Rodrigo Chaves, President of the Republic of Costa Rica, has emphasized the accelerated economic changes brought about by his administration and the potential for investment in the country.
Why is Costa Rica an attractive destination for foreign investment?
Costa Rica is a small nation with a powerful voice. With an impressive track record of democracy, human rights, and environmental protection we are proud to be powered entirely by renewable energy sources and have become the go-to destination for foreign direct investment (FDI). In the modern world, nations must strive to add value to their production chains as well as delivery of services to remain competitive.
To this end, Costa Rica is investing heavily in human capital and developing the necessary skill sets to compete on a global scale. The National Institute of Learning (NIL) works with foreign investors to customize the skills required to produce their desired output, and places great emphasis on foreign language proficiency, particularly in English. By investing in these areas, Costa Rica is positioning itself to remain competitive on the international stage.
At the same time, this government is taking steps to rectify mistakes of the past two decades and fortifying our infrastructure. I recently mandated an opening of 5G frequencies, making Costa Rica one of the first nations in Latin America to have a fully-implemented 5G system. Our nation is also one of the leading technology hubs of the world for biomedical microchip products, with exports amounting to nearly 10% of our gross domestic product. We have a vast free-trade zone system, meaning investors will find nothing but open arms when doing business in our country.
What actions is the government taking to address the challenges posed by the COVID-19 pandemic and other global crises?
The current global climate is decidedly unpredictable. In Europe, Russia’s aggression against Ukraine is not to be tolerated. Additionally, the Organization of the Petroleum Exporting Countries have cut back on production, potentially leading to rising prices of oil. However, in looking at international trends through the U.S. Dollar lens, Costa Rica stands out as an exception.
The exchange rate of the colón has appreciated by 10 percent in just a few months, indicating stability and confidence in the nation’s macroeconomic foundations. Moreover, tourism is reviving, facilitating an influx of foreign exchange dollars, while exports from free trade zones are increasing as well. Although inflation remains a challenge and interest rates have had to be raised, Costa Rica is faring better than many other countries affected by the global climate.
Bank of America has recently praised the budget proposed by Costa Rica’s government to Congress for 2023 as ‘heroic’. All quantitative targets and benchmarks have been surpassed, contributing to the sustainability of our microeconomy under an International Monetary Fund program.
This success could not have been possible without the overwhelming support from the people of Costa Rica towards the new administration. Polls show an unprecedented 86.8 percent approval rating for the government, which has been met with enthusiasm from both the Costa Rican citizens and the international community. These developments give legitimacy to our structural reforms and demonstrate the effectiveness of our efforts.
Many are confident that Costa Rica can continue to make progress and improve the lives of its citizens with similar initiatives in the future.
Costa Rica has re-emerged onto the international stage. We have conformed to the World Trade Organization’s regulations concerning avocados – a topic that had previously been restricted by prior administrations. At present, we are actively negotiating a bilateral free trade agreement with Ecuador and our eyes are set on joining the Pacific Alliance on November 25, 2022.
In addition, we have also applied for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – a conglomeration of eleven nations. We hope for a positive outcome.
What are Costa Rica’s economic expectations in 2023?
We are confident that Costa Rica’s gross domestic product will increase by at least 2.6 percent in 2023. Over the past few years, we have implemented a series of structural reforms designed to break up monopolies previously granted by outdated legislation to powerful private groups. This has allowed us to open up the markets for rice production, medicine and the pharmaceutical industry, creating greater confidence in our private sector.
Our internal estimates are much more optimistic than those of other nations in the Organisation for Economic Co-operation and Development, who have not yet adopted these reforms. We predict that if the global economy remains on its current trajectory, 2023 will be a very profitable year for Costa Rica and its investors.
Where is Costa Rica positioned globally?
Costa Rica is an example to the world of democracy and sustainability. We are a nation that values human rights for all, regardless of gender or sexual orientation. Freedom of expression in the press is upheld in our country as well. While many countries fall into political trends that move toward either Europe or Latin America, Costa Rica remains steadfastly on its own path, upholding the values shared by other nations and communities such as the United States, the European Union, the Dominican Republic, and Panama. We are a shining light of the American hemisphere, showing that it is possible to preserve democracy and sustainability even in the midst of shifting political tides.
Costa Rica is a nation of compassion and generosity when it comes to immigrants. Around 20 percent of our population consists of refugees and illegal immigrants whom we provide access to education and health services at low costs. We are now faced with an immigration crisis, as Venezuelans continue to seek refuge in the United States, which we take very seriously.
As a country that values human rights, we are dedicated to upholding our international commitments and standing by the rule of law and democracy. We will continue to be a caring nation when faced with humanitarian crises, playing a legitimate lead role in the Americas.
At the seventh session of the United Nations General Assembly in New York, Costa Rica took a leadership role in advocating for environmental sustainability. Our country reaffirmed its strong partnership with France to host the UN Ocean Conference in 2025 and furthered discussions about joining the Pacific Alliance.
In just a short period of time, Costa Rica has regained its footing on the international scene, radiating a new vitality and optimism. We are ready to take on the global challenges of tomorrow with a renewed spirit.
How is Costa Rica supporting the regional integration through the Central American Integration System (SICA)?
Central America is committed to engaging with the global community. The internal politics of the decision to support Nicaragua’s nomination for Secretary General of SICA was difficult, as there were some voices in Costa Rica that did not agree. I made the choice independently from any political or democratic differences we may have had with them; it was their turn, and SICA needed a leader to restart the integration process.
As president, I am faced with tough decisions on a regular basis, however, in this case, I was confident that my choice would bring about a sense of unity among all the countries involved. Together, we can create positive outcomes through larger markets, which will be beneficial to us all.
What opportunities are available for investors from the U.S. and abroad in the Costa Rica economy?
Costa Rica and the United States have enjoyed a strong alliance since 1854. The U.S. is our biggest trading partner and source of tourism, as well as having close ties in terms of geographical proximity and shared values. In recent years, the CHIPS and Science Act has marked an important policy milestone for national security, supplying American technology to key areas. We have worked diligently with the U.S. government to position Costa Rica as a major player in these operations and Intel recently expanded its chip production capacity in the country.
Our high-tech sector is booming and we’re seeing a surge in growth with the development of biotechnology, as well as the implementation of the CHIPS act. We are looking to further expand our capabilities through 5G networks and shared services, while also exploring new opportunities for greater value creation within food processing.
We are constantly striving to open our markets and build relationships with key international partners, which has so far seen us establish free trade agreements with 75% of the world’s countries. We are committed to creating even more beneficial alliances in the near future.
Additionally, Costa Rica is poised to capitalize on the latest trends in tourism. Tourists are now looking for more active and immersive experiences, such as adventure and nature activities, as well as cultural tours. As one of the safest countries for tourists visiting the hemisphere, Costa Rica boasts an extensive range of nature and adventure attractions—including popular white-water rafting activities, which have seen a surge in investment.
The country also stands out for its commitment to environmental conservation; it is the only tropical nation to have reversed deforestation and outlawed all forms of animal trapping and hunting. While no destination can be perfect, Costa Rica comes as close as possible to creating a truly exceptional travel experience. We invite everyone to come and see the beauty of our country and take advantage of the great investment opportunities it offers.
Source: Washington Post
