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According to La Nacion and data collected by the 2008 survey of the Foreign Commerce Promoter (PROCOMER), exporting companies operating in Costa Rica currently have 409,438 employees. In spite of the global economic crisis, the survey found that the jobs generated by the sector increased by 2,328 so far this year, as compared to 2007.
Additionally, Experian, a United Kingdom based multi-national company, which began operations in operations in Costa Rica in 1980 with 80 employees, will add 200 employees in 2009. The company provides information analysis for businesses and consumers in 38 countries from its offices in the Ultralag Free Zone in Heredia. Experian and 61 other multi-national firms provide these types of global services from Costa Rica.
Another US based company will be investing millions of dollars in Costa Rica during 2009. Houston Airport System (HAS) which is the new administrator and operator of Juan Santamaria International Airport and will be investing millions to revamping the facility, has also been awarded the administration of Daniel Oduber International Airport in Liberia, Guanacaste. According to the Minister of Public Works and Transportation Karla Gonzalez, the initial investment at Liberia will be $35 million. Houston Airport System is the fourth largest airport operator in the United States and the sixth worldwide.
However, other sectors of the Costa Rican business community are not as optimistic about the near future.
Business executives representing 44 companies and six productive sectors belonging to the Association of Private Business Chambers (UCCAEP) blame credit restrictions for the recent slow down in Costa Rican production. UCCAEP chairman, Manuel Rodriguez said that state banks have applied the most restraints in recent months and that increased production depends on credit. Central Bank chairman Francisco Gutierrez explained that the situation does not result from bank policy but rather from the accelerated expansion of credit in the past and the recent restrictions spawned by the international finance crisis.
Moreover, the global economic crisis will hurt the export of goods and services from Costa Rican free zone parks, which are still growing, but at a slower pace than 2007. The Association of Free Zone Businesses (AZOFRAS) foresees that the 215 firms under the special duty-free regime will increase their sales abroad by only 5% in 2009 as compared to 17% during 2008. However, AZOFRAS director Timothy Scott is optimistic for 2009, and he foresees a 10% increase in exports. The 5% increase for the year means that the overall sales will be $5,319 million, from $5,066 million in 2007. Scott said that the lower increase this year is not a disaster, when one takes into account the economic slowdown in the USA, its strongest market.
Costa Rican President Oscar Arias predicts rising unemployment during 2009.
He stated, “It will impossible to avoid the unemployment resulting from the impact of the international finance crisis. Sooner or later, unemployment is going to increase, a general slowdown is going to be felt, particularly in the construction sector” Sources of the construction sector said that 20,000 workers have been laid off so far this year and that the final figure for 2008 is likely to be close to 40,000.
I hate to be the one to say “It is going to rain on your Parade today” but read this article which describes what is happening to the REAL Costa Rica.
Warren
95,000 more poor people in Costa Rica
By Gillian Gillers
Tico Times Staff | ggillers@ticotimes.netPoverty and unemployment increased in 2008, as the economy slowed and incomes failed to keep up with inflation.
The percentage of households below the poverty line increased to 17.7 percent in July from 16.7 percent the previous year, according to a study released yesterday by the National Statistics and Census Institute (INEC).
The study, based on queries of nearly 15,000 households nationwide, shows that about 95,000 more people are below the poverty line in 2008 than last year.
Unemployment also increased to 4.9 percent from 4.6 percent, and extreme poverty increased to 3.5 percent from 3.3 percent. Still, poverty and unemployment were at their second-lowest point since 1995.
A household was labeled as “extremely poor” if its income was less than $56 per person per month, the cost of about 42 basic food products. A household was “poor” if its income was less than $122 per person per month, the cost of the food basket plus such necessities as housing, clothing, education and health care.
Víctor Hugo Céspedes, vice president of INEC’s board, said he had expected poverty rates to be higher in response to a mere 3.3 percent growth in GDP expected for 2008.
But strong growth in income and employment in 2007 provided a cushion to soften this year’s bad economic news.
Still, poverty and unemployment may increase further once this cushion wears down, he said.
The size of the employed workforce grew 1.7 percent in a 12-month period ending in July, down from 5.2 percent the previous year. And real income grew 1.7 percent in the year ending July 2008, down from 14.1 percent the previous year.
Meanwhile, growth in the hotel, restaurant and financial sectors shrank and construction stagnated. The trend could be evidence that the global financial crisis began hitting Costa Rica as early as July, Céspedes said.Can someone explain the “duty free zone” to me please. On a different note, I was surprised at the high costs’ of living outlined by many members here and what I observed on my trip, everything from cars, to gas, to food, I imagine the impact it will have on the local population if things stagnate over the next year or two. What did the CR people do before the influx of outsiders (construction, hotels, service, etc)
TM:
This Economic Meltdown affects the whole world and CR is part of it. The # are down for ALL investments, employment, costs, houses, etc, and CR is not insulated from this phenomenom.
$56 a month for a person in CR is EXTREME poverty, $122.00 a month is poverty and there are more than 95,000 families in CR in extreme poverty today (2008) than (2007.
In the USA those #’s are growing exponentionaly.As little as four years ago, items such as food from the feria were 1/3 less than they are now. The price of rice has risen; beans, too. Chicken is nearly the same price I pay for it in the States. I don’t know how a person can even survive on $56 a month, or any of the figures quoted in that article. As for the growing class of poor in this country, I’m hearing all kinds of stories about people who just walked away from their houses, their cars, and everything in their houses. These people are now homeless, and 3 years ago my county was the 6th richest county in America. As the poverty levels rise in Costa Rica, we can expect crime — especially theft — in increase exponentially. It’s not a good time to play rich gringo in a poor country.
