Saturday 29 November 2008, San José, Costa
Rica
Financial Crisis Washes
Up in Costa Rica
Suzanne Wilton, Calgary
Herald
Suzanne Wilton and her
family moved to Costa
rica four months ago to
escape Calgary's boom,
its hectic pace and all
the trappings that go
along with life in a
wealthy metropolis that
has grown at breakneck
speed.
Their yearlong search
for perspective is being
published on the last
Saturday of every month
in the Calgary Herald
and can also be followed
online at Canadians
incostarica.
wordpress.com
When the world last
suffered a major
economic crisis, former
Calgarian Gary Rogers
was working at the
downtown Playboy Club in
the seedy capital of
Costa Rica, a city of
some one million in the
mountains of the Central
American country
teetering on the edge of
being termed a developed
nation.
The bunny ears and good
times were suddenly
gone, along with the
foreign investment that
dropped like a rock in
the azure waters of the
Pacific.
Nearly three decades
later, Rogers is still
here, having weathered
that financial storm and
successfully carving a
niche in the cutthroat
vacation rental business
in this growing tropical
tourist destination.
But another similar
global financial crisis
is reverberating like
the tremors of an
earthquake across Costa
Rica, where Canadians,
and particularly
Calgarians, have
increasingly sought
refuge from the snow.
For Rogers, who
abandoned Calgary when
he was 25, times are
tough once more, the
global meltdown cutting
into this year's
business at Condotel Las
Cascadas, near Quepos,
one of Costa Rica's top
three tourist
destinations.
Reservations for the
upcoming Christmas
season, a time that
sustains many tourist
operations through the
quiet, rainy months, are
down at Rogers' business
by 30 per cent compared
with last year. The
situation is worse at
other popular
destinations, with hotel
operators near Lake
Arenal, where foreigners
are drawn to its active
lava-spewing volcano,
reporting a 50 per cent
decline.
When the bottom fell out
of the stock market
several weeks ago, my
family was splashing in
the waves on the beach
at San Juan del Sur,
Nicaragua, blissfully
unaware that the world's
economies were drowning.
We returned to our
rented home in Costa
Rica's central valley to
discover the Canadian
dollar had sunk.
Like everyone else, we
watched helplessly as
our retirement savings
funds dwindled and
wondered whether our
escape from Calgary's
boom was a bust.
Costa Rica's economy,
like others, is based on
the value of the U. S.
dollar. And with the
loonie way down, so is
our purchasing power.
But where there are
losses, there are also
gains.
Like Calgary, Costa Rica
has in recent years
undergone a construction
boom and real estate
prices soared along with
inflation. Construction
projects have now
similarly halted in the
wake of the meltdown and
prices on everything
from gas to housing are
falling.
A beach house that last
year would have rented
for $1,500 per month is
now going for $900 and
owners of luxury
vacation homes are
offering deep discounts
to get bodies in the
beds.
"For Sale" signs dot the
lush landscape and some
property developers are
so stretched they are
unable to finance the
completion of their
projects.
The downturn is
benefiting
deep-pocketed,
self-financing
developers like Robert
Irvin, who counts
Canadians among half the
buyers in a condo
project on Costa Rica's
northern coast.
While some developers
are suffering a serious
sales slip because
buyers can't get
financing, Irvin is able
to offer options for
those still wanting to
snap up a piece of
paradise despite the
uncertainty of the
markets.
"The lack of
construction financing
means that a lot of the
projects that were
advertised are now
stopped, so the options
for the buyer have
narrowed dramatically. .
. . That has turned out
be to very good for us,"
says Irvin, whose
company has two other
projects about to begin.
Despite suffering a hit
to his beach-based
business, Rogers says he
almost welcomes a
cooling of the economy,
in both Costa Rica and
Calgary, a city he
hardly recognized as his
hometown when he was
last there a couple of
years ago. He lamented
Calgary's skyrocketing
cost of the living,
including paying $8 for
a beer that costs $1 in
Costa Rica.
"One day when I was
going into the Calgary
Tower, a bum came up to
me on the street and
said, 'Hey buddy, you
got a toonie?' "
"What happened to a
quarter?
"People have lost touch
with the value of a
dollar." |
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