Inside Costa Rica

Get ready for lightning speed internet service in the coming year as the Radiográfica Costarricense (RACSA) retools, investing some us$360 million dollars in infrastructure that will increase connection speed up to 100 times that of today.

Alberto Bermúdez, RACSA’s general manage, says the state institution will offer connections up to 1GB and at an economical price, starting at us$30 a month for the basic service.

Currently, RACSA and ICE offer connection speeds from 128kB to 4Mbps at prices ranging from us$11 to us$30, by way of dial up, cable modem (in conjunction with the cable companies) and ADSL.

The new high speed RACSA connection will first be introduced in the Gran Área Metropolitana (San José), from Rohrmoser to San Pedro.

In Costa Rica, 45% of the population (some 2 million) is connected to the internet.

Currently RACSA competes with its parent company, ICE which provides mobile internet and ADSL and AMNET with its cable internet.

The move by RACSA will force competitors, including ICE, to ajust their prices downward and increase connections speeds as well.

Technology ‘Fundamental’ to Development

Microsoft manager says Costa Rica is on track to become a developed nation

By Adam Williams
Tico Times Staff | awilliams@ticotimes.net

An often-mentioned goal of President Laura Chinchilla’s administration is to transform Costa Rica into the first “developed” country in Latin America.

Powerpoint: Juan Pablo Consuegra, the Microsoft Corporation’s general manager in Costa Rica, discusses the importance of technology and how the company is supporting Costa Rica’s national goals and projects.

Francesco Vicenzi | Tico Times

The recipe for success in achieving that goal will require many ingredients, and one of the most vital of them will be the development of advanced, accessible and reliable technology.

Over the last decade, using computers, cell phones and all-encompassing handheld devices has gone from optional to almost mandatory. Many jobs require knowledge of how to operate a computer, schools teach computer literacy courses, and to roam about without a cell phone is considered almost Precambrian. These days, communication and information are expected to be immediately accessible. Therefore, to be considered as such, a developed country must live up to these standards.

In a speech in Costa Rica in May, Norm Judah, the chief technology officer of the Microsoft Corporation, the world’s leading developer and provider of computer software, commented on today’s high-tech life.

“One of the biggest changes with the Internet has been the immediacy of information,” he said. “If you are trying to find information, whether you are looking for it on your computer or on your phone, you can get it. We have practically done away with the need to go to people to get information. You don’t even have to go to a library to get a reference book. Almost everything is available online.”

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New recycling law passes unanimously

By Mike McDonald
Tico Times Staff | mmcdonald@ticotimes.net

Nearly two years after receiving unanimous approval from the Legislative Assembly’s Special Environment Commission, The Integrated Waste Management Bill (GIR) became law on Tuesday through a vote of 51 to zero.

The new law directs funds and resources to the Health Ministry and the Ministry of Education to help promote waste management and to launch public education campaigns. It mandates that municipalities create waste management plans and penalizes citizens, companies and local governments that litter.

Sanctions range from fines to up to 15 years in prison, although jail time is reserved for serious offenses, such as deliberately contaminating a river.

Under the new law, companies that produce hazardous waste must sign contracts with treatment facilities that safely dispose of products’ harmful leftovers.

A commission of representatives from the Institute for Municipal Development, The Health Ministry and the Ministry of Environment, Energy and Telecommunications will be in charge of enforcing the new law.

Costa Rica produces 11,000 metric tons of solid waste every day. Roughly 30 percent of that trash ends up in streets, rivers and vacant lots, the introduction to the new law estimates.

Since 1991, when the Costa Rican government declared a national emergency over the problem of trash disposal, 15 different bills have been presented to the legislative assembly in an attempt to solve the dilemma. None of them had passed until Tuesday.

Nydia Rodríguez, director of the recycling group Terra Nostra, said the approval of the new waste manage law is an important step to a cleaner future in Costa Rica.

“This law legally regulates the responsible management of waste throughout the whole country,” Rodríguez said in a press release. “It involves the participation and the responsibility of all the actors that make up the Costa Rican population…and makes crucial the role of local governments in their communities.”

