By Jeffrey Hickcox & Michael Anthony of Ameurope Global Services
The Global Financial Crisis, as it is being called, is clearly the number 1 topic of discussion. Economists and politicians have weighed in from all sides to paint a universal picture of despair. However, one economist, Peter Schiff, accurately states, "There is always a bull market somewhere." There is mounting evidence that Costa Rica is that 'somewhere' and one would be wise to look at the fundamentals of why Costa Rica maintains a strong position amid global weakness.
Costa Rica is ranked the 8th most stable country in the world. a March 2009 study by The Economist Intelligence Unit, in collaboration with George Mason University, has identified the most politically and economically stable countries amid the global economic meltdown. Using 17 measures that encompass social structures, economic statistics, political structure and history, the report was compiled from a comprehensive study of 164 nations. 1. Norway, 2. Denmark, 3. Canada, 4. Sweden, 5. Finland, 6. Switzerland, 7. Mauritius, 8. Costa Rica, 9. New Zealand, 10. Luxembourg Other notable rankings include: USa 56th, Nicaragua 77th, Mexico 87th, and Panama is ranked 131st.
Solid real estate values. Costa Rica's real estate market remains stable because private capital and foreign buyers primarily drive it. Whereas the market in the United States is critically dependent on institutional financing and the job market, both of which have been recently decimated. With the expected explosion of retiring baby boomers, demand for property in Costa Rica is poised for long-term growth. Furthermore, other popular retirement locations like Mexico are less attractive now because of increased crime, while high taxes, expensive health care, and general cost of living plague Florida or arizona, making retirement in the U.S. nearly impossible for many americans. Costa Rica clearly represents an oasis for retirement abroad.
Costa Rica is a developing country. By definition, a developing country is in a state of growth. Costa Rica now boasts an unemployment rate less than that of the United States and has some of the best social indicators on the planet. Furthermore, with the arrival of CaFTa, privatization will be introduced, which will update or replace inefficient national systems, thus creating more jobs across the board and strengthening overall growth opportunities. Road conditions are not only improving dramatically, but as new highway initiatives are completed, the country's key locations will be connected, thus creating more efficient business transportation as well as offering the tourist ease of transit between destinations. Major companies such as Pfizer, Amazon and Western Union, are seeing growth potential and have increased their staff in Costa Rica, even as they have downsized worldwide.
History of Stability. Costa Rica is more protected than its North american and European counterparts during any crisis, because of its unique political stability, strong social structures, a large middle class, and a strict lending environment. Costa Rica's economy is rooted in reality; credit has always been difficult to obtain, and there is a cultural lack of consumerism. although real estate continues to increase in value, it is not likely for there to be such a universal 'bubble' as was seen in the United States, simply because there is not a subprime lending environment, or 'easy credit' to encourage people to use their house as a source of cash. These stable financial indicators combined with an educated work force and investment- friendly tax policies will continue to keep Costa Rica's economy stable.
Healthy tourism. Costa Rica still derives most of its income from tourism. It stands as the most visited nation in Central america, with nearly 2 million foreign visitors per year, a higher per capita rate than other popular destinations such as Mexico, Dominican Republic, and Brazil. Furthermore, with popular expat destinations such as Mexico experiencing increased instability, Costa Rica offers a safe haven. Moreover, Costa Rica continues to gain popularity for its strong stance on the environment, which has led to a ranking of 5th in the world on the 2008 Environmental Performance Index rating (an index developed by Yale University)? up from 15th place in 2006. This trend will continue as more channels are opening for those interested in ecotourism and sustainable living.
China. Regardless of politics, the fact that China has begun to invest in a country the size of West Virginia bodes well for Costa Rica on many levels. Costa Rica has already been the recipient of a new stadium, and now there are talks of a new $65 million dollar science and business center. added to this is the fact that the Chinese people are increasing their wealth and are now beginning to travel in earnest. China is building 40 new airports in order to accommodate departures from their country. It is estimated that the Chinese will be the largest group of travelers in the world, perhaps numbering 115 million in coming years. Costa Rica is now on their radar, and by virtue of sheer numbers, the Chinese will dramatically enhance business and tourism in Costa Rica.
True, the world economy is gloomy, and no country is completely immune from the fallout, but the fact that Costa Rica is a developing country, changing in fundamentally beneficial ways for the tourist, retiree and investor, presents a positive and exciting alternative for those desperately seeking some good news.
Costa Rica Real Estate
