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16:36 09 de janeiro de 2022 Por Daniel Oiticica

Luis Rodríguez, Director for El Salvador, Central American Bank for Economic Integration (CABEI)

Luis Rodríguez: "One of our main initiatives as an investment bank is to connect the region". Photo: Fabio Lima.

Among CABEI's main objectives is to connect the entire region, promoting growth by supporting different investment projects. One of its most important goals is the creation of a regional debt market, which has great chances of having El Salvador as its headquarters, thanks not only to the country's growth, but also to its development plan. In this interview, CABEI Director Luis Rodríguez discusses this and many other of the bank's initiatives.

How is El Salvador positioned today in Central America in terms of projects and economic development?
Since about two and a half years ago, El Salvador has stood out at the regional level due to certain decisions that have been made regarding how to manage economic growth and how to complement it with the entire social base. Being able to make political decisions on certain public strategies, so that they occur at the right time, has energized the country to the point of reaching a prominent position in the region. Investments in infrastructure, logistics and mobility, being aware that the social base needs to be more cohesive, and promoting a series of social rehabilitation processes, with the State taking care of all the basic services for the people, has had an impact on security and generated the confidence investors need.

How does the bank participate in the country's growth?
The bank has three strategies. One is to be able to work in the short term, injecting the State with a series of resources in order to make its public policies even more dynamic. The second is to design, together with the State, a series of projects that are connected to each other to bring benefits to the country. The third strategy is for El Salvador to become a regional hub for specific initiatives. In this sense, we have been structuring a series of proposals. One is that El Salvador can become the hub of the regional debt market, creating a portfolio of public and private investments that exceeds 3 billion dollars and that all of this is supported by the public policies of the Government and linked to the objectives and dynamics that the private sector is also managing.

In addition, the bank works with the government on mobility, logistics and railway infrastructure, ports and airports, housing, environmental issues, electricity, water, modernization of the Ministry of Agriculture and Livestock, coffee loans and modernization of agriculture, tourism, tourism infrastructure and country promotion strategies, with a portfolio of more than one billion dollars for private investment. We also work with social welfare, the office of the First Lady, Gabriela Bukele, with education through My New School project, which allows the State to implement a system of education and capacity building for children, so that in ten years we will have citizens with better training as regards social and technical aspects.

Which would be the value of this regional debt market and which is the benefit for the country?
Debt issuance is not normally performed in the region. It is sought abroad, the purchases are more expensive and deadlines shorter. It would be different if we could do it among ourselves in the region, also inviting other countries that have some relationship with CABEI, such as Spain, Korea, Taiwan, Mexico and others. We can attract investment much more easily. Of course, the participation of the entire ecosystem of countries is extremely important. The President of the Republic, the Congress, the entire private sector, the international sectors that notice a different dynamic in El Salvador. The civil society and, obviously, the bank as a support to all of them. Having all this ecosystem aligned makes it easier for the country to access a regional debt market, estimated at 150 billion dollars.

Which are the bank's expectations for the infrastructure and growth projects that the country has been carrying out?
They are quite ambitious. It is very attractive to see how they connect and complement each other in terms of logistics and mobility infrastructure. The port growth projects, La Unión and Acajutla, with all the complementary investments planned, added to a railroad project, not only local, but also connected at a regional level, to open a Pacific-Atlantic railroad gateway, complemented with the ports and with a more robust airport system, that moves the tourism industry, and that makes the entire logistics, product and passenger mobility industry grow. One of our main initiatives as an investment bank is to connect the region, promoting integration and considering that El Salvador is moving at breakneck speed.

Which are the major challenges to regional integration in Central America?
We need to understand how to better take advantage of our geographic location. Another challenge we face is the technical capacity of future generations, which involves education. We need to generate a robust structure in terms of capacity building. There is a very important concern on the part of the Government, and the Bank shares it 100%, which is to work from early childhood, starting to generate conditions and provide skills from the youngest ages to youth. Supporting sectors that are already beginning to generate economic dynamics. This is a great challenge at the regional level, but we know that we can get industries that traditionally have not taken off in the region, technology, orange industry, specific issues in terms of logistics, marine industry, blue economy. These issues depend not only on companies, but also on the social base that the countries are building.

Another issue is connectivity infrastructure. Getting our ports and the two oceans connected, via a Canal, is extremely feasible. Recently, the bank made a historical placement of a little more than 600 million dollars to the entire economic base, for micro, small and medium-sized enterprises, and entrepreneurial projects. Even though it is a very local project, its incidence with our second most important partner, which is the region, will have an impact in terms of services and purchases of inputs. We also see tourism as not only an activating factor, but also a complementary one. If we think of a train connecting Guatemala, Honduras and the region, in the end the associations between cities and tourism products become much more dynamic.

These are issues that ultimately promote mobility, and this itself will also promote tourism. On the other hand, both the bank's regional public and private investment portfolio and the regional debt market, are capturing and consolidating investment projects that are connected within the region. The environmental issue is also important, because the region has a lot of potential. We have extremely relevant areas, an environmental asset that we must be taken care of and promoted. And another important point is traditional connectivity, the whole issue of roads and borders, which must be worked on in a much more dynamic way so that the region is more connected, especially regarding commercial activity.

What can we expect from the regional investment portfolio that CABEI has been leading?
The portfolio already exceeds US$3 billion in public and private projects. Multiplied by all the countries in the region, it becomes much more attractive. There are local entrepreneurs who, supported by the bank, are preparing investments throughout the region. And there are non-Salvadoran and more regional businessmen who are interested in coming to invest in the country, in integrationist projects, with a portfolio that exceeds 20 billion dollars or perhaps more. All the necessary social and economic studies are being prepared, consolidating projects in a single platform to encourage even more investments.

How important is CABEI for the development of Central America?
The bank has existed for 60 years. We manage assets of over US$13 billion. We work with the entire region, from Guatemala to Panama. We have extra-regional partners, such as Mexico, Dominican Republic, Argentina, Colombia, Spain, South Korea, Taiwan, among others. We cover more than 54% of public investments in the entire Central American region and the Dominican Republic, as well as co-investment projects, regional or local, with investment funds in other countries. We see the Middle East and Europe as major partners. We also have a very strong private investment portfolio. Our competitive advantage lies in the fact that the bank is quite closely tied to our governors, who are the Finance Ministers and presidents of all the countries in the region. We have a fairly quick decision-making capacity, and we are open to different projects.

We are preparing the regional innovation center in El Salvador, something that is going to dynamize and accelerate the economy, especially at the level of startups, changes in different areas, modernization, etc. On the other hand, we are the largest cooperating partner in the region also in terms of social projects, especially in non-reimbursable technical cooperation, both for public and private agents. We manage the Green Climate Fund of more than US$870 million. In September 2021, we obtained a double A rating from Moody's (high quality, very stable and low risk companies), which positions us as the best development financial institution in the region.