- Category: Business
- Published on Monday, January 23 2012 04:31
- Written by Rod Hughes
- Hits: 584
Foreign investment in Costa Rica hit $1.56 billion in the first nine months of 2011 and will probably surpass the government goal of $1.85 billion when all the figures are in, according to the Foreign Trade Ministry and the investment promotion agency CINDE.
The figure for 2011 is a 52% increase over 2010. "The three main exports last year were integrated circuits, transfusion equipment and medical prostheses," pointed out Anabel Gonzalez, Trade Minister, "all produced in free zones."
The country is now fourth in the world in export of medical devices, reported the English-language news paper The Tico Times. Seven new companies engaged in this manufacture created 3,000 new jobs.
But the figure was inflated by the opening of 48 year-old telecommunications monopoly formerly held by ICE, the government-owned company that also produces electricity. That sector was the second largest foreign investment with $384 million in direct investment by Movistar and Claro.
Moveover, Mexico's America Movil (Claro) and Spain's Telefonica (Movistar) paid the government $170 million to use mobile phone frequencies during the next 15 years.
Service exports from free zones accounted for $1.6 million, a third of the country's total service exports.
Commentary: We run the risk of sounding like a broken record in this, but the tax reform bill before the Legislative Assembly runs a serious risk of drying up investment in the free zones.
Several companies have put further expansion on hold after the plan for taxing foreign firms in the free zones if their profits were exported was hashed out between President chinchilla and Citizen Action Party leader Otton Solis, in exchange for the votes to pass the measure.
The self-congratulatory tone of the government information can well turn to lament if new companies give this country a pass in order to invest in other emerging nations.