A New Year Brings New Opportunities and Challenges to Costa Rica.

With a difficult end to 2008, economically speaking, Costa Rica must prepare itself for an equally turbulent start to 2009. The most defining change this year was the recent implementation of a free trade agreement with the United States. Now, on the base of a lulling economy, Costa Rica businesses must learn to compete on an even playing field with multinationals and others vying for the tiny, yet significant Central American market. The following expectations are more or less inevitable, but it is how the population chooses to react to them that will define the future of Costa Rica.

Without further ado, here are Costa Rica Pages’ top expectations for 2009 in Costa Rica:

1. COMPETITION: On the positive side for the consumer, more competition for a populace with less buying power will undoubtedly lead to price wars as well as freedom of choice in previously monopolized industries like insurance and telecommunications. The thousands of Costa Ricans still on the waiting list to obtain a cell phone line with the Costa Rican Electricity Institute (ICE) will likely be the first to abandon ship as the ex-monopoly struggles to incorporate the term “quality service” into its vocabulary.

The question remains how smaller “Mom & Pop” stores are set to deal with incoming competition. With horror stories of the Wal-Mart invasion in Mexico post-NAFTA, hopefully the past year spent making addendums to the treaty will serve to protect potential CAFTA victims. So far, it seems the export industry, which directly and indirectly employs a total of 1 million people in Costa Rica, will see a necessary boost from CAFTA to combat losses caused by the economic crisis.

2. LESS ACCIDENTS: Despite having the most stable government and economy in Central America, Costa Rica’s roads and infrastructure have gained notoriety for being some of the worst in the hemisphere. Add to this loose drunk driving laws and the number of accident-related deaths in Costa Rica totaled more than 60% of all violent deaths in 2008. This year, foreign and national investment in bridges and roads combined with the new Transit Law are expected to drastically reduce accidents. The law entails much stricter consequences for drunk drivers as well as stricter enforcement of car maintenance requirements, among other driving infractions. In October, it is also expected that the new highway from San Jose to Orotina should be completed, helping to dilute the congestion on what is currently the only route heading to the Central Pacific beaches.

3. POLITICS: With the Costa Rican presidential elections coming in February of 2010, residents and visitors will note a very politically-charged atmosphere in the country. Elections in Costa Rica have not caused wide spread violence in the country since the 5-week civil war in 1948 when an election was said to have been robbed, and then righted by military force. While this year should not prove to be an exception, a weakened economy will lead to more extremist thoughts as the average Joe (or Jose) may now find himself faced with problems that were not there before the economic crisis. The effects of CAFTA will surely play into whether or not the current political party in power will achieve their goals of getting ex-Vice President Laura Chinchilla into the Casa Presidencial.

4. DIVERSIFICATION OF VISITORS. As Costa Rica so clearly learned last year, it is not safe to put all of your eggs in one basket. With an uncertain economic future for the United States, Costa Rica will be forced to focus on diversifying trade partners and tourism markets beyond its northern neighbor. After a recent trade agreement with Singapore, sights set on the Chinese market and negotiations with the European Union for the facilitation of trade over the Atlantic, one might expect an increase of Hello Kitty, Marmite and electronics to the country. As for human visitors, Costa Rica travel agencies are already working on targeting foreigners beyond the states with multilingual travel experts and translated web pages. Another event that is expected to bring in thousands of surf fanatics from all over the globe is the 2009 Billabong World Surfing Games event that is set to take place in Playa Hermosa, just south of Jaco.

5. PLANNING & PREPARATION. While this expectation may be more of a hope, it seems that with the economic crisis slowing the rapid growth experienced in Costa Rica over the past five to 10 years, 2009 could be a great opportunity for everyone to take a breather. With a smaller queue for construction permits, municipalities could use their extra time to finalize and implement Plan Reguladoras, and check up on existing construction projects and developments to catch any environmental abuses in the act. With the new trade agreement bringing change and competition, current business owners and government institutes should take the opportunity to review their products and services to find out which areas need improvement. While the past protectionist policies offered job stability, they did nothing to promote innovation nor quality of products and services. In a country known for its educated work force, it would be exciting to see home-grown industries competing on a global playing field.

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Filed under: Costa Rica News on January 5th, 2009