting. If you are concerned or interested, please get in touch with us at this email: crosales@investincartagena.com. This is my personal. I will be very attentive to any request, and our agency will be very happy to support you and make your decision to invest in Cartagena and Bolivar easier, and, of course, help you achieve your business goals.

LATAM FDI: Okay. Typically, we’ll do it in the transcript section of the podcast; if it’s okay with you, I’ll put your name and make it a link to your LinkedIn page so that people will have it to you. I’ll provide the email address you mentioned and a link to your website so that anybody with any questions can go straight to you and get the answer.

Carolina Rosales-González: That would be great.LATAM FDI: Well, thank you for joining me today. I appreciate it. I enjoyed our conversation, and I hope you have an excellent rest of the day.

Carolina Rosales-González: Thank you very much, Steven, for the time, for the generosity, and for the opportunity for this space to present the Cartagena and Bolivar potential. We hope everything we said in this post is helpful to the investors. And we are very attentive to anything that you may need. Cartagena is waiting for you. Cartagena and Bolivar are waiting for you. So thank you. Thank you very much. Have a good day, too. Thank you. Bye-bye.