25th November 2022

El Salvador, Nicaragua and Panama have agreed to an integration of their security markets. The Superintendency of the Financial System of El Salvador (SSF), Superintendency of Banks of Nicaragua (Siboif) and the Superintendency of the Panama Stock Market (SMV) agreed to let investors acquire and negotiate securities registered in any of the three countries. It also allows stock market institutions to work in the area covered by the agreement. Regional sources suggest this could see an increase in trading on the Nicaraguan stock market up to 60 times its current level. 98.25% of transactions in Nicaragua are public titles and bonds.

Photo by Maxim Hopman

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11th November 2022

El Salvador and China discuss Free Trade Agreement; confusion over debt

Discussions have already started on a free trade agreement between El Salvador and China. President Nayib Bukele stated that the FTA would help end international isolation and the agreement would be fast tracked to be signed as soon as possible. Meanwhile, Taiwan’s FTA with El Salvador, which had been kept afloat by legal means, has ended. Vice President Félix Ulloa announced that China had offered to buy all of El Salvador’s external debt but the Chinese foreign ministry claimed they were unaware of this offer. El Salvador’s external debt amounts to US$1.6bn.

Photo by Ian Taylor 

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28th October 2022

Central American judges have issued a plea for independence to carry out their functions. Supreme court elections are currently ongoing in Costa Rica and Panama against a backdrop of interference in El Salvador and Guatemala. Of the 25 members of Guatemala’s judicial service that have fled the country in the past 18 months, the majority are either judges or prosecutors. El Salvador has seen alleged illegal appointment of Supreme Court magistrates and the enforced retirement of those over 60. The Seattle International Foundation has warned of increasing authoritarianism in Central America at a forum in Tegucigalpa. Director Adriana Beltrán warned about the criminalization of human rights, the restriction of press freedom and of expression in the region.

Photo by Michael Dziedzic

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14th October 2022

Hurricane Julia’s path through Central America caused an expected level of havoc, leaving dozens dead, millions affected, and repair bills estimated in the billions of dollars. The Honduran government alone reported needing at least US$ 2bn for its recovery efforts. With hundreds of roads and bridges affected, infrastructure repairs will be of a high priority. Guatemala’s agricultural ministry reported that 250,000 families have lost basic food crops with bananas, cardamom and coffee also severely affected. Nicaragua, where Julia made landfall at its strongest, reported US$ 160-200mn in damages and no deaths. Many of the areas affected also suffered damage during Hurricane Eta and Iota in 2020.  

Photo by NASA 

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30th September 2022

Prior to the effects of Hurricane Ian, Honduras had already implemented a state of emergency as heavy rains battered Central America. Guatemala was considering issuing a similar decree with El Salvador also suffering loss of life and structural issues. Sinkholes have appeared across Guatemala causing the deaths of at least two people. Collapsing buildings and landslides have killed dozens more. So far the rainy season has killed 45 and affected over four million in Guatemala. Classes were suspended in El Salvador, as Guatemala endured the fourth wettest rainy season in 40 years.

Photo by Ruslan Zh 

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16th September 2022

Panama’s judicial system is under the spotlight with the opening of the Odebrecht case.
Considered the largest corruption scheme in the country’s history, the preliminary hearing
has opened and will spend days being read out. A total of 48 people are accused of money
laundering and corruption including former presidents Ricardo Martinelli and Juan Carlos
Varela. Charges against a further 29 defendants have been dismissed. The investigation
began in 2015 and after Odebrecht admitted to bribery charges in the US, Martinelli’s sons
Ricardo Alberto and Luis Enrique are serving jail sentences having been captured in
Guatemala and extradited. In July 2017, Odebrecht signed an agreement with the
Panamanian Prosecutor’s Office to pay a US$220 million fine to the State over 12 years.

Photo by Darren Miller

Photo by Alexander Aguero 

12th August 2022

Yesterday, President Rodrigo Chaves announced that Costa Rica had officially applied to join
the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),
becoming the first Central American country to do so. The CPTPP currently consists of eleven
countries across Asia, Oceania, and the Americas. “The CPTTP will allow Costa Rica to share
commercial strategies, attract investment, and create linkages for small and medium-sized
companies,” Chaves told the press yesterday. The CPTTP entered into force in 2018 (after the
US pulled out of the Trans-Pacific Partnership, the CPTTP’s predecessor) and currently
comprises nearly 20% of international trade.

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Photo by Luka Slapnicar 

29th July 2022

According to a study released this week by ForwardKeys (a Spanish firm that monitors travel industry trends), Central America (along with the Caribbean) are the “recovery pacemakers” of the aviation sector, seeing as flights to Central American destinations have risen across the board year-on-year and are projected to keep increasing through the summer. For instance, Central America as a whole received 5% more air travellers this past quarter than during the same span in 2019. Costa Rica is the best-performing Central American locale so far, having experienced a 25% climb this quarter. This data complements recent findings from Hostelworld (per the lead story in our previous issue) indicating that Central America as a region is currently leading global hostel bookings for the first time ever, with total bookings having jumped 40% since before the pandemic.

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Photo by Rikin Katyal 

6 May 2022

This week, the Panama Canal Authority (ACP), which governs the waterway, announced the continuation of its record growth. The Canal witnessed its “highest-ever shipping flows in fiscal year 2021.” During the first half of this new fiscal year, ACP reported that “new tonnage rose 0.8%, container ship tonnage rose 8.5%, and liquefied petroleum gas tonnage increased 11.1%.” However, “liquefied natural gas carrier tonnage plunged 31.1%,” which ACP attributes to mounting Western-led sanctions against Russian natural gas in response to its invasion of Ukraine. Ilya Espino de Marotta, Deputy Administrator of ACP, was quick to note that “we have seen other market segments compensating for the drop in LNG.” Marotta admitted that China’s “zero COVID strategy,” which has resulted in the lockdown of its largest port city, Shanghai, “will have near-term effects on the Canal’s volume” as well. “We don’t know what’s going to happen with the COVID situation in China,” she said, “but we think that we will feel a decline in April and maybe May. Then, after China reopens, I think there’s going to be a flood of merchandise arriving to both coasts.” “We’re also looking at inflation rates and the increase in bunker prices,” Marotta continued. “It’s very volatile. We are not sure how the consumer is going to react to this inflationary pressure and how demand is going to behave.” Marotta remains optimistic since this week’s figures show that growth has largely persisted despite these obstacles. “We are at about 70% of capacity,” she noted. “We still have room to grow [and] I’m still confident we’ll do as good as last year, if not better.”

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