Eric Santiago Justiniano, President, Puerto Rico Manufacturer’s Associaton (Photo: El Vocero)
Understanding and internalizing Puerto Rico's loss of competitiveness vis-à-vis other jurisdictions in the hemisphere has caused a lot of commotion. Countries such as Costa Rica and the Dominican Republic have focused in the past decades on creating optimal conditions to aggressively promote Foreign Direct Investment.
The Dominican Republic has already reached, by 2022, the GDP of Puerto Rico based on sponsoring, without limitations, U.S. manufacturing companies to invest in the country. We recognize the challenges that our Quisqueyano brothers and sisters face in their daily lives as they have lower average salaries than those of Puerto Rico. But, those wages today are much higher, in real value, than the wages we saw in 1986 when the "twin plants" sponsored by the Caribbean Basin Initiative that President Ronald Reagan used to counteract the spread of communism in Central America and the Caribbean were nimbly developed..
Similarly, we see the same tendencies in Costa Rica. Our Costa Rican brothers have adopted a strategy of facilitating all the steps for any multinational company to invest in the country, guaranteeing that they "do not look in another direction". This attitude and mentality of the Costa Rican government management led them to "defeat" Mexico in the search for the "crown jewel" of microprocessor manufacturing in Latin America: the 3,000-employee Intel plant in San Jose, Costa Rico. But let's not stop there.
Johnson and Johnson announced on September 25, 2023 a $2 billion investment in a state-of-the-art plant in Costa Rica that will employ over 3,000 workers.
Why Costa Rica?
99% of Costa Rica's energy is from sustainable sources-green energy. Costa Rica is home to one of the three hydrogen plants located in Latin America. Costa Rica graduates over 3,500 engineers annually in areas needed by companies locating in the country. The country has over 15 trade agreements to facilitate exports and imports of locally manufactured products. A company located within the Free Trade Zone regime will pay 0% corporate income tax... 0%.
But Costa Rica has an attraction that exceeds all of the above: the firm conviction of the country's government management that a company like Intel should not face any hurdles when applying for permits, building its infrastructure, or dealing with regulatory aspects of the country. The concept of "Pura Vida" is intermingled with the mentality of throwing a "Red Carpet" of honor to foreign investors.
While in Puerto Rico we explore innovative initiatives on how to squeeze and undermine foreign investment by imposing onerous taxes; while in Puerto Rico we consider the possibility of invalidating labor laws that cause us to lose investment attractiveness; while Puerto Rico reflects insecurity to foreign direct investment, the countries in the area make life easier for investors.
Does Intel really not want us?
This article was originally published in Spanish in El Vocero.
