Google And El Salvador Reach A Modern Multi-Million-Dollar Agreement

The seven-year agreement will see El Salvador become the first Latin American government to benefit from Google Distributed Cloud.

El Salvador and Google have announced a $500 million strategic partnership to modernize the country’s government.

Although details of the agreement are scarce, it will include digital government, digitizing processes such as electronic invoices and incorporating Google Cloud AI into education and healthcare.

“El Salvador is moving forward. We believe technology and foreign investment are key for development. We are quickly becoming a hub for innovation. This ground-breaking alliance with Google Cloud opens unprecedented avenues for innovation, economic growth, and enhanced public services,” said El Salvador President Nayib Bukele in a press release.

In terms of public health, the aim is to give doctors access to real-time information to improve delivery of medical services to communities. In 2021, El Salvador adopted Google for Education as its primary learning platform for 1.5 million students and teachers.

The seven-year agreement will see El Salvador become the first Latin American government to benefit from Google Distributed Cloud.

Critics are concerned that the alliance document has not been made public and that it did not go through the legislative assembly. Some politicians have claimed this makes the agreement anti-constitutional.

Google’s investment into El Salvador has not been revealed although a Cloud tech center and offices will open. This will also include a legal entity.

“This could be a good moment to digitalize all public services and attract investments to El Salvador. A key policy for this government,” says economist Esaú Menjívar.

In June 2022, CEO Sundar Pichai announced that Google would invest $1.2 billion over five years in Latin America. Besides highlighting the region’s importance as a digital growth market, Pichai said the money would be used for infrastructure, online training programs and supporting start-ups and nonprofits.

Google’s subsea Firmina cable runs from the US East Coast to Las Toninans in Argentina, one of around 20 it has invested in since 2010. The company currently has cloud regions in Santiago, Chile and São Paulo, Brazil and has announced plans to open a new one in Mexico.

Off the back of the Google deal and an agreement between the state and eight local private banks to reprofile short-term debt, El Salvador’s international bonds have continued to rally. The operation is estimated at around $1.45b according to the finance ministry.