The specialization of Costa Rica has made it a Medical Device export hub in the continent. Medical Device exports in this country experienced a remarkable growth rate of 28% in 2023, surpassing the US$7.6 billion mark.
Bank of America issued a report on Costa Rica, comparing its economic development to the countries that were called “tiger” in East Asia in the 1960s.
The paper draws an analogy with the rapidly developing East Asian ‘tiger’ economies, such as Taiwan, South Korea, Singapore, and Hong Kong, which were able to grow by focusing on capital accumulation, export-oriented manufacturing, and human capital development.
However, the report clarifies that Costa Rica has some advantages over those countries: higher health indicators and an export offer that is not restricted to manufacturing.
Read: The Advantages of the Free Trade Zone Regime in Costa Rica
As a matter of fact, the specialization of Costa Rica has made it a Medical Device export hub in the continent, with only Mexico surpassing its sales.
Medical Device exports in this country experienced a remarkable growth rate of 28% in 2023, surpassing the US$7.6 billion mark.
Additionally, in comparison to other countries in the Latin American region, the Costa Rican labor force has higher educational and health standards.
The current state of human and economic development of Costa Rica does outperform the Asian economies of the 1960s, which can be encouraging for the Central American country.
| A Central American jaguar A report of Bank of America makes us believe Costa Rica has the potential of the 1960s East Asian economies, that were able to grow by focusing on human capital development and a solid export model. These are the advantages of its current economic model:
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A solid Free Trade Zone regime
According to Bank of America, the Free Trade Zone policy is a key contributor to the country’s success. This policy has no geographical limitations and can be established anywhere in the country, making it a flexible and accessible system.
The report says this regime provides benefits to both goods and services companies, making it an advantageous option for businesses. “In our view, this flexibility is an important factor in the superior profitability of this sector,” it states.
In addition, Costa Rica is achieving a combination of output growth and deflation due to export performance, resulting in a reduction in the unemployment rate, an improvement in the balance of payments, and the strengthening of the local currency (Colón).
Another reason for which Bank of America refers to Costa Rica as a “jaguar” is due to its remarkable increase in productivity, growing five times faster than in the United States. Furthermore, according to a document, the real wages in Costa Rica are increasing at a faster rate than in the past 20 years.