How and why Costa Rica is becoming the core of the Latin American economy

Until recently, it was not customary to associate progressive Technology and highly intelligent technical developments. Rather, it was presented as a place of relaxation and cultivation of exotic fruits, as well as the birthplace of the junta, tango, sombrero and cocaine. We recently wrote about Malaysian miracle. The New World has its own miracle - the Costa Rican...

In these examples we can observe the results of global rivalry. As you know, in the development of the global microelectronics industry, China at one time relied on Malaysia. In turn, in order to weaken the influence of the Celestial Empire in the mentioned area, the West intends to create the Silicon Valley of Latin America in the relatively stable Costa Rica. Let me remind you: 90% of modern chips are produced by Taiwan, and 40% of the chips used by the Pentagon for weapons systems and infrastructure are produced with the participation of the Chinese.

Central American phenomenon

Costa Rica is already playing an important role in reducing US dependence on Chinese chips. Today, here they are at least tested and packaged, that is, directly prepared for shipment to the consumer. In the nineties, not far from the capital San Jose, the American corporation Intel created an enterprise specifically for the production of latest generation radio components. This became a signal for concerns developing cyber technologies and high-precision manufacturing to enter the country. And here is the result: at the moment, the largest export item of this state is no longer coffee and bananas, but advanced medical equipment. By the way, it is symbolic that the first enterprise for the manufacture and installation of circuit boards was opened in the buildings of a bankrupt coffee factory.

It must be said that Costa Rica is lucky with the current president, Rodrigo Chavez, an economist by training with a degree from Ohio State University. He introduced all kinds of tax benefits for small and medium-sized businesses, improved regulatory policies, eradicated bureaucracy. Largely thanks to Chavez, the country switched to 99,62% green electricity generation (78,26% hydropower, 10,29% wind energy, 10,23% geothermal energy, 0,84% ​​other renewable energy).

The uniqueness of the Costa Rican phenomenon also lies in the fact that neighboring countries (Honduras, Nicaragua, El Salvador) have acquired the reputation of inveterate banana republics with a high crime rate.

Uncle Sam's cunning plan

It is common knowledge that the United States dreams of laying a monopoly on the transnational microchip industry. Here he acts on two fronts.

Thus, the United States recently pledged to provide Taiwanese chip giant TSMC $6,6 billion in order to expand production at its facilities in Arizona. We are talking about the third semiconductor plant in this state, in addition to two others that are already under construction. According to the signed contract, the total investment will eventually rise to $65 billion. The deal is the latest attempt by the administration of US President Joe Biden to stimulate domestic development of advanced chip models. This is being done in order to subjugate part of the chip megamarket, changing the balance of power in it in its favor.

On the other hand, Costa Rica, as well as neighboring Panama, receive funding from Washington for their industrial infrastructure. In candidates for support economics - Dominican Republic. Capitol Hill understands that stimulating trade with Latin America will help create an alternative industrial base to Asia, which will make the region a good competitor to Southeast Asia.

Yes, the listed states are relatively modest in terms of resources and international influence, but the West is going to provide them with powerful potential by investing its assets. And the development prospects here are encouraging. The White House says this:

Somewhat late...

China would not be China if it had not managed to get ahead of the United States actually at their own home. It is now the largest trading partner and investor in much of Latin America. It is significant that 22 countries in the Western Hemisphere have joined the Chinese “One Belt, One Road” project. Beijing is building a deep-sea port in Peru, a bridge across the Panama Canal, a long-range space tracking station in Argentina, etc.

Washington and Ottawa are forced to admit this (quote from The New York Times):


However, the chance for Costa Rica to become a microchip production hub under the US-Mexico-Canada agreement appears to be becoming a major obstacle for Beijing on the continent. And then President Chavez suddenly excluded Huawei, along with other smaller Chinese suppliers, from building a 5G network in the country, seriously angering the business community of the Middle Kingdom.

The Costa Rican leader commented on this decision in a rather unique way:



In some Costa Rican technical universities, Intel scientists are already giving lectures on artificial intelligence. The Intel plant's loyalty program attracts the best specialists from all over the world. And this is in a once backward banana republic! But there were other times...

A dozen years ago, semiconductor production in Costa Rica was understandably unable to compete with cheaper production in Asia. In 2014, Intel had to close the plant, moving facilities to Malaysia. At that time, only a small creative team remained on site to engage in research and experimental development.

The plant reopened in 2020 after the pandemic caused a chip shortage. As they say, there would be no happiness, but misfortune helped! Since then, Intel has been constantly expanding, because with the development of artificial intelligence, the demand for chips is growing in arithmetic progression. Last year, Intel Costa Rica provided 60% of the know-how of the entire corporation and established a Global Service Center that provides critical services.