CAFTA, Big Ass Fans, and Costa Rica’s Future. July 4, 2007
Posted by admin in : Real Estate, Investing, Living, Retirement , 1 comment so farAccording to the U.S. Government, if you are Big Ass Fans, you should be very excited if CAFTA (Central American Free Trade Agreement), gets approved by Costa Ricans this September. But should you?
CAFTA - , or TLC as it is known in Costa Rica, will be approved or disapproved in a referendum vote by Costa Ricans in September. At stake is the future of Costa Rica. This is not another boring trade agreement. Costa Ricans are taking the upcoming elections seriously - and you should be as well.
Pro-CAFTA supporters suggest that passage will benefit Costa Rica by increasing investment into Costa Rica, create more employment, and expand Costa Rican exports. Furthermore, Costa Rica’s state monopolies will be privatized, and Costa Ricans will receive better service and lower costs for tele-communications, banking, and insurance, among other services.
They are correct.
Anti-CAFTA opponents suggest that that passage will destroy Costa Rica’s middle class, it’s treasured environment, and will create greater poverty in Costa Rica.
They are correct.
How can both sides be right? I will try and over simplify.
Investment - More investment will enter Costa Rica. It already has, Wal-Mart now owns all of Costa Rica’s major retail operations, for example. The privatization of the state owned monopolies will also cause a huge influx of investment.
Employment - More low-wage jobs will be created to work the new factories. And call-center jobs, the so called high-tech jobs, will boom. call-centers jobs are nothing more than people who learn english, sit at a computer all day, and harass you to pay your credit card bill.
Exports - will increase as the output of the factories, farms and fish, are shipped north.
Environment - More of Costa Rica’s precious environment will be destroyed as international agri-business takes over Costa Rica’s farming and fishing industries. Creating export farm products, typically environmentally un-suited, and un-friendly.
Tele-communications - More investment will go into communications, mainly to service call-centers, but will also expand the network of cell phones, and high-speed internet. This benefits those that can pay for the higher costs. The rest will be left with inefficient service.
Middle Class - Will shrink and get squeezed. Consolidations in banking, retail, agriculture, tele-communications, and government employment, through the state owned enterprises such as ICE, will cause loss of jobs in those industries.
Poverty - Will increase as the middle class declines and inflation eats away at real incomes. Inflation in Costa Rica is at 12%. Wages do not increase anywhere near that amount. Easy credit (predatory lending) to Costa Ricans the last few years has masked the deficiency.
How does this affect you? The person interested in living, investing and retiring in Costa Rica? Unless you are a multi-national corporation, a wealthy Costa Rican manufacturer, a large farmer, or you own an English Language School, you don’t receive any benefit. What you will get is a worsened environment, higher crime, and Big Ass Fans.
Ramsay
A Fan Company
Lexington, Kentucky 40505
Country of Success: Honduras
This company is a manufacturer of over-sized ceiling fans used to cool factories, warehouses, dairy barns, and other large spaces economically. As a result of U.S. Department of Commerce programs, this SME has had increased success in international markets, such as Europe, Southeast Asia, New Zealand, and South America. Most recently, the Big Ass Fan Company added a new-to-market sale of two fans to a factory in Honduras. Big Ass Fans anticipates additional export sales to follow soon.
