What most considered to be an inevitable result of the new highway is confirmed by a recent article in El Financiero.  Property values along the new highway from San Jose to Caldera are rising dramatically, as well as are permits for new construction.  Here are a few figures quoted in the article.  Prices of fincas (large parcels) of between six and seven hectares (or around 16 acres) have increased from around $8 per square meter to $18 per square meter AND that is on the low end.  For smaller parcels the prices are as high as $33 and over per square meter.  This is for land basically in the middle of nowhere, but near small towns like Orotina and Atenas.  In fact it is predicted that in two years Orotina will be hardly recognizable as the small pueblo one always passed through on the way to Jaco.  Construction permits are booming as well, rising in Orotina from 2,190 square meters last year to 7,574 in the first few months of 2010.  Most of the permits are for urban and residential development, although there is an increase in industrial and commercial permits as well.  In some areas, such as El Coyol and San Rafael, appreciation is 75% over prices in these areas just three years ago.  Of course, the anticipated rise had already brought in quite a bit of speculative buying and now those buyers want to be sellers.  This can give rise to some poorly informed buyers getting ripped off at these elevated prices as much of this land, while near the highway, is still far from other basic services.  Also, ingress and egress to the highway can be challenging in these remote areas as many planned exits have not materialized as of yet.  There is also the fear of development ensuing similar to what occurred in Guanacaste, where there were many developmental regulations ignored in pursuit of progress, which now has given rise to environmental and other problems.

Click for Article in El Financiero

Costa Rica’s took a first step at opening the market for Internet services by allowing the company Amnet to have direct access to the submarine cable “Maya 1.”  Maya 1 one of Costa Rica’s main international connections.  Amnet is the first company that Sutel (or the government body that regulates telecommunications in the country) has allowed to have such access.  Amnet has actually been operating in the country for some time, but it formerly had to offer its services in connection with an agreement with Racsa, which is the government run arm that up until now has enjoyed sole access to Maya 1.  Customers of Amnet were thus treated with two bills each month, one from Amnet and another from Racsa.  Raúl Ibáñex, Amnet director, stated that the authorization to connect to Maya 1 marks a new era in Internet access in Costa Rica.  In addition, Sutel authorized seven cable companies in various areas of the country to begin offering television access in competition with Amnet.  However, so far Amnet only has access to Maya 1.

Link to Article in La Nación

I read and interesting article in the Tico Times that posed this question.  I have always wondered who it is exactly that determines whether a country deserves the coveted status of “developed.”  The article answered that question for me…it is based on determinations by two organizations.  First, there is the 30-member Organization for Economic Co-operation and Development (OECD).  Then there is the United Nations “Human Development Index.”  Each have their own criteria for determining if a country makes the cut.  The OECD bases the issue in large part on gross national income and amount of foreign aid received.  Basically, whether a country can stand on its own two feet without help from other nations.  Based on this analysis a country is placed in one of five categories, the top being Developed and the bottom being Least Developed.  Costa Rica at present is in the Upper Middle Income category.  You cannot actually be a member of the OECD until you reach the top category and have the capacity to actually help other countries do the same.  The HDI of the United Nations lists Costa Rica as the 54th most developed country in the world, with a index rating of 0.854.  To be developed a country must reach a level above 0.90, with 1 being the highest possible score on the scale.  Chile is the most developed in Latin America on the HDI scale and is considered the 44th most developed country.  Norway is at the top of the world list with a rating of 0.971.  The HDI scale is not as economically weighted and considers such things as life expectancy and education.  The Tico Times article went on to note that despite Costa Rica’s rapidly rising development status, there are many contrasts that would counter the trend.  Things like poor infrastructure, expending gap between rich and poor, and others.  Roman Macaya, a businessman who unsuccessfully sought nomination of the Citizen Action Party (the part of Otton Solis) for Presidency, stated that there are two Costa Ricas, one for the rich and affluent and another for the poor.  In my opinion that is a bit overstated.  I have spend considerable time in Nicaragua, for instance, and I would say Mr. Macaya’s statements would be true if he were talking about that country.  However, here it is the middle class that experts the most power, both politically and economically.  So, while there are problems with crime and poverty, Costa Rica is definitely making steady progress.  Laura Chinchilla made a campaign pledge that Costa Rica would become Latin America’s first true developed country (Chile might argue that point with her) and I believe if she can continue the good progress of her predecessor and mentor, Oscar Arias, perhaps the country has a shot.

