Monday 21 June 2021

Costa Rica’s Foreign Investment: Less Industry, More Services

"We will be announcing the opening of another service center later this year, with a capacity for 400 people," said Alejandro Filloy, general manager of Amazon. Photo La Republica
“We will be announcing the opening of another service center later this year, with a capacity for 400 people,” said Alejandro Filloy, general manager of Amazon. Photo La Republica

QCOSTARICA – The bad news is that foreign investment in the country in 2014 declined for the first time since the 2009 economic crisis. On the other hand, foreigners increased investment in Costa Rican services, reflecting a tendency to focus on information services.

According to the Costa Rican Investment Promotion Agency (Coalición Costarricense de Iniciativas de Desarrollo – CINDE), foreign investment last year totalled US$2.2 billion last year, a decline of US$500 million from the US$2.7 billion in 2013.

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Among the sectors most affected by the decline are manufacturing and tourism. There were also important declines in agriculture and trade.

The data reflects the doubts of some investors given the country’s worsening international outlook each year.

In January of this year, Fitch ratings lowered Costa Rica’s rating. Others, like Standard & Poor’s and Moodys are following the same trend.

“Costa Rica is positioned as an investment destination for high value-added services. Several studies have placed San José as the number one city in Latin America for service centers,” Roy Mena, communications manager Sykes, company that provides shared services to third parties, told La Republica.

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The expansion in services at least partly explains the decline, as services companies start their operations in the country renting offices and equipment in modern office centres, instead of making large capital investments.

“Multinational companies offer competitive compensation packages that include compensation as group medical insurance policies, and the ability to work from home,” said Sol Echeverría, managing partner of the recruiter Factor Humano.

Among the services companies with recent growth in the country are Procter & Gamble, Amazon and National Instruments.

Despite the decline in foreign investment in the manufacturing and tourism sectors, the country could be interesting for highly specialized industries, evidenced with the arrival of Zollner Elektronik.

The German company manufactures mechatronics systems to a variety of industrial companies such as BMW.

“Costa Rica was chosen for many reasons, first, education was one of the basic principles, there are professionals with excellent profile, compared with other countries we are ahead of them … there is also a good opportunity to attract new professionals from all the universities in the country,” said Octavio Matus, operations manager at Zollner Costa Rica.

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With respect to the tourism sector, according to several realtors, including Coldwell Banker and Re/Max in Costa Rica, say they have detected a growth in demand for tourist properties, especially in the Pacific coast.

Source: La Republica

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FACT CHECK:
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