POVERTY REDUCED TO AROUND 20%

Costa Rica 2019 | DIPLOMACY | VIP INTERVIEW

Epsy Campbell Barr, Minister of Foreign Affairs and first Vice President of Costa Rica, on democratic values, the Pacific Alliance, and free zones.

How would you define the Costa Rican identity today?

Beyond legal security and favorable environments for investors, Costa Rica is the only country that has a historical democratic foundation, which is fundamental to secure the long-term stability of the economic outlooks. Many have bought into the short-term incentives given by our neighbors in the region and end up returning here because value-added, long-term business strategies need more than low costs and infrastructure projects.

What are the plans to promote and continue with the Central American Integration System (SICA) agenda?

Celebrating 200 years of our republic during our administration, we are extremely committed to advancing the agenda of SICA with the necessary reforms. We need to align the objectives of certain SICA institutions to serve the development needs of our countries and the region. We need to adapt the organization to understand the specific situation of countries that promote more advanced agendas. For example, while there are countries that live with 50 or 60% poverty rates, ours is around 20%, so we want to advance the sustainable development agenda. We also understand the need to strengthen our regional market, as our neighbors should be our main trading partners, and we should be theirs. The strengthening of the Central American institution may allow Costa Rica to have greater economic opportunities in closer markets, so that the local economy can have more benefits and to open access channels for SMEs that have difficulty accessing and logistics to markets geographically farther.

What is the new administration's perspective and position in terms of access to organizations like the OECD?

The most important challenge in Costa Rica is to make the most out of the commercial agreements that it has already signed with different partners, rather than intensively spending diplomatic capital on signing new ones. We were the first country in the region to establish economic and political relations with China. We could do more things with the UK, which is our most important business partner. We are making an important institutional effort to achieve accession to the OECD with all the advantages that it implies. The OECD far exceeds the commercial issue. We will adopt important standards related to efficiency, transparency, use of public funds, use of data, education, and technology. On the other hand, we will consider joining the Pacific Alliance as long as we can protect our highly vulnerable sectors that have an impact in the regions they are located, such as the agricultural sector. Many times, we enter into competition against heavily subsidized industries, which diminishes the sectors that continue generating a large amount of employment and that are still important in different regions of the country as they lose competitiveness. However, we have important advantages, such as in the area of services.

What are the main priorities on the agenda of the new administration?

One of the most important elements of this administration will be decarbonization. This project brings together specific government actions, the first of which is public transportation. When we decided to change the country's energy matrix to do away with fossil fuels, it implied the absolute transformation of the means of transportation. High-speed railways is one of the most important projects in the urban sector that also requires a large number of long-term private investments. We need financing that is attractive for the country and investors. On the other hand, the freight train on the northern border with APM Terminals is another great and necessary project that we must consolidate in the short term. There are some important investments in the infrastructure sector that we have pending. One of them is public infrastructure. We have to advance significantly the construction of certain hospitals that we do not have fully funded, for example, the Hospital of Limón and the geriatric hospital. We have to accelerate investment in telecommunications to generate all the necessary conditions for another kind of investments. We want to guarantee universal access to the internet, which can jumpstart development in most impoverished areas of the country. Costa Rica plans to become a global green lab where the best experimentations on environmental sustainability and climate change are made. This space is a great investment scenario linked to the decarbonization plan and the use of renewable energies nationwide.

What message would you like to send to the investment community in terms of the structural changes in the free zone or the promotion of systems of public and private sector concessions?

Free zone regimes will be maintained. The democratic system works, and the investment attraction models that have produced important results cannot be changed on a whim. There is a national plan that aims to increase the supply of bilingual and technical personnel. We have a policy with public-private partnerships, and the most significant manifestation of that is that President Alvarado has in his cabinet a representative of the private sector to look at where the joint investment opportunities are and where are the strengths and weaknesses of each one to start specific investment projects. Decisions have also been made to reduce the red tape through leaning due diligence for operating businesses.