Important governmental arms of Costa Rican promotion like the ICT (Ministry of Tourism) and the Ministerio de Comercio Exterior have joined to make attempts at attracting more retirees, or pensionados, to Costa Rica in the national interest.  All that remains necessary is for President Arias to sign on to the idea and it becomes part of the governmental plan of promotion.  In which case, important things could happen that could really have an impact, like giving tax breaks on the importation of autos and household furnishings and possible even income taxes.   As to the specifics of the plan, that is still to be studied, but Costa Rica has recognized that “baby boomers” in places like, Texas, Florida and Arizona may take a more than serious look at Costa Rica as a potential permanent, or temporary, retirement home.  Government prognosticators have estimated that in the next few years the number of retirees could grow to 10,000, generating some $340 million in income annually and creating the need for 40,000 new jobs.  The idea is to have retiree-focused communities in places like San Pedro de Poas, where a new development dedicated to retirees is already in operation (see www.retirementhomecr.com).  These places would focus on the specific needs of those who are getting up in the years (this is a little offensive, since I am technically a “baby boomer, but nowhere near ready for a “retirement home”).  Private hospitals like Clinica Biblica and Catolica want in on the act and propose that there be a certification for those specialized to care for the needs of retirement age persons (clarified….above 65 years of age).   This all sounds like an idea whose time has come.  I have always believed Costa Rica could be a retirement haven and with the rapidly improving infrastructure it begins to look all the more appealing.  I just hope everyone in their rush to cash in on the growing trend resolve to keep efforts 100% sustainable, remembering always that it is Costa Rica’s great natural bounty that draws so many of all ages, shapes and sizes to its borders each year. 

Link to Article in La Nación

Well now that I have utilized the new and greatly anticipated “carretera Caldera” that extends from Escazu to Esparza (where it connects with the Pan American Highway), I do have an opinion on the matter.  I have heard the criticisms about the fact that the road is only two lanes in some areas, that there has been some environmental damage and that residents in communities along the highway have been negatively affected in various ways.  But I guess with a project this big, there is always going to be some controversy, i.e., someone’s ox will get gored.  I am sure that some of the criticism is valid and deserved.  However, on the whole, my opinion is that this highway is the best thing that has happened in this country for a long time, at least as long as I have been here, even better than passage of the T.L.C., whose anticipated positive effects may take as long to be realized as the highway did to construct.  In short, the new highway cuts drive time by about an hour to points along the entire Pacific Coast.  I made a trip to Monteverde using the new highway to get from San Jose to Esparza and then the Pan American to the point where you exit to go up the mountain in a little over TWO HOURS!  That is nothing short of amazing.  Moreover, I used far less gas than I would have before and the trip was far less stressful, both to my car and to my nervous system.  This highway is a godsend for people who want to travel within Costa Rica and that includes just about everyone.  I anticipate it will be good for foreign investment and real estate values (I read recently that Atenas is already gearing up for it) and it will be good for tourism.  One of the most oft-heard complaints from tourists is the difficulty in getting from Point A to Point B in Costa Rica.  Well, this new highway, while not perfect, is a major stride towards fixing that issue.  The times I have used it, which have been both during the week and on the weekend, my average speed was around 80 kph, or more, versus the less than 50 average one would experience crossing the mountains either via San Ramon or the dreaded (though picturesque) Monte de Aguacate route.  The new highway should also relieve some of the congestion from those old routes as the many trailers will opt to take the new highway..and they were the principal source of the problem on those more mountainous routes.  I was highly skeptical of all the talk over the last decade of how great this new highway would be, primarily for Jaco.  However, now I am convinced and the benefits will extend far greater than Jaco, which as of late has gone from being Costa Rica’s most popular beach town to Cost Rica’s biggest eyesore.  My hats off to the Arias administration for getting the job done.  Thirty-two years was a long time in the making, but better late than never.  Okay Laura, let’s see some more of that over the next four years!  But start with a pocket full of ”monedas” for the many tolls on the road (5 in all) and gas up, because you won’t see any gas stations along this route, probably for a while.