Regional Trade With EU Opens

By Adam Williams
Tico Times Staff | awilliams@ticotimes.net

Central America and the European Union (EU) are officially free-trade partners. On Tuesday, the six countries of Central America and the 27-member EU bloc signed a free-trade and cooperation agreement in Madrid, Spain that will slash tariffs on key items such as bananas, milk, automobiles, textiles, rice and sugar.

In Agreement: European and Central American leaders signed an historic agreement between their two trade blocs that left both sides feeling optimistic.

JuanJo Martin | EFE

If the agreement is ratified by Costa Rica’s Legislative Assembly, it will be the country’s eighth free-trade deal, with number nine – the agreement with China – also awaiting the legislature’s approval.

“This is one of the first achievements of this government,” said Costa Rican President Laura Chinchilla via video conference from Madrid on Tuesday. “ Costa Rica now has access to the biggest markets in the world, including Europe, the U.S. and China.”

The final round of negotiations in Madrid centered on setting satisfactory trading quantities for sugar, cheese, powdered milk, textiles, beef and bananas, as well as assuring the geographic origin of specific products. During the previous round of talks in Guatemala during the first week of May, disagreements over quotas for these products stalled negotiations. The talks began in mid-2007.

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Costa Rica Business Prospects – “Excellent” According To New Deloitte Report

Scott Oliver – May 2010

Oh! No! Scott’s found even more positive news about retirement living and business in Costa Rica?

Deloitte is an audit, tax and advisory firm that has a global network of companies and members in 140 countries and, the title of their new April 2010 report about business in Costa Rica refers to: Excelentes perspectivas para el futuro empresarial or, Excellent prospects for the future of business.

Some of our VIP Members happily living here are now have giving me a tongue-in-cheek hard time saying things like: “Scott, what you write about the cost of living in Costa Rica is too true to be tolerated. Please withdraw this article immediately or we’ll be awash in the unwashed of the Northern Hemisphere looking for a place they can survive and thrive. Can’t we just keep Costa Rica our little secret?”

When Deloitte says Costa Rica’s business prospects are “excellent”, isn’t that great news?

Costa Rica Business Prospects – “Excellent” According To New Deloitte Report

When the President of Intel, Paul Otellini says the education system in Costa Rica is “outstanding”, and speaks of his “…incredible engineering team” in Costa Rica and raves about the: “…caliber and quality of the people who work here”, that’s not just great news for entrepreneurs thinking about setting up new businesses in Costa Rica, having a polite, well educated, multi-lingual society is good for everyone living in Costa Rica, including retired people, right?

Deloitte has previously published their Business Barometer report for Spain, Mexico, Argentina and Panama, this is the first time that they have completed the study on Costa Rica.

Good employment outlook and positive expectations

Here are a few highlights from the new April 2010 Business Barometer report done by Deloitte which involved a total of 110 companies in the country who employ 57,100 people and, have an annual turnover of US$10 million:

1. Most of these companies in Costa Rica aim to maintain or increase their staff levels in the next year. Only seven in 100 of them say they may reduce their staff levels.
2. These employers have no plans for layoffs in 2011, in fact 46.3% of them plan to hire more staff.
3. This increased employment outlook means that 74% of respondents felt that they would be paying their workers more over the next 12 months, no one considering a reduction in pay.
4. For 2010, most respondents (46.7%) said they expect the wages to increase by about 5%. For the same year expected inflation by 49% of respondents, would be between 5% and 7%.
5. This projection is similar to that estimated by the Central Bank, whose inflation target of 5% this year.
6. In line with the recovery in Costa Rica, 43.3% felt that production last year improved and 81.8% of respondents believe their companies will expand over the next twelve months.
7. 66% believe the economy is now in a better position than a year ago, 78% believe that there is now a better investment climate, and the same percentage said that unemployment is lower, compared with a year ago.

Higher production and much better than last year.

Alan Saborio, managing partner of Deloitte said that “…the economic recovery has been faster than we all thought.”

In conclusion, the vast majority of business people in Costa Rica and Deloitte believe that Costa Rica has a promising and very optimistic future.

