A UVM blog Lessons from the Osa

Abbott Laboratories is a multinational healthcare company based out of Chicago, Illinois. It was founded 130 years ago and specializes in the development and production of medical devices, though Abbott also develops pharmaceutical drugs, diagnostics, and nutritional products. Abbott is best known for its cardiovascular and neuromodulation devices, such as pacemakers, ablation catheters, implantable cardiac monitors, and pulse systems that aid with symptoms of Parkinson’s and CRPS. They employ 113,000 people in 160 countries, and have 31 manufacturing sites and 12 development centers globally. 

In Costa Rica, Abbott has three sites concentrated around the capital, San Jose. Abbott has had corporate offices and distribution reach in Costa Rica for about 80 years, selling diagnostic products, supplements, and medical devices within the country. In December of 2010, Abbott made the move to build a vascular device manufacturing plant in El Coyol, Alajuela, where over 1,000 employees work building catheters. Another one was built in 2014 in a neighboring area producing heart catheters and valves. These sites are within the Coyol Free Zone, one of many economic free zones that give significant tax benefits to companies that make at least $150,000 USD investments in fixed assets in the plant. Medical device manufacturing plants specifically are exempt from income taxes for the first eight years, with the potential to receive a 50% reduction afterwards. This has led to a significant boom in the medical device manufacturing sector within Costa Rica, supplying many jobs to the locals while also incorporating the country into the global market. Companies such as Abbott also benefit from the highly educated population there, and the ease with which products and supplies can be shipped to and from the country. 

Economically, it is uncontested that Abbott, along with every other medical company establishing manufacturing plants in the country, is contributing to a major increase of economic growth. In 2017, medical devices overtook agriculture in exports, comprising 27% of all export trade and contributing about $3 billion to the national economy. In terms of how society perceives its presence, there wasn’t a ton of information. Reviews of the company sites tended to state high satisfaction with their employment, though the repetitive messages seemed to indicate outside influence. It is also noted that Abbott is a major employer in Costa Rica, and aids its domestic employees in development of their skills and knowledge. Environmentally, no manufacturing plant is going to be perfect. As with any factory, there are likely hazardous outputs, and the nature of medical device production leads to a lot of waste to ensure sterility. However, Abbott has taken steps to protect the environment, and has managed to convert 100% of the waste into compost. Additionally, by 2015, they had reduced water consumption by 35%.

I absolutely think that this is an example of neoliberalism. Costa Rica specifically made these tax exemptions for a specific market, intending to introduce a profitable industry into specific zones of the country. This allowed them to have another source of exports other than agriculture, and to bring a significant boost to their economy by becoming more involved in the global market. The education level of the Ticos, the geographic benefits, and the tax cuts make Costa Rica an extremely desirable place to establish the industry. Meanwhile, the zoning of the plants ensures that there isn’t any sprawl that takes over the country, and the tax cuts ensure that the locals are being paid fairly, so exploitation is unlikely.

References:

Abbott grows in Costa Rica – Celebrates 5th anniversary of its medical devices plant in the country. (2016, January 13). cinde.org. https://www.cinde.org/en/essential-news/abbott-grows-in-costa-rica-celebrates-5th-anniversary-of-its-medical-devices-plant-in-the-country

Abbott laboratories – Products, history, lawsuits and recalls. (2018, July 10). Drugwatch.com. https://www.drugwatch.com/manufacturers/abbott-laboratories/

Costa Rica free trade zone regime – Coyol Free Zone. (n.d.). Coyol Free Zone – Costa Rica | Central América. https://coyolfz.com/medical-manufacturing-companies-directory/

(n.d.). Home | Abbott U.S. https://www.abbott.com

The first Europeans to establish themselves in Uruguay were the Spanish, though it took them a bit of time. In 1520, led by Ferdinand Magellan and Sebastian Cabot, the Spanish led expeditions up the Río de la Plata, though they chose not to settle there due to lack of mineral wealth opportunities. Additionally, they faced fierce opposition from the indigenous tribes they encountered, and were not able to easily enslave them. In the 1620s, Jesuit and Franciscan missions landed in South America to aid the conquistadors. These missions aimed to spread their faith to the new world, as well as pacifying the natives so that the conquistadors could more easily gain control. There were an estimated 5,000-10,000 natives in the area prior to European contact, however foreign disease such as smallpox ran rampant, and the population rapidly collapsed. Due to an apparent lack of potential, the Spanish left.

Around 1603, the Spanish realized Uruguay’s potential may not lie in silver, but cattle. With cattle shipped down from Paraguay, and with lush, widespread fields and plentiful water, the cattle population boomed. This also attracted Portuguese attention, causing many decades of struggle between the two colonizing powers. While the Spanish reaped the abundant silver mines in other countries, such as Peru, beef production rapidly became the main trade in Uruguay. Due to a lack of native populations to enslave, the Spanish brought over African slaves to work on estancias (ranches), salderos (meat-salting operations), and in houses, comprising of about one-third the total population by 1800.The pioneers and gauchos that roamed the region were largely self-governed and controlled their own slaves as needed. However, in the early 18th century, the Spanish fleet founded Montevideo as a military stronghold, with foundations in perpetuating the laws of the Spanish monarchy. As more settlements popped up in the rural regions, and with increased Portuguese presence harassing the ranchers, the Spanish created a patrol force called the Blandengues Corps. Today, the cattle industry still drive Uruguay’s economy, and is deeply imbedded in the country’s culture.

