The Driving Force Behind Costa Rica’s Economy
Costa Rica remains the epicenter of foreign direct investment (FDI) appeal, a trend that has bolstered its economy for decades. Thanks to emerging trends like ‘nearshoring’ (producing in countries close to the target market) and ‘friendshoring’ (producing in nations with strong external ties and policies), post-pandemic initiatives have raked in millions of dollars and generated a multitude of job opportunities for the local populace.
Costa Rica: A Global Leader
Recent history points out Costa Rica as an optimum location for multinational corporations, not just on a regional scale, but globally.
The Top 10 Countries in the Spotlight
In this latest edition of “La Dataserie,” we’re unveiling the top 10 countries excelling in greenfield investments, as per the Greenfield FDI Performance Index by fDi Intelligence Magazine, based on a study developed by fDi Markets. This study, released in June, evaluates the 95 countries that logged more than 10 FDI projects in 2022 and ranks them based on performance. Essentially, a greenfield investment refers to when a company establishes a new subsidiary from the ground up, which includes investing in new facilities like offices, factories, staff accommodation, etc.
Where Does Costa Rica Stand?
It’s crucial to note that the index mirrors the amount of FDI drawn by each nation in relation to its Gross Domestic Product (GDP). For instance, Costa Rica scored a 12.7, signifying that given its economic size, it pulls in 12.7 times more projects than its GDP would suggest. It has now been three consecutive years that Costa Rica leads the index charted by the foreign investment-focused fDi Intelligence Magazine. Hot on its heels are North Macedonia and the UAE, which attract 11.9 and 11.1 more projects, respectively, than indicated by their output.
Furthermore, the magazine highlights Costa Rica’s consistent position, signifying a strengthened investment proposition post the COVID-19 crisis and the Ukraine war.
The top 10 features countries like North Macedonia, Georgia, Armenia, and Malta, each with a 2022 GDP of less than $25 billion, showcasing the mounting ability of emerging economies to target and fetch FDI projects, giving a stiff competition to larger economies.
However, while Costa Rica remains on top, it has lost some lead over its closest rivals. Its performance dipped from 15.4 in 2021 to 12.7 in 2022, whereas the chasing countries have ramped up their stats. As of the 2020 FDI index, Macedonia held the third spot with a score of 8.8 and now stands second at 11.9. Concurrently, the UAE shifted from second to third but ascended from 8.9 to 11.1 index points.
According to the latest index, Costa Rica holds a significant lead over its Latin American neighbors. Colombia ranks second with 2.5, followed by Uruguay with 2.0. Rounding up the top 5 are Mexico (1.9), Chile (1.8), and the Dominican Republic (1.5).
