INVESTING IN DEVELOPMENT INTEL COSTA RICA
II. Post-Investment Impacts
Before the decision to invest was made, Intel in Costa rica was
compared to a whale in a swimming pool,7 a reference that speaks to
both relative size, antic-ipated impact and likely ripples (or
waves) across several dimensions of Costa ricas economy and
society. For purposes of this discussion, Costa rica was affected
in four main areas: its economy, or more specifically, in its FDI
inflows, gDp and trade; its investment climate; its industry; and
among aspects of its development and society, such as
education.
Macroeconomic Impacts
Dubbed the Intel effect, the disproportionately large Intel
project relative to the small Costa rican economy almost
immediately created distortions in the countrys macroeconomic
indicators. these distortions became apparent soon after Intel
began operating and exporting in 1998. economists began to measure
the economy with and without Intel, in order to understand the
trends of the other Costa rica. this sort of analysis later evolved
to dual sets of macroeconomic sta-tistics for Costa rica, both with
and without high technology multinational com-panies in general,
including Intel.
Table 1 FDI Growth in Costa Rica 1995-2004 (US$ millions)
1995 336.9
1996 426.9
1997 406.9
1998 611.7
1999 619.5
2000 408.6
2001 453.6
2002 661.9
2003 576.7
2004 585.0
Sources: Central Bank of Costa Rica, COMEX, PROCOMER, ICT,
CINDE
100
200
300
400
500
600
700
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03
04
95 96 97 98 99 00 01 02 03
3000
4000
5000
6000
7000
8000
Total imports
Total exports
Figure 1 FDI Flows in Costa Rica, 1984-2004 (US$ millions)
Sources: Central Bank of Costa Rica, COMEX, PROCOMER, ICT,
CINDE
