December 13, 2021
Ambassador Brian Nichols
Assistant Secretary for the Western Hemisphere, U.S. Department of State
Jonathan Fantini Porter
Executive Director, Partnership for Central America (PCA)
Vice President, Trade & Customs Policy, American Apparel & Footwear Association, Spokesperson, Coalition for Economic Partnerships in the Americas (CEPA)
Managing Director, Nespresso Sustainability Innovation Fund
To help bolster the global economy, the White House has issued a call to action to invite the private sector to help promote economic opportunity in Central America.
Small businesses and large corporations have an opportunity to help change the business culture of Central America and grow. By investing in Central American businesses and communities, the private sector can help spur our own national economy, as well as create a positive economic impact worldwide.
To highlight these opportunities and success stories, the U.S. Chamber of Commerce recently invited government and business officials, including Vice President of the United States Kamala Harris, to discuss the impact of investing in Central America’s economy. Here are three takeaways from this conversation.
Private Sector Investment Can Help Address Corporate Corruption
Corporate corruption costs the people of El Salvador, Guatemala, and Honduras billions of dollars each year. Private sector investments could go a long way to prevent corruption and inject much-needed funding into infrastructure and community initiatives, ultimately benefiting the economy and the businesses that invest in it.
Brian Nichols, assistant secretary for the Western Hemisphere at the U.S. Department of State, outlined the impact corruption has on Central America’s economy.
“It’s a heartbreaking loss when you think about the potential benefit of investing those [billions of dollars in corruption] in infrastructure, healthcare, education, and jobs,” said Nichols. “Corruption, illegal and anti-competitive by nature, siphon away public resources and imposes a heavy burden on doing business, constraining economic growth and stability.”
“[Granting] contracts, tenders, and government services based on personal gain rather than merit distorts markets by adding costs and creating inefficiencies, contributes to an uncertain business climate, deters foreign investment, and slows economic growth,” added Nichols.
Multinational Corporations Can Support Local Entrepreneurship in Central America
For the last two decades, multinational retailer PriceSmart has had a presence in the Northern Triangle, with locations in the Caribbean, Colombia, and Central America. David Price, vice president of omnichannel initiatives and social and environmental responsibility at PriceSmart, said the company is proud of its work in the region, especially when it comes to supporting local entrepreneurs.
“Our local suppliers are incredibly important to our business,” said Price. “[We] work with … [some] small businesses run by, in some cases, really new entrepreneurs in Guatemala, Honduras, and El Salvador.”
On average, said Price, PriceSmart’s product mix at its warehouse-style clubs is between 48% and 52% local merchandise.
“This is not only a great benefit to our local partners and suppliers but also a great offering for our members who love their local … products,” he noted. “This is a way that we can participate in not only bringing outside merchandise into the region but really invest[ing] in the communities and the businesses that come from the different places where we have our business. We look at these local vendors as really key partners in the growth and continued development of our business.”
Businesses Need to Put People First in Central America Partnerships
To conclude the event, Vice President Kamala Harris spoke about the great work that businesses have already contributed to Central America, and what still needs to be done.
She stated that in order to make these investments successful, the private sector needs to not just partner with the government, but with the people as well.
“I've … met with the people of Central America and in those conversations, these extraordinary people have expressed an incredible amount of optimism,” said Vice President Harris. “They are aware of the root cause of this strategy and they see themselves in it. They see their voices of leadership in it, and we are counting on them to lead.”
“This is not about us coming in and telling anyone what they should do,” she added. “It is about being partners and assisting and helping to facilitate the natural desire of the people of these nations.”