(Updates with quote, economic data, bonds)
By Manuela Badawy
NEW YORK, Sept 21 (Reuters) - Costa Rica’s economy is expected to post solid growth of 4.5 percent this year and 5 percent in 2011 as it continues to invest in infrastructure and open up the telecommunications industry, the country’s president said on Tuesday.
“We are efforting this push into Asian markets to increase the rate of growth. We have a very ambitious program,” said Laura Chinchilla, President of Costa Rica, on the sidelines of the United Nations General Assembly in New York.
The economy of this small Central American country, known for its eco-tourism and coffee production, will boost growth by improving infrastructure such as ports, and by opening and promoting markets such as electricity and telecommunications.
Costa Rica has trade agreements with China, Singapore and the European Union bringing the amount of free trade agreements to 42 and increasing trade to 92 percent of total exports. It is also starting negotiations with South Korea.
Chinchilla, the first woman president and just four months in government after succeeding Nobel laureate winner Oscar Arias, is set to increase competitiveness by continuing to educate and train its population of more than 4.6 million.
Costa Ricans take pride in the fact that they are the only country in the Americas without an army, and that since their independence about 50 years ago have established free education — a competitive advantage difficult to emulate in a short period of time.
With a skilled work force, and political and social stability, Chinchilla’s government hopes to capture $9 billion in foreign direct investment over the next four years.
In 2009 inflows of FDI reached $1.3 billion of which 57 percent were from the United States. Most of the inflows go to manufacturing, real estate, services, and tourism.
Economic growth has come from the services sector with 60 percent of gross domestic product, industry with 32 percent and agriculture with 8 percent.
“Today, after serious trade policies based on the promotion and diversification of exports and the attraction of foreign direct investment as key elements, Costa Rica exports more than 4,116 products to 135 countries around the world, with a net worth of $8.675 billion,” Chinchilla said.
“Our total exports have increased over 60 percent in the last decade,” she said. Imports however, reached $11.4 billion in 2009.
Chinchilla also stressed security and prevention of the high levels of organized crime that other neighboring countries have experienced as one of her key issues in her domestic agenda.
“We are trying to design a regional agenda in terms of security issues,” Chinchilla said. “Our homicide rate is relatively low. We are just trying to prevent what has happened in other regional countries.”
In terms of bond issues, the president of Costa Rica’s promotion agency, Jose Rossi, said it would be favorable for the finance ministry to issue global bonds as global interest rates are low and as Costa Rica’s credit rating was raised to investment grade earlier this month by Moody’s.
The country has $1.25 billion in outstanding debt, divided into five different global bonds, one of them maturing next year. If and when the country issues, Rossi said part of the money will go to repay the maturity due, projects in infrastructure, education and other debt issues with multilaterals.