Improving the competiveness and insertion in Global Value ...€¦ · The Case of Services in Costa...
Transcript of Improving the competiveness and insertion in Global Value ...€¦ · The Case of Services in Costa...
Regional Dialogue on Promoting Services Development and Trade
in Latin America and the Caribbean
The Case of Services in Costa Rica: Improving the competiveness and
insertion in Global Value Chains
This presentation is reproduced by the UNCTAD secretariat in the form and language in which it has been received. The views expressed are those of the author and do not necessarily reflect the view of the United Nations.
12−13 November 2013 Room Raul Prebish, ECLAC, Santiago
Mr. Francisco Monge
Deputy Director General of Foreign Trade,
Ministry of Trade of Costa Rica
The Case of Services in Costa Rica:
Improving the competiveness and
insertion in Global Value Chains
Francisco Monge, Deputy Director
General Ministry of Foreign Trade
Costa Rica
Services: an opportunity for
development
The unbundling of global production has created an
opportunity for countries to drive development focusing
on the tasks in which they have comparative advantages.
Two types of services that are important:
Services that are tradable inputs in
GVCs
R&D, design, marketing, sales, business and IT
processes.
Services that enhance the competitiveness of
countries in GVCs
Transportation, logistics, communications,
financial, etc.
Services
integrated
in GVCs
The evolution of service
exports in Costa Rica
Source: Constructed by COMEX with data from BCCR
Costa Rica: Service Exports (1999-2012)
Costa Rica: Composition of service exports (2000-2012)
0
1,000
2,000
3,000
4,000
5,000
6,000
2000 2002 2004 2006 2008 2010 2012
US$
mill
ion
es
Viajes Informática e información
Otros servicios empresariales Transportes
Los demás
1,952.3
5,482.6
0
1,000
2,000
3,000
4,000
5,000
6,000
2000 2002 2004 2006 2008 2010 2012
US$
mill
ion
s
Tourism
Business services Other Transportation
IT based
The evolution of service
exports in Costa Rica
*Data from the Central Bank of Costa Rica (BCCR).
Costa Rica: Share of exports integrated in GDP by sector (2000-2012)
1.6%
8.8%
5.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2000 2002 2004 2006 2008 2010 2012
% P
IB
Computer, information services and other business services Agriculture
Costa Rica´s upgrading path
in offshore services
KPO
General Business Activities Industry Specific Activities
Va
lue
Ad
de
d
Broad Spectrum
(ITO, BPO & KPO)
d
$638.2
$223.4
$186
$140.8
Cal
l & C
on
tact
C
en
ters
C
all C
en
ters
IT
Bac
k O
ffic
e
$51.3
$66.1
$84.5
10,472
6,034
BPO
7,753
6,106
792
1,123
890
6
ITO
Breakdown of Costa Rica´s participation in
offshore services, 2011
0
2
4
6
8
10
12
14
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
NumberofCompan
ies
YearofEstablishment
BPO ITO BroadSpectrumServices(ITO-BPO-KPO) KPO Ver cals
First Stage (13 companies Eg. Western Union,
Equifax, P&G, Sykes)
Second Stage (60 companies Eg. Convergys,
Teleperformance, AvVenta, Amba Reserach, HP, Intel, IBM))
The
evolution of
facilitating
services
Facilitating services
High quality and low cost facilitating services are critical to competitiveness in GVCs.
In Costa Rica the opening of the telecommunication and the insurance markets in 2009 enhanced competitiveness and the facilitated insertion in GVCs
10
BEFORE AFTER
Monopoly market. Competitive market (119 companies).
7,4% of GDP in 2007. 9,1% of GDP in 2011 and 2012.
Limited FDI (only cable internet). US$913,4 million in FDI recieved in 2011, 2012 and the first half of 2013.
Long wiating list for land lines and cel phones (1 year, with 150 requests in celphones).
A phone line can be obtained in minutes.
34,4% of population has cell phone in 2007.
116% of population has cell phone in 2012.
13% of households have internet access in 2007.
47% of households have internet access in 2012.
9% of (non-wireless) internet connections were over 2Mb/s in 2007.
53% of (non-wireless) internet connections were over 2Mb/s in 2012.
Liberalization of
telecommunications market
11
BEFORE AFTER
Only 1 insurer in 2008 12 insurers in 2013
147 types of policies offered in 2009 442 types of policies offered in 2013
$612 million in total received insurance premiums in 2008
$929 million in total received insurance premiums in 2012
$83 million in personal premius received in 2008
$187 million in personal preiums received in 2012
4,3 million policyholders in 2010 5 million policyholders in 2012
Liberalization of
insurance markets
Success
factors
and
priorities
for the
future
Costa Rica´s policies to foster
services in and for GVCs
• Attraction of FDI • Interagency execution
Strategic vision - proactive and coordinated
approach
• Political and economic stability • Export processing zone regime
Sound business environment
• Quality of educational system - 1st in LA (WEF) • Cost competitive
Educated work force
• Middle of the Americas • Proximity to US time zones
Privileged geographical location
• WTO + 14 PTAs • TiSA negotiations • Liberalization commitments stemming from CAFTA-DR
Deep trade integration
Policies moving forward
Continued attraction of FDI in strategic
niches
Strengthening human capital
Further liberalization of facilitating service
markets
TiSA
Need for international investment
agreement
The Case of Services in Costa Rica:
Improving the competiveness and
insertion in Global Value Chains
Francisco Monge, Deputy Director Ministry of Foreign Trade
Costa Rica