So says the recent report entitled, Estado de la Nación (State of the Nation).  The bottom line according to the report is that Costa Ricans are consuming more resources than the country can provide and generate more waste than it can absorb.  All this seems to fly in the face of Costa Rica’s avowed harmony between development and care for the environment.  The report goes to show that to maintain a proper equilibrium between these two often competing forces is a very delicate balancing act.  The report evaluates Costa Rica’s impact along two measurements, “bio-capacity” and “ecological footprint.”  Bio-capacity has to do with the capacity of an ecosystem to produce biologically useful material and absorb waste generated by humans.  Investigators found that Costa Rica’s bio-capacity per person is 1.66 hectares.  That is, to produce a sufficient amount of material and absorb the resulting waste from consumption each person in Costa Rica needs 1.66 hectares of space.  This measurement takes into account the current actual lifestyle of a typical Costa Rican, in terms of rate of consumption and generation of waste.  As for “ecological footprint” the report found that each tico has a footprint of 1.86 global hectares.  When you subtract Costa Rica’s ecological footprint from its bio-capacity a deficit is produced.  This basically shows, according to the researchers, that Costa Rica would need 12% additional territory to meet the needs of development.  In short, the development is unsustainable and thus dependent on the bio-capacity of other countries.  Costa Rica thus is viewed as an eco-debtor.  Even so, Costa Rica is nevertheless well below the average ecological footprint of other countries of the world, which stands at 2.7 global hectares per inhabitant.  The report cites as the cause for the deficit both patterns of consumption along with population growth.  Also contributing to Costa Rica’s poor showing are high emission of contaminating gases, the consumption of its forests, and inefficient use of its resources. 

Link to Article in La Nación

It has been up until now dreadfully difficult to build a new marina in Costa Rica.  For years the only one in the country was Los Sueños, located at Playa Herradura near Jaco beach.  Within the last year another marina, the Marina Papagayo, has opened its slips to massive luxury yachts.  There are several other projects in various stages of administrative approval.  The problem is that administrative approvals have been the “black hole” for marina developers.  A hole from which hardly anyone ever escaped.  That all could be changing now with the new “Ley de Marinas” approved last week by the legislature. The new law tightens up certain environmental controls and enforces compliance with Costa Rica’s Equal Opportunities for the Disabled law. But were the beauty lies for developers, at least potentially, is the way it clarifies and streamlines the approval process and allows for a much faster pace of gaining the myriad of administrative approvals and concessions necessary to push a marina project to actual construction.  Is it a good thing?  Well not all of the “diputados” (or legislative representatives) agree.  Some, like Ana Helena Chacón, believe that it is essential for promoting more tourism in coastal communities and thus more jobs and economic development.  On the other hand, Olivier Pérez doesn’t like marinas in the least.  He says they are only for the benefit of a select few..a very rich select few.  He also claims that large luxury marinas displace the local population and can lead to social unrest.  He nevertheless voted for the measure, because the regulation offered by the new law is better than what is on the books currently.  I have been saying for some time that Costa Rica could use another marina or two, but that doesn’t mean the floodgates should be open allowing a dozen to fast-track towards completion.  There are serious social and environmental implications posed by marina development and each situation should be reviewed carefully.  Also, in the end the ticos living and working in the communities affected should have the final word.

