Costa Rica’s Encounter with China

Last week, I attended a conference on China’s Reforms held at the University of Costa Rica (UCR), located in the capital of the country – San José, Costa Rica. I benefitted from information in books on Costa Rica prior to the trip. Other than my previous short trips to Mexico, this would be my first trip to an LAC (Latin America and the Caribbean) country – I was eager to see it with my own eyes. In the process of preparation, I so regretted having quit Spanish language training a decade ago.

The drivers from our designated hotel were waiting at the exit when I landed at the Juan Santamaria International Airport – once we got on the shuttle van, we were able to witness the outskirts of the capital. The roads were a lot more cleaner than I expected of a middle-income developing country. MNC presence was also highly visible – Japanese and South Korean companies were all over the place. China recently embarked on a new era of bilateral relations with Costa Rica, with Xi Jinping visiting the country and meeting with the president of Costa Rica. The meeting involved promises of economic partnerships and a $400 million loan from China for Costa Rica. At this backdrop, the Association of Chinese Political Studies (ACPS) Annual Meeting and International Symposium was held in Costa Rica. My research presentation was mainly on China’s hurdles toward financial reforms coupled with China’s ideas of the ‘China Dream’.

‘Dealing with the Open Economy Policy Trilemma? China’s Dream Agenda of Financial Reforms’, Panel on the Chinese Political Economy at the 2013 Association of Chinese Political Studies Annual Meeting and International Symposium, “China’s Domestic and International Relations: Expanding Reforms and Global Influence?”, University of Costa Rica, San José, Costa Rica (August 22-23, 2013)

Costa Rica is a country of GDP per capita totalling $12,600 (2013 estimate) with improved living standards compared to its LAC peers. It mainly produces coffee along with other agricultural products, and electronic goods (semiconductors) and high-tech parts. It also has a good educated workforce. Nevertheless, Costa Rica still shows signs of underdeveloped infrastructure and high income inequality. In San José, many of the resident buildings (of low stories) have high fences around them structured with steel in pointy thorns on top. It shows that security around the capital area is not that great, and it is also a manifestation of high possibilities of theft due to social inequality.

Costa Rica also imposes taxes on foreigners to the highest level that I have seen amongst countries I have visited – there is a 23% tax on foreigner consumption of goods and services, basically rolled into everything in Costa Rica. It is the addition of an I.V.I. tax (the equivalent of a national 13% value-added tax) and 10% of service charges. There is also a departure tax of USD 29.00. Since I hold a ROK passport, my visa fees were waived, but all foreigners must pay this departure tax prior to check-in. Although a departure tax is not uncommon (some countries tend to include it in the airport tax), taxes levied on foreigner activities within the country is a strong proof that it sees its own country lagging behind a lot of countries that are better off and that it seeks to benefit from visitors from those countries.

With Chinese and Costa Rican participants at the 2013 ACPS Conference, beside the beautiful Butterfly Garden "Mariposario", University of Costa Rica, San José, Costa Rica (August 22-23, 2013)

The virtue of Costa Rica is in its inherent conditions of nature – rain forests, ecological and environment-friendly environment carefully regulated by the government.It remains to be seen whether Costa Rica would take on further development with the development loans from China. The next few years will demonstrate what fruits the relationship between the two countries may bear.

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