In 2013 Costa Rica exported $2.4 billion in electronic components for microprocessors. That amount was 20.9 percent of the nation’s total exports of $11.4 billion that year.
In second and third place were pineapples and bananas.
The major manufacturer is Intel Corp. in Belén with 2,700 workers.
Early Friday the Spanish-language online newspaper CR Hoy went public with a story that its reporters had been following for months. The newspaper reported that Intel would be leaving Costa Rica.
The newspaper had some information from government sources, but the story lacked official confirmation. That was not long in coming. Intel told the press that some 1,200 of its workers would soon be let go and that the manufacturing operations in Costa Rica would move to Vietnam.
The government had hoped to keep the news of this devastating economic blow secret, perhaps until President Laura Chinchilla left office May 8. CR Hoy said a reporter asked Ms. Chinchilla about Intel’s plans but she declined comment.
Intel, which has been here 15 years, has declined recently to make more investments in the country. The firm has had operations in Vietnam since 1997, and in 2006 it announced a $1 billion investment there to build its seventh and largest assembly test facility to produce chipsets, the firm said on its Web site. In July 2010, Intel Vietnam began using the latest Intel chipset technologies to produce chipsets that will help support the growth of mobile computing, it added.
The Costa Rican facilities are mainly for desktop computers.
Intel now has a 500,000-square foot facility in Ho Chi Minh City, the former Saigon.
The company in the past has expressed concern about Costa Rica’s economic position with a soaring annual budget deficit. A main concern was higher taxes and fees that might affect exports and operations here. The Chinchilla administration, as part of the failed tax package presented in 2011, proposed a 30 percent export tax for some firms.
The company also has been rebuffed in efforts to obtain a concession in the country’s labor law to allow it to schedule four 10-hour working shifts a week instead of the usual five-day, eight-hour shifts provided in the law. Now the firm is obligated to pay two hours of overtime for hours for more than eight a day even though 10-hour shifts might be more efficient in some cases.
Political figures are concerned that the great reduction in the Intel work force might trigger similar moves by other foreign firms.
Costa Rica is certainly more expensive than some Asian locations in which to run a business. A.M. Costa Rica estimates that the firm is paying more than $1 million a month in social charges and perhaps $4 million in the obligatory Christmas bonus. These costs are in addition to its Costa Rican income tax. Meanwhile the company is struggling to maintain its place in international markets.