Finance

Costa Rica: FDI at its finest

FDI strategy focuses on the long term returns on every dollar arriving into a host country, the stock in Latin American FDI was estimated to be $2.3 tn as of 2018. The average return edged up-to 5.5%

Several countries attract most FDI in natural resource sectors where as Costa Rica concentrated its flow to the technologies and the differences accounted favoring Costa Rica. In Costa Rica FDI was estimated at $40 billion as of 2018. When compared the rate of return of European companies investing abroad raised from 5.7% in 2008 to a peak of 7% in 2011 before falling back to 3.9% in 2016 and rising back to 4.5% in 2018.

Inflow changes concentrating on agricultural products and textiles, garments to more diversified export structure evolved which brought profits with new technology-intensive products and services.

FDI also a positive impact of work-life quality with improved education and training standards therefore improving business environment. Increased labor productivity to produce great outputs for same level of inputs with innovations.

Highly skilled human capital is increasing the appeal to other efficiency seeking companies from Costa Rica’s FDI for ideal locations. A sense of reliability in seen in the host country which makes the foreign investors keen on it.

Notable effects of knowledge intensive FDI attraction related to value-added services export. One being non tourism services have grown and Costa Rican IT and IT-enabled services exports reached from than $4bn in 2018 holding a lead of 6.7% of Latin American GDP.

Second, Costa Rica being the net exporter of services, the surplus of trade balance reached 10% of GDP in 2018.

The trained and up-skilled human capital of Costa Rica by foreign companies makes all the difference.

Finance

Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

Finance

Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

Finance

IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.