Costa Rica a new shareholder: Remarks by the president, Enrique García

It is an honor to participate in this solemn act to formalize the membership of Costa Rica in the Andean Development Corporation, after a dynamic and constructive negotiating process that has ended with the signing of the membership documents and has enriched our mutual understanding of the potentialities offered by this new association.

I would like to thank the President of the Republic for the stimulus given to this initiative and for honoring us with his presence, and give a special recognition to the President of the Central Bank, Eduardo Lizano, who with dedication and effort assumed the leadership of this process, and to the authorities and officials who were involved in its success.

This new association should be seen as a two-way street. In one direction is the help the CAF can offer for the development of Costa Rica and the strengthening of its links with other member countries. In the other direction, the member countries - through the CAF - can learn from the successful experiences of this country in a variety of fields. In this respect, I would like to mention Costa Rica’s democratic tradition and stability, institutional strength and important achievements in competitiveness, human development and environment responsibility as an example for the region.

The CAF is an institution with a clearly Latin American identity. Backed by the efforts of the countries of the region, and with imaginative and flexible management, coupled with rigorous standards in credit and financial matters, the CAF is an important catalyzing agent for change in the region. The volume of its operations - approvals for over US$25 billion in the last ten years - and the versatility of its products and services for the public and private spheres have made the Corporation into the principal source of multilateral finance for the Andean countries and an important financier and link in the regional integration process. With this solemn act, the CAF now has 16 shareholder countries: the five countries of the Andean Community, Chile, the four members of MERCOSUR, Mexico, Spain, Panama, Trinidad and Tobago, Jamaica and of course Costa Rica.

In the framework of CAF's strategies and policies, we are looking forward with great interest to future cooperation with your country. Allow me to mention some areas that we would be interested in supporting:

First, stimulate an increase in trade and investment flows to and from Costa Rica with the other member countries of the organization through financing, seminars, business rounds and other means.

Second, promote the financing of sustainable physical infrastructure in the public and private spheres, with emphasis on projects that make an effective contribution to regional integration, as is the case of the projects linked to the Puebla-Panama Plan. It would also be interesting to help with the design and financing of a bi-national program of connectivity between Costa Rica and Panama, within the guidelines of the plan just mentioned.

Third, help small and medium-sized enterprises, benefiting from the experience of the National Development Bank and the National Bank of Costa Rica, and other financial intermediaries.

Fourth, offer our successful experiences in structured financing, cofinancing with private international banks and application of partial guarantees, as well as other risk mitigating products, which give countries more fluid access at lower cost to international capital markets. This is possible thanks to the preferred credit umbrellas that the CAF is able to provide as the Latin America issuer with the best rating from Standard and Poor's, Moody's and Fitch.

Fifth, offer Costa Rica access to a series of investment funds intended for the private sector in which the CAF is shareholder and whose aim is to promote equity investment, subordinated loans and/or guarantees against political risk for private companies.

Sixth, give Costa Rica access to non-reimbursable technical cooperation for sustainable development, competitiveness, institutional strengthening, governability, culture and other priority areas of development. As a first mark of our backing for Costa Rica in this field, we have signed with the Minister of Foreign Affairs, Roberto Rojas López, an agreement on non-reimbursable technical cooperation for US$100,000. These funds will assist Costa Rica in its role as Secretariat Pro Tempore of the Group of Rio and with the work program.

Before concluding, I would like to briefly comment on the situation in Latin America, which is the backdrop for the future action of the Corporation.

Despite the difficulties the region is facing as a result of the serious international crisis, Latin America has great possibilities to the extent that countries individually, and the region as a whole, deepen the reforms they successfully put through in most of the 1990s and that this is accompanied by an improvement in international economic relations, especially in the areas of commerce and development finance.

The time is right to go beyond the merely macroeconomic aspects to highlight issues such as competitiveness, increasing domestic savings, development of local financial markets, building a solid and credible democratic institutional base which guarantees stable ground rules for attracting private investment, and of course, consensus building, which is crucial for setting development agendas that give priority to environmental issues and stimulate the building of social capital.

It is in this context that we welcome with great satisfaction Costa Rica’s membership of the CAF, which offers us the opportunity to work together for the progress of the Latin American region with a view to achieving effective and equitable integration in the irreversible process of globalization. To give a practical sense to what I have said in these remarks, I am pleased to tell you that we are making plans for the visit of a technical mission in April to move ahead with the programming needed to transform these ideas into reality. Thank you.