El Salvador has the potential to become the Singapore of the Americas and establish itself as a financial center in the region, according to Gabor Gurbacs, a strategy advisor at investment management firm VanEck. Gurbacs made this statement in a recent post on X, where he highlighted El Salvador’s potential for economic growth and compared it to Singapore’s success.
Gurbacs pointed out that, similar to Singapore in the late 1900s, El Salvador can attract new capital investment and immigration to drive its economic expansion. He emphasized the importance of portfolio managers and asset allocators recognizing the potential of El Salvador and considering it as a strategic investment opportunity.
This endorsement of El Salvador’s prospects comes after Max Keiser, a well-known Bitcoin advocate and broadcaster, praised the country in a post on October 28. Keiser, who now resides in El Salvador, listed several reasons why the Central American nation should be on everyone’s radar. These included the adoption of Bitcoin as legal tender alongside the US dollar, a decrease in crime rates, beautiful beaches, and excellent coffee.
El Salvador’s emergence as an attractive investment destination gained momentum when Nayib Bukele assumed the presidency in June 2019. Since then, the country’s sovereign bonds have outperformed many other emerging markets, delivering a remarkable 70% return by August 2023. This impressive performance caught the attention of major investment management firms such as JPMorgan and Eaton Vance.
In addition to its financial accomplishments, El Salvador has also made significant strides in the cryptocurrency space. In September 2021, Bukele’s government declared Bitcoin as legal tender and introduced the Chivo Wallet, a Bitcoin custodial wallet, for all Salvadorans. The country has leveraged its volcanic resources to establish a Bitcoin mining operation startup called Volcano Energy, which attracted a $1 billion investment. Keiser serves as the executive chairman of this venture.
El Salvador’s commitment to Bitcoin extends beyond mining and adoption. The country appointed Dr. Saifedean Ammous, author of “The Bitcoin Standard,” as an economic advisor to the National Bitcoin Office in May. El Salvador’s plan includes accumulating Bitcoin as a strategy to mitigate its debt within the next five years.
To further incentivize economic growth, Bukele made a bold move in April by eliminating all taxes on technology innovations. This decision aims to attract more entrepreneurs and foreign capital to the country, fostering innovation and economic prosperity.
With supportive policies, the adoption of Bitcoin, and a focus on attracting investment and talent, El Salvador is well-positioned to become a financial powerhouse in the Americas. The ongoing success of the country’s sovereign bonds and its developments in the cryptocurrency industry highlight its potential for future growth. As El Salvador continues to showcase its economic potential, it remains an exciting prospect for portfolio managers and asset allocators seeking new opportunities in the region.