Meridian 5: Renewing the U.S.-Central American Relationship

On March 3, 2021 the Meridian Corporate Council partnered with Millicom to host a virtual conversation with H.E. Alfonso Quiñónez, Ambassador of Guatemala to the United States and H.E. Milena Mayorga, Ambassador of El Salvador to the United States, for a discussion on their vision for the future of the U.S.- Central America relationship. Ambassador Quiñónez and Ambassador Mayorga acknowledged that economic stability and national security were fundamental to the prosperity and growth of the region.

Below are the top takeaways from the conversation:

CREATING STABLE PUBLIC-PRIVATE PARTNERSHIPS

Collaboration between all actors across the public and private sector strengthen productivity efforts in Central and Latin America, according to Mauricio Ramos CEO of Millicom. Local economies within Central America require foreign direct investment to generate long-term fiscal and economic gains with countries such as Guatemala utilizing various incentives for corporations interested in investing. Recently, Guatemala’s developed a public-private partnership with McKinsey and Company as an example of the government embracing private companies. Incorporating the findings within the McKinsey report allowed the country to develop a 10-point plan with 50 specific action items, all to recover and generate new jobs, attract strategic investments, and encourage consumption.

REFOCUSING IMMIGRATION PRIORITES

Lack of workforce development and stagnant economic growth opportunities primarily contribute to migration from Central America to countries like the United States.  President Bukele of El Salvador has committed his government to free market opportunities and projects, which in his view are promising for current citizens, and repeatedly emphasizes that foreign direct investment remains necessary for local job creation. Additionally, Ambassador Quiñónez of Guatemala expressed that Central America needs more trade than aid, emphasizing that trade will supply long-term educational and social resources directly to the population in Central America.

STRENGTHENING DEMOCRACY AND NATIONAL SECURITY

Democracy and security are fundamental pillars of a healthy relationship with the United States as explained by both Ambassadors. Enforcing law and order is of the utmost importance to the future of El Salvador, while eliminating corruption is a common objective for the United States in Central America. Recently, President Biden displayed his dedication for combatting corruption in Central America as well by offering a $4 Billion aid package to form sound economic foundations in Honduras, El Salvador, and Guatemala, proving that both security and establishing a sustainable democracy are overlapping priorities for foreign leaders, U.S. officials, and the citizens of Central American countries.

REVITALING INFRASTRUCTURE OPPORTUNITIES

After a period of Civil War, El Salvador has seen infrastructure investments as critical to their national success. Ambassador Mayorga commented that El Salvador is beginning to execute an upgraded infrastructure plan by implementing green technologies throughout the country, designing new roads and trains, and constructing the El Salvador Pacific Airport, which will serve an international hub to cities in Europe, the Caribbean, North America, and South America, Ambassador Mayorga recognized that confidence in El Salvador’s leadership is required to secure investment, but she affirmed that the country is implementing measures to protect their partners.

REIMAGINING ECONOMIC OBJECTIVES WITH CHINA

China continues to seek investment opportunities in Central America and while Ambassador Quiñónez expressed that Guatemala has a long-standing relationship with Taiwan, their specific stance on China is undetermined. Yet, he sees the recent economic tensions between China and the Western world as an economic opportunity for Central America to position themselves in the value chain. Recent reports concluded the Central America has the potential to play a key role in increased nearshoring in the next decade to avoid regional logistical issues in the Post-COVID era. Ambassador Quiñónez reiterated that Guatemala is open to assisting the United States in its supply chain transition as the two countries continue to negotiate their position on the international stage.