Holy Week marks the end of the high season in Costa Rica and, with it, the beginning of months of uncertainty for an industry that contributes 8% of the national annual wealth, with three million tourists. Tourism employs almost 175,000 people, one in every 12 active workers in the country and is the engine of the economy. But now it is in trouble and not for lack of customers.
The exchange rate of the dollar against the colon fell 24% between June 2022 and December 2023. In July 2022, it was close to 700 colones per dollar and is now at 500, like a decade ago. The trend put the growing export sector led by dynamic foreign capital companies that manufacture medical devices on alert, although the most vulnerable activities show signs of anxiety. It happens with tourism and also with coffee producers, who export more than 85% of the harvest and who saw the value of sales decrease by almost 13% last year.
Costa Rica faces a flood of dollars due to the arrival of investment capital and the increase in exports, but also due to speculative capital that saw profits from high interest rates, explains economist and consultant Gerardo Corrales, without ruling out the possible incidence of money from illegal activities. “Now the tables have turned with the lowest inflation in OECD countries (-1.8%) and with the exchange rate appreciation of 24%, the highest in the world at the end of 2023, but without measures aimed at balancing the situation. ”he adds.
“It is a continuous, abrupt devaluation and it does not seem to have an end,” lamented authorities of the local coffee sector in a press conference in which they pleaded for attention from the government of Rodrigo Chaves to preserve the productive base made up of almost 26,000 farms, mostly small. . Each coffee farmer now receives 27,000 colones less per bushel than the year before, almost a 20% drop, without the costs of imported agricultural inputs having become cheaper by that proportion.
“My dad is very sad because this is unsustainable and producing coffee is the only thing he has done his entire life, it is his identity. “He feels very bad and doesn't even want us to talk about it with anyone,” said Manuel C., the youngest of a coffee-growing family in the south of San José, after listening to statements by Vice President Stephan Brunner, also coordinator of the economic team. Brunner said that those affected by the exchange rate should look for another activity and that producers should have made financial reserves for “lean times.”
Rodrigo Chaves has said that the appreciation of the colon is a sign of a strong economy (the national GDP grew 5.1% in 2023, among other favorable indicators) and that there are winners and losers in everything. The annoyance of export groups is widespread and warnings from economists about an impact on employment figures are frequent. The Central Bank of Costa Rica (BCCR) is under pressure to adjust the reference rate to move the exchange rate upward, but the monetary and government authorities are going too slowly or showing signs of not having the will to apply the tools. at hand, Shirley Calvo, executive director of the National Chamber of Tourism (Canatur), a business group of an industry with abundant chains and generator of wealth throughout the territory, tells EL PAÍS.
“They have not wanted to use the instruments; The response has been almost non-existent and it seems that they are allowing the destruction of the local economy,” commented Calvo, who considers Brunner's statements “offensive.” He assures that the high season ends this Easter and businesses could not save enough to face the low season. He warns that some will close or reduce operations to a minimum, because the appreciation of the colon also encourages local tourists to vacation outside the country, spending in dollars.
Corrales points out particular risks for tourism and coffee growers. In the Costa Rican tourism industry, unlike other nearby countries, it is common for tourists to take out the dollars from their Bermuda shorts to pay directly to the tour guide or the ceviche seller, the restaurant, the car rental or even the beach supermarket where they shop. refreshments. Greenbacks circulate in tourist areas as much as colones. This makes the impact direct on medium and small scale businesses.
In coffee, the threats are different: climate change that alters harvest cycles and the instability of the international market, in addition to the temptations of the real estate business. The commitment to produce high-quality coffee under environmentally and socially sustainable conditions persists, but the moment is critical for the sector that contributes less than 0.1% of the national GDP and which ranks 14th in production in the world, but which has been basic for the development in certain rural areas. “The best coffee in the world,” Pope Francis repeated this year when he received a Costa Rican diplomatic delegation.
Activities that are an essential part of Costa Rica's image in the world are at risk, says Francisco Mirabelli in a telephone conversation from Monteverde, a town in northwestern Costa Rica known for its cloud forests. He has been a tour guide since 1995 and also presides over a trade association that brings together some 3,000 accredited guides. “I can assure you that almost all of us are working like with a knife in our backs, looking for additional employment and thinking about what will happen after this week. The same hotels and transporters,” he says. In 2022, tourists paid $1.8 for a local beer and now pay almost three dollars. The problem, he says, is that there is no quick solution in sight. “The tourist perceives this while we try to support ourselves, others work with a lot of stress and the service can be affected, but many people are not going to endure,” he says.
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