Thanks to the LAII Student Field Research grant, I spent May of 2016 in Costa Rica conducting preliminary field research on the relationship between Foreign Direct Investment (FDI) and rural economic development in the Pacific region.
A large part of my studies focuses on investigating the fast growth of Foreign Direct Investment (FDI) and the lack of legislative control over the exploitation of natural resources to environmental and social consequences in communities. I carried out research in the Pacific region and the Valle Central of Costa Rica from May until mid-June of 2016 to analyze the relationship between foreign-led economic and environmental exploitation, and their sociocultural effects on the Costa Rican Pacific. My central research questions were: How have local and statewide regulations regarding FDI and foreign-led physical infrastructural development changed from the 1990s to today? How have they affected employment and salary rates, quality and types of employment, literacy rates, and household access to public services in the Pacific region? The first question consisted of identifying changes in FDI national policies, and the second question focused on how these changes have affected this locality. Most of my findings have been shared through conference presentations, class projects, and independent studies on this topic.
I used this grant to expand my preliminary research, and to overcome the previous lack of access to primary sources and up-to-date studies on the effects of the latest accelerating physical infrastructural development projects and environmental exploitation. The most recent substantial and reliable studies I have found were published in 2012. Significant economic and social changes happened in Costa Rica after CAFTA was put in place in 2009. However, the majority of internationally published research often does not have appropriate evidence to show the economic and social changes that CAFTA has brought to the nation.
Between 1970 and 2010, the economy of Costa Rica shifted from primarily agricultural to tourism and foreign lead industries. This was part of the government's strategy to cope with the economic recession and the debt crisis in the late 70s, and early 80s. Previously, the economy depended on few traditional exports such as coffee and fruit.
The international market considers Costa Rica to be one of the safest Latin American countries to invest in. This is because Costa Rica does not have an army, it has had a stable democracy for decades, and it has a positive reputation for environmental protection and renewable energy initiatives. Thus, this country has the potential to improve the quality of life across all classes without compromising the environment. Costa Rica also has the potential to assist other Latin American countries through economic and political cooperation. To achieve this, the government first needs to emphasize how to maximize the benefits of FDI while mitigating environmental exploitation and sociocultural consequences.
In 2009, the UN Human Rights Council declared that the Costa Rican government must improve on giving maximum priority to domestic consumption over tourist and real estate development. Studies conducted in the early 2000s show that even though the Costa Rican economy has grown, the pace of foreign infrastructural investment projects has been faster than the government's abilities to update their policies regulating environmental exploitation and land use. For example, the government created laws for t water and natural resources management for the first time in 2011. Previously, the majority of hotels and residences were constructed without official studies regarding their potential environmental impacts. These studies show that if the nation is not able to improve in mitigating the consequences of accelerated growth, rural communities might suffer irremediable consequences.
The scholar Marc Edelman proposed that the tourism incentives of 1985 motivated foreign investors and private companies to establish their businesses in the Pacific state Guanacaste. Even though Guanacaste makes up to 20% of the Costa Rican total territory, its population only makes up 8% of the total national population. Forests and bodies of water cover 60% of Guanacaste´s land, allowing for a wide diversity of ecosystems. In 2005, 25% of the total FDI was in the property market, and Guanacaste received 67% of this investment. The Statistical 2012 Yearbook of Tourism of the Instituto Costarricense de Turismo named Guanacaste the number one state for lodging infrastructure. However, these aspects do not seem to benefit the quality of life in rural communities; in 2012, the Instituto Nacional de Estatísticas y Censos stated that 34.5 % of Guanacaste households were living under the poverty level whereas the national average was only 16.3%. The unemployment rate was 11.4%, which is almost double the national average, and 73.18% of people earned less than minimum wage.
In the Field:
My trip lasted twenty days; ten days in the capital of Costa Rica and ten days in various Pacific cities. My main goals were: 1. Investigate the relations between FDI, regional planning regulations, and economic development in the Pacific; 2. Access archives only found in CR about these issues; and 3. Based on the gathered data, evaluate how I can improve initial research questions and methodology. In preparation for the field research, I spent time in Costa Rica in December 2015 establishing contacts and resources. The prior semester, I took an independent study and a qualitative research methods class which trained me on basic qualitative research methods such as interviews.
