El Salvador Turns Up the Heat A highly pro-business government, political stability, investment-grade debt and a population eager to participate in the industrial development boom in Latin America are helping El Salvador emerge from the shadows of the larger players in the region.         Free trade agreements with Mexico and other key markets in the Western Hemisphere and a competitive corporate tax rate of 25 percent are behind foreign direct investment of US$500 million in the past two years.         Among recent projects under way in El Salvador are a $20 million expansion of Bayer AG's Bonima production facility in Ilopango – the largest pharmaceutical production facility in Latin America. The expansion brings Bayer's investment in the facility to $60 million.         "Investments in machinery and equipment are exempt from duty, and you don't pay any import duty on raw materials," says Dr. Gerhard Wiech (inset, above), Bayer's regional manager, Central America & Caribbean. An incentive for exporting products outside of Central America also is in place, which is not the case in neighboring Central American countries, says Wiech.         South African Brewery-Miller PLC (SAB Miller) invested in a soft drink bottling plant in late 2001 and plans to expand the facility to include canning operations. The plant is operated by Embotelladora Salvadorena (Embosalva), the largest producer and distributor of carbonated soft drinks in El Salvador.         "Doing business in a truly dollarized economy is very important to any foreign investor, because he knows he won't be affected by [local currency] devaluation," says Jose Carlos Bonilla (inset, left), president of Embosalva, of the motivation behind such investments as SAB-Miller's. El Salvador has been fully U.S. dollarized since January 2001. "The fiscal policies in this country have been simplified substantially," he adds. – Mark Arend