As CEO of IPoint Capital Partners in Panama City, Hilt Tatum manages a group of private equity funds. Hilt Tatum has also spearheaded launching more than 20 companies internationally, including in Central America. The winds of change have arrived for this region, and a few trends are shaping this trend.
The countries comprising the region include Nicaragua, Costa Rica, Panama, Honduras, El Salvador, Belize, and Guatemala. In general, foreign direct investment (FDI) has increased and governments are establishing regulatory guidelines for investors and entrepreneurs. Moreover, economic policy reforms have made conditions more favorable for foreign investment in the last 20 years illustrated by the fact that in the years spanning 2010 and 2017, FDI has grown by around 7.9 percent and was expected to grow additionally by 3.8 percent in 2019.
Four major industries are driving the growth in foreign investments. In Costa Rica, known for its environmental stance, has been recognized for its green platform, a country that used only green energy for 300 days of the year in 2018. Guatemala is becoming a hub for technology as in the last few years growth in the telecommunications and tech-related start-ups has created the foundation for growth. One of the strongest textile and retail industries is growing in Nicaragua, growing by five percent spanning 2016 and 2017. Finally, Panama has grown to be known as a tax haven, but it also has a flourishing service-based industry. 80 percent of its GDP is service-based.
Several trends are fueling these economies. For one, in some of the countries, fertility rates are declining with growth rates slowing by one percent. The digital revolution is also impacting how many works, which are expected to fuel more jobs and growth. Rapid urbanization, however, will be one of the key challenges to economic stability as overpopulated areas are vulnerable to organized crime. More significantly, as the markets become more sophisticated in this region, the area will diversify and engage in trade agreements outside the US.
The countries comprising the region include Nicaragua, Costa Rica, Panama, Honduras, El Salvador, Belize, and Guatemala. In general, foreign direct investment (FDI) has increased and governments are establishing regulatory guidelines for investors and entrepreneurs. Moreover, economic policy reforms have made conditions more favorable for foreign investment in the last 20 years illustrated by the fact that in the years spanning 2010 and 2017, FDI has grown by around 7.9 percent and was expected to grow additionally by 3.8 percent in 2019.
Four major industries are driving the growth in foreign investments. In Costa Rica, known for its environmental stance, has been recognized for its green platform, a country that used only green energy for 300 days of the year in 2018. Guatemala is becoming a hub for technology as in the last few years growth in the telecommunications and tech-related start-ups has created the foundation for growth. One of the strongest textile and retail industries is growing in Nicaragua, growing by five percent spanning 2016 and 2017. Finally, Panama has grown to be known as a tax haven, but it also has a flourishing service-based industry. 80 percent of its GDP is service-based.
Several trends are fueling these economies. For one, in some of the countries, fertility rates are declining with growth rates slowing by one percent. The digital revolution is also impacting how many works, which are expected to fuel more jobs and growth. Rapid urbanization, however, will be one of the key challenges to economic stability as overpopulated areas are vulnerable to organized crime. More significantly, as the markets become more sophisticated in this region, the area will diversify and engage in trade agreements outside the US.
