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Business Dynamics: El Salvador

March 2021

Economies that offer an efficient, fast and inexpensive path to starting a business enjoy great dynamism and high FDI intake. A country with a competitive business environment has sound transport and ICT infrastructure; an effective juridical system; a flexible and skilled labour market, supported by trade openness and low corruption. Companies can assess these factors to understand the strengths and weaknesses of a country’s business environment for better strategic investment decisions.

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Overview:

The Country Briefings series examine market potential, economic and consumer trends impacting each country and how they are set to change.

Each Country Briefing covers one of these topics:

Economy, Finance and Trade: Understanding the structure, health and potential risks of an economy are important for decision-making within an existing operating environment as well as for expansion strategies. Real GDP growth, inflation and exchange rate fluctuations will directly impact consumer market potential. Import and export trade profiles help gauge how open an economy is to trade and investment, while analysis of government finances can be used to explore macroeconomic stability and susceptibility to economic shocks.

Income and Expenditure: Insights into income, wealth and expenditure of consumers are vital in helping businesses make strategic decisions with regards to which country (or even which region within a country) to enter, which consumer segment to target, which products or services to market, and at which price point. Other factors such as the size and expansion of the middle class and income inequality are also important in helping companies gauge the potential of a country market.

Households: Global shifts in gender, ageing, migration and housing are transforming the size, location,  general make-up as well as income and expenditure of households around the globe, with diverse implications for governments and companies. Households insights can help identify the decision-making processes and consumption tastes of different household groups and types within a country, and assess household appliance and digital readiness that is key for formulating market technology and internet strategies.

Business Dynamics: A stable and competitive business environment is vital to operate efficiently and attract inward investment. Businesses can assess these factors alongside challenges such as corruption, political instability and terrorism, also gain insight into business operating environment and make strategic investment decisions. Transport infrastructure, ICT readiness and labour force dynamics will also identify potential issues with a supply chain and the level of workforce skills.

Sustainability: Insights on key sectors directly related to the environmental sustainability of a country such as energy, water, pollution, environmental resilience, forest and biodiversity and food and agriculture help businesses to make strategic decisions in relation to environmental and sustainability trends, improve brand reputation and ensure long-term operations while ultimately growing the bottom line.

The briefings cover 103 countries and identify topics of crucial interest to planners, marketers and researchers.

Business Dynamics: El Salvador

OPERATIONAL AND LEGAL ENVIRONMENT

Chart 1 Operational and Legal Environment Key Indicators Chart 2 Ease of Doing Business Ranking by Pillar Regional Comparison 2020 Chart 3 Ease of Doing Business Ranking Regional Comparison 2015-2020 Chart 4 Ease of Doing Business Indicators: Time Needed to Start/Close a Business 2020 Chart 5 Ease of Doing Business Indicators: Costs Incurred to Start and Operate a Business 2020 Chart 6 Tax Rates 2020 Chart 7 Insolvency Recovery Rate by Secured Creditors in El Salvador and Regional Comparison 2020 Chart 8 Global Competitiveness Ranking by Pillar in El Salvador and Regional Comparison 2019 Chart 9 Global Competitiveness Ranking for El Salvador and Regional Comparison 2014-2019 Chart 10 Global Competitiveness Index: Macroeconomic Stability Pillar for El Salvador and Regional Comparison 2014-2019 Chart 11 Index of Economic Freedom Ranking by Pillar in El Salvador and Regional Comparison 2020 Chart 12 Index of Economic Freedom Ranking Over Time 2015-2020 Chart 13 Index of Economic Freedom: Judicial Effectiveness Pillar Rank in El Salvador and Regional Comparison 2017-2020 Chart 14 Index of Economic Freedom: Government Integrity Pillar Rank in El Salvador and Regional Comparison 2015-2020 Chart 15 Number of New Businesses and Annual Real GDP Growth in El Salvador 2015-2020 Chart 16 New Business Density in El Salvador Compared to Regional Average 2015-2020 Chart 17 Operational Environment in El Salvador and Regional Comparison 2019 Chart 18 Corruption Perceptions Ranking: El Salvador and Regional Comparison 2014-2019

