Costa Rica Economy Red Hot!

Recently La Nacion printed a story with the headline, Family Consumption in 2007 is the Highest in the Last Ten Years." Here are some of the facts as reported:

1. Consumer Imports (cars, pharmaceutical products, domestice appliances, etc.) were up 29% in the first nine months of 2007;

2. The Central Bank estimates that household expenses will increase by 6% in 2007, the largest increase in the last decade;

3. Interest rates have fallen to almost half the levels of last year;

4. In August consumer debt reached 920 millions in local currency (colones), an increase of 25% over last year;

5. Purchase of cars increased 25% over the same period last year;

6. Reasons cited for the above include higher employment, higher household incomes, low rates of interest, easier access to consumer debt and high consumer confidence.

There is fear that the high increases in consumer debt may cause trouble for households if interest rates creep back up in the future. Inflation is also lower due, among other things, to the change in Central Bank monetary policy adopted last year.

The bottom line is that Costa Rica's stock is rising. Isn't it about time you took closer look? Call us anytime for more information on visiting or investing in Costa Rica. 1-866-424-6439

A Little More About Package Costa Rica

In my blogs I often refer to "my travel company" and I wanted to give those who are fortunate enough to read my drivel a little more information. The idea for Package Costa Rica was born in 2004 while I was in the midst of trying to complete a deal whereby a family owned private university I was representing for sale was acquired by a large international educational company. Actually at the time PCR was conceived I was in La Fortuna in a hot tub and the deal was about to fall apart. My thinking was that (1) I need to capitalize on the growing tourism market and (2) I better figure some way to make money in the country or it may be the last time I ever see it!. I spent the next morning furiously writing a business plan on whatever pieces of paper I could find (still have it by the way). A that time I had the idea that there would not be much competition. Well, of course, I was wrong about that. We made our first sale in April of 2004 and since then I estimate that we have brought about 1,000 tourists to Costa Rica. Many have been families, many honeymooners and others that have wanted to come for any number of reasons.

Our office is in a commercial center not too far from downtown San Jose and right next to the Hotel Best Western Irazu (one of the largest hotels in the country). We have a small staff of only three since most of our work is outsourced. They are Mario (aka "the Package Guru") who builds the itineraries, Alessandro (aka "El Che" since he is Italian and lived in Argentina for a while) who takes care of managing the office and yours truly (I have no nickname and no real job assignment). We try to have a lot of fun while we work and to our advantage there is a bar right across the hall where we can run for Imperials, usually around 5:30 PM.

The picture to the left is of a painting I had done by an artist from Atenas. On my many trips to Jaco or Manuel Antonio I kept noticing that someone was painting beautiful murals on the rocks along the mountain roadside. I also noticed a phone number on one of the rocks. I called it and the rest as "they say" is history. The ornately painted counter in the form of a traditional Costa Rican Carreta (or oxcart) is complements of the Chaverri Oxcart Factory in Sarchi.

Most of our business comes from our Package Costa Rica website, but we also get some walk-in business from the hotel next door. If you are here in the neighborhood, please stop by and meet us. If you are still in the planning phases, please give us a call at 866-424-6439 or fill out our Package Inquiry Form. Either way, we would like to meet you and show you our beautiful country.

Pura Vida from Package Costa Rica!

Hurricanes in Costa Rica?

Many of our customers at Package Costa Rica wrongfully assume that the Atlantic hurricane season poses a major threat to Costa Rica. Actually, while we do sometimes get excessive rain from storms that pass through the Caribbean Sea, usually on their way to the Yucatan or Gulf Coast of Mexico, we very rarely get any direct impacts. Let’s take a look at what history shows us.

Two storms that had an impact on Costa Rica were Hurricane Gert (a category 2 storm when it impacted this country) and Hurricane Cesar (a category 1 storm).

Hurricane Gert (1993)

As a forming tropical storm, Gert brought torrential rainfall to Central America

, leaving 100,000 people homeless from its heavy flooding. Mudslides were reported in mountainous areas, causing considerable damage, especially to roads. Excluding Honduras, 13 people died across the region. Costa Rica only experienced 1 fatality due to the storm.

Hurricane Cesar (1996)

Costa Rica received heavy rainfall from Cesar, leading to mudslides and widespread flooding. River flooding damaged 51 houses and washed away 213. Contaminating drinking water across the country led to outbreaks of malaria and cholera. 72 bridges were destroyed from the flooding, and a disruption to the road network was damaged across the country. Damage amounted to $10 million (1996 USD) and 34 people were killed. Costa Rica requested international aid subsequent to the storm. Hurricane Cesar later became Hurricane Douglas, a category 4 storm in the Pacific.

So while history shows us that it is possible for Costa Rica to have direct impact, it is very rare and unlikely. Storms generally make their turn northward long before they reach our shores. The bad news is that if there is a storm in the Caribbean that gets close enough to mix with our already wet weather, it can lead to lead to landslides, flash floods (cabezas de agua) and major road damage. This is because such storms are likely to occur at the peak of our rainy season (September and October) and therefore any major increase in rainfall can lead to problems. Investors and those interested in moving or traveling to Costa Rica should not be overly concerned with these storms affecting this country. There is much less of a risk here than you have with the Gulf and Southern Atlantic coasts.

Pura Vida!

The TLC: A Gringo’s Viewpoint

October 7 will be a momentous day for Ticos. This is the day of the national referendum for the TLC, the trade agreement with the United States. Costa Rica is the only country in Central America that has not signed onto the agreement. The latest polls show that public sentiment in almost equally divided between the Si’s and the No’s. There are many good (and bad) arguments on both sides of the issue. The agreement will, among other things, eliminate the tariffs on goods and services that Costa Rica exports to the U.S., as well as providing the same favorable treatment for goods and services imported by the U.S. into Costa Rica. A good source of information (in Spanish…but the effort to translate is worth it) is the pamphlet by Comex (Ministerio de Commercio Exterior de Costa Rica) entitled, “Lo Mas Importante sorbre el TLC.” The pamphlet can be downloaded at the Comex web site.

To be honest I am a little divided. Actually, not being a naturalized citizen, I really have no right to express an opinion, but I will anyway (at least to the readers of my blog and The Costa Rica Zine). I believe the TLC is important for potential investors because, among other things, it can have an affect on the regulation of land use in Costa Rica. There in lies part of the problem for me. Although I am a fan of foreign investment in Costa Rica, much of which has come (and will continue to come) in the form of property development, I am more of a fan of preserving its rich natural resources. Costa Rica is an environmental crown jewel and it must be protected. As I read about certain aspects of the agreement (or treaty) I am concerned that Costa Rica may be giving up some of its sovereign right to enact and enforce laws that protect its environment in order to foster more open foreign investment. It is an undeniable fact that there is a delicate balance between the benefit foreign investment can bring to the economy of Costa Rica and the detriment unregulated property development can wreak on the environment. It concerns me that the TLC, an agreement not written specifically with Costa Rica in mind, might cede some power to regulate away from Costa Rica and to some international tribunal or arbitration panel. That being said, however, I do have confidence in our president, Oscar Arias. I don’t want to be so naïve as to simply say, “well, if Oscar Arias supports it, then so do I,” but it does calm my fears that he has been such a staunch supporter of this agreement. Other provisions of the agreement, such as those that open up competition in areas like telecommunications, I am completely in favor of.

One thing is for sure, the method by which Costa Rica has decided to decide is one that should make every Costa Rican proud. The referendum that will take place Sunday, October 7, will be a great example for the world of true democracy in action. Costa Rica has been a shining star amongst its neighbors of this fact for many decades and I am sure for many more to come.

Pura Vida!