(Bloomberg) -- Costa Rica's presidential front-runner says the nation can break out of years of sluggish growth by creating incentives for foreign investment in vaccine production and renewable energy, and by becoming a medical services hub for the Americas.
Jose Maria Figueres, who leads polls ahead of the Feb. 6 election, says Costa Rica can attract North Americans looking for cheaper health care and South Americans seeking higher quality service.
Costa Rica's economy has lagged fast-growing peers such as the Dominican Republic and Panama in recent years following a decade of declining foreign investment and new taxes passed in 2018 to contain a widening government fiscal deficit. Figueres, 67, said he wants to run a business-friendly administration that boosts annual economic growth to 6%, from less than 3% in 2019, before the pandemic.
“Our responsibility as government is to be business friendly, incentivize, help, aid, stimulate and do everything we can to take the corks out of the bottles, the sticks and stones out of the road so that we can unleash the power of entrepreneurship and business,” he said in an interview with Bloomberg News on Saturday.
Read More: Costa Rica Central Bank Sees GDP Growing 3.9% This Year
Costa Rica's mountains, heavy rainfall and volcanoes allow it to produce almost all its electricity from renewable sources such as hydroelectric dams, wind farms and geothermal plants. Figueres says this is another niche in which the Central American nation can create more jobs, including by producing so-called green hydrogen, or hydrogen produced using renewable energy, to replace fossil fuels.
Figueres, who served as president in the 1990s, said he is seeking to attract a messenger-RNA vaccine production facility that could manufacture enough vaccines for Costa Rica's five million people, and then begin exporting to the rest of Latin America. He declined to name any specific pharmaceutical companies that might invest.
As president from 1994-1998, his administration attracted a chip-making plant from Intel, the country's largest foreign investment at the time, and opened up a state monopoly on checking and savings accounts. Annual economic growth was over 7% by the time he left office.
In 2004, he was named in a corruption scandal involving mobile phone company Alcatel for having received large consulting fees after leaving office. Figueres cooperated with investigators and was never charged of any crime, according to his campaign website.
A poll by the firm Demoscopia published on January 27 showed Figueres leading voter intention with 20.2% to 16.5% for nearest rival Lineth Saborio, a former vice-president. A poll by the University of Costa Rica on January 25 gave him with a one percentage-point edge over Saborio, within the survey's margin of error.
A record 25 candidates are competing in the first round, and a runoff between the top two will be held on April 3 if no one wins more than 40% of the vote.
IMF Agreement
Figueres said he supports the nation's agreement with the International Monetary Fund, but would review some of the reforms in congress that are part of the current administration's extended-fund facility with the lender. He said the threshold for proposed luxury home tax, which would raise property taxes on homes valued over $210,000, should be increased to $500,000.
He supports a public employment bill that would slow growth in government wages, which is part of the agreement.
“The government is not going to create the jobs,” Figueres said. “If anything we already have a government that is well-manned, to say it politely.”
Costa Rica's government spends more than half its revenue on public payroll, the highest among members of the Organisation for Economic Co-operation and Development, and double the OECD average.
A West Point engineering graduate, Figueres said his years at the U.S. Military Academy taught him “a focus on being driven by what one wishes to accomplish” and “a profound feeling that nobody should be left behind.”
Figueres said he attended every Army-Navy football game during his years as a student in the 1970s and still watches the annual rivalry.
©2022 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
