It is easy to look back on the last two years of the Covid-19 pandemic, and forward to a world dominated by a growing climate emergency, and take a pessimistic view of the future. Factor in the prospect of trade wars between the world’s largest economies and the prospects can seem bleak. However, the changing global landscape is creating opportunities as well as challenges, and Costa Rica is seizing the chance to make the future more prosperous.
Through the pandemic, it has shown remarkable resilience by not only weathering the storm but also finding ways for its economy to adapt to new realities and emerge stronger. Throughout 2020 and 2021, Costa Rica has launched new initiatives to ease global supply chains, build more responsible and sustainable businesses, and foster growth and partnerships during the most challenging of times.
For instance, during the pandemic there has been no disruption to the normal operation of businesses, with 100% business continuity maintained throughout. Furthermore, Costa Rica has tackled the pandemic head-on, and is among the countries in the American continent with the highest rates of vaccination, with, at the time of writing, over 70% of the population fully vaccinated.
Resilience, however, is not just economic, but also social and environmental. In the face of pressing global health concerns, the country has not backed away from long-term commitments to the environment. Indeed, at the COP26 climate summit it was praised by leading figures from Amazon boss Jeff Bezos to UK Prime Minister Boris Johnson for its work to tackle climate change.
With global supply chains facing disruption because of the pandemic, multinationals are looking for more flexibility from their service providers and manufacturing partners. Nearsourcing within reach of major markets such as the US is increasingly appealing, so Costa Rica’s location, as well as its many free trade agreements with key economies, make it an ideal destination.
Testament to this are the ongoing partnerships and investment with the country’s service providers from multinational enterprises in key sectors, among them healthcare and technology. Chip manufacturer Intel, for instance, has reactivated its Assembly and Testing Plant in Costa Rica with an investment of more than $600m in specialised research and manufacturing activities. During the pandemic, the company hired more than 750 people locally.
Similarly, innovative digital product development partner 3Pillar Global experienced a major growth phase during the pandemic and Costa Rica was a key hub for its development plans.
“In 2020, the enhancement of 3Pillar’s global footprint in Costa Rica extended capabilities and client relationships,” says Marie-France Beaulieu, managing director, 3Pillar Global Costa Rica. “The Costa Rica team was trained successfully to serve a wide variety of clients by building for customer needs, quickly adapting to change, and minimising time-to-value creation.
“I am proud that we have a 3Pillar Global Delivery Center in Costa Rica,” she adds. “Our talented team members and Costa Rica’s tech community have the unique opportunity to be part of the development of the most innovative digital products.”
Beaulieu is not alone in seeing the potential for value generation, with Costa Rica topping the Greenfield Performance Index 2021, recognised as being the best-performing location relative to its size for attracting FDI.
In fact, 2020 marked its second-best year for new FDI projects since records began, and the country has seen solid post-pandemic growth in exports, which grew by 27% in the eight months to August 2021, reaching a total of $9.55bn. This figure is more than $2bn higher than for the same period for 2020 and represents the highest growth in exports of goods in the last five years. It has also expanded its role as aglobal hub for life sciences. In August 2021, the precision equipment and medical devices sectors grew by 42%.
Costa Rica’s official accession to the Organisation for Economic Cooperation and Development (OECD), ratified in May of last year, is likely to propel the country forward in this key industry sector, and many others. This, however, is just one example of how the country is positioning itself for long-term growth.
The country has emerged, as the COP26 attendees recognised, as a global leader in environmental protection, and recently won the Earthshot Prize 2021 in the category ‘Protecting and Restoring Nature’, awarded by the Royal Foundation of Prince William of England.
In line with its environmental ambitions, Costa Rica is also venturing into the development of a next-generation green data centre located within a hydroelectric power plant. Dedicated to mining cryptocurrencies, such as Bitcoin, it will use 100% renewable energy.
New laws on regulating the production of hemp for food and industrial use, which will generate the development of new products, services and foreign investment, and a new law to attract investment from the film and entertainment industry are further signs that the country has a long-term plan that looks beyond recovery towards real economic growth and social and environmental prosperity.
Much has been said about the ‘new normal’ that will emerge in the wake of the pandemic, but Costa Rica is a live example of a country striving to shape it.