Competitiveness Summit Addresses Key Issues

June 18, 2010

The American Chamber of Commerce (AMCHAM) gathered some of Costa Rica’s best-known business minds to discuss the nation’s most pressing economic issues.

The day-long series of presentations and discussions, billed as the Competitiveness Summit, centered on issues including telecommunications, free-trade agreements, infrastructure, and methods to improve Costa Rica’s economic “competitiveness.”

The day opened with an extensive discussion of the long-delayed opening of the cellular telephone market. The cellular market, which was legally cleared for competition when the Central American Free-Trade Agreement with the U.S. (CAFTA) was activated on Jan. 1, 2009, has yet to welcome new competitors. Since then, the cellular market’s regulator, the Superintendency of Telecommunications (SUTEL), has on several occasions presented a timeline for the opening of the market, only to rescind it weeks later.

At the summit on Tuesday, June 15 at the Hotel Real Intercontinental in Escazú, Carlos Gallegos, telecommunications director of the international consulting firm Deloitte, explained the financial benefits for the country that will accompany the opening of the market, as well as the money that is being lost as the market remains closed. Currently, the Costa Rican Electricity Institute (ICE) is the only provider of cellular service in the country.

According to Gallegos, with the opening of the cellular market to competitors, Costa Rica would gain an estimated $3 billion in the first five years and an estimated 2,500 to 3,500 people would be employed by the new providers.

To provide perspective on the benefits seen by a country that successfully ushered in the telecommunications market, Jorge Nicolau, the president of Cable & Wireless in Panama, spoke about the economic impact of the privatized telecommunications market in Costa Rica’s southern neighbor.

“In the last year, the revenue earned by the telecommunications market was greater than the earnings of the transportation and construction sectors,” Nicolau said. “Considering the revenue earned by our transportation sector, which includes the Panama Canal, the importance of telecommunications in our country is astounding. There isn’t a more progressive industry than telecommunications.”

The second panel discussion focused on free-trade agreements and the existing obstacles to their implementation in Costa Rica. Tomás Dueñas, a former foreign trade minister and former Costa Rican ambassador to the United States, Alberto Trejos, an economist and former foreign trade minister, and José Rossi, the current president of the Costa Rican Investment Board (CINDE) discussed inefficiencies in some of the free trade agreements, the unstable economic image created by the varying exchange rate, and the sluggish processes whereby things are accomplished in Costa Rica.

“Costa Rica has made great economic advances in the last 10 years with foreign direct investment, trade agreements and creating an open market with access to the biggest markets in the world,” Dueñas said. “But we could be flying. We’ve created a system that thrives on delays and resistance and that takes a very long time to make decisions.”

In 2009, the World Economic Forum ranked Costa Rica as the 55th most competitive country in the world.

–Adam Williams

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