Central America can “incubate” technologies to boost its economies, according to experts

Central America could become an attractive incubator for the technology industry and spearhead for the economies of its countries, according to experts consulted by the Voice of America.

The promotion of several initiatives to promote the sector, as well as growing investments, would favor an ideal scenario for the development of that industry.

According to Tomás Bermúdez, manager of Central America, Mexico, Panama, the Dominican Republic and Haiti of the Inter-American Development Bank (IDB), in recent years several initiatives have been carried out to attract investment in the technological field, considering that this region It has great potential to develop in this industry.

“We seek to attract new technologies, implement them, look for how to close these development gaps that we have,” explains the IDB director in statements to the VOA.

In his opinion, the region also offers “a sale to ‘test’ certain things that may be used in other parts of the world and bring them to our region, things that we are developing within our region that we want to incubate here,” so that can help potential economic development in the medium and long term.

The economy in Central America, in positive

According to the most recent figures from the Economic Commission for Latin America and the Caribbean (ECLAC), Central American countries show the best GDP growth prospects since 2019.

In the accumulated until 2024, the Dominican Republic has grown by 23.2%, followed by Panama with 22.2%, Guatemala with 21.3%, Costa Rica with 19.7%, while Honduras and Nicaragua register a 17.7%, and El Salvador 16.2%.

These growth levels exceed those of other major economies such as Brazil, which has registered accumulated growth of 10.9% in this period, and Mexico, with just 5.9%. They even exceed the growth of Colombia, which reaches 16%.

On the other hand, the average annual growth of these Central American countries between 2019 and 2024 has also been notable. The Dominican Republic has achieved an average growth rate of 3.8% of its GDP in the last five years, followed by Panama with 3.7%, Guatemala with 3.5%, Costa Rica with 3.2%. and Honduras and Nicaragua with 2.9%.

The power of entrepreneurs

Susan Segal, president and general director of the Society of the Americas and the Council of the Americas (AS/COA, in English), argues that the region has also become an incubator for entrepreneurs who have taken advantage of the rise of the technology industry. .

“I think that, for Latin America, in the long run, new technologies have been key to the creation of companies, but also to connecting towns and people,” he says. “We must remember that for a long time there was no accessible information and I think “There were very few people who had information,” she points out, convinced that, given this scenario, many “have not been able to think, create and have dreams.”

IDB initiatives to boost the economy

Among the initiatives that the IDB has recently launched is the “America in the Center” project, focused on Central American countries, “from Guatemala to Panama” and which seeks to “attack the most relevant problems in the region.”

“One of the pillars is productivity, it is about addressing how we improve the productivity of these countries, how we improve the infrastructure in a sustainable way in these countries, how we improve the trade flows of these countries and how we attract investments,” he maintains. Bermudez.

“I think access to the internet and new technologies are helping to level the playing field,” he adds.

Climate change and the region

One of the challenges that the Central American region, like many other parts of the continent, has to face is the climate issue.

“It is one of the most vulnerable regions to climate change compared to the rest of the world and we see it constantly every time a hurricane passes. It also has a huge economic impact with between 2 or 3% of the GDP every time we have a serious situation, as happened with hurricanes Eta and Iota,” says Bermúdez.

In this sense, the IDB spokesperson emphasizes that “there is an element of resilience and adaptation to climate change that has to do with infrastructure, but also in seeing how funds are raised for our region” in order to be able to promote projects that benefit economically. to the region and adapting to the conditions of the terrain.

Connect with the Voice of America! Subscribe to our channelsYouTube, WhatsApp and to newsletter. Turn on notifications and follow us on Facebook, x and instagram.