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NOTE FROM PARADISE PROFITS:  As the article below illustrates, traditional gold mining as conducted by large companies is horrible for the environment — particularly the use of cyanide and mercury in gold processing.  There is a new company that will be processing gold in an eco-friendly way.  For full details about this exciting development for Costa Rica — and the full support they have gained from the Costa Rican government — CLICK HERE.  Investors are currently being sought, with the potential to be paid dividends in physical gold.

By Mike McDonald
Tico Times Staff | mmcdonald@ticotimes.net

Digging in: An aerial view of the installations of the Crucitas gold mine in Costa Rica shows the lush setting that environmentalists say is endangered by the mine. The mine’s operators claim the operation poses little threat.

Photo courtesy of Infinito Gold Ltd.

From the pharaohs in Egypt to the forty-niners in California, through the gold standard days to today’s dazzling jewels, the precious metal’s shiny, imperishable glisten strikes awe in the human eye.

The coveted mineral’s magical sparkle has costs that some claim go far beyond what it fetches on the market, but few can deny its unparalleled power.

This force has captured Costa Rica.

Gold deposits in the developed world have been largely diminished and most of the golf ball-size nuggets have been mined out of the earth. As a result, mining companies have begun to search remote corners of the globe in pursuit of the alluring element.

Companies have shown a clear preference for exploring in the developing world, where gold still exists in profitable quantities and where operations have proven cheaper and regulations more lax. In these countries, companies build quarries and haul out tons of rock and ore in order to sift out the ounces of gold that make the endeavor worthwhile.

But the use of cyanide and mercury to extract the gold from the rock in which it is embedded has inspired protests by citizens over environmental and health concerns about the mining business.

In Africa, mines have come under fire for worker rights and human health violations.

Opposition to gold mining in the developing world has grown strong and Costa Rica is no exception.

A proposal by the Canadian company, Infinito Gold Ltd., to open up lands in Crucitas in northern Costa Rica to gold mining has stirred a passionate group of opponents into a fierce whirl.

On April 22, less than a week after a high court ruling gave the constitutional nod to allow the project to continue, thousands of protesters gathered to shout “No to mining!” in the streets of San José and in northern Costa Rica.

Opponents’ arguments against the mine are both legal and scientific. They draw on failed mining experiences from the past, such as the landslide at the Bellavista mine in the hills above the Pacific port city of Puntarenas, which led to major concerns over cyanide leaks and water contamination.

They cite questionable presidential tactics that allowed the project in Crucitas to advance.

But beneath the charges of environmental harm and the debatable legalities that the protesters hurl at the state, many opponents simply don’t see the justifications for Costa Rica’s poor to extract a mineral that the world’s rich demand. That Crucitas has been declared by the country’s government to be in the “public interest” doesn’t pan out.

“We don’t see how this can possibly be a priority,” said 24-year-old Cristina Mora at a recent rally. “Who needs this gold and why? We live fine without it. It’s not the development model we need or want in Costa Rica.”

But in spite of opponents’ doubts surrounding the need for the metal, the demand for gold has risen sharply and its price has soared in the past decade, reaching record highs.

Since 2000, gold prices have rocketed from less than $300 to around $1,200 per ounce. And the price showed little decline during the recent worldwide recession.

The demand comes largely from private investors and central banks around the world, who have flocked to the commodity in the past 10 years as a means to store value. While the days of gold-backed currency are over, governments are increasingly seeing the benefit of using gold as a hedge against economic crises.

“Gold is special,” said Pamela Aden, Costa Rica-based author of a monthly newsletter that forecasts metal prices. “It’s the currency of last resort in the world. During times of economic uncertainty, people run to it.”

In November of last year, India, the world’s leading gold consumer, purchased three tons of gold from the International Monetary Fund. China also helped boost the demand for gold when their central bank expressed more interest in buying gold to hold as reserves.

An ongoing campaign in East Asia that encourages citizens to buy gold has also led to a spike in demand for the metal. In 2007, China became the world’s second largest consumer of gold jewelry.

