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    Jacson
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    Caso costa rica historia económica y comercial

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    Caso costa rica historia económica y comercial

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    © All Rights Reserved
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    5 visualizzazioni4 pagine

    Caso Costa Rica

    Caricato da

    Jacson
    Caso costa rica historia económica y comercial

    Copyright:

    © All Rights Reserved
    Scarica in formato PDF o leggi online su Scribd
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    CASE: COSTA RICAN TRADE, FOREIGN INVESTMENT, AND ECONOMIC TRANSFORMATION! Costa Rca, a Central American country of nearly 4 millon people (see Map 6.1), borders the Pacific Ocean and the Caribbean arm of the Atantic Ocean. its name means “rich coast” because ofits fertile soll and rich biodiversity. n some ways Costa Ria is typical of developing counties. it has a low per Capita income ($9,000 in 2003 based on purchasing orica panty), igh dependence an primary products {or export earnings (primarily bananas, coes, pineapples, and sugar), manulactured products that rad. "oully used high inputs of cheap lator for its foreign exchange earings, and afeirty high evel of axter- nal debt. In many other ways, however, Costa Ria is atypical. is fiteracy rate of 96 peroent, is ite expectancy at bith of 76.43 years, and its fairly even income distribution (the highest 10 percent nave about one-third af income) are more similar to figures for developed countries. Further, Costa Rica has a Jang history of politic democracy and stability. Costa Rica is a Central ‘American county that ‘borers on both the Pacific Ocean and the Caribbean arm o the Atfantc Ocean, Although Costa Rica is largely an agricuitural country, i North Pacific has transformed itset to Ocean include stronger technology and tourism sectors. - J Satz. \ tated Costa Rica, tke al cher countries, has used international rade and tactr mbilty ples to help it ‘achleve its economic objectives, These policies are claselyimtertwined with what and how much a coun- {ry pracuces. They change over time as home country conditions progress and as foreign market and ‘competitive situations unfold. These policies also refact views of different politcal leaders in terms of ‘her economic oioities and their convictions on what will work and what wl not. Although Costa Rican Policies have continually evelved, they generally fl nto four basic categories anc periads. They are: * 1800-1960, liberal trade regime (minimal government interference in wade and investment) * 1860-1982, import substtuion (seeking local production ot goods and services that would other- \wise be importee) * 1983-early 1990s, Iberatzaton of imports, export promotion, and ncentves fr foreign investments Early 19808-precent time, strategic trade and investment policy (seeking production of specific ‘ypes of products) and openness to imports Theories and institutions: Trade and Investment 18008-1960, In the tattar part ofthe 1800s, most countries adopted polices whereby goods, capita, and people cous move fairy freely trom one couriry to another. A the same time, government interfered minimaly to sup- fort particule industries. The result wes that individual producers determined what and where to praduce Under this regime, trade flourished and countries specialized in seling what they could produce best. Mast Latin American countries specialize inte production of a single or 2 few commodities (rw matertals or agricultural products), which they exported in exchange for other commodtties and manufactured goods Costa ica was no exception, and it flowed tis regime uti the early 1960s. farmers specialized fst in coffee and later as well, in bananas aftr the development of refrigerated ships Far most of the perlod, this regime promoted economic development for Costa Rica Uecause commodity prices, especialy cotes prices, were high, However, the accumulation of several experiences convinced Costa Rican leaders tb aact ‘government programs to dversiy production and become more sett-sufficent. These included its trade dis- ruptions during two world wars, the lowering of coflee and banana prices relative to prices of manufactured products 2s new commodity production (especialy in rican counties) competed in word markets, and a ‘ealiation that Lain American countries with less open international markets had insulated themseWves ‘more from aoverse international condtions. Asa reut, Costa Rica tured to import substitution, 1960-1982 Import