Costa Rica’s foreign direct investment will return to 2008 levels after falling about 30 percent this year, boosted by tourism and investments in ports and telecommunications projects, said Marco Vinicio Ruiz, the country’s minister of foreign trade.
“I visit companies all the time,” Ruiz said in an interview at Bloomberg’s headquarters in New York. “They say they are ready to go to Costa Rica, they’re just waiting for the board to approve that.”
Ruiz, 55, is in New York for an event to attract money to the telephone industry, which opened to private investments this year. He will travel to Singapore on Nov. 7 to present bid opportunities for a concession of a port in the Caribbean Sea, which will be the country’s biggest.
Foreign direct investment will be about $2 billion next year, in line with 2008, after plunging this year as the global recession reduced tourism and spurred companies to halt spending plans, Ruiz said. The investment, which accounts for 7 percent of gross domestic product, is the main driver of the Costa Rican currency, he said.
Costa Rica’s colon has slumped 3.3 percent against the U.S. dollar this year after sliding 10 percent in 2008. It has traded in a “crawling band” for the last three years, after being tied to a peg for more than two decades, Emmanuel Hess, the general manager for Procomer, the Trade Ministry’s export and investment promotion agency, said at the interview in New York.
“The bands have been expanding all the time, just a little bit more,” Hess said. The floating currency is an “irreversible” trend, he said.
Foreign direct investment has the biggest effect on the colon because Costa Rica isn’t dependent on exports of a specific commodity with fluctuating prices, Ruiz said.
“The only thing that goes up and down is the amount of foreign direct investment,” he said. “That is something we have to control, because it is very important.”
The Central American country probably will conclude a trade agreement with China, its second-biggest partner after the U.S., by the end of February, Ruiz said. It will likely sign a trade accord with Singapore by early January and an agreement with the European Union by May, he said.
After the accords are completed, 84 percent of Costa Rica’s exports will be made under trade agreements, he said.
“We rely on trade agreements because we know it is going to take many, many years to have a comprehensive agreement at the World Trade Organization level,” Ruiz said. “Our strategy is we have to get access to our most important markets through trade agreements because that will send a long-term message, especially in lean times.”
Ruiz said his team is in Beijing working on the fifth round of negotiations with the Chinese authorities. The agreement with the European Union is on hold until the Honduras political crisis is solved, he said.