And lured by the Internet and an increase in the number of coin and bullion trading websites, private investors have found it quicker and easier to buy and sell the mineral online as they please.

“These are the reasons why the price of gold has been going up,” Aden said. “It’s a monetary instrument unlike any other.”

What does it mean for Costa Rica?

The price for gold is still on the rise and Aden predicts that it will continue to climb in the foreseeable future.

Gold’s record prices have led to a 21st century gold rush.

Having struggled to compete with the technology boom in the 1990s, mining companies see more reason than ever now to invest in gold exploration and restart operations that they began abandoning around 15 years ago.

They are looking in new places for deposits and requesting exploration and mining permits at rapid rates.

While gold exploration is expensive – Infinito Gold spent $34 million exploring for gold in northern Costa Rica – its potential rewards are too great to ignore.

“That’s capitalism,” said Bob Zwerneman, investor relations officer for the New Hampshire-based Jaguar Mining Inc. “There is profit to be made and there will be investors to help make it. As long as the price keeps going up, investors and mining companies will spend money to find the stuff and try to generate the most capital they can.”

While mining companies may bring jobs to locals – one of Infinito Gold’s arguments in favor of exploration in Crucitas – the real benefit for the host country comes through fees paid to the government.

In Brazil, where Jaguar Mining has been working, the company pays 34 percent of every dollar that it makes to the local, state or federal government through a stream of royalty, corporate and other state taxes.

“Gold mining is no different than any other operation,” Zwerneman said. “It’s a major source of revenue for the government, and that’s hard to ignore.”

The Costa Rican association of geologists estimates that there are 20 million ounces of gold buried under the nation’s territory. As of last Wednesday’s closing price, that equals more than $23 billion worth of the resource.

Much of the country’s gold is locked away in the Talamanca range, a remote and mountainous region in southern Costa Rica that is largely protected as indigenous territory and as part of the La Amistad International Park. The Spanish daily La Nación reported that during the past 40 years Costa Rica has received 20 requests to explore and mine this region for various metals, including gold.

The Legislative Assembly ultimately denied these requests.

Set to assume presidential powers on Saturday, Laura Chinchilla said in a press conference in April that she will “take all measures necessary that assure that (open-pit metal mining) disappears from our legal framework.”

She promised that she will sign a decree that places a moratorium on all pending metal exploration and extraction permits, and will submit mining law reforms to the assembly to prohibit future open-pit mining in Costa Rica.

But the pressures that Chinchilla and future governments will face are large.

The demand for the world’s most desirable metal has never been greater and its value has never been higher. A mineral that was once deemed the “barbaric relic,” will likely continue to tempt Costa Rica and its future governments.

“The pressure to mine for gold will continue all over the world, and Costa Rica is going to feel that pressure,” Aden said. “Mining companies will continue to see if they can do it. They will ask and see what they can get. It’s a good investment that has an open life ahead and as long as that’s the case, there will be interest in exploring anywhere gold can be found.”

After a drought of financing options, banks are making a push to re-start housing in Costa Rica.  The recent housing Expo showcased several banks offering long-term, low-interest rate financing for single-family homes, as well as large construction projects.  This bodes well for Costa Rica real estate over the next few years.

By Adam Williams
Tico Times Staff | awilliams@ticotimes.net

The Construction and Housing Expo, or Expo Construcción, brought together sellers and would-be buyers of home appliances, construction materials and building related services Wednesday through Sunday in San Antonio de Belen in Heredia.  Under the same roof, visitors to the fair could find doorknobs, showerheads, solar water heaters, refrigerators, floor tiles, plumbing materials and even luxury items such as hot tubs.

But in the center of the sprawl of displays sat the most essential stands for realizing home ownership and remodeling dreams: those of the banks. Just off the main entrance to the Expo, several public and private banks, including Banco Nacional, Banco de Costa Rica (BCR), HSBC, Banco Popular and BAC, were promoting their limited-time-only housing and construction financing deals. Of the five banks interviewed by the Tico Times, each claimed to offer home construction financing for at least 80 percent of the cost of the project for terms of up to 30 years, with BCR and Banco Nacional offering 100 percent financing.

