EL SALVADOR ON THE PATH TO ECONOMIC DEVELOPMENT THROUGH DIGITAL TRANSFORMATION

In recent years, El Salvador has embarked on a transformative process aimed at consolidating an economic and digital de velopment model that responds to the challenges of the global economy. The El Salvador Digital Agenda 2020-2030, promoted by the government of President Bukele, establishes as one of its principles the strengthening of economic activities linked to technological innovation, recognizing that these are a fundamental driver for the growth of the country’s productivity and competitive ness. Launched in 2020 under the Secretariat of Innovation, the Agenda is structured around four pillars: digital identity and service integration, enabling laws and cybersecurity, modernization of the Government, and innovation, including connectivity, smart cities, and technological education, with the aim of achieving full digital transformation by 2030 through inter-institutional coordination.

The national strategy has been based on the construction of a modern regulatory framework, institutional strengthening, and the international projection of its achievements through economic diplomacy. These efforts reflect a vision of the Government that not only seeks to modernize productive sectors, but also to project El Salvador as an emerging technological hub, with the aim of attracting foreign direct investment, generating special ized employment, and developing competitive human talent.

National institutions such as the Secretariat for Innovation play a notable role in digital transformation, as they are the governing body responsible for implementing the 2020-2030 Digital Agenda, which has helped to promote the digitization of public services. All this coordinated work, along with other institutions overseeing economic policy such as the Secretariat of Trade and Investment, the Ministry of Economy, and the Ministry of Foreign Affairs, complements the work of the Secretariat for Innovation, focusing on attracting foreign investment, promoting the country as a technological hub in interna tional markets, and promoting the portfolio of strategic projects for technological and digital innovation. This inter-institutional framework reflects the cohesion between national policies and international outreach by diplomatic and consular missions.

In the same vein, another relevant regulatory milestone led by the Ministry of Economy is the Law on the Promotion of Inno vation and Technological Manufacturing, which offers a frame work of competitive tax incentives for companies in sectors such as software development, cloud services, video games, augmented reality, and specialized hardware manufacturing. This legislation has removed tax barriers and facilitated the importation of strategic inputs, consolidating an environment conducive to technological investment.

Among the incentives promoted by the Law for the Promo tion of Innovation and Technological Manufacturing are total exemption from income tax on incentivized activities, the ex tension of all types of withholdings from said tax, as well as complete exemption from the payment of customs duties and taxes levied on the importation of goods, supplies, machinery, equipment, and tools necessary for the development of these activities, with the aim of boosting investment and growth in technological and innovative projects in the country.

In 2025, the Law for the Promotion of Artificial Intelligence was enacted, an instrument that promotes innovation, trans parency in the use of algorithms, and guarantees ethical and safety standards. Within the framework of this law, the National Artificial Intelligence Agency (ANIA) was created, an entity responsible for coordinating actions between the govern ment, academia, and the private sector, ensuring compliance with international standards and positioning El Salvador as a benchmark in responsible and competitive artificial intelligence.

The arrival of international capital and the establishment of glob al technology companies in El Salvador, notably the opening of Google’s offices in El Salvador and Data Trust, consolidate the successful implementation of the aforementioned Agen da, generating confidence in the country’s regulatory and economic environment. The Google office, inaugurated on April 15, 2024, under an agreement signed in 2023 with the Presidency, provides support for cloud and artificial intelligence solutions for public services, with an investment of US$500 million over seven years.

At the regional and international levels, El Salvador has used innovation as an instrument of economic diplomacy through active participation in multilateral forums, the promotion of bilateral agreements, and the organization of trade missions, projecting its technological ecosystem as a reliable platform for collaboration and investment.

El Salvador has not only demonstrated tangible progress in attracting investment, exporting services, and generating talent, but has also consolidated a narrative of an innovative, competitive country with global ambition, capable of leading the technological future from the heart of Latin America.

Since the establishment of diplomatic relations, El Salvador and Türkiye have built a path of trust, mutual respect, and effective cooperation. This has been made possible through open dialogue, which has helped consolidate a strategic re lationship that has enabled progress in various areas such as state modernization, security, health, agricultural development, and education.

This bond was strengthened by the historic visit of President Nayib Bukele to his counterpart, Recep Tayyip Erdoğan, in 2022. These ties continue to solidify thanks to the visit made by the Minister of Foreign Affairs, Alexandra Hill, in July of this year, during which she met with Türkiye’s Foreign Minister, Hakan Fidan. “The agreements we are working on have be come pillars of our constantly evolving strategic alliance. We remain firmly committed to strengthening our cooperative ties with Türkiye, a partner and friend nation,” stated Minister Hill.