San José, Costa Rica, since 1956

Security concerns drop Costa Rica in global competitiveness ranking

Increasing security concerns and poor infrastructure were cited as the primary reasons for Costa Rica’s drop in World Economic Forum’s annual global competitiveness rankings, released last week. Costa Rica’s competitiveness ranking fell five spots from 2010, dropping from 56th to 61st among the 142 countries rated.

“The main reasons for this drop are the perceived deterioration in the country’s sense of security – a common feature of almost all Central American economies – and the lack of improvement to its transport infrastructure, caused by insufficient maintenance and investment,” the report stated.

Of the 142 countries surveyed, Costa Rica was ranked 97th in security and 121st in transportation infrastructure. Costa Rica’s ranking also suffered due to the country’s escalating budget deficit, high inflation rate, and amounts of bureaucracy applied to new businesses.

On a positive note, Costa Rica remained the fourth highest ranked Latin American country, behind Chile, Panama and Brazil, and was praised for “friendly policies towards trade,” low tariffs, and few restraints on foreign direct investment. Costa Rica’s highest grades came in education, where it was ranked 23rd and was commended for high enrollment rates and overall academic quality.   

Panama, which moved up one spot from 50th to 49th, was the highest ranked Central American. Only Panama and Honduras improved their rankings during the last year. 

“The highest drops in the region have been experienced in some countries of Central America (including the Caribbean) – for example, in Costa Rica, Guatemala, El Salvador, Nicaragua, and Jamaica – mainly due to a deterioration of the security conditions,” the report said. “In order to keep the positive momentum going, Latin America and the Caribbean will need to address some of the persistent challenges that constrain its competitiveness.”

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