“We want to offer premiums to people who are looking to buy or build a home,” said Olman Fallas, the sales and customer service manager at BCR. “We are coming out of a recession year and a lot of people are just starting to regain their footing financially. What we aim to do is offer a plan that will help them reestablish stability over the long term.”

The financing offers are accompanied by discounted interest rates in both dollars and colones. The offerings vary among the banks, but in general include very low interest rates over the first one to three years of a mortgage, with incremental growth beginning in year four or five. The initial interest rates on financing on offer range between 2 and 7 percent in colones and 3.5 to 8 percent in dollars.

A new ecological community, Rancho San Roque, is being developed in the foothills of the Rincon de la Vieja volcano in Costa Rica.  The developer has engaged the services of The Project Office (TPO) to manage the project; Deppat to create the master plan; and Zurcher Architects to create the architectural detail for a private residential community in harmony with nature.  Each of the 37 fully-titled lots available for purchase has at least 1.25-acres (5000M2) and incorporates sweeping views of the Guanacaste countryside, enjoying cool mountain air and rich volcanic soil.

Residents will enjoy the tranquility of country living with the convenience of modern services.  Located in Cañas Dulces – only 30 minutes from Liberia – where modern shopping, fine dining, and premium services are abundant.  The international airport in Liberia is just 40 minutes away, and some of Costa Rica’s best white-sand beaches and fishing are also an easy drive from the community.

Rancho San Roque is situated at a comfortable 1500 feet above sea level, offering fresh cool mountain breezes.  The area is host to a growing number of ecotourism facilities such as Buena Vista Adventure Center and Spa, which offers adventure sports such as canopy tours, rappelling, waterslides, horseback riding, hiking, thermal spa baths, and much more.  A high-end eco-resort, Borinquen Mountain Spa, showcases hot springs, a luxury hotel, restaurants, nature trails, and many more attractions within just minutes of the community.  The community is also located within minutes from the planned Guanacaste Country Club designed by Jack Nicklaus and being developed by a U.S. group that includes Frank Biden (Joe Biden’s brother).

“Most of the development in Guanacaste has happened at the beaches, but an increasing number of full-time expats find it to be too hot and too touristy,” said Dan Harris the CEO of The Project Office. “That is why we chose a tranquil country setting with a cooler climate for our community.  We’re in a laid-back rural area, yet still close to all modern services and amenities in Liberia.”

The city of Liberia is continually expanding with modern services.  Several banks, shopping centers and restaurants make up the town center along with the Home Depot-style hardware store called the Do It Center.  Large commercial developers are betting that Liberia becomes the business capital of northern Costa Rica, similar to the Central Valley, as evidenced by the million square-meter Solarium office industrial complex.  Furthermore, the best hospital in Central America, CIMA Hospital San Jose, has plans to build a new full-scale private hospital in Liberia.

Rancho San Roque will engage in a permaculture project to restore the pastureland, and will feature a community center with a pool and fitness center, walking trails through orchards, a greenhouse, organic gardens and aquaculture ponds.  The rich volcanic soil is perfect for gardening where the project aims to produce fresh organic vegetables, many fruit and nuts, fresh-water fish, chickens and eggs for the residents.

“Our goal is to restore the land with an edible forest and permaculture gardens producing healthy food security for residents” Harris added. “The intention of permaculture is not only to produce food, but also give immeasurable benefits to the environment while creating a beautiful and diverse landscape to enjoy.”

All environmental permitting is in place and all lots are ready to sell with clear title.  The developers are encouraging alternative energy such as wind and solar power, but are providing electric grid service in the community.  Satellite TV is readily available and high-speed Internet will be on site creating a fully connected community.

Each lot comes with a Costa Rica corporation allowing for clean transfers with low fees, and gives buyers a vehicle to obtain cell phones and other utilities.  The community is currently one of the best values in Costa Rica starting at $50,000 during the development phase. Financing is available with 40% down at 8% interest for 5 years ($20K down, $608/mth).

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