Years of unprofitable operations, however, have effectively decapitalized many of the state-owned companies, leaving few tangible assets. At 15 percent of GDP, the overall tax burden imposed by the Government is not unusually high, but the Government depends on taxes levied on imports for 40 percent of its revenues. Foreign businesses can be at a distinct disadvantage in this process. U.S. businesspersons operating overseas are obligated to abide by the provisions of the U.S. Foreign Corrupt Practices Act. Institutional difficulties common to developing countries are also present.
Businesses often find that the labor force is good but untrained.
Although a judicial reform effort is underway, it can be difficult and time-consuming to obtain an equitable result in the antiquated justice system. In addition, the banking system is weak and a modern regulatory framework for banks is only now being put in place. Earnings from the free trade zones also are an important contributor. This concern seems not to have been borne out, as the Central Bank reports that family remittances grew in 1997. The merchandise trade balance continues to deteriorate.