April 2008: Nieuwsflits Costa Rica
From Handelswijzer Midden-Amerika van de Koninklijke Nederlandse Ambassade te Costa Rica
Economic growth and inflation
Costa Rican inflation in 2008 will likely exceed the central bank's 9 percent target because of international food and energy prices, according to President Oscar Arias. Inflation across Latin America has jumped over the past few months as rapidly developing economies like India and China boost global demand for food and commodities. The expected economic downturn in the United States, Costa Rica's top trading partner, has already put a damper on economic growth across Central America. Costa Rica's central bank expects the economy to grow 3.8 % this year, down from 6.8 % in 2007 Annual inflation through last month stands at 11.04%, still far above the Central Bank's stated goal of 8%.
Costa Rica attracts new level of luxury investment
With the estimated arrival of nearly 2 million tourists to Costa Rica in 2008, and a projected income of nearly $3 billion for the tourism industry, luxury hotel and rental establishments are eager to start operations in Costa Rica. Last year saw an investment of $800 million in the tourism sector alone. The Doubletree by Hilton is one of the big newcomers this year, with two hotels recently opened under their name, and another on the way. Costa Rica remains one of the top eco-tourism destinations in the world, with visitor arrivals growing more each year. Plenty of opportunities for Dutch investors in real-estate en tourist development areas.
Costa Rica cell phone industry of interest to multinationals
Despite the fact that the Costa Rican Legislative Assembly just approved the bill that sets the stage to open up the telecommunications industry, a few multinationals have had their eyes set on the market for several years now. While the country has a relatively small population, Costa Ricans are ranked 3rd in the world for the amount of minutes they talk on their telephones, after Japan and the United States, making them a very desirable market. The state-run telecom monopoly ICE (the Costa Rican Institute of Electricity) does not have a great reputation for service and lacks many of the services that are currently in high demand throughout the rest of Latin America, opening up plenty of room for competing companies such as America Movil & Telmex (Mexico), Telefonica (Spain), AT&T (USA), Digicel (Ireland) and Huawei (China). It is expected that by the end of this year there will be new network providers for landline, mobile phone and internet services besides that of ICE.
Costa Rica’s electric bill on the rise
ARESEP - Costa Rica’s Public Services Regulating Authority approved increases of up to 75% in electricity rates. According to the Instituto Costarricense de Electricidad (ICE), this increase was required to pay for the electricity generated this year, payment of outstanding debts acquired in 2007 and necessary investments in new power generation projects. The increases went into effect on the 15th of April. ICE’s expenses have risen exponentially due to the high price of fuel used to run power plants and the cost of renting privately-owned power plants to make up for the extra demand.
Procter & Gamble to invest in new Strategy Centre in Costa Rica
Procter & Gamble will be investing $2 million to create a new Business Strategy Centre in Costa Rica from which they will provide business consulting to all of the regional branches throughout Latin America with a focus on innovation. Procter & Gamble has had branches in Costa Rica since 1999, and its Financial Services Headquarters has already seen 75% growth since its creation three years ago. After the United States, the multinational has more employees in Costa Rica than any of its 80 other international locations, and sees approximately $30 million coming from the Costa Rica branch annually.
Costa Rica government is enforcing environmental laws
Costa Rica’s government is seeking to obtain funds for sewage treatment plants to resolve several national environmental issues and problems that have caused eight popular beaches to lose their ecological blue flag certification and the closing of several hotels. Costa Rica will need $500 million to treat sewage water problems. Several parts of the country have no water filtration plants and no sewage systems resulting that waste and sewage runoff go into the rivers and finally into the ocean. Opportunities for Dutch sanitation and financing companies.
Costa Rican government to give subsidies to poor families
Costa Rican government plans to give ¢50,000 monthly (approximately $100) to 16,000 poor families to supplement what income they have to overcome rising food prices and shortages. The money will go to 16,000 female heads of households, living in poverty, and with at least one child under age of 12. The government will allocate $70 million to prevent a Costa Rica food crisis. Part of this official plan is to strengthen the local agricultural sector, helping it to produce more rice, beans, and corn, three of the country’s most important staples. The government’s total plan calls for about ¢44 billion ($87 million) for its National Food Plan: ¢18 billion ($35 million) will help to reduce the social vulnerability of the least wealthy population. ¢26 billion ($51 million) will serve to finance small and medium-sized farmers, as well as farmers from the Institute for Agricultural Development (IDA).
China to aid Costa Rican police security
China has promised to donate 200 patrol cars and US$10 million (€6.4 million) to Costa Rica announced by Chinese Vice Premier Hui Liangyu, who visited the country. The money will go to an emergency fund to use in case of natural disasters. These additional gifts come after China had already donated US$20 million (€13 million) to the country's emergency fund and promise to build a new stadium in Costa Rica's capital. Costa Rica officially recognized China last June, after years of allying itself with Taiwan
