Costa Rican Economy - Essay Example

(Culture in Costa Rica 2002) Recently, Costa Rica has been trying to shift its economic trend, and adopting a more global approach. Plans are to turn Costa Rica, from a coffee exporter, to a silicon based company. Skilled labor, new opportunities, global participation is the new goal, as it is with most developing countries. (Costa Rica Businesses 2008) A small scale chain of grocery stores in a developing country can go both ways when it comes to 'making it'. If we talk about the current world events, then there are many going on right now.

With the phenomenon of global inflation taking over the planet, businesses, both small and large scale, are feeling the thump. A global issue that engulfs us all, are the prices of fossil fuels, namely; oil. As oil prices sky rocket above, everyone is feeling the shock. Major steps are being taken such as the development of alternative fuels, international talks, visits and conferences. This is an issue that affects the global economy. A grocery store chain in Costa Rica would be no exception.

It is simple economics that, the inflation caused by the rise in oil prices, would result in higher prices of goods and products all across the globe. Products will be more costly to produce and thus, will be exported at a higher price. The local Costa Rican grocery store will have inflated prices as well, of both, local and imported products. As prices of products increase, their demand goes down. Extreme conditions could result in recession or worse. Local producers would find it costly to produce with input costs going high because of the oil prices, and thus, a decrease in production could result in loss of jobs and a lower standard of living.

This situation can be seen in many regions around the world including many third world countries. Obama vs. ClintonAnother major global event is the U.S presidential elections. The ongoing rivalry between Hillary Clinton and Barack Obama is heating up day by day. (Troy 2007) The United States being a neighboring country and a trade partner can have a significant role in the Costa Rican economy. A change in government often results in a change in trade policies and international relations. New government expenditure would result in creation of employment in the country.

This would open up newer opportunities to earn and contribute to a raise in the GDP. Demand for local and imported goods would increase and people would be willing to buy more. If situation in the U.S improves further and employment over there increases, such activity can bring about a rise in the demand for Costa Rican imports. As a result, employment is created in Costa Rica, with production increasing and firms hiring more skilled and unskilled labor, resulting in a higher aggregate income level.

This would stimulate demand for products locally and people would have a higher level of disposable income. In this way, the chain of grocery stores could experience higher levels of business and revenues. War and UnrestAnother major issue is the ongoing unrest in the Middle East. Though the whole scenario may seem geographically far away but the world is a global village now. War and unrest in the Middle East is causing countries around the world to experience threats to national security, strained international relations and so forth.

(Yahoo News 2008) With many countries, including the United States,