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| Kids playing at Manzanillo Beach, Limon |
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Costa Rica News - Friday, October 15, 2010
Is Limon Costa Rica's Next Investment Frontier?
"Right Coast" far from realizing promise
LIMON – While the checkbooks of foreign investors and the bulldozers
of developers have long been focused on prospects on the country’s
Pacific coast, Costa Rica’s Atlantic province of Limón has gone
unnoticed.
In Limón, dirt roads outnumber paved strips, rustic
hideaways are far more common than ritzy hotels and one can still find
good price tags on properties with an ocean view. However, because of
historical neglect by the central government, a lack of land titles or
easy access to building permits, as well as an inflated perception of
crime, there’s lingering doubt about whether any investment on the
“right” coast is the right choice.
Limonenses, as its
residents are known, are quick to defend their lush tropical enclave,
saying that embedded racism and lack of interest on the part of the
county’s San José control room has held the region back.
“It’s an
area with a lot of promise; with beautiful beaches and a high level of
safety,” said Leda Villa, former vice president of the Southern
Caribbean Commerce and Tourism Chamber who now works for the local
development association. “But it has also been plagued by limited
resources and a lack of investment from the central government.”
In
recent years, there has been a renewed effort to channel more
investment toward the Caribbean coast. The province’s capital, the port
city of Limón, is awaiting the government’s delivery of a $72.5 million
loan from the World Bank, which will eventually contribute to a makeover
of the city. Central government officials are wrestling with local
workers over a possible concession of the port to private interests
aimed at creating a more efficient and productive port. A free-trade
zone has recently been established to attract foreign companies. And
security forces have intensified efforts to crack down on organized
crime.
“We have come far, but we have a long way to go,” said
Limón Mayor Eduardo Barboza (see related story, P. 6). “(Our hope) is
that we can attract businesses to a zone that has all the ingredients to
develop.”
Leaders in central government have acknowledged the
features of the region that make it an important ingredient for the
country’s overall development, such as the high number of English
speakers (provided by generations of Afro-Caribbean residents), its
location as a gateway to North American and European markets, and its
natural resources, which have already proven to be a draw for tourism.
However,
many share the feelings of Steve Aronson, former president of leading
coffee exporter Café Britt, who says, “the government, in my view, is
long on rhetoric but short on support for the Limón area.” A recent
initiative by the company to create a tour by train of a cacao
plantation near the port for inbound cruise ship passengers was rejected
by government officials.
Land Prospecting
The region of the Caribbean coast most trampled by people seeking
real estate deals are the beach communities of Puerto Viejo and Cahuita
in the southern part of the province. While the tourism and real estate
industries in the rest of the country are suffering, these quiet tourist
destinations are seeing more and more traffic.
Manuel Pinto,
owner of Caribe Sur Real Estate, says he gives tours to three to four
clients a day, and receives eight to 10 e-mails from people interested
in homes or land. Whereas most buyers used to be the “hippie crowd,”
he’s seeing a shift to a growing Tico market and higher-income
clientele.
“There’s been a fear about the Caribbean coast,
especially among Costa Ricans from the Central Valley,” Pinto said.
“They’ve been scared off by the idea there’s a lot of black people, too
many drugs and too much rain. But Costa Ricans are rediscovering the
Caribbean.
“They all say that the Pacific has been overdeveloped,” he continued. “What they like about here is that it is still authentic.”
The
main difference between the two coasts is that the Pacific beaches have
a “grandeur,” which has traditionally attracted the “yuppie crowd,”
Pinto said. Pacific properties tend to have more beachfront and
breathtaking views.
“We don’t have that ‘wow’ effect here,” Pinto said. “But the nature and the lifestyle is what attract most of our clients.”
Pinto
said the risk to investors is the same that they’d find on the Pacific
Coast, except for lack of clarity about building regulations. In the
past, the local municipality has approved constructions that were later
prohibited by central government authorities. Pinto steers his clients
away from beach property, he says, as some landowners have been prodded
to leave after building too close to the shore. (Costa Rica’s coasts are
protected by a no-building buffer zone of 50 meters from the mean high
tide.)
