---------- Forwarded message ---------- Date: Tue, 17 Mar 1998 16:42:33 -0800 (PST) From: "Camp. Resp. Tech." <[EMAIL PROTECTED]> To: [EMAIL PROTECTED] Subject: Intel's banana chips in Costa Rica The Washington Post ran a big article about Intel's new facility down in Costa Rica in the March 11, 1998 issue. Visit their website to check out the entire article. I have excerpted a bit of the article, HIGH TECHNOLOGY'S TOP BANANA? Costa Rica Lures Intel, Other Industry Giants by Serge F. Kovaleski Washington Post Foreign Service below. _________________________________ Costa Rican President Jose Maria Figueres' administration, has been meeting with executives of high-tech firms thatt have been operating in Costa Rica. This is part of Costa Rica's effrot to become the next Latin American Silicon Valley. Figueres also visited the US to meet with Bill Gates of Microsoft, and other executives from Boeing, Hewlett Packard. Hewlett-Packard which is one of the biggest conputer manufacturers announced it would open a new customer support office geared for some of its clients like Intel Corp., Motorola Inc., Espion and DSC Communicaciones. Fifteen years ago, Costa Rican officials decided to move the economy from one based on traditional export staples (coffee, bananas, sugar and beef) , to one centered on computer chips and services. Costa Rica is expected to earn more from high-technology exports in 1998 than from bananas or coffee or even its lucrative tourism industry. "This is a country that is at the turning point of its evolution toward integrating into the world economy," said Eduardo Alonso, general manager of the Costa Rican Foreign Trade Promotion Office (PROCOMER), which oversees the nation's free trade zone, in which 150 overseas companies operate. Costa Rica's political and economic stability has drawn corporations, as has its socialized medical system and the general quality of life in a nation where 93 percent of the inhabitants have electricity. Costa Rica has clearly developed a niche as a technology hub, one that in some respects insulates it from the changing political and social winds in the region. "We are building a competitive advantage and we do not see why we cannot continue to compete and be successful," said Enrique Egloff, director of the private-sector Coalition for Development Initiatives (CINDE). Executives point out that Costa Rica has effectively shown the advantages of running complex businesses in a small country, where they have greater access to government officials than in many larger nations such as Mexico, Brazil and Chile. "In Intel's eyes, Costa Rica showed us the fact that small is beautiful," said Danilo Arias, public affairs manager here for Intel. The Santa Clara, Calif.-based computer chip giant considered Mexico and a number of other countries before deciding to invest $500 million in a new complex in Costa Rica -- the largest investment to date in this nation by a single corporation. Arias added that overall, "The country has been very clever at looking at itself and evaluating its strengths and weaknesses." These weaknesses include a pressing need for extensive infrastructure improvements (upgrading and increasing the capacity of the international airport and seaports, and improving the quality of roads). Furthermore, proposals can get bogged down in a process that is designed to ensure the integrity of contracts but which can result in frustrating delays. "Costa Rica is very legalized. If a comma is out of place they will send the bid back," said Lynda Solar, executive director of the Costa Rican-American Chamber of Commerce. "It is aimed at being transparent. But some people think the controller's office is overzealous and that it can make the process very slow." Corporations have also complained that dealing with Costa Rican customs can be inconvenient because of archaic bureaucratic practices. Within the next few months, PROCOMER hopes to introduce around-the-clock customs clearance for companies in the free trade zone, and it is expected that by the end of the year all customs paperwork will be shifted to computer. Foreign corporations would also like to see Costa Rica's labor codes modified to allow greater flexibility in scheduling work shifts. There is concern about the country's high internal debt, which has led to an annual inflation rate of about 11 percent, reduced government spending and increased the economy's reliance on private enterprise. But inflation today is lower than several years ago, when it stood at 17 percent. Executives also say they would also like the government monopolies over telecommunications and insurance broken up to improve services. By some estimates, it can take one to two years to receive a new business or residential phone line and about six months for cellular service. The presence of Intel, which will employ 2,000 workers at its two plants here, has highlighted another problem that Costa Rica must deal with: a shortage of qualified engineers that has prompted the educational and business sectors to band together.
