COSTA RICA: LINKING TRADE AND INVESTMENT FOR INCLUSIVE GROWTH AND DEVELOPMENT

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1 COSTA RICA: LINKING TRADE AND INVESTMENT FOR INCLUSIVE GROWTH AND DEVELOPMENT

2 GETTING TO KNOW COSTA RICA o A small country of 51,100 km2 o With 4.7 million inhabitants o Strategically located in the middle of the Americas o With a long tradition of peace and democracy

3 IN RELATIVE TERMS A middle income economy o Gross Domestic Product: US$ 49.6 billion o GDP growth rate (real): 3.5% o GDP per capita: US$ 12,874 o Inflation: 3.7% Ranked 2 nd in Latin America in the Political Stability Index With high social progress and human development indexes (#1 & #10 in Latin America, respectively) High adult literacy rate (96.3%) and life expectancy (79 years) And other high rankings (2013) o o o #1 in education in Latin America (WEF) #1 exporter of high technology in Latin America #3 per capita exporter in Latin America of products not related to natural resources Source: World Bank, 2012

4 A STABLE ECONOMY OPEN TO INTERNATIONAL TRADE AND INVESTMENT Trade and investment are key drivers of growth and lie at the core of Costa Rica s development strategy Over the last three decades, Costa Rica has achieved significant economic transformation, changing its export composition from primary products to high-tech manufacturing and value added services 50% 40% 30% 20% Share of high-tech exports in manufactured exports Exports of goods and services have grown at an average yearly rate of 8.3% since 2004, and have diversified, both in terms of products and markets In the last decade, exports almost doubled, reaching US$ 11,543 million in % 0% Costa Rica Korea China Ireland USA Mexico OECD Suriname Barbados Brazil LAC Finland Bolivia Ecuador Argentina Paraguay Peru Spain Uruguay El Salvador Guatemala Chile Colombia Venezuela Nicaragua Honduras Jamaica Trin & Tob Source: CINDE, with data from World Bank Foreign direct investment quadrupled during the same period, reaching US$ 2,300 million in 2013

5 HOW HAS THIS BEEN ACCOMPLISHED?

6 INTER-AGENCY COOPERATION IN TRADE AND INVESTMENT was established in 1986 with a mandate to define and coordinate foreign trade and foreign investment policies. COMEX works with two implementing agencies: Created in 1996 as a non-state public agency to promote Costa Rica s exports. It is responsible for administering the free zone regime. Created in 1982 as a private institution to promote Costa Rica as an investment destination. It is in charge of all investment promotion related activities.

7 1990 Costa Rica s accession to GATT BUILDING A TRADE PLATFORM 1995 Costa Rica becomes founding Member of the WTO 14 Free Trade Agreements 13 in force 1 pending implementation 14 Bilateral Investment Treaties

8 TAKING ADVANTAGE OF OUR STRENGTHS 1 Highly qualified human resources - Productive, creative and well trained - 95% of employees in multinational companies are local Infrastructure - Two international airports - Ports on both coasts (improvements underway) - Redundant access to telecommunications 4 2 Excellent business climate - Political stability and respect for the rule of law - Predictible and clear rules - A competitive free zone regime - Government committed to helping trade and investment (+CINDE) Quality of life - High quality of life - Secure country 5 3 Proven track record - More than 250 multinational companies in high-tech industry operating in the country Strategically located in the middle of the Americas - Geographical and cultural proximity to the United States - Preferential access, through a solid trade platform, to 2.5 billion people, representing 63% of the world s GDP 6

9 MAIN RESULTS

10 A TRANSFORMATION IN GOODS EXPORTS

11 EXPORT DIVERSIFICATION Costa Rica Number of export products and companies (2000 y 2013) Costa Rica Number of countries, as export destination (2000 y 2013) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 3,295 4,473 1,625 2, Number of products Number of companies Source: COMEX, based on data from PROCOMER. 85% of Costa Rica s exports benefit from preferential access

12

13 Blue-Chip companies 1990 First contact centers Costa Rica is one of the main high technology FDI recipients in Latin America st leading company in medical devices 1960 Pioneer in the industrial sector

14 PARTICIPATION IN GLOBAL VALUE CHAINS Costa Rica is fully integrated in 5 sophisticated manufacturing GVC s: electronics, medical devices, aeronautic, automotive and filming devices Costa Rica: GVC-related exports by industry % 1.60% 1.40% 56.70% 39% of total goods exports are associated to GVC s 34.20% Electronics Automotive Aeronautic/Aerospace Medical devices Film & Broadcasting

15 THANK YOU

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