The most recent Global Competitiveness Report ranks Costa Rica number 57 out of 144 countries.
This position places the country second in Central America after Panamá which ranked 40. Guatemala followed at 83, Honduras at 90, El Salvador at 101 and finally Nicaragua at 108.
Costa Rica rose four places from last year. The report cites a lower budget deficit, a decrease in government debt, well-functioning public institutions and an increase in information and communication technology as reasons for the better position.
However, according to the World Economic Forum, the government spends wastefully, politicians are untrustworthy, infrastructure is poor, business startup procedures are too lengthy and there is little availability of business financing.
Jaime Molina, the Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado president, notes that the country has improved worldwide from position 66 to 57 in the index, but called for a law of contingency power that would allow more private renewable energy and would avoid the use of the backup heat for discussion and adoption.
The union of chambers has pointed out that it is urgent to work and provide long-term solutions to promote the development of energy, infrastructure, security and reduce excessive formalities.
Also, the group is working with public officials to eliminate unnecessary procedures and shorten the time taken to analyze the procedures for the approval of credits.
In regards to gaining the population’s respect, the union pointed out that it is imperative to define rules and establish clear and concise controls, in order to promote a favorable climate for investment and employment generation.
Molina praised the work of entrepreneurs who are working to develop the country. Their success is proven by the several indicators measured by the economic forum that show progress, notably those relating to innovation and the use of new technologies, he said.
The United States fell two positions to seventh. The decline was linked to what the report called unaddressed weaknesses such as a distrust in politicians, lack of confidence in the governments ability to not interfere in private sectors, and wasteful spending by the government. Also, the United States macroeconomy is unstable, according to the index.
On the other hand, U.S. companies are still considered to be highly sophisticated and innovative, labor markets are flexible and the scale opportunities afforded by the size of the domestic economy which is the largest in the world make the country still competitive, the report said.
Switzerland continues to hold first place scoring hight marks in all categories due to the countries strengths in innovation, efficiency in the labor market, and the sophistication of its business section. Switzerland’s scientific research institutions are also regarded as among the world’s best.
It is followed by Singapore, Finland, Sweden and the Netherlands to finish the top five.
Despite the many positives of each country, the overall world economy is weak. Global growth remains historically low for the second year in a row and is expected to slow even more in the upcoming year. Still, emerging and developing countries continue to grow faster than advanced economies, steadily closing the income gap, said the World Economic Forum.