Link to Article in La Nación

No one can deny that in certain parts of the country, crime has risen. The facts speak for themselves.  In 2008 the homicide rate per 100,000 inhabitants reached double digits (10).  In 2007, the figure was 7.5  Also in 2008, 435 people were violently killed, a figure that is 86 more than the 349 in 2007.  This increase in crime is not escaping the attention of the rest of the world, and that could mean troubles for Costa Rica’s future growth unless something is done to stem the rising tide. The World Economic Forum rated Costa Rica 104 out of 133 countries in terms of insecurity, placing it in the neighborhood (ranking-wise) of African countries like Lesoto (103) and Uganda (105).  Vanessa Gibson of Cinde, an entity dedicated to attracting foreign investment into the country, told La Nación that one of the principle challenges of improving the investing climate in Costa Rica is to deal with the problem of delincuencia.  Compared with many other Latin countries, Costa Rica is still considered relatively safe.  For my own part, I believe that much of the crime is drug related and confined largely to certain parts of the larger metro areas. Although petty theft by young adults brandishing firearms has become a real problem.  The answer?  I believe Costa Rica needs more and better paid police. Often the police become part of the problem themselves as they struggle to squeak out a livelihood trying to protect the rest of us. Police corruption is rampant and the bad apples need to be weeded out and the good cops paid better for doing their jobs.  One major international company that has felt the “crime pinch” is Western Union.  Several of its locations around the San Jose metropolitan area have been the victim of armed theft (including the branch located where my office was previously).  Christian Rodríguez, Vice President of Operations, told La Nación, that while crime has not yet become a major obstacle to further investment by the company, it is headed in that direction fast.  In terms of risk in this regard, Costa Rica has received a rating of 2 out of a possible 4 by the company. The worst of the region is El Salvador.  We definitely do not want to see Costa Rica catch up to the problems that country has faced.

Link to Article in La Nación

Puerto Rico came out on top in a recent competition by FDI Magazine (Foreign Direct Investment Magazine) to determine the top Caribbean and Central American countries of the Future for 2009/10.  However, Costa Rica (second) and the Dominican Republic (third) fared very well also, with only three points separating them from the top.  Costa Rica scored in the top five ranking across categories of economic potential, quality of life, business friendliness, human resources and FDI strategy.  The one area where Costa Rica did not score so well was cost effectiveness.  The methodology used to judge the competition, as described by FDI’s web site, is as follows:  FDI Countries of the Future shortlists are created by in independent collection of data by FDI Benchmark across 31 Caribbean and Central American countries. This information was set under six categories: economic potential, human resources, cost effectiveness, quality of life, infrastructure and business friendliness. A seventh category was added to the scoring – FDI promotion strategy. In this category, 14 Caribbean and Central American countries submitted details about their promotion strategy and this was judged and scored by our independent judging panel. Countries scored up to a maximum of 10 points under each individual criteria which were weighted by importance to give the overall scores.

I wrote in my other blog, 365 Reason I Love Costa Rica, about Jacó the other day.  What I said wasn’t too flattering.  It just seems to me that all the development that has poured into that area is creating an experience that is just not Costa Rica.  But then again, one man’s potsherd is another man’s paradise and I guess there are many for whom Jacó has a certain appeal.  However, no one can seriously argue that in recent years development hasn’t been a little bit overdone.  A recent article in El Financiero only bolsters that argument.  The article points out that the economic crisis hit at a time when most of the new condo towers were completed or near complete and sales already well advanced.  Nevertheless those that were in earlier stages have expereinced delays and at present construction in the area has all but halted.  One of the cases cited is Sonesta.  Of its six condo towers, only three are ready for habitation.  Others that are feeling the pinch of the crisis are Day-Star Properties and the Jacó Bay Ramada.  All in all there has been a reduction of 15% in square meters of new construction, from 565,181 in 2007 to 477,543 in 2008. The “breath” that Jacó is experiencing is actually a good thing as it allows the authorities to get a better handle on future development in the area.  The rampant development put tremendous pressure on the ability of the municipality to deliver public services effectively.  According to Marvin Elizondo, mayor of the cantón of Garabito, one of the great benefits of the construction slowdown is to avoid the elimination of vegetation that occurs with much earth movement and excavation.  This can cause irreversible environmental damage such as the obstruction of “quebradas” or creeks and narrow rivers.  The lowering of prices of land in the area makes it more feasible for the municipality to acquire land for the construction of a protected watershed.  Another project in the works is the construction of a sewage treatment plant.  A plan of regulation is also in the process of approval that will bring a greater degree of order to future development in Jacó, as well as surrounding municipalities. 

Click for El Financiero Interactive Guide to Pacific Central Development