CINDE Has Sent the President of Costa Rica the Requested Proposal and Information
San Jose, May 17, 2023. On Wednesday, May 17, the Costa Rican Investment Promotion Agency (CINDE) sent Costa Rican President Rodrigo Chaves Robles the information and proposal he requested on May 9 in the Presidential Palace.
Since last week national legislators, the media, and other organizations that view the issue as one of strong public interest, have also been asking about the document, which consists of the following five specific parts:
- Proposal for CINDE operations and national FDI coordination
- New FDI governance model costs and risks
- CINDE’s return and impact as FDI manager for Costa Rica
- Outlook for CINDE’s continuity - tried and true path
- Final messages
CINDE’s proposal aims to strengthen national coordination of foreign direct investment and the search for ways to address key competitiveness challenges. It also considers maintaining the current agreement with PROCOMER for two and a half more years, albeit with changes in the share of contributions, after which continuation of the partnership would come up for review, taking care not to slow the impetus of foreign direct investment and job creation in Costa Rica.
Notable among the data are comparisons that show the country impact and effect of replacing CINDE as the investment specialist and manager with PROCOMER, whose experience is in the field of export promotion.
The document includes a letter that ends by saying:
“Many sectors are clearly asking for the successful collaboration between COMEX, PROCOMER, and CINDE to be maintained. We cannot elude our responsibility to foreign investors, to Costa Ricans whose lives have been favorably impacted by the opportunities created by the companies, or, above all, to the history of Costa Rica, of which we have been an important part during the last 40 years. CINDE once again states its genuine willingness to continue building together.”
- To achieve CINDE’s FDI and job creation results, PROCOMER would have to invest similar amounts, at least, and fill the gap that would be left by other sources of funding currently contributed by CINDE. As a reference for 2023, covering the additional 53% would entail an incremental outlay of at least an additional $3.2M in PROCOMER’s budget. This means that for every $100 that PROCOMER has contributed to promoting FDI through CINDE it would have to allocate $212 to achieve the same goals doing the work in-house.
- For every CINDE employee 378 new jobs were created for Costa Ricans in 2022, some 2.75 times more than the IDA agency in Ireland, a world leader and clear example of one of Costa Rica’s competing countries for attracting greenfield investment. Source: CINDE, 2023, based on IDA Ireland data, 2021.
- CINDE is five times more productive than IDA in Ireland in attracting new companies. While Ireland requires more than $800,000 to attract a new company, CINDE requires less than $150,000 in government spending. Source: CINDE, 2022, with IDA Ireland data, 2021.
- CINDE has been increasingly more efficient in the use of funds to generate each job position. Each job that was created in 2022 cost an average of $155 compared to $405 in 2018, using fewer funds each time at a 21% compound annual rate of decline.