QCOSTARICA – Beyond the announcement Saturday by Burger King closing four locations, the business sector warns that many more have closed or will close, just not all have come to light publicly.
Just in the first two months of 2015, businesses that closed their doors and put hundreds of people out of work include Burger King, Coca Cola, Jack’s, Wendy’s and Bagelmens. In 2014, the list of closures included Bank of America, Cartex and Yanber. Othes like Intel that cut more than 1.200 jobs, downsized.
But, according to the Costa Rican Union of Chambers and Associations Private Sector ( Unión Costarricense de Cámaras y Asociaciones del Sector Privado – Uccaep), these are the business that made the headlines, many more have closed or are considering locking their doors that we don’t hear about.
Ronald Jimenez, president of the Uccaep, reiterated the concern of the business sector, undoubtedly alarmed. “Although the number of public announcements may be small, worrisome is the number of closures that have not come to the attention of the public,” said Jimenez.
The main reasons stated by these companies is that Costa Rica is too expensive, and the loss of competitiveness.
Electricity rates and gasoline prices being the two of the major items causing high price of operations in the country. Only Burger King says its closures are not related to high costs, that the locations closed Saturday weren’t profitable.
According to the National Institute of Statistics and Census (Instituto Nacional de EstadÃstica y Censos -INEC), between the last quarter of 2013 and the same period of 2014, some 30,880 people put out of work due to closures.
Via Prensalibre.cr
The Costa Rican Government and associated corporate subsidiaries such as ICE, continue to make decisions about matters affecting the cost doing business, such as taxation, utility costs,etc., without reference to the fact that Costa Rica is in competition with many other countries when it comes to foreign investment considerations. The Tourism Sector is likewise lacking competitveness in pricing with many other similar destinations, with a noticeable increase in hotel room vacancies.The mass departure of major firms, or downsizing, with the consequential loss of jobs, should be evidence enough that Costa Rica is on the wrong track. Intel was first, with lower cost skilled jobs being readily available in Asia for its microchip production. Now Jack’s, not requiring skilled employees, is moving 50% of its production to Nicaragua and El Salvador, where lower cost unskilled employees are readily available. Costa Ricans by-in-large enjoy a higher standard of living based soley on a foreign investment, or foreign revenue stream, in the case of tourism. Otherwise, there is nothing to rely on except Costa Rica’s agrarian roots of growing coffee, bananas, and pineapples. No longer would late model BMW’s and Mercedes roam the streets of San Jose and the Country at-large, if we were to return to those times.
Isn’t “the locations closed Saturday weren’t profitable” possibly also related to high costs? U.S. fast food places are often quite a bit more expensive in CR than in the U.S.