Challenges in Migrating to an
Opened Market
System
Rogelio Douglas - February
2009
With the wave
of free trade agreements around
the world in the past decade
and the repeated stories of
their positive effect, Costa
Rica has been gradually
adapting its laws, policies,
government entities and
citizenry in general towards an
openly competitive market with
much less direct government
participation. While this
move is welcomed by many inside
and outside the country the
challenges and potential
pitfalls oddly enough are
similar to many other countries
in the region and to some
degree even to the
USA.
For most of
the 20th century the Costa
Rican government owned and
controlled the country?s only
telephone (land-line, wireless,
data network, internet),
electrical, ports, insurance,
primary banks, railroads and
airline.
Gradually these entities have
been or are being either
privatized or allowed the
freedom to reorganize and
compete in an opened
market.
For example,
the telephone company (ICE) is
investing over $1B USD this
year rapidly upgrading and
expanding its national network
to increase its coverage as
well as the quality and
quantity of new services it can
offer, in anticipation of a
competitive market scheduled to
open in 2010. There are
six foreign carriers who have
expressed interest in entering
this market with a population
of only 4.5 million but with a
projected cell phone
penetration of over 75% by the
end of this year. The
competitors are all world class
multinational carriers who
presumably intend to offer the
most advanced voice, data,
internet and video
services.
It would
appear the primary challenge
the Costa Rican government will
have over the long term is in
helping the general citizenry
adjust to and benefit more from
an open market system, i.e.: to
assure the high tide will raise
many more
boats.
While Costa
Rica has been very successful
in attracting foreign direct
investments, estimated at over
$10B USD in the past 20 years,
an overwhelming majority of
this investment is concentrated
in the four central valley
states (provinces) and the
remainder in the recent
North-West real estate
boom. This leaves as much
as 25% of the population on
both coasts and the Southern
end of the country with little
or no new employment,
infrastructure, educational or
business opportunities, which
collectively creates an
environment undermining the
potential overall benefit of an
open, dynamic and growing
economy. After all, the
general populace will need to
have a decent job / income in
order to buy the fantastic new
products and services this new
economy will produce. How
ironically similar, all be it
on a much larger scale, is the
overall goal of the new US
administration.
Source:
http://www.gbdusa.net
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