Costa Rica Coffee Guide

Costa Rica drops two spots in global competitiveness ranking

September 29, 2016

Costa Rica ranked 54th out of 138 countries evaluated in the World Economic Forum’s latest Global Competitiveness Report released this week.

The country ranked fourth in Latin America this year and second in Central America behind Panama.

The World Economic Forum ranked Chile the most competitive country in the region, followed by Panama and Mexico. Paraguay, Bolivia and Venezuela ranked at the bottom of the Latin American countries.

The report notes that Costa Rica’s slight decline in ranking is mainly due to its scores in three areas: institutions, market efficiency for goods and innovation. In each of these pillars the country dropped 11 spots compared to last year’s report.

Costa Rica also dropped in the ranking in terms of business sophistication.

In terms of macroeconomic environment, Costa Rica rose 12 spots in the ranking, from 94 to 82, event though it got weak scores for the country’s rising debt and fiscal deficit.

The country also ranked low on infrastructure, mostly because of its public roads, ports and air transport infrastructure.

The report noted that the most problematic factors for doing business in Costa Rica are inefficient government bureaucracy, inadequate infrastructure, high tax rates and minimal access to financing.

The World Economic Forum calculates its index by collecting figures from the World Bank, United Nations, World Health Organization and International Telecommunication Union on 107 variables grouped into 12 categories.

The Costa Rica-based Central American Institute of Business Administration also provides information about Costa Rica and other countries in the region.

Where Costa Rica improved

Despite its drop in the global ranking, Costa Rica leads Latin American countries in the categories of innovation and business sophistication. It also leads the region in terms of health and primary education.

The country received a score of 6.2 out of 7 in health and primary education, which placed it near global leader Finland, which scored 6.8.

Costa Rica has a life expectancy of nearly 80 years, one of the highest in the report. Costa Rica also has few cases of diseases like malaria and AIDS, which negatively impacted public health indicators for many poor economies, the report noted.

The country’s scores for its elementary, high school and college education systems were among the top 35 in the world.

Business leaders agree

In response to Costa Rica’s ranking in this year’s Global Competitiveness Report, local business leaders demanded improvements from the government, mainly in public infrastructure and in cutting red tape.

Francisco Gamboa, executive director of the Costa Rican Chamber of Industries, said Costa Rica’s decline in the ranking wasn’t surprising.

“We will not improve our position in the competitiveness ranking until we improve our roads, finish the Moín cargo terminal and declare war on excessive red tape,” he said.

Yolanda Fernández, president of the Costa Rica Chamber of Commerce, said in a public statement that the World Economic Forum report reflects the country’s reality. She said private-sector entrepreneurs face daily problems with excessive bureaucracy.

She also said that the country’s precarious infrastructure is always a major problem. As an example, Fernández criticized the excessive time cargo trucks spend transporting merchandise every day because of constant traffic jams.

Economy Minister Welmer Ramos said the administration of President Luis Guillermo Solís has passed legal reforms to promote competitiveness and is currently promoting changes in legal procedures to speed up the process to open new businesses.

Ramos said the country’s drop in the World Economic Forum report does not necessarily mean its competitiveness has deteriorated. “It can also means that other countries are improving,” he said.

Costa Rica’s results in the World Economic Forum ‘s Global Competitiveness Index 2016-2017

[documentcloud url=”https://www.documentcloud.org/documents/3115595-WEFCRCProfile2016.html” pdf=false]

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