Tourism Trials
More than 50 cruise ships dock in Limón each year, flooding the zone with Hawaiian shirt-wearing, picture-snapping tourists.
For
Limón city leaders, the challenge has always been how to keep the
dollars these tourists spend within the community. In this, they are up
against the well-established tour companies of the Central Valley, which
tend to whisk any potential business away to full-day canopy tours and
boat trips through the canals of Tortugero, north of the city.
The city’s Limón Port City Project, a $72.5 million makeover, will fund building restoration, improve sanitation, and might encourage other opportunities, but there’s a hunger for more.
The
Limón region suffers some of the highest unemployment rates in the
country with a 7.9 percent rate in 2009, according to the latest
statistics from the National Statistics and Census Institute (INEC).
Grettel
Buitrago, a manager at Park Hotel, one of only a few more upscale
hotels in the city, said there needs to be more done to attract
land-based tourists to the city of Limón. The best beaches and national
parks are far away, and there is no draw to “el centro.”
“There’s
not much offering,” said Buitrago, whose hotel tends to cater to
traveling businessmen. “We need to do more to attract the tourists.”
Commercial Stimulation
Limonenses are quick to note that 80 percent of the country’s
commerce passes through Limón. The thriving shipping industry is evident
in the stacks of shipping containers that line the highway leading into
the city like pyramids, denoting hidden wealth.
But as with
tourism, the money from the booming shipping industry largely bypasses
the region. The Atlantic zone has a higher rate of poverty than the rest
of the country at 27 percent; the dropout rate in local high schools is
topped only by the Pacific cantons of Aguirre and Liberia, and the city
ranks dead last out of 81 municipalities in quality of life, according
to a cantonal competitiveness report published by the University of
Costa Rica.
María Moya, the director at Limón’s Rafael Iglesias
Castro primary school, said that lack of opportunity has undermined the
city’s educational system.
“Few see the benefit of staying in high
school or going to university because there are limited high-skilled
jobs available,” said Moya, who not only worries about the 700 students
who pass through the school’s doors every day, but also about her three
children. “In Limón, unemployment and underemployment is a huge issue.”
She
estimates that only 15 percent of high school graduates pursue a
university degree at the local campuses of public or private
institutions such as the University of Costa Rica, the State University
at a Distance (UNED) and Universidad Latina.
Costa Rican trade
promoters are negotiating with several companies to invest in a recently
established free-trade zone “to create new employment opportunities,”
according to the Foreign Trade Ministry. One company, Guanazul JRV, is
drawing up plans for an office park with a total investment of $5
million. The minimum investment for companies interested in locating
operations within the zone is $100,000 (TT Online, Sept. 29).
“The
benefit of investing in a free-trade zone here is that you are minutes
from the port,” said Luis Guillermo, who is running for vice mayor of
Limón on the Citizen Action Party ticket. “There’s none of this trucking
supplies back and forth to the Central Valley.”
The idea of
relocating call centers to Limón, with its highly-bilingual population,
has also been broached, but apparently not seriously pursued. According
to Guillermo, there is one call center in operation.
Limon's Promise
Former legislator Yalele Esna, who now heads up the local welfare
office – IMAS – knows it will take a lot more than the Limón Port City
Project to revitalize the area. The region needs greater employment,
better coordination and improved security, she said. But no region has
greater potential than Limón.
“We are the entrance and exit point
of the country … we have the greatest percentage of protected areas … we
have the most diversity,” she said, adding that the only thing the
region is missing is faith on the part of people from the outside.
“If
only more people are willing to invest and to believe, then we can
grow,” Esna said, explaining that the first deterrent to investment were
the region’s labor troubles, and now, outsiders are turned off because
of security issues.
“There is only potential,” she said.
For Leda Villa, it’s something that can’t be put on hold much longer.
“We need to develop the area. We can’t stop,” she said. “There is so much to do.”
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