LatinFinance - March/April 2013 - Costa Rica Supplement - 20
Costa Rica | FDI
which will double the size of its operations in the country.
German companies have been looking into producing
photovoltaic cells for Costa Rica’s budding solar power industry,
says Juan Ramón Rivera, president of the Costa Rica Chamber
of Industries. Tourism has also flourished on the back of the
environmental message, with a growing array of activities and
accommodation geared to green-aware travelers.
At the same time, the country has enticed new companies to
established areas, such as medical equipment production. US
healthcare technology firm Baxter first came to Costa Rica in 1987
and has built its operation to nearly 1,200 employees. The country is
rapidly attracting global leaders in cardiovascular technology. Five
of the world’s top 10 firms in this area have operations in the country,
says Llobet. They include Abbott Vascular, Saint Jude Medical and
Boston Scientific, all of which have arrived since 2010, she says.
They are involved in highly sophisticated, high-tech niche areas.
“Today, Costa Rica makes implantable devices that stay in your
body for 20 years or more,” says Llobet.
Services industries, also well–established, are the fastest
growing area, and the product range is becoming ever more
elaborate. Call centers came first. Since then, services have
developed through increasingly complex back and mid-office
functions in finance and accounting, to full-blown business process
outsourcing.
The country offers an array of IT services, including human
resources management and procurement, engineering and design,
and software development, says Llobet. San José was ranked the
number one center for outsourcing by consultant Tholons this year.
Research and development is also arriving.
Diversifying the services of already established companies
is another way to build FDI. Intel is an impressive example. Last
year, it consolidated engineering services here and employs 300
TERMS OF TRADE
INTERVIEW WITH COSTA RICA’S TRADE
MINISTER ANABEL GONZÁLEZ
Anabel González became Costa Rica’s trade minister in May
2010, joining from the Inter-American Development Bank,
where she was a senior adviser. She spoke to LatinFinance in
February about Costa Rica’s free trade plans and the challenges
for attracting FDI
LF: Costa Rica has recently
imposed controls on capital
inflows in a bid to stabilize
the currency. Is that the right
response from a small, open
economy?
González: It is important to start by
saying that as Costa Rica is a small
economy. Its integration into the
world economy is crucial to generating
wealth and development. Integrating
into the world economy means having
an open market and having foreign
direct investment (FDI) as a way to
complement domestic savings and
expand domestic capacity.
For reasons that are in many ways
external to Costa Rica, capital inflows
have increased recently. But we are
not talking about FDI that expands
capacity, rather speculative flows that
come to take advantage of the good performance of the Costa
Rican economy and the difference between interest rates in
Costa Rica and the rest of the world.
These flows can have an impact on the economy. That is
20
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to
why the administration has adopted a number of measures, the
most important of which is a reduction in interest rates, the main
element in terms of promoting the inflow of capital flows. It also
sent a bill to Congress that gives the executive the tools to be
able to curtail those capital inflows.
This is a moderate, cautious approach in an open economy.
Costa Rica is not alone: other countries are facing the same
situation and the impact in Costa Rica
is moderate compared to some of these
countries.
LF: The government faces a
persistent deficit. Could it look at
foreign investment, such as free
trade zones, as a source of tax
revenue?
González: I do not think that will be
the case, for several reasons. Costa Rica
is in competition with many countries
in the world, which are enhancing
their tax regimes to attract investment.
Our value proposition is based on
key factors such as human resources
and capital, our strategic location,
our strong network of free trade
agreements that provides a platform
for selling to the world, and strong
air transportation. The free trade zone
regime is an important part of this
proposition.
Different countries have different propositions, but in most
there are preferential tax regimes or other incentives. This is well
understood in Costa Rica and we have performed a number
of cost-benefit analyses which show the impact is more than
LatinFinance | March/April 2013
Table of Contents for the Digital Edition of LatinFinance - March/April 2013 - Costa Rica Supplement
Latin Finance - March/April 2013 - Costa Rica Supplement
Contents
Getting it right
Securing the future
Making the leap
Finding space
A hard currency
Trading up
Green credentials
LatinFinance - March/April 2013 - Costa Rica Supplement - Latin Finance - March/April 2013 - Costa Rica Supplement
LatinFinance - March/April 2013 - Costa Rica Supplement - Cover2
LatinFinance - March/April 2013 - Costa Rica Supplement - Contents
LatinFinance - March/April 2013 - Costa Rica Supplement - Getting it right
LatinFinance - March/April 2013 - Costa Rica Supplement - 3
LatinFinance - March/April 2013 - Costa Rica Supplement - 4
LatinFinance - March/April 2013 - Costa Rica Supplement - 5
LatinFinance - March/April 2013 - Costa Rica Supplement - Securing the future
LatinFinance - March/April 2013 - Costa Rica Supplement - 7
LatinFinance - March/April 2013 - Costa Rica Supplement - Making the leap
LatinFinance - March/April 2013 - Costa Rica Supplement - 9
LatinFinance - March/April 2013 - Costa Rica Supplement - 10
LatinFinance - March/April 2013 - Costa Rica Supplement - 11
LatinFinance - March/April 2013 - Costa Rica Supplement - 12
LatinFinance - March/April 2013 - Costa Rica Supplement - 13
LatinFinance - March/April 2013 - Costa Rica Supplement - Finding space
LatinFinance - March/April 2013 - Costa Rica Supplement - 15
LatinFinance - March/April 2013 - Costa Rica Supplement - A hard currency
LatinFinance - March/April 2013 - Costa Rica Supplement - 17
LatinFinance - March/April 2013 - Costa Rica Supplement - Trading up
LatinFinance - March/April 2013 - Costa Rica Supplement - 19
LatinFinance - March/April 2013 - Costa Rica Supplement - 20
LatinFinance - March/April 2013 - Costa Rica Supplement - 21
LatinFinance - March/April 2013 - Costa Rica Supplement - 22
LatinFinance - March/April 2013 - Costa Rica Supplement - 23
LatinFinance - March/April 2013 - Costa Rica Supplement - Green credentials
LatinFinance - March/April 2013 - Costa Rica Supplement - Cover3
LatinFinance - March/April 2013 - Costa Rica Supplement - Cover4
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