What Happened: U.S. Vice President Kamala Harris announced an additional $1.9 billion in private-sector investment pledges in Central America, with a focus on the Northern Triangle countries of El Salvador, Honduras and Guatemala, Reuters reported June 6.

Why It Matters: The U.S. government's effort to boost investment in Central America will likely include additional incentives for companies to begin significantly investing in the region, and many companies already were considering increasing their presence in the region as part of a broader interest in nearshoring. However, heightened political risk due to expropriation concerns and the limited term of the Biden administration may see this trend reverse, especially should a new government come into office in the White House in 2024. In the long term, increased investment in Central America's industrial, textile and technology sectors could help regional economies shift away from exporting raw materials and toward industrialization.

Background: The new round of private sector investment was announced under the U.S. Strategy for Addressing the Root Causes of Migration in Central America, which seeks to stem migrants' northward migration by alleviating push factors like a lack of economic opportunity in migrants' countries of origin. In May 2021, Harris announced the "Call to Action" initiative that encouraged the U.S. private sector to invest in Central America, and the region subsequently raised $1.2 billion in December 2021.