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COSTA RICA |
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Costa Rica Foreign Investment to Rebound,
Ruiz Says
By Fabiola Moura
(Bloomberg) - Costa Rica’s foreign direct
investment will return to 2008 levels after
falling about 30 percent this year, boosted
by tourism and investments in ports and
telecommunications projects, said Marco
Vinicio Ruiz, the country’s minister of
foreign trade.
“I visit companies all the time,” Ruiz said
in an interview at Bloomberg’s headquarters
in New York. “They say they are ready to go
to Costa Rica, they’re just waiting for the
board to approve that.”
Ruiz, 55, is in New York for an event to
attract money to the telephone industry,
which opened to private investments this
year. He will travel to Singapore on Nov. 7
to present bid opportunities for a
concession of a port in the Caribbean Sea,
which will be the country’s biggest.
Foreign direct investment will be about $2
billion next year, in line with 2008, after
plunging this year as the global recession
reduced tourism and spurred companies to
halt spending plans, Ruiz said. The
investment, which accounts for 7 percent of
gross domestic product, is the main driver
of the Costa Rican currency, he said.
Costa Rica’s colon has slumped 3.3 percent
against the U.S. dollar this year after
sliding 10 percent in 2008. It has traded in
a “crawling band” for the last three years,
after being tied to a peg for more than two
decades, Emmanuel Hess, the general manager
for Procomer, the Trade Ministry’s export
and investment promotion agency, said at the
interview in New York.
Floating Currency
“The bands have been expanding all the time,
just a little bit more,” Hess said. The
floating currency is an “irreversible”
trend, he said.
Foreign direct investment has the biggest
effect on the colon because Costa Rica isn’t
dependent on exports of a specific commodity
with fluctuating prices, Ruiz said.
“The only thing that goes up and down is the
amount of foreign direct investment,” he
said. “That is something we have to control,
because it is very important.”
The Central American country probably will
conclude a trade agreement with China, its
second-biggest partner after the U.S., by
the end of February, Ruiz said. It will
likely sign a trade accord with Singapore by
early January and an agreement with the
European Union by May, he said.
Trade Agreements
After the accords are completed, 84 percent
of Costa Rica’s exports will be made under
trade agreements, he said.
“We rely on trade agreements because we know
it is going to take many, many years to have
a comprehensive agreement at the World Trade
Organization level,” Ruiz said. “Our
strategy is we have to get access to our
most important markets through trade
agreements because that will send a
long-term message, especially in lean
times.”
Ruiz said his team is in Beijing working on
the fifth round of negotiations with the
Chinese authorities. The agreement with the
European Union is on hold until the Honduras
political crisis is solved, he said.
Ousted Honduran President Manuel Zelaya
agreed last week with acting President
Roberto Micheletti to have Congress consult
the Supreme Court before lawmakers decide on
whether to restore the leader to power. The
Oct. 30 accord calls for the creation of a
coalition government today. Costa Rica
President Oscar Arias has been actively
involved in the negotiations.
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