Maravilla:
My oldest son is living in CR with his wife and two daughters’ with the equivalent of $1,400 income a month (his wife does not work) because my oldest grandkid was born blind.
Tought times in the US and CR economy and Crime is on the rise, just ask my wife who is in CR right now.
warren
$1400 sounds like a lot of money, but with rising costs for nearly everything in CR, it certainly doesn’t provide for the average American lifestyle, but it certainly is adequate to live well. All of my fixed income neighbors in my hood are concerned enough about rising food prices that we’re going to start a communal garden. One of us is going to build an outdoor bread oven, and on my property I have 18 fruit producing trees of various kinds of citrus, figs, bananas, etc. I doubt that any of us will wind up being totally self-sufficient, but in a crashing ecomony every little bit helps. The global meltdown even extends to the Middle East and all the projects we were hired to work on in Dubai and Pakistan are now on hold until after the first of the year. Even the billionaire sheikhs are feeling the crunch. Credit is frozen in Dubai right now, according to my nephew.
Question for you aguirrewar”
Since you declare that we are not living in the REAL Costa Rica – Please would you tell me? In which Costa Rica I am living?
On a positive note, it’s good to see that in the face of catastrophic financial problems around the world, the President – Oscar Arias believes that “our little country is well prepared” (today’s La Nacion) and that he considers these numbers a “success” and “very good” or is the President of Costa Rica – (who is not an insulated multi millionaire like so many other ‘Presidents’ in other countries) not living in the REAL Costa Rica either?
It’s also comforting to see that unemployment in Costa Rica is lower than the US and that while the US is laying off tens of thousands of people, employment in Costa Rica is growing…
Scott Oliver – Founder
WeLoveCostaRica.comScott:
I travel to CR every year and Oscar Arias “said” that unemployment will be 40,000 next year, add 20,000 for this year, do the math for a population of 3 million, not counting the Nica’s.
The #’s do not add to saying “all is well in CR” we are in a recession worldwide and CR is not immune.
Stop comparing the #’s from CR and the USA, it is not the same population and not the same economy. Employment in CR will decrese and will continue to go down from 2007 to 2009 by .1% per year.
Warren
PS: Scott; you are living in CR but; not the Tico’s world, your income is completly different from the Tico’s income. Or maybe the question should be! Could you live in CR with a wife and two kids with an income of $1,400 a Month??? without your wife working.
Edited on Nov 02, 2008 09:25
You’ve just made my point Warren.
This website is not aimed at helping to educate the ‘average Tico’, this website is clearly aimed at English speaking non-Costa Ricans who desire to live here, retire here or invest in Costa Rica real estate.
I never said that Costa Rica was “immune” – it is certainly feeling the effects of the global liquidity crunch – but Costa Rica is definitely more insulated and self sufficient than most ‘developed countries.’
We use US comparisons because that’s where most of our VIP members are from and lastly, my personal income would be very high compared to the US average income never mind the average Tico family income.
This is not due to ‘family wealth’ – we have none – or connections, that’s purely and simply because there is nobody I have ever met in my life that reads more or works harder than I do …
Posting this at 11.28am on a Sunday morning would be another example of that…
Scott Oliver – Founder
WeLoveCostaRica.comScott:
I get your point. Your website is from CR for CR but for English speaking NON-CR who desire to live in CR.
Then; Scott, what happens to those that live around you in CR? What about the real CR? Stop for a minute and think about the people around you in CR, those that not have the buying POWER of the EURO or US$. Then how would you like it to be for you or your family?
Why not educate those araound you also. CR IS NOT immune to the world effects in money issues. Out of the 5 legs of income, tourism is 1/5 of income and it just happens that 70% comes from the USA which by the way is -25% as of now, good luck CR.
warren
I think about the people around me here every day – and pay about a dozen of them every month for various work with video, editing, drivers, translations, photography – and don’t just “travel to CR every year.”
We also pay various craftsmen like furniture makers, painters, decorators, interior designers and curtain makers to furnish the apartments and homes that our VIP Members want furnished.
I also hired half a dozen people to build a home in the country and will hire the same team again to build another home starting in a few weeks.
I have also paid for English lessons for a number of young Ticos to try and help them “get on.”
In the past ten years I have certainly invested over one million dollars in this country….
What exactly have you done Warren?
Scott Oliver – Founder
WeLoveCostaRica.comWell, Well Scott:
I do not pay for labor in CR since I am NOT in CR but I have just paid $5,000 for the education in CR for my son. WHY?
Because it would cost me more to give him a fish a day but if I tought him to fish, then he would learn how to fish and eat for the rest of his live.
Case in point; he works for HP in Heredia and by studing for a CISCO education he makes an increse in his monthly pay and it does not cost me $500.00 a month to support him.
Due the math Mr. Scott, CR is NOT for those that make $1,000 a month, maybe people that make $1,000.00 a week will make it.
Edited on Nov 02, 2008 14:03
$1000 a week? Are you kidding? There would be no point in moving to CR to live on that kind of money. Most of the people I know in Costa Rica live on way less than $2000 a month, for two people. They live a far more extravagant lifestyle than I do in Costa Rica, but they are living well by any standard. I even know some people who are living well on less than $1000 a month. It really depends on what’s important to you.
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