More Than $2 Billion in Direct Foreign Investment Granted to Costa Rica in 2014

It is little secret that since taking office, President Solis has been intent on courting foreign investors. Recently, it was announced that Costa Rica went far beyond its original goal by about $300 million in direct foreign investments last year. Even so, those investments were not enough to make up for the losses experienced when countries such as Bank of America and Intel opted to leave Costa Rica last year. All total, Costa Rica attracted $2.2 billion in foreign investments. This proved to be no small feat, given the increasing competition from other nations in addition to the loss of some of the country's largest foreign employers. As a result, the Foreign Trade Ministry and Costa Rican Investment Promotion Agency will need to make even more efforts this year.

Challenges Facing Costa Rican Investments
Telecommunication has made it increasingly possible for businesses to open and operate anywhere in the world. This has proven to be the source of even more competition for Costa Rica, particularly from other Latin American countries. Panama, which currently has the fastest growing economy in the region, is an excellent case in point.

Even so, Costa Rica has made significant strides in attracting investors and employers. In total, nearly 40 new investment projects have been awarded this past year, which will amount to more than 10,000 new jobs and nearly $475 million in investments from foreign corporations. Among the companies with plans to either open new projects or expand in Costa Rica include Boston Scientific, Bacardi, Amazon, and Accenture, and Cargill.

As a result of such investments, Costa Rica benefitted from the creation of 9 percent more jobs this past year from foreign companies than last year. Despite that, the total number of positions in Costa Rica ended this past year down 17 percent. This was primarily due to the departure of Bank of America, Intel and other large companies that opted to either scale down or shut down their operations entirely in Costa Rica.

Among the biggest hurdles Costa Rica is facing to attracting more foreign investors are the need for additional multilingual workers with technical skills, the cost of electricity, and the need for increased salary stability.
Costa Rica Taking Steps to Meet Challenges
Foreign Trade Minister Alexander Mora has acknowledged Costa Rica's economy has been moving forward at a slower pace. While the country has made strides to improve conditions, setbacks have prevented the country from achieving all of its goals. As part of the effort to overcome those challenges, the country now plans to conduct follow-up studies to gain improved insight into why some companies have opted not to invest in Costa Rica.

Along with increased investment dollars from the United States, Costa Rica has also seen an increasing number of investments from other countries in Latin America, including the Pacific Alliance trade block, comprised of Colombia, Mexico, Chile, and Peru. Eventually, Costa Rica hopes to join the bloc.