Building A Cluster - Costa Rica
Building A Cluster - Costa Rica
Building A Cluster - Costa Rica
the country start to export beef and sugar in the first half of 20th century
IMPORT SUBSTITUTION MODEL
prescribed by ECLAC in 1960
goals : overcome Costa Ricas dependence on imports and its exposure to price
fluctuation
IMPORT SUBSTITUTION MODEL - FINDINGS
recognized a constraint on the import substitution development model in the smaller
countries
local markets would be quickly saturated and scale efficiencies hard to achieve
CENTRAL AMERICA COMMON MARKET
established in 1960 by Guatemala, El- policies
Savador, Honduras, and Nicaragua intraregional free trade for 239 product group
to cover costs: cuts in gov. spending and workforce, increase taxes on sales, export
and personal income
POST CENTRAL AMERICA COMMON MARKET
COLLAPSE RECOVERY
in 1980s, the government shifted its economic plan to one focused on the promotion
of non-traditional exports to no-CACM countries
upgrades in the national airport, ports, and customs to facilitate international trade
custom duties were suspended and fiscal incentives were granted to firms
establishing manufacturing operations for export
THE COSTA RICAN Generalities
Composition of the Economy
The total exports $3.75 billion (leading goods exports: banana ($631 million) and
coffee ($385))
The Costa Ricas port is the busiest for origin and destination in Central America
(handling 2,433 ships and 6.7 million ton)
The Costa Rica is the largest electricity generating capacity in Central America (73%
is hydroelectric)
GENERALITIES
The Costa Ricas density of telephone lines is the third highest in Latin America (16
lines per 100 inhabitants)
Working condition in the export processing zones were equal or better than
prevailing outside
The total gross exports originating from free zones is $643 million in 1996
ZONA FRANCAS
There are two branches of the government that sought to establish link between the
firms operating in Zonas Francas and domestic companies:
PROCOMER (The government agency in charge of promoting Costa Rican export abroad and managing the export
processing zones
CINDE (A nonprofit organization responsible for promoting foreign direct investment in Costa Rica)
THE FIGUERES The National Strategy
Under the Zona Francas legislation some manufacturing had established more
advanced manufacturing operations
Some software companies had been formed, software exports were estimated to be
$20 million
THE PURSUIT OF INTEL
The Intel ATP plant was expected to create 2.000 direct jobs in 1998, of which 20%
would be management and engineering position
Gross exports derived from the investment expected to reach $1.5 billion in 1999
the countrys growing emphasis and success in attracting high tech FDI
it is clear that Costa Ricas long term commitment to investing in education has been
the most important factor behind the recent developments
applied the diamond analysis to the region as a whole, and to every country
individually