https://www.britannica.com/place/Uruguay/Sports-and-recreation#ref407712

https://www.globalsecurity.org/military/world/uruguay/history-2.htm

African Palm Oil

In 2020, Costa Rica maintained its stance as the largest exporter of palm oil in Central America, generating around $148.4 million USD, with most of it going to the Netherlands and Mexico. A recent development in Costa Rica, the palm oil industry has deep roots in the fruit business. In the 1940s, The United Fruit company faced crisis, so to maintain profits, they transitioned over to palm oil. It was quickly found that palm oil was a cheap substitute for more expensive fatty oils such as cocoa butter, and it quickly became a hugely demanded product worldwide. This explosion in demand has led to massive amounts of deforestation and monoculture in Central America, taking over land that were previously forested or rice farms. The fruit is harvested from the trees using spades and delivered to the processing mills in under 24 hours. At the mills, the fruit bunches are separated into mill effluent, empty fruit bunches, and a mixture of kernel, fibers, and oils, though the fruit bunches are the most important for extracting the oil. Once the crude oil is extracted, it is then shipped to refineries around the world.

Palm Oil Production

https://oec.world/en/profile/bilateral-product/palm-oil/reporter/cri

Costa Rica is the Main Exporter of Palm Oil in 2020

Cacao/Chocolate

The harvesting of cacao is a historical practice that dates back to the indigenous tribes of Central America, and became a major contributor to the region’s economy when the Spanish colonizers learned about it in the 17th century. Through time, cacao on the Osa has typically been grown in small-scale farms and family plots. As the country-wide focus on sustainability grew, these farms evolved to be less monocultured and they now explore various routes to transform the cacao into sellable chocolate. Cacao is harvested as a raw fruit, and processed in various ways to reach the final product of sellable chocolate. This involves some version of drying and grinding the fruit into a powder, and adding other ingredients to make it into the final bar form. Many farms create a chocolate experience, giving tours and then having stores on site where the final chocolate product is sold, usually to tourists. Some of these include the Osa Cacao Chocolate Factory and CocoaEthika. Chocolate can also be found in unaffiliated tourist shops around the country.

Osa Chocolate

Eco Tourism

A major source of Costa Rica income comes from the sale of experiencing all that this beautiful country has to offer. With large swaths of protected forested land with beautiful land features such as volcanoes, beaches, and rainforest, an abundance of rare species, and sustainable agriculture, there is something for every outdoorsy person. Whether it be a wildlife tour, a hike, a tour of a chocolate or coffee factory, or sport excursions such as surfing, horseback riding, ziplining, and more, Costa Rica offers it all. This is a booming industry that allows the country to boast its strong focus on sustainability, thus allowing it to make sustainability profitable and create a huge job market for the locals. In addition to paying for the experience, the tourists also must in turn pay for lodging and food, thus boosting multiple sectors of the economy. The Osa specifically benefits from this industry due to the Corcovado National Park, and boasting the title as the most biologically intense place on the planet.

Ecotourism in Costa Rica: The Ultimate Eco Travel Guide

Rice

A major food staple in the country, growing rice preceded the boom in palm oil plantations. While the number of rice farms are dwindling due to transition over to the more profitable palm oil farms, this still remains a practice on the peninsula. One such farm is located in Selva Buena. However, the rice grown here is not nearly enough to satiate the country’s appetite for it, with internal production only covering national consumption for half a year. While Costa Rica exports $7.2 million USD of rice each year, it imports around $73.4 million USD. A large reason the country doesn’t expand to satiate the country’s own need for rice, aside from converting to palm oil farming, is to preserve the country’s natural areas rather than farming the land. Once rice has been harvested from the paddy, it does through a rice mill, where the rice is husked, polished, separated, and bagged. It is then ready for shipping.

https://oec.world/en/profile/bilateral-product/rice/reporter/cri

https://rice-processing.com/rice-processing-steps-from-pre-planting-to-post-production.html

Bananas

The banana industry in Costa Rica has an unfortunate origin. A native species of Asia, bananas were introduced to the country in the 1890s by Keith Minor, an entrapenuer looking to grow bananas next to the newly built transnational railroad. When bananas exploded in popularity around 1899, the United Fruit Company swooped in and controlled production in many parts of Central and South America. The company removed large swaths of forest to convert the land to either plantations or dwellings for the people working on these plantations. When the company finally did leave Costa Rica in the 1980s, they left the soil exhausted and thousands of acres depleted of its natural state. Since then, banana demand is still high, with Costa Rica being the 3rd largest exporter of bananas in the world (netting about $1.23 billion USD), with most of those bananas going to the US. Many of the sources nowadays, however, are smaller farms with a big focus on restoring the soil and farming more sustainably, such as the Osa Verde Farm. Once harvested, bananas are carefully packed and shipped in refrigerated containers to preserve their freshness until they reach their destination.

https://osaconservation.org/bananas-the-spotty-past-and-precarious-future-of-the-worlds-most-consumed-fruit/

https://growjungles.com/united-fruit-company-in-costa-rica/#:~:text=The%20United%20Fruit%20Company%20was%20given%20a%20significant%20land%20concession,exhaustion%2C%20and%20higher%20production%20costs.

https://oec.world/en/profile/bilateral-product/bananas/reporter/cri#:~:text=About&text=Exports%20In%202021%2C%20Costa%20Rica,exported%20product%20in%20Costa%20Rica.