Speaking to fDi during his visit to London, Hugo Martínez, El Salvador's minister of foreign affairs, pointed out that many of the positive changes in his country have gone unnoticed. “A lot of people still associate El Salvador with an armed conflict that took place many years ago. But after the peace building process and the peaceful change of government in 2009... our country moved on in terms of political stability."

Civil war may be a thing of the past, but new problems have emerged. El Salvador, along with many of its neighbours, saw a steep increase in drug trafficking recently. Mr Martínez, who spoke in London during the Central American Intergration System (SICA) conference, admits that together with other  countries in the region, El Salvador must be “prepared to deal with that threat”.


A further set back to the country came in October 2011, when torrential rains caused extensive flooding in the region. In El Salvador the floods left 30 people dead and 50,000 displaced, with $600m of damage caused, the equivalent of 3% of the country's gross domestic product.

Mr Martínez highlighted that apart from a growing number of projects in the shared services and tourism sectors, El Salvador is especially attractive for the investors seeking sites for manufacturing operations in the aerospace, electronics and textiles industries. “We have young workforce with good reputation across the US and central America and we invest money to make our workers more efficient.”

 Since El Salvador is a member of the Central American Free Trade Agreement, Mr Martínez suggests that creating enterprises similar to Mexican maquiladoras – where materials are imported to the country, assembled and then send back to their country of origin – could also prove an interesting option for the investors in the western hemisphere.

As El Salvador is planning to introduce a one-stop shop for investors in 2012, it intends to simplify the procedures for setting up a business, in order to make the process quicker.

According to fDiMarkets data, with 25 FDI projects in the 2010 to 2011 period, El Salvador is the second most popular investment destination among the SICA members, which as well as El Salvador, include Belize, Guatemala, Honduras, Nicaragua, Costa Rica and Panamá. The most popular areas for investment in El Salvador in 2010 to 2011 were the manufacturing and financial services sectors.

However, the number one destination for FDI among SICA members, Costa Rica, recorded over three times as many projects as El Salvador between 2010 and 2011, with 77 projects in the country.