If we analyze the economic reality of Costa Rica in recent years, we can conclude that we are suffering a generalized economic contraction, a drop in consumption, construction, industry, commerce, etc.
The inefficiency of the state, the fiscal deficit, the lack of measures to reactivate the economy and the Pandemic, have increased this contraction. Today we are on the brink of default, with a fiscal deficit of 8.3% of GDP, 26% of poverty and unemployment.
Despite this reality and latent threat, we have very successful sectors, globally competitive, and with enormous growth potential. Outsourced services for the global market and the life sciences / manufacturing cluster, both under the free zone regime, are our most dynamic, successful and competitive areas. They are the engine of the country’s development, only in 2020 (despite the pandemic), they generated more than 15 thousand jobs and grew 8%, while Costa Rica contracted 4.5% of GDP.
Opportunity for growth
There is an opportunity for growth, thanks to the United States’ nearshoring policies, in addition to the success and expansion of the operations already established in the country. The Pandemic has brutally punished tourism at a global and local level, however before the Pandemic we maintained accelerated growth, without neglecting that it is one of the sectors that best distributes wealth in all strata of society.
The country’s image and media coverage today favor us with reports in the main global media, which position CR as the best tourist destination, the most natural, exotic, the paradise to live, study, work and visit after the pandemic. Clearly we have a golden opportunity to promote tourism, attract investors, professionals and talent.
What are our strengths so that these sectors are successful today?:
– Country stability and democratic history.
– Talent and human resources.
– Same time zone and proximity to the United States.
– Free zone regime.
– Biodiversity, exuberance and richness in natural resources.
– Abundant qualified workforce, professionals and technicians, so that these sectors grow and new companies can be attracted.
What limits those sectors to grow?:
The bureaucratic – legal obstacles that limit the ease and increase the cost of doing business (doing business report).
Cost of energy.
Country cost derived from the tax burden and social security, which affect the cost of production and competitiveness.
What urgent steps can we take to unleash our full potential?:
– Align the educational system based on the needs of these sectors, focusing public resources on the training of necessary skills, technical and / or university careers, including dual training, and emphasizing bilingualism.
– Apply a real simplification of procedures aimed at facilitating investment, business establishment and entrepreneurship.
– Reduce the cost of energy through reforms in the tariff system, generation and sale of assets.
– Reduction of taxes and social charges that increase competitiveness and reduce country cost.
– Development of an aggressive policy of attracting talent, professionals and investors, taking advantage of the trend of digital nomads and the country’s image, to compensate for the shortage of qualified talent, while training the required talent.
This does not mean that Costa Rica does not have potential in other areas and should not invest or encourage other sectors. But it does have to focus the scarce resources we have on those investments that will make it possible for the most successful and competitive sectors to exploit their full potential and grow. This will generate a multiplier effect that will make the country grow, permeate all other sectors, improve employment, consumption, tax collection, redistribute wealth, etc.
None of this is rocket science. It is a list of actions that the Asian tigers applied to achieve development. In less than 50 years they went from a social and economic reality worse than ours, with fewer economic and natural resources, but with vision, discipline and focus, they knew how to enhance their strengths and opportunities based on their scarce resources, to achieve development. Singapore, Taiwan and Korea are clear examples of that vision and pragmatism.
Making this possible in Costa Rica depends on the leader of the State and his work team, but it also depends on a social consensus that focuses on our coincidences, and puts aside the political or ideological differences that today have us divided as a country, without realizing that in the end we aspire to the same thing: eradicate poverty, improve the quality of life of all our inhabitants, achieve development in a sustainable way, utopia.
We have the talent, the natural resources, the state structure and the capacity to make Costa Rica the first developed country in Latin America. Our successful sectors are the best example. But we must focus on a roadmap that enhances our strengths and coincidences.
The key to development lies in the political will to lead the necessary actions, let’s dream big, let’s once again be one Costa Rica that puts aside its differences and focuses on working shoulder to shoulder to achieve development and the common good.