substitution is a poicy of developing industies to make products that would otherwise be imports Costa Rican authorities reasoned that if they limited imports, such as by taxing them heavily, bth Casta Rican and foreign investors would have an incentive to produce more things win Costa fica for Casta Rcan con- sumers, At the same time authorites realized that Costa Rica's market was to smal to Support investments requiring large-scale production. To help mitigate tis problem, Casta Rica joined four other countries (Ei Salvador, Guatemala, Honduras, and Nicaragua) in forming the Central American Common Market (CACM to alow goods produced in ay member county te enter rely nto the ater member counties. Thus, company ‘ight be more wing to invest o serve afive-country market than simply a one-courtry market The resus of import substtution policies were moved. Costa Rca a aversity ts economy by becom ing less dependent on agriculture (25.2 percent of GOP in 1960 versus 18 percent in 1980); however, the shift was even greater in the 1960-1960 period—from 40.9 percent af GOP to 25.2 percent when the gov- ‘stnment interfered itl to transform the economy. Some foreign Investment oid enter in the manutact ing area but mainly just o serve the Costa Rican, rather than the entre CACM market, For example, there ‘was considerable imgort substitution in the pharmaceutical industry where small-scale packaging and processing is ecient, Simply, nether local nar foreign investors were convinced that the CACM would be an enduring arrangement. Their skepticism was well founded. By the late 1970s the CACM was efectivay inoperative. Civil wars in both Ei Salvador and Guatemala stied those economies, Nicaragua vecame ideologically committed to governmental contol overall aspects of is ecanomy including trade, and Salvador and Honduras fought a bre but consequential war. In some cases, import subsitin also edt increases in expos, tke Costa Rican processing of such r- citonal exports 2s coffee and cotton seeds fr both local and export markets Neverthaess, economists 7 concemed thatthe palces to protect local production iprice contol, Import prohibitions, and subsicies) were shiting Costa Rican resources away from thase products that it could produce most efficient. For exami, Costa Rca became nearly selt-sutficient in ce production during this period, but only because government policies kept lower-cost oreign-oraduced rice from entering the market. At the seme time, Costa Rica placed contofs on consumer prices a rice. Meanviile, efficient industries caus not expand fut because they had 12 ay more taxes to support subsides going to inafcent producers, Further, higher consumer prices on many products gave people less disposable income Given the concerns, Costa Rican policymakers casoned tha tid country must emphasize tution of goods that coud ve competitive in international markets. These pofci~ ‘makers were also inuenced by the fact that some Asian cous had achieved ecent rapid arowth by eind ccmpettive internationally. Thus, Costa Rica shifted to an export promation poy in 1983. CHAPTER 6 International Trade and Factor Mobility Theory & 1983-EARLY 1990s sonst Rca began removing import barriers so that only internationally competitive companice and "industries would likely survive, For example, Costa Rican imports of rice increased substantially as the government decreased protection of domestic production, Paicymakers also reasoned that the country would nee outsige caltal and experts to transform the economy. At abou he same te the United stats established the Caribbean Basin Intiativ, whereby procucs originating from the Caribbean cei (nluding Gosta Ale) could enter the United Stats ata lower tari Ggort ay than products angina e'seviere. To capitalize onthe new opportunty to export to the United States, Costa fica ‘ured CINDE, private organization funded by the Costa ican government and grants by the US. gov ernment. The purpose of CINDE was to develop the economy, and one ofits top rors was to atact forcign dec investment To augment CINDE's work, Costa Rica established an Export Processing Zane (2) that allowed companies (a long a8 they were exporing their ished ouput io impor ll ther inputs and equipment tax fee, to avoid gaying Costa Rican income tax freight year, and to pay oniy 50 percent ofthe income tax rate forthe next four years, 8y 1989, 36 comoaries had located in te EP2 These were mainly texte and footwear producer that sought Casta Rica's pool af inexpensive labor However, Oy his time CINDE officials word about two factors—(i) that Costa Rca coud not cemain

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