FINANCING AND INVESTMENTS

Chart 19 Key Financial and Investment Indicators Chart 20 Ease of Doing Business Ranking: Getting Credit Pillar for El Salvador and Regional Comparison 2015-2020 Chart 21 Soundness of Credit Information: Credit Bureau Coverage 2020 Chart 22 Global Competitiveness Ranking: Financial Systems Pillar for El Salvador and Regional Comparison 2014-2019 Chart 23 Ease of Doing Business Ranking: Protecting Minority Investors Pillar for El Salvador and Regional Comparison 2015-2020 Chart 24 Index of Economic Freedom: Property Rights Pillar Rank in El Salvador and Regional Comparison 2015-2020 Chart 25 Bank Claims on the Private Sector as % of GDP 2015-2020

SKILLS AND LABOUR

Chart 26 Key Skills and Labour Indicators Chart 27 Global Competitiveness Ranking: Skills Pillar for El Salvador and Regional Comparison 2014-2019 Chart 28 Population Aged 15+ with Higher Education 2015-2020 Chart 29 Education Indicators 2020 Chart 30 Number of University Graduates by Programme 2020 Chart 31 Global Competitiveness Ranking: Labour Market Pillar for El Salvador and Regional Comparison 2014-2019 Chart 32 Employment by Age 2020 Chart 33 Employment by Gender 2020 Chart 34 Labour Structure Change over 2015-2020 Chart 35 Labour Structure Comparison 2020 Chart 36 Self Employed as % of Total Employed Population 2020 Chart 37 Index of Economic Freedom: Labour Pillar Rank in El Salvador and Regional Comparison 2015-2020 Chart 38 Minimum Wage per Hour over 2015-2020 Chart 39 Wage per Hour in Manufacturing Sector over 2015-2020 Chart 40 Labour Market Regulations in El Salvador and Regional Comparison Chart 41 Employment by Industry Sector 2020

TRANSPORT AND INFRASTRUCTURE

Chart 42 Key Infrastructure Indicators Chart 43 Logistics Performance Index Scores by Pillar in El Salvador and Regional Comparison 2020 Chart 44 Logistics Performance Index Ranking for El Salvador and Regional Comparison 2015-2020 Chart 45 Global Competitiveness Ranking: Product Pillar for El Salvador and Regional Comparison 2014-2019 Chart 46 Global Competitiveness Ranking: Infrastructure Pillar for El Salvador and Regional Comparison 2014-2019 Chart 47 Transportation Mode Indicators in El Salvador and Regional Comparison Chart 48 Road Infrastructure 2020 Chart 49 Ease of Doing Business Ranking: Trading Across Borders Pillar for El Salvador and Regional Comparison 2015-2020 Chart 50 Transaction Time for Trading Across Borders 2020 Chart 51 Costs of Trade Transactions Across Borders 2020 Chart 52 Global Competitiveness Ranking: Market Size Pillar for El Salvador and Regional Comparison 2014-2019

DIGITALISATION AND INNOVATION

Chart 53 Innovation and Digitalisation Key Indicators Chart 54 Network Readiness Ranking by Pillar in El Salvador and Regional Comparison 2020 Chart 55 Network Readiness Ranking for El Salvador and Regional Comparison 2019-2020 Chart 56 Network Readiness Ranking: Technology Pillar for El Salvador and Regional Comparison 2019-2020 Chart 57 Global Competitiveness Ranking: ICT Adoption Pillar for El Salvador and Regional Comparison 2014-2019 Chart 58 Global Competitiveness Index: Innovation Pillar for El Salvador and Regional Comparison 2014-2019 Chart 59 Intellectual Property: El Salvador Compared to Selected Regional Peers

APPENDIX A

The World Bank’s Ease of Doing Business Index (Doing Business) 2020 

APPENDIX B

The Global Competitive Index (GCI) 2019

APPENDIX C

The 2020 Index of Economic Freedom

APPENDIX D

The Logistics Performance Index (LPI) 2020

APPENDIX E

The Network Readiness Index (NRI) 2020
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