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OEJ_PPT_10_2003.ppt

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  • 1. IMPACT OF CAFTA ON INVESTMENT OPPORTUNITIES Marvin Taylor, Ph.D Chief Economist, CABEI [email_address] October, 2003
  • 2. Content of the presentation
    • CABEI: Mission and Background.
    • Our Vision of CAFTA.
    • CAFTA: Impact and Investment Opportunities.
    • CABEI´s Role in CAFTA.
  • 3. CABEI: Mission and Background
  • 4.
    • Founded in 1960 in order to promote development and integration in Central America
    • 5 founding member countries:
      • Costa Rica
      • El Salvador
      • Guatemala
      • Honduras
      • Nicaragua
    • 4 extraregional member countries:
      • Argentina
      • Mexico
      • China (Taiwan)
      • Colombia
    • Initiatives under way to involve:
      • New extraregional countries
      • Non-founding beneficiary member countries
    • With disbursements of US$1.1 billion in 2002, which equaled to 93% of FDI directed to the region that year.
    • The Central American market has the following characteristics:
    • Population 35 million
    • GDP US$68 billion
    • Imports US$21 billion
    Nicaragua Costa Rica Honduras Belize Panama El Salvador Guatemala
  • 5. Our Vision of CAFTA
  • 6. STAGES EFFECTS A. Negotiation and Ratification B. Preparation and Implementation C. Maturity and Sustainability Destruction of Employment Sources Creation of Employment Sources Geographic Sector Social BALANCES Temporal asymmetry
  • 7. CAFTA: Impact and Investment Opportunities
  • 8. Central America´s market share in the United States has been growing steadily Source: Magic, ECLAC
  • 9. Why?
    • CBI.
    • Geographic location: proximity to the US market.
    • Improvement in the business climate.
    • Off-Shore Assembly.
    • Natural resources.
    • Human resources.
  • 10. CAFTA will provide a new context that will…
    • Increase sales to and from the United States.
    • Improve market access for the regions products (from a unilateral concession under CBI to a permanent treaty with the CAFTA).
    • Reverse trade and investment deviations that resulted from NAFTA.
    • Increase FDI flows towards the region.
    • Allow for greater knowledge, technology and management sharing.
    • Institutionalize clear rules for investment and trade in a variety of sectors.
  • 11.
    • …and if we manage the potential geographic, sector and social imbalances, the CAFTA will foster greater growth and prosperity in Central America and closer political, economic, financial, social and cultural ties between Central America and the United States.
    Towards greater Partnership…
  • 12. Some Challenges…
    • Strengthen institutions.
    • Improve the business climate.
    • Foster greater macroeconomic stability.
    • Promote human resource development.
    • Reduce poverty.
    • Protect the natural environment.
    • Seek greater social integration.
    • Improve business strategy and operations.
  • 13. Opportunities in productive sectors
    • Agribusinesses.
      • High value added products: Fruits, vegetables.
      • Agribusiness processing: Fishery, forestry, furniture.
      • Support services: Technology, innovation, human resource development, research.
    • Tourism.
      • Niche market tourism: arqueology, culture, nature, adventure, health, business.
      • Tourism services: hotels, transport, restaurants, entertainment, shops, training institutes
      • Infrastructure in support of tourism: roads, telecommunications, energy, water.
    • Textiles and clothing.
      • Mens, women's and children's clothing.
      • Accessories.
      • Raw materials: cotton, wool, silk, fiber.
    • Electronics and high technology sector.
      • Software development.
      • Electronic circuits.
      • Computer components.
      • Biotechnology and medical research.
  • 14. Opportunities in services and infrastructure
    • Financial services.
      • Leasing.
      • Investment banking.
      • E-banking.
      • Investment funds.
    • Central America´s Logistic Corridor (PPP).
      • Roads and highways.
      • Ports.
      • Energy.
      • Telecommunications.
      • Transport.
    • Services.
      • Trade services.
      • Information technology.
    • Housing.
    • Social development
  • 15. INVESTMENT OPPORTUNITIES
    • CABEI HAS IDENTIFIED CLOSE TO US$2.5 BILLION IN INVESTMENT OPPORTUNTIES WITHIN THE CENTRAL AMERICAN COUNTRIES.
    • CAFTA WILL OPEN GREATER BUSINESS OPPORTUNITIES, AS OUR COUNTRIES WILL NEED TO DEVELOP KEY INFRASTRUCTURE AND TRADE SERVICES, STIMULATE PRODUCTIVE SECTORS AND PROMOTE HUMAN DEVELOPMENT, IN ORDER TO INCREASE COMPETITIVENESS AND GROWTH.
  • 16. GUATEMALA (IN MILLIONS OF US$) Investment opportunities identified by CABEI: US$605 Millions
  • 17. EL SALVADOR (IN MILLIONS OF US$) Investment opportunities identified by CABEI: US$223 Millions
  • 18. HONDURAS (IN MILLIONS OF US$) Pipeline and investment opportunities identified by CABEI: US$692 Millions
  • 19. NICARAGUA (IN MILLIONS OF US$) Investment opportunities identified by CABEI: US$304 millions
  • 20. COSTA RICA (IN MILLIONS OF US$) Investment opportunities identified by CABEI: US$630 millions
  • 21. CABEI´s Role in CAFTA
  • 22. What does CABEI offer?
    • High market share, with 43% of multilateral lending to the region.
    • A regional strategic focus, with a physical presence and knowledge in the five CAFTA negotiating countries.
    • Attends to different market segments, given the nature of clients and the variety of projects that are financed.
    • Credit facilities, such as direct co-financing, two tier lending, and new financial products and operations.
    • Financial soundness, with investment grades, assets of US$3.4 billion, a loan portfolio of US$2.4 billion, and a net worth of US$1.2 billion.
    • Different investment funds.
    • Specialized and well trained human resources.
    • Modern technological platform that connects all the Central American countries and these countries with the rest of the world.
  • 23. Strategic initiatives under consideration to support CAFTA
    • For the Ratification and negotiation Phase.
    • For the Preparation and Implementation Phase.
    • For the Maturity and Sustainability Phase.
  • 24. IMPACT OF CAFTA ON INVESTMENT OPPORTUNITIES Dr. Marvin Taylor, Ph.D Chief Economist, CABEI [email_address] October, 2003

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