San José, Costa Rica, since 1956

President, business leaders trade ideas on competitiveness

Crime, bureaucracy and the inability of the government to make decisions are dragging down Costa Rica’s business competiveness, leaders of the country’s business sector said.

The Costa Rican Union of Chambers and Associations of the Private Business Sector (UCCAEP) presented President Laura Chinchilla on Thursday a list of 10 demands they say need fixing to keep Costa Rica competitive in the global economy.

The occasion was National Private Business Day.

“We are conscious that the realization of these 10 tasks requires national agreements,” said UCCAEP President Manuel Rodríguez. “The business sector, as a responsible actor, will not only support the discussion with the document that we are delivering, but from here forward we commit ourselves to seeking agreements among diverse actors with the goal of procuring the development and implementation of these proposals.”

The 10-point agenda, developed from surveys of more than 500 businesses, has numerous sub-points under each category and suggests reforms in almost all Costa Rican policy areas from improving governance, improving citizen security, modernizing infrastructure and supporting the production sector to improving energy efficiency and controlling interest rates.

Rodríguez said spending on security, government bureaucracy and political gridlock in Congress are dragging down Costa Rican competitiveness. He added that the threat of crime has gotten so bad that many businesses are spending three to four times what they used to on private security.

“At a certain point,” he said, “that expense makes us less competitive.”

Chinchilla accepted UCCAEP’s document of suggestions and responded by adding eight more points of her own to grow the country’s economy and competitive edge.

Chinchilla’s plans include loosening up credit from state banks for small- and medium-sized businesses, the development of affordable housing for middle-class Ticos and growing Costa Rica’s tourism industry. On this last point the president said Costa Rica will court more Chinese tourists by revising tourism visa regulations for Chinese travelers and partnering with Chinese airlines to add more direct routes between the countries. Chinchilla also mentioned construction of a National Convention Center.

Other steps the president discussed include the opening of telecommunications and energy markets in the country to private competition, strengthening Costa Rican export markets with business treaties with Singapore, Peru and the European Union, and improvements to infrastructure at Peñas Blancas customs facilities on the Nicaraguan border.

Finally, Chinchilla said her administration will be investing in public infrastructure in the next two years of her presidency with an estimated 2012 public investment of around $1.3 billion – about $900 million is expected to come from the finalization of contracts for an enormous shipping concession and at the Caribbean port of Moín.

“Given the magnitude of the investment we have projected in public infrastructure,” said Chinchilla, “we are conscious that on this rests one of the largest revitalizations of our economy. It is because of this that we have been reinforcing, since the end of last year, the management schemes and supervision of diverse projects that are happening, especially with respect to projects of the Public Works and Transportation Ministry.”

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