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EL SALVADOR - Economy

María Luisa Hayem

Minister of Economy, El Salvador

Bio

María Luisa Hayem is the Minister of Economy of El Salvador.

"One positive aspect of the economy is that growth has been multi-faceted, multi-sectoral, and multi-territorial."

TBY talks to María Luisa Hayem, Minister of Economy of El Salvador, about the Bukele administration’s Economic Plan, trade facilitation, and fostering entrepreneurship.

What do the current phases presented in the Economic Plan by President Nayib Bukele consist of?

President Bukele has prioritized the economy and affirmed that the country will focus on the macro and micro economy. The first strategy aims to protect family economies by lowering product costs and eliminating tariffs and import taxes on crucial household items. The Ministry of Agriculture aims to ensure access to essential inputs like vegetables and fruits while addressing intermediary abuses. To date, we have established 50 agro markets. Furthermore, we have introduced subsidies for critical products, such as cooking gas, benefiting households. We are also implementing trade facilitation measures to reduce costs and improve the speed of imports, ultimately lowering consumer prices and easing the pressure on the cost of goods. The second strategy focuses on technology, creating an attractive environment for tech companies. The country has passed a law offering 15 years of fiscal incentives, providing benefits like zero income taxes, municipal taxes, and tariffs on inputs for tech products and services, including software and drone hardware. Google’s arrival in El Salvador in 2024 highlights the success of this initiative, with 36 companies already benefiting from these incentives, including local Salvadoran firms. El Salvador is actively working to digitalize government services after an initial phase of simplification, making business and citizen services more accessible online. For example, the Ministry of Economy’s Directorate of Investments has fully digitalized its services, allowing companies to access tax incentives like those under the Tech Law and Free Zone Law through an online platform. This digital push earned first place in a competition among 80 projects. Additionally, projects are underway to train people in technology and encourage businesses to automate, making the country more competitive. El Salvador has formed alliances with 87 entities—including Meta, Microsoft, AWS, banks, and accelerators—to boost the entrepreneurial ecosystem, recognizing the role of FDI in expanding exports and driving economic growth. The third strategy is the development of our two ports: Port Acajutla, our gateway to the world, and Port La Unión. We are strengthening the infrastructure with an investment of USD 1.6 billion, the biggest in the country’s history, that will be developed via a government partnership with a private company, Yilport.

What projects will the Ministry of Economy work on in the next five years to achieve sustained, inclusive economic growth for El Salvador?

Primarily, we are constructing a new airport in the east of the country while strengthening Ilopango International Airport with a USD320-million investment under different financing modalities. Another project of note that aims to spur economic growth and attract investment is a USD150-million initiative to train more than 40,000 people for high growth in key sectors such as construction, tourism, technology, call centers, and services. Other key focus sectors include agriculture and aero maintenance. Furthermore, the ministry has three critical projects planned to attract more investment, including the modernization of the customs offices and a USD60-million project underway with the Development Bank of Latin America and the Caribbean (CAF).

How is the Ministry of Economy working to support trade facilitation?

One vital step has been eliminating excessive paperwork and updating the country’s regulatory framework. Several reforms have been catalyzed; for example, the Free Trade Zone Law was modified to incorporate the food and beverages sector, generating more investment in the country. Additionally, the International Services Law offers incentives for as long as a company is established in the country. Other reforms have accelerated business creation; entrepreneurs can establish companies within a week. Additionally, a new Income Tax Law exempts capital transfers to the country from taxation. These changes have been crucial in creating a favorable business environment. In 2023, 3,340 companies were established—an impressive figure; however, in the first nine months of 2024, there were already 3,900 new companies in the economy. In addition, the country has made significant progress on intellectual property, placing us among the top countries in the World Intellectual Property Organization. El Salvador is working to modernize its regulatory framework, moving away from outdated laws.

How have recent investments performed, and how has the ministry promoted the innovative entrepreneurship ecosystem?

One positive aspect of the economy is that growth has been multi-faceted, multi-sectoral, and multi-territorial. The 3,340 companies established in 2023 include technology, manufacturing, trading, and tourism companies. We are also seeing positive territorial expansion into the interior of our country. We now have five free trade zones being developed. There are projects underway that encourage innovation and, in particular, the adoption of clean technologies to meet increasingly strict requirements, such as those from the EU. Our ecosystem of innovative entrepreneurship includes projects with an environmental focus. One company has developed a digital platform to identify and repurpose waste by connecting it with companies needing those materials as inputs. Another partners with bakeries and stores to reduce food waste. The winner of our last World Entrepreneurship Cup, already expanding into Mexico, connects construction companies with supplies, machinery, and talent, streamlining resource access. These efforts aim to systematize innovation and strengthen ties between start-ups and major manufacturers.

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