www.CostaRicaTicas.com

So the whole CAFTA discussion got me thinking: what separates CR from first world status as a place to invest or retire? The truth is, the infrastructure of the place is pretty good. If any of you have gone to eastern europe lately, say poland or ukraine, you might remark on how fast those places have gotten (relatively) clean courts, good roads, and the accoutrement of first world status as a place to invest. Hell, closer to home, check out the changes in ireland since 1980.

What is my point? There is something still missing from CR. I'll lay out 3 points and see if anyone wants to agree or flame.

1. Property rights. From everything I've been able to gather, foreigners are free to own capitol goods and real property, but tax law (and to some extent local corruption) makes such ownership ill-advised. Hence the commonly dispensed advice to hold everything in the equivalent of an LLC and work through a local agent. Why is this, and what are the costs? Transperancy and liquidity. Simply put, relatively simple transactions (let's lease property X; let's subdivide property Y) become unmanageably complicated and/or expensive.

2. Legal infrastructure. Much as is the case with investments on indian land in the us, there is a fundamental (and reasonable) fear that cases are decided on local relationships, not the merits.

3. Financing. While mortgages might be available in CR, it strikes me that in most of latin america the availabilty of money is strictly limited by banks and governmental policy. How does the average tico buy a car? A home inmprovement loan? A sofa? This nonsense about cellphone rates derailing CAFTA may be accurate, but I argue it is a symptom of a greater issue, not an explanation.

Ok, enough. If anyone wants to engage, let's go from here.

Are you a lawyer?

The three reasons listed above are good reasons to rent in CR and not to buy real estate.

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Providing humanitarian assistance to self employed chicas, one cash grant at a time.

MKHobby03 – Very good thought points for discussion.

The Tico finance system is clavo por clavo or nail by nail. Their SOP does not utilize leverage of debt as a growth factor to advance the economy. Perhaps CAFTADR will create a more aggressive open market environment yielding more aggressive financing. Who knows?

The land ownership/agent issues are too complicated for my over indulged mind. With that said I would proceed gingerly with a partnership 49/51 to protect my culo with a “trusted” local partner. Maybe that is an LLC? The squatter laws are an entirely added twist to the game just when you thought perhaps you had it mastered.

Another point for renting the basics unless one plans a major factory or development as a growth position.

Some of the entertaining “propaganda” associated with CAFTADR – NO was Stop Organ Harvesting. You gotta love that. In reality it was all about monopoly busting via an open market free trade position.

Let’s see what’s next with CR through the implementation plan which I think is like 13 steps. One more that a twelve stepper so it must have juice.

What seems to perpex most of us gringos is how Ticos and Ticas can lie, cheat and steal without any personal concern. A small example: Florida competes with CR for tourists. Florida exagerates the beauty of its beaches and the beautiful weather. Costa Rica flat out lies and smiles at you when you ask about their lies.

Additionally, you hear about the high rate of literacy among the Ticos. Completely untrue. If they can read, they don't and they haven't and they don't intend to in the future. I've met more happily ignorant Ticos with exhaulted opinions of themselves than I have ignorant rednecks from southern Georgia. It's rather comical, until you try to depend upon them or seek to hold them responsible or accountable.

Another is the claimed low crime rate in CR when there have been over 200 home invasions so far in 2007 and only 15 have been solved. It also is reported that over 95% of arrests in CR never result in convictions!!!!. So, if you only count the crimes for which there is a conviction, you have a low crime rate even though homes are being invaded, people are being killed and bank accounts are being emptied even by bank employees.

Now this has nothing to do with the fantasy world we enjoy of us old guys chasing young pu*sy, but that also is a big part of the lie upon which Costa Rica is based. We might call this the economics of the lie, but much has been written on this already.

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Slut Puppy in Training

Is low self esteem a prerequisite for being a good Ho or is it a result? ;-)

Costa Rica has a lot going for it. But like much of Latin America, the regulatory climate is quite punishing for entrepreneurs. As a point of reference, here's what the World Bank's annual "Doing Business" survey reported (the 2008 edition was released last week):

Of 187 countries surveyed, Costa Rica ranks 115 in overall ease of doing business. Chile, at 33, is the best performer in Latin America.

Starting a business in Costa Rica takes 77 days and 12 procedures. Dealing with licenses, on average, takes 178 days, with an average of 23 procedures. Enforcing a contract takes 877 days and 40 procedures. There's much more detail in the report, but suffice it to say that the formal business environment is so punishing that many entrepreneurs operate in the "informal" sector.

Governments can and do make meaningful reforms in their business climate. El Salvador cut the time required to start a business in half without changing any laws. Here again, however, Costa Rica is not making meaningful reforms. This particular World Bank survey has been done since 2004, and for the first time Costa Rica trails El Salvador, Nicaragua, and Guatemala in the rankings.

More details can be found at <http://www.doingbusiness.org>


Osogrande

You can't buy happiness, but you can rent it.