El Salvador's consumer culture
The Christian Science Monitor has a good article today looking at El Salvador's slow growth economy titled Supersize me: Golden arches crowd El Salvador's economy. It's a consumption driven economy, purchasing imports with remittances sent from abroad:
“El Salvador is becoming a giant supermarket… international products keep increasing, and it’s due to a structural problem with the economy,” [Roberto Rubio, director of FUNDE] says. El Salvador’s trade deficit – the amount by which products brought into the country exceed exports – is one of the highest in the region relative to the size of its economy.
“We take in a lot, consume a lot. Our trade deficit is almost 20 percent of our GDP,” Rubio says, blaming a lack of adequate economic and fiscal policies “that stimulate investment.”
Instead of choosing an investment path and creating incentives in sectors like alternative energy or technology, “what’s growing in this country? Commercial centers, car sales, cell phone consumption,” Rubio says.
National investors – who don’t take their money to neighboring countries with more developed investment opportunities – might be more inclined to open gas stations or fast food chains at home, he says.Read the rest of the article here. But I might not have chosen the Golden Arches to be the headline, since McDonald's has a quite small footprint in the country owing to the long-running litigation between McDonald's and its Salvadoran franchisee. Maybe a better headline would be Yum: Pizza Hut and Kentucky Fried Chicken crowd El Salvador's economy -- in recognition of the number of Yum Brands franchises in the country.