Industrial Council to launch plan to attract $1 billion in investment over four years

The president of the guild informed that the plan will be made official on June 12.

The president of the Salvadoran Association of Industrialists (ASI), Jorge Arriaza, stated this morning that on June 12 the work plan of the Industrial Council of El Salvador will be officially launched, which aims at an investment of $1 billion over four years, that is, $250 million per fiscal year.

Arriaza assured that, apart from this important amount of investment (including domestic and foreign direct investment), the plan is that 400 new companies will be created or land in the country, which could create some 40,000 new jobs.

He also commented that the idea is to double the industry’s Gross Domestic Product (GDP) in those four years. This closed 2024 at $4,259.88 million, so if the plans come to fruition, it would reach $8,519.76 million.

Industry is one of the most important sectors of the economy in El Salvador (last year it represented 12% of the economy) and the one that provides the most formal jobs.

It has had critical indicators in recent times, especially in terms of GDP growth and Foreign Direct Investment (FDI).

As reported by El Diario de Hoy, during five and a half years of Nayib Bukele’s presidency (from June 2019 to December 2024), FDI in that sector was almost 46 times lower than that recorded in the same period before.

Specifically, between January 1, 2014 and May 31, 2019, foreign direct investment for the industry was $1,800.66 million. Since Bukele has been in office it has been only $38.72 million.

On the other hand, the industry sector closed 2024 with a GDP just $4 million higher than in January 2019, only 0.29% growth. To get an idea of how low this figure is, we must take into account that the rest of the economy has grown almost 34% since then. In addition, there has been inflation of 16% in the same period.

However, Arriaza affirmed that the best is yet to come for the sector with the plan elaborated by the Industrial Council of El Salvador, which has already had meetings with the Bukele government. This Council brings together 26 sectors of the economy. According to the union leader, the idea is that the industry also migrates towards technology.

“The auto parts industry is developing, for which there is a lot of potential. Also for electrical materials. And so are other new sectors,” he said.

Arriaza said that one idea is to also increase exports of non-textile sectors (which is a large volume) to the United States, El Salvador’s main trading partner.

“Many industries are moving from Asia, because it is a desire of the United States that they relocate to Latin America. If not, let’s look at the example of Mexico, on the northern border,” he illustrated.

The legal certainty factor

Foreign direct investment (FDI) is particularly sensitive to the factor of legal certainty in a country, i.e., that the rules of the game are respected by all participants, especially the State.

El Salvador is no exception, as evidenced by the fact that rates plummeted when the Legislative Assembly staged a coup d’état to the Supreme Court of Justice in May 2021.

In addition, President Bukele has in the past threatened business sectors with imprisonment for crimes unrelated to the conduct he reproaches and, last week, public transportation businessmen were imprisoned for not agreeing to comply with an order issued by him only after a post on X.

Arriaza was asked about these latest developments and their possible impact on making El Salvador a less attractive country for foreign direct investment.

The president of the ASI declined to give his opinion and referred to the National Transportation Board, which brings together this business sector. He was asked what his position would be if the arrests were against the sector he represents.

“We are not the ones who can say if an action is legal or illegal… I understand that this is a country of laws and that there is a legal security that we have felt in all these years. I could not tell you what happened in this case in legal terms, it is up to the carriers and the authorities of the Judicial Organ,” he commented.