- Category: Business
- Published on Wednesday, January 18 2012 03:46
- Written by Rod Hughes
- Hits: 626
Despite gloomy predictions by the government for this year, Costa Rica's chronically cautious businessmen appear to be upbeat, according to the country's leading newspaper, La Nacion. (See previous article.)
A survey published Monday of 13 large businesses received responses by 12 of them of plans for expansion and investments, including in some cases of employee increases.
This includes Coopeguancaste, a major electrical supplier in Guanacaste province, whose plans for a $62 million investment in the Bijagua hydroelectric plant near the town of Upala. This is despite a gloomy reports by President Laura Chinchilla's economic team for lower electrical consumption in the province in 2012.
The reduced consumption, by government estimates, would be the result of a downturn in construction and tourism. But Coopeguanancaste is banking, obviously, on the long term.
Central Bank president Rodrigo Bolaños, for example, predicted that the increase of national production in 2011 would turn out to be around 4% when the data comes in, but expressed doubts that the increase could be duplicated this year.
In another instance of business confidence, the giant dairy cooperative, Dos Pinos, is going ahead with plans to upgrade its powdered milk plant in San Carlos canton.
Nor is all the action planned by cooperatives. The Transportes HyH trucking firm is planning to upgrade its fleet. Formento Urbano is going ahead with plans to increase its high-rise condos and residences.
For most, investment is simply a logical outcome of growth. "Dos Pinos can't stop investing," explained their manager, Jorge Pattoni, "because it has to industrialize and sell the milk produced in increasing quantity by our associates."
Bruce Burden, president of Cargill Meats Central America, sees the need to improve the company infrastructure, such as its company vehicle flotilla. Grupo Britt intends of expand its operations outside the company and will need to hire new personnel. Deloitte also intends to hire personnel to increase its services this year.
Granted, these companies are relatively large by Costa Rican standards, larger than the majority of family-owned companies that make up the majority of the nation's business base. Hewlett Pacard, for example, another business polled, employs 7,500 here.
Some companies, such as Walmart Mexico and Central America, will be turning their efforts to more efficient internal operation, such as diminishing their use of water, electrical conservation, recycling and initiating reusable bags to present at more environmentally-friendly face.
Others will expand the employment market such as Deloitte which plans to add 15% to its payroll or HyH which will add 50 or 60 employees to its current 700 workers.
Analysis: These encouraging figures from a newspaper contrast to the conservative estimates of the government in their end-of-the-year report. While pie-in-the-sky figures can come back to bite the administration politically, economics, like politics, is largely perception.
It is difficult to see why the central government could profit from underestimating the economic growth for this year. But only the next 11 1/2 months will tell who has the clearest economic vision, politicians or business.