"Regulation Scares British Investors"
- Details
- Category: Business
- Published on Monday, October 31 2011 07:14
- Written by Rod Hughes
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Last week, British Deputy Foreign Minister Jeremy Browne engaged in a little English straight talk. In an interview with newsmen, he said potential British investors have repeatedly told him that this country's bureaucracy scares them off.
On a three-day visit to Costa Rica, Browne said frankly that investors "have told me that they are worried that more obstacles (to business) exist here than in other countries."
"They (investors) recognize that Costa Rica has a high level of education," he said, "It is important to them that Costa Rica is a country with a very strong democracy and a very strong legal system as well."
Despite its stability, Browne said, over-regulation cancels out these strengths. "Costa Rica needs to be open to trade and business with international investors. They say that these obstacles (come from) the best of intentions but they make it difficult to create new employment opportunities."
Last year, notes the daily paper La Nacion, British investment from the United Kingdom amounted to an anemic $15 million as contrasted with the more than one billion dollars of U.S. investment.
"I just came from Panama City and Panama is very open to international investment." Browne added that Costa Rica's southern neighbor has surpassed this country in competition in terms of taxation and other incentives.
There current situation with British investment is a far cry from what it was early in the last century, after Britain had opened coffee exports here. The staid old Union Club, which still exists in downtown San Jose, was a favorite refuge where British investors here could converse and relax.
Commentary: Whether Browne's comments will have an impact on the tax reform currently being considered by the Legislative Assembly is difficult to predict. That bill before the lawmakers would tax foreign concerns that settle here in the so-called free zones, industrial parks that currently give businesses tax breaks.
Memories of old abuses in Latin America are long. The old image of Standard Fruit Company in Central America early in the last century with its exploitation of workers still reverberates in the Latin psyche. In the 1950s, liberal college students in the U.S. made it a battle cry.
But that changed when Standard Fruit in Costa Rica hired a public relations specialist named Richard Dyer who convinced the company hierarchy to build schools and decent housing for its workers. Today's Standard Brands company employee relations does not resemble that of the bad old days.
Today, some transnationals are better corporate citizens than the average domestic firm. Many engage in community improvement and impeccable environmental practices.
Still, leftist politicians such as in the Citizen Action Party (PAC) fear foreign companies will dominate local business and government. Their efforts are spurred on by inflammatory anti-American rhetoric by Venezuelan President Hugo Chavez and Nicaraguan Chief of State Daniel Ortega. The bitter PAC opposition to trade pacts such as CAFTA is partly a result of this influence.
The Arias Administration (2006-10) began a drive to make doing business in this country a less complicated process. Under President Laura Chinchilla, Vice President Liberman has taken up the attempt to cut red tape. So far, their efforts are barely perceptible.
