First it was the turn of nearshoring, when companies, especially from the United States, sought to move operations from Asia to closer markets where they had confidence. There Costa Rica took the lead, adding from qualified human resources to having a schedule similar to the parent companies in North America.
Now, with a new government in the United States that promises local economic recovery, two new concepts arrive (with their respective challenges at the local level).
On the one hand there is onshoring, which focuses on developing investments in the capital’s own country. It is joined by reshoring, which tends more to recover companies that have set up abroad.
At the forum “Global Transformation of Foreign Direct Investment” convened by Cinde, a diagnosis was made of the challenges, implications (and even some niches of opportunity) that this new context would bring to Costa Rica.
Carrots and sticks
A first key piece of information to understand the new investment scenario is the mirror of 2017, when Donald Trump assumed his first term. There, global statistics showed the initial variation in investment (later also disrupted by the pandemic).
Subsequent movements have also been variable according to the reviews of the UN Agency for Trade and Development. Investment statistics show adjustments depending on who governs in the United States
The former president of the Central Bank, Rodrigo Cubero, details that this reconfiguration is based on two lines of public policies in the United States: “Carrots”: subsidies and tax reductions are offered. “Stick”: measures such as tariffs are applied.
Added to this are the current geopolitical factors such as the situation in Ukraine, the Middle East and possible tariff policies, which end up slowing down investments.
What is useful and what Costa Rica can do?
Costa Rica is not exempt from the international reconfigurations that are taking place. It is there where more expert voices detail the mix of elements that the country must make.
The first appreciation is political, given the need to introduce the diplomatic variable into the economic world
“We have to navigate carefully to understand that in a much more transactional United States administration. Costa Rica will have to stay on the right side to be able to continue attracting this investment related to nearshoring,” Cubero stressed.
“Nearshoring and friendshoring require more than just an investment strategy. Or a diplomatic strategy and so on that allows us to continue having a good relationship with our major generators of investment flows,” agreed Vanessa Gibson, director of Investment Climate at Cinde.
Let companies in the United States not forget Costa Rica
The other scenario is more logistical in the context with companies and their needs. There is the essential component of human resources, which are currently a challenge for companies. An eventual massive corporate return to the United States would not guarantee that there would be that workforce there. This would allow Costa Rica to remain relevant in investment flows.
In any case, the call combines the need not only to remain relevant in attracting investments but also in retaining those that are already here. This also involves detecting new niches of importance. Just as medical devices are currently consolidated in the national portfolio, it will be necessary to review the semiconductor issue in case the United States changes the strategies where Costa Rica was already positioning itself.
Nearshoring investments in Costa Rica
In the global context of the investment movement, experts continue to call for monitoring various socioeconomic indicators of the country, which companies also pay attention to. These include issues ranging from governance and security to financial ones such as the exchange rate or the cost of social security.
Two injections against changes in nearshoring
Amidst the concerns about the disruption of nearshoring, there is also a space to highlight the added values that Costa Rica continues to maintain. The first is the positioning that the Life Sciences industry has achieved. Gibson details there that these are countercyclical investments accompanied by a solid deployment.
Added to this is the other success story in attracting investments: “servification.” Companies not only from the United States have also opted for local talent in terms that have been advancing from accounting to strategy.
“Many of what we export are services. And services are not vulnerable to tariffs, tariffs fall on goods, not on services,” Cubero highlights on this subject. “That gives us a flank of less vulnerability to the possibility of tariffs being imposed on exports to the United States,” he added.
Marianela Urgellés, General Director of Cinde, expands on this line how the subject of services has achieved its position:
Like the rest of the investments that have come to the country, the model of success has depended and will depend on the adaptation to the new demands and the possibility of satisfying the spaces where companies require it.
