LatinFinance - March/April 2013 - Costa Rica Supplement - 21

FDI | Costa Rica

specialists. “80% of Intel server microprocessors comes from this
plant, which is the most complex of its type,” says Karla Blanco,
manager of corporate affairs at Intel. Today, it counts NASA among
its clients. In 2005, when Intel was looking for a back- and midoffice financial operation, it ended up picking Costa Rica over
Malaysia, she says. That has seen staff numbers quintuple to 100 in
this area.
Intel arrived in Costa Rica with much more humble intentions.
“We started just with the assembly of microprocessors,” says
Blanco. “Our engineers’ curiosity, innovation and commitment
helped to make Costa Rica the center.” Intel started with $115
million in investments and 500 employees in 1996. It has invested
$800 million and has 2,800 employees today, she says.
A number of factors drew the firm to Costa Rica. Tax breaks
were a consideration. The level of education and English-language
skills and the number of engineers were also factored in. The

compensated by the benefits that the Costa Rican economy
derives. This is a strong, consolidated regime and has been in
place for more than two decades. It brings important benefits
in generating growth, new employment opportunities and
transforming our productive structure.
I like to remind people about the depth of the
transformation of the economy. In 2011, exports of IT services
and business process outsourcing (BPO) in Costa Rica equalled
exports of agricultural products. This used to be an economy
based on the export of four or five different commodities. Now
we export 4,300 products to 145 countries. We are very
much integrated into value chains
in electronics, medical devices, the
automobile industry, and avionics and
the export of services is growing fast.
Its importance is understood by the
government and Costa Rican society.

government was flexible and welcomed the firm. It even brought
forward the completion of a generating sub-station. “In other larger
countries, you wouldn’t get the kind of access to the government
that you get in Costa Rica,” Blanco says.
Intel proved such a fast growth story that it even started to raise
concerns over an unhealthy dominance of Costa Rica’s exports.
It is still a very significant investor, but new openings have diluted
its share of exports, which is set to keep falling as Costa Rica’s
industrial base diversifies.
The speed of that diversification has been exponential. In the
1960s and 1970s, Costa Rica practiced an import substitution
model, but took on too much debt which provoked a crisis in the
early 1980s. Since then, the economic model has been firmly based
around investment and free trade. Today, a web of bilateral free
trade agreements are at the heart of Costa Rica’s success story.
“We went from producing some 15 exports to a handful of countries

majority, an FTA with China. There are few countries in the
world that would do so with such strong backing and this
sends out a powerful message. We are a democracy and there
are pockets of opposition to free trade, of course. We are a small
economy and don’t have the market size for economies of scale
and specialization: integration into the world is vital for our
development.
LF: What agreements are you working on?
González: We will see the ratification of the FTA with the
European Union pass with a large majority. We are concluding
the agreement with the European
Free Trade Association and hope to
sign an agreement by mid-year and
we are concluding an agreement with
Colombia.
A very important element of our
trade policy is to expand the platform.
We are continuing negotiations with
full members of the Pacific Alliance
where we are an observer alongside
Panama and hope to conclude negotiations this year. We are
closely looking at the Trans-Pacific Partnership, which brings
together 11 counties, and are very keen in participating in this
process. We look at different opportunities to strengthen the
platform as they arise.

“We have been a success
story, but there’s still
great potential”

LF: How accepting is Costa Rican
society of the idea of free trade?
González: Costa Rica went through
a very complex process in 2007 when the free trade agreement
(FTA) with the US was subject to a referendum. This is a
country that had been supporting free trade for a long time, but
it became controversial in the negotiations with the US because
the agreement provided for the opening of long-held public
monopolies in telecoms and insurance.
It was decided to submit the agreement to a public
referendum. This was the first in Costa Rica’s history and the
only one in the world that I know of based on the signing of a
free trade agreement. The vote drew a very strong participation
of registered voters and a positive outcome. This was a very
important moment and our society is pro-free trade today.
In August 2011, our Congress approved, and by a strong

A Supplement

LF: How much acceleration in FDI flows is possible and
what sectors are you most emphasizing?
González: We have been a success story, but there’s still great
potential. We have been proactive in attracting investment and
have demonstrated our capabilities in advanced manufacturing
and more recently in clean technologies. We think there’s great
potential in this area as it brings together our environmental

LatinFinance | March/April 2013

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