Costa Rica 2017 | ECONOMY | INTERVIEW

TBY talks to Welmer Ramos, Minister of Economy, Industry and Commerce, on sectors that will spearhead growth in 2016 and where FDI can be deployed to further boost growth going forward.

Welmer Ramos
Welmer Ramos was appointed Minister of Economy, Industry and Commerce in May 2014. Previously, he worked as a parliamentary counselor in the Legislative Assembly of Costa Rica, and has more than 15 years of experience in the Costa Rican Central Bank. He has been Chairman of the Central American Evaluation Association, member of the Coordinating Committee of the Network Monitoring, Evaluation and Systematization of Latin America and the Caribbean (ReLAC) and a member of the Board of the International Organization for Cooperation in Evaluation (IOCE). He also is a postgraduate professor for several public and private universities in Costa Rica and has a BA in economics as well as an MA degree in business administration.

The IMF predicted a 4.2% growth for Costa Rica in 2016. What fundamentals have led that growth?

Costa Rica is a country with almost three decades of continued and uninterrupted growth, which has led to a much more diversified economy. We export over 2,000 products. In the last few years, services and new technologies have gained a lot of momentum. In terms of services, we have seen the establishment of service centers across the country in different economic sectors. We also have diversified and strong agribusiness exports. This diversification has allowed us to not suffer as much when prices of a certain commodity such as coffee drop and has insulated us from international crises. Another of the strong features of our economy is that we have a strong domestic market, with people enjoying a relatively good consuming power, especially compared to the rest of the region. Costa Rica enjoys a consolidated political, economic, and regulatory stability that makes our country an attractive destination for FDI. On top of that, we have registered zero inflation for two consecutive years, we enjoy freedom and good capital flows, we have enjoyed internal peace for over 100 years, we have low violence rates, and the public and private sectors always look to create synergies and jointly develop the economy of Costa Rica.

What are the sectors with the greatest potential to attract foreign investment?

The service sector is among those with the greatest potential in Costa Rica. In this context, the tourism industry should be particularly highlighted, as it has in itself a great deal to offer, such as beaches, ecotourism, gastronomy, and mountain sports, for example. In 2016, we saw a nearly 20% increase in the number of visitors. However, the northern region is leading this growth, accounting for 30% of the increase in tourist arrivals. We have attracted a lot of investments in high technologies due to the fact that we have a highly qualified and skillful workforce. Costa Rica needs to invest in rail and road infrastructure. Additionally, the fishery industry and maritime logistics have not been fully exploited and still present a lot of potential. There is also room for improvement in the export of agricultural goods with greater added value. Costa Rica has attracted the investments of many companies that have relocated their businesses and call centers here. We offer a competitive regulatory and retribution package to these kinds of companies, and we have a competitive workforce to offer as well.

What efforts are being carried out by the government regarding green policies?

Over 50% of Costa Rica's consists of protected natural areas. Costa Rica is mainly made of volcanic soil, which is particularly fertile. Over the years, we have developed a strategy of national parks and protected areas. We have always prioritized green policies and the protection of the environment, implementing energy policies based on renewables and 2016 we will achieve a surplus of energy generated from renewables. We have put a lot of effort into solar, wind, hydroelectric, and geothermal energy and have promoted the use of renewable energies among the private sector. We also have nationwide plans for recycling plastics and paper, an effort in which the education sector is heavily involved. We need to further invest in wastewater and solid waste treatment, which are two areas set to offer plenty of opportunities for private investors to collaborate with the state on the development of joint projects.

How does the Ministry work on attracting foreign investment to Costa Rica?

Costa Rica enjoys highly valued bilateral relationships with many countries, and we are stable from a macroeconomic point of view. We also have the tools and conditions to attract foreign investment through free trade zones, the availability of qualified and skilled human resources, high quality education, and a strong network and strategy of promotion at the international level.