I interviewed a total of 13 people using a qualitative interviewing method, including scholars, local entrepreneurs, regional government representatives, economists, private tourism companies and NGOs engaged in the economic development of the Pacific. I established contacts for future continuation of research. I was able to access governmental reports, archives, and scholarly literature on the socioeconomic development. I translated the interviews into English, and I am in the process of coding them using ATLAS.ti.
I interviewed experts in governmental and non-governmental institutions (ACEPSA, the federal ministries of women, labor, culture, and education, FECON, and Centro de Investigación en Cultura y Desarrollo) who work on social and economic development issues of Pacific communities. I interviewed academics from La Universidad de Costa Rica, Universidad Nacional, University of Peace, and EARTH University to explore the impacts of FDI in these communities. I analyzed archives, surveys and other publications only accessed in Costa Rica on how legislation can improve addressing the environmental and social consequences of the accelerated growth of FDI. I interviewed locally owned eco-tourist business owners to investigate their impacts on local economies.
Based on the interviews I see the need for further critical analysis on the changes CAFTA has brought to environmental protection in foreign investment. The questions regarding regional planning trends and were somewhat challenging because the concept of “regional planning” is not as popular in Costa Rica as it is in the US. Many of the people I interviewed and the articles I read expressed that discourse on “regional planning” does not exist in Costa Rica because planning laws vary depending on each municipality. Planning laws, called “planes reguladores,” function mostly as preventative safety measures, i.e. to prevent accidents or safety violations, rather than to promote sustainable regional planning. Given that these “planes reguladores” vary from municipality to municipality, interviewed scholars and government officials described these laws as outdated, contradicting and obscure. They also expressed discontent for the political process for obtaining building permits, which they believe promote corruption and lack of accountability.
While I was in Costa Rica, the government was trying to pass a Dual Education reform to encourage private small and large businesses to hire high school and college students as interns. In exchange, these businesses would receive government incentives via tax breaks, insurance options for employers, and economic support to finance stipends. The mission of this reform was to reduce unemployment rates, offer better and more alternative career training opportunities, and help private companies expand their pool of employees at a lower cost. This reform targets businesses that work within the service industry.
This potential reform affected the people interviewed; there was a common concern that the vast majority of available jobs for the college educated youth are with call centers, which are not considered to offer stable long-term careers. Records and interviewees pointed out that high position jobs in these companies were often given to outsiders. Also, careers offered by universities located in rural areas were mostly within the service and tourism sectors. Therefore, more specialized careers such as medicine were only offered in the main cities
My field work highlighted to me the potential of the dual education initiatives to benefit low-income communities through diverse training options. At the same time, these insights help me expand my interest in looking at how strengthening the role of transnationals in the local economy might promote the dependency on the service industry.
After interviewing owners of local small businesses, I began thinking about the role of small locally owned private companies, and how projects such as the Dual Education reform could help promote the local industry. Are service jobs through local businesses rather than through corporations better? Why? What can be learned from the way sustainable community-based businesses operate?
Conducting this field research has helped me examine how I need to change and re-focus my previous research questions. It seems that the implementation of CAFTA did not bring many changes into policies regarding foreign investment, and it appears that it even brought environmental regulation requirements for companies. As intended, conducting field research this summer allowed me to collect preliminary data and information to build on for future research questions, comparative studies, and dissertation proposal.
 Lober, D. and Menkhaus S. (1996). International ecotourism and the valuation of tropical rainforests in Costa Rica. Journal of Environmental Management. 47(1), 1-10.
 U.N. Human Rights Council, 12th Session. (2013). Annexes mission to Costa Rica. UN Human Rights Council.(A/HRC/12/24/Add.1). Official Record. Retrieved on Nov 10 2013.
 Costa Rica Estado de la Nación en Desarrollo Humano Sostenible. (2007). Décimotercero informe estado de la Nación en desarrollo humano sostenible. San Jose: CR. GPO.
 Instituto Costarricense de Turismo. (2013). Anuario Estadístico de Turismo 2012. Visit Costa Rica. Retrieved from http://www.visitcostarica.com/