With COMEX rescinding its support and the news that PROCOMER will do the same, CINDE stares down budget cuts totaling 73%.
San José, May 4, 2023: Yesterday, the Costa Rican Investment Promotion Agency (CINDE) confirmed that it had received from the Ministry of Foreign Trade (COMEX), an official letter communicating the unilateral rescission of US$1,211,701 in annual funding that said portfolio provided to CINDE. This support has been authorized under the "COMEX-PROCOMER-CINDE Cooperation Agreement for the Design, Execution, and Monitoring of Foreign Investment Attraction Programs."
The agreement, which was signed in 2010, established one entry for COMEX, one entry for PROCOMER, and one entry for CINDE, to allow compliance with the technical plan to attract foreign companies to the country. This work had been entrusted to CINDE, as a public-private alliance that has been recognized as exemplary and is authorized by law, thus allowing CINDE to be designated as a private, non-profit association that has the technical knowledge required for these responsibilities.
Return on Investment: How efficient is CINDE in its use of public funds?
- For every $1 in public funding that CINDE received in 2022, it generated $44.
- USD Foreign Direct Investment at Free Trade Zones per USD executed: CINDE used an average of US$380.7 in its operations to generate an investment of US$1 million for the Free Zone Regime.
Additional Funding Reductions
Though CINDE has not yet received official notification, the association is concerned because Manuel Tovar, the Minister of Foreign Trade, as well as PROCOMER's General Manager, Pedro Beirute, confirmed yesterday at a press conference that PROCOMER had also decided to withdraw support for CINDE. This means an additional decrease of US$3,373,532.
The cumulative reduction from both sources accounts for 73% of CINDE's total budget or a total of US$6,318,383.
In the ministry's official letter, Minister Tovar argued on the one hand that COMEX resources are limited and during the conference, added that CINDE had not obtained the expected results regarding attracting companies from new regions and specific sectors; he also cited the small number of projects established outside the Greater Metropolitan Area (GAM).
In this regard, CINDE expresses its concern regarding the withdrawal of support and the impact that this action will have on the country; the agency also expresses its surprise at the points indicated. Notably, the Minister was unaware of CINDE's accumulated 40 years of technical experience as the agency in charge of attracting investment and generating employment.
Regarding the Information Stated on Performance:
CINDE has expressed its commitment to continue working to bring more opportunities to areas outside of the GAM. The #1 axis of this work, as established in the 2023-2026 Strategic Vision, is precisely that: employability outside the Central Valley.
To date and with the support of CINDE, 36 companies have established operations in communities outside of the GAM. In 2022 alone, 10 of the 40 new FDI companies decided on a region outside of the Central Valley.
For 10 years, CINDE has worked directly with more than 20 communities, facilitating the conditions necessary to make them competitive when establishing national operations. The communities and CINDE have vehemently called on authorities to work together to improve their investment climate conditions.
New regions for investment attraction:
- Of the 40 new companies attracted in 2022, 11 came from non-traditional countries.
- Of the 405 companies attracted throughout CINDE's history, 140 came from new regions.
From which countries do CINDE's investments come? Germany: 13 Argentina: 1 Belgium: 2 Bermuda: 1 Bosnia and Herzegovina: 1 Brazil: 1 Bulgaria: 2 Canada: 10 Chile: 1 China: 6 Colombia: 3 Costa Rica: 14 South Korea: 2 Denmark: 2 Ecuador: 1 El Salvador: 2 Spain: 7 France: 5 Guatemala: 1 Italy: 3 India: 8 England: 15 Ireland: 1 Israel: 3 Japan: 7 Luxembourg: 1 Mexico: 6 Nicaragua: 1 Norway: 1 Netherlands: 4 South Africa: 1 Switzerland: 6 Uruguay: 1 Venezuela: 6