San Jose. Costa Rica ranked first in innovation among Latin American countries in the Global Competitiveness Report. Image Credit: Courtesy: M. Torres

Staff Report

DUBAI: Costa Rica stands “shoulder to shoulder” with the UAE as it seeks to build closer ties between the Gulf and Latin America, the country’s Minister of Foreign Affairs said.

Bilateral trade between the two countries — which grew from $3 million in 1999 to $25 million in 2014 — still has “a long way to go in reaching a business trade which is up to our expectations,” Manuel Gonzalez Sanz said in an interview in the run up to the Global Business Forum 2016, which focuses on Latin America.

“From a traditional economy based on agriculture to as service-oriented open market economy, we look to Dubai to share experiences and best practices where Costa Rica can assist Dubai in penetrating the Central American, Caribbean and North American markets…” he said, adding that Costa Rica had free trade agreements with 50 countries including Mexico, the US, Canada and the Caribbean Community.

During 2015 23 Costa Rican companies exported goods to the UAE. The largest share of exports (28 per cent) was food products, including palm-palmito, coffee, bananas and tropical fruit. Medical devices and technology accounted for 22 per cent of exports, and 15 per cent were wood products.

Aluminium alloys represented 81 per cent of Costa Rica’s imports from the UAE, with plastic sheets and plates accounting for 4 per cent.

“Dubai is an important gateway for the UAE and the Gulf States, but as well to the entire Middle East,” Sanz said, adding, “Since the UAE imports 90 per cent of the food consumed, Costa Rica’s agricultural set of exporting products could very well achieve a place in the option of goods for Emirati citizens and their families.”

Costa Rica was also seeking outside investment, particularly in advanced manufacturing, life sciences, lean manufacturing, the food sector and in corporate and IT services. It ranked first in innovation among Latin American countries in the Global Competitiveness Report, he said, and its free zones offered low taxes for up to 12 years.

“Despite being a small country with no mineral resources and a limited manufacturing tradition, Costa Rica has been able to insert itself successfully in the global economy and attract high levels of FDI,” Sanz said.

“Largely thanks to high levels of human development, many global corporations’ operations in Costa Rica cover highly sophisticated processes that have successfully integrated the country in major global value chains such as electronics, medical devices, automotive, aerospace and film devices.

“The story on services is as or even more successful, as processes in the country have rapidly evolved from transactional functions to multifunctional sophisticated processes including financial analysis, regional centres, software development and IT, and engineering and design, among many other business opportunities.”

Though Costa Rica lacks an airport capable of taking a direct transatlantic flight from the UAE, he believed a single-stop flight would boost the country’s tourism market, which currently stood at three million visitors a year, primarily in ecotourism.

“As is the case for most countries in Latin America, the Middle East is still largely unexplored and many challenges need to be overcome in order to advance towards the construction of deeper relations,” Sanz said.

“A prominent event like Dubai’s Expo 2020 could serve as a good opportunity to show to Latin American investors the UAE’s competitive advantages for doing business and perhaps even the possibilities of offering a gateway into the broader Arab region.”