ONWARDS AND UPWARDS

Peru 2015 | DIPLOMACY | GUEST SPEAKER

TBY talks to Luis Guillermo Solís Rivera, President of Costa Rica, on joining the OECD and how key relationships within the region are helping to shape the country's future.

Solís Rivera
BIOGRAPHY
Luis Guillermo Solís Rivera studied History at the University of Costa Rica and completed his Master’s in Latin American Studies at Tulane University. He has held various academic positions, both in Costa Rica and the United States, and has worked at the Latin American Faculty of Social Sciences, the Ibero-American Secretariat and the Foundation of External Services for Peace and Democracy.

What would be Costa Rica's competitive advantage in its contribution to the Pacific Alliance and how would it benefit from becoming a member?

Regional economic integration is an essential element for our countries to progress towards greater economic and social development and better quality of life. In this framework, the Pacific Alliance should be seen as an alternative to propel growth and development, based on increasing the competitiveness of the economies concerned, and a deep integration that transcends the purely commercial aspect. This initiative offers the opportunity to establish strategic partnerships that favor the development of investments, increase real and effective competition, improve productivity and the competitiveness of goods and services, and facilitate commerce between countries, fostering better integration with other regions. Costa Rica has closely followed the Pacific Alliance as it gradually approached the initiative. As with other member countries of the Pacific Alliance, our country offers a pro-business investment environment that we continue to work on in order to improve and strengthen. We coincide in our end goal of promoting a deeper regional integration in order to achieve greater growth and to promote greater closeness to other regions, particularly Asia Pacific.

In 2013, the free trade agreement between Peru and Costa Rica came into effect. The treaty reduced and eliminated tariffs on specific products such as precious metals and chocolate. How has this agreement benefited both economies until now?

The treaty with Peru came into effect not that long ago, and so it is early to make a concrete analysis of its results. However, recent commercial and investment figures confirm that there is a growing tendency toward consolidating in regards to commerce with Peru. The commercial exchange between Costa Rica and Peru has maintained a growing tendency for the past decade. It went from $20.4 million in 2003 to $60.1 million in 2013, registering an average annual growth of 18.9%. Prepared foods, medicines, paper or cardboard for recycling, caps and plugs, covers for metal containers, tires, rigid tubes of vinyl chloride polymers, homogenized preparations, joints or gaskets of vulcanized rubber, machinery for cleaning, classifying and grading seeds or other similar products are amongst the main export products from Costa Rica to Peru. The number of Costa Rican companies exporting to Peru rose from 42 in 2009 to 70 in 2014. With regard to direct foreign investment, the period between 2007 and 2013 reached a cumulative amount of $42.7 million. In 2013, the real estate sector concentrated the total investment coming from Peru, with a sum of $5.5 million.

What could countries learn from Costa Rica's industrial reconversion program that would help encourage exports through free trade zones?

Free zones are a great appeal for those who wish to invest in our country. This system offers a series of fiscal benefits and competitive advantages that characterize our country: the talent and value of our workers, political stability and a strategic location. The attraction of direct foreign investment is associated to the promotion and diversification of exports, the search for improving and refining products manufactured in the country. The government offers benefits and incentives to companies and investors that are interested in settling in the country as long as they comply with the requisites and obligations outlined in Law 7210.

Costa Rica will celebrate its third summit of the CELAC at the end of January. How has the organization helped to foster links between countries in the region?

During the year that Costa Rica had the temporary presidency, we managed to agree on 50 declarations during the last semester. We also had a very productive leadership. We established effective mechanisms for dialogue in the region and with the region's partners, for example our meeting with China. During the summit, the commitment to implement the food security plan was consolidated in order to eradicate famine by 2025 and a plan to end illiteracy in the country was generated. Working together in these processes will be the key to success. The Community of Latin American and Caribbean States (CELAC)'s voice has to be heard and valued in the international arena, contributing new experiences to influence fresh results. What is at stake concerns us all. It is about the development agenda that will guide humanity till 2030. CELAC's value is in its provision of a medium for dialog and the influence that we manage to have in our political integration and in the ability to conciliate positions in diverse and necessary matters such as the environment, human rights and nuclear weapons. In maintaining these scenarios and in working together lies our vision for our continent's future.