III. ECONOMIC TRENDS AND OUTLOOK 1. MAJOR TRENDS AND OUTLOOK The economy of Costa Rica continued to grow at a healthy rate during 1993. Gross Domestic Product (GDP) in constant terms (1966 colones) grew 6.1 percent, less than the 7.7 percent rate of GDP growth during 1992, but still well above the 2.4 percent annual population increase. The growth of GDP in recent years has been fueled by large capital investment in tourist facilities, resulting from renewed interest in Costa Rica following the conclusion of conflicts in Nicaragua, Panama and El Salvador. In addition, Costa Rica, with 1/4 of its land dedicated to national forests, parks and reserves, has benefited from the phenomenal growth of eco-tourism and has become a destination for more affluent foreign tourists. Unemployment remained at 4.1 percent of the labor force during 1993 -- the same as in 1992. Real wages increased about 8%, reversing a downward trend that began in 1979, and regained 1980 real income levels. Inflation for 1994 is expected to be between 15 and 20 percent, significantly higher than the 9.8 percent experienced in 1993. Poverty, an issue in the recent political campaign, seems to have decreased slightly. The previous government claimed poverty declined from 22 percent to 17 percent from 1990 to 1994. However, about 27 percent of the population is at the poverty level as defined by the the United Nations Economic Commission for Latin America (ECLA), a third of which (9 percent of the labor force) is said to be in extreme poverty. In an effort to address the concerns of Costa Rica's poorest citizens, the new Figueres administration has introduced a consumer basket of 49 basic household commodities whose prices the government intends to monitor closely. 2. PRINCIPAL GROWTH SECTORS Sectors directly involved in servicing tourists grew considerably during 1993, continuing the trend of recent years. Unfortun- ately, there is no statistical information on the growth of sectors directly involved with visitors to Costa Rica. However, the importance of tourism can be deduced indirectly. According to the tourist board (ICT) 690,000 visitors came to Costa Rica during 1993, in comparison with 376,000 in 1989. At the same time, the number of available rooms increased from 5,456 in 1989, to 13,000 in 1993. Income from tourism is estimated at over $500 million in 1993, two and one-half times the amount in 1989. Employment in the tourist sector is estimated to be about 62,000, with a comparable number of workers employed in jobs indirectly connected to tourism. The growth rates for construction (4.7 percent), commerce, hotels and restaurants (8.2 percent), transportation, storage and communications (11.3 percent), and financial intermediation (12.4 percent), indicate continued growth of tourist activities, the most dynamic sector of the economy. Agriculture, the most traditional economic sector, employing about 24 percent of the labor force, grew only 2.2 percent in 1993 (3.9 percent in 1992 and 6.3 percent in 1991), despite a modest increase in banana exports. Industry, the largest contributor to GDP and employer of 19 percent of the labor force, grew 6.5 percent in 1993 (10.3 percent in 1992 and 2.1 percent in 1991). The public sector grew 2.0 percent in 1993 (1.0 percent in both 1992 and 1991) -- predictable considering that 1993 was a political campaign year. 3. THE GOVERNMENT'S ROLE IN THE ECONOMY Costa Rica is one of the few remaining Latin American countries where the direct participation of the state in economic activities is still accepted as legitimate. This stems from special historical and political circumstances which may not be found elsewhere. Any modification of the existing system of parastatal institutions requires the consensus of the two main political parties (94 percent of the electorate vote for either the Partido Unidad Social Cristiano (PUSC) or the Partido Liberacion Nacional (PLN)) which is generally very difficult to obtain. State participation in the economy is not new. Tobacco and alcohol production were made state monopolies by 1830 (alcohol production continues as a monopoly), in order to finance the government of the young republic. Insurance was made a state monopoly in 1929, in order to buy out a foreign private monopoly. National Health (Caja Costarricense de Seguro Social - CCSS) was founded in 1940. The largest commercial bank, Banco Nacional de Costa Rica (BNCR), was created by the state in 1920. BNCR's currency issuance department was later separated to form the Central Bank in 1950, as a result of the Bretton Woods agreements soon after WWII. Other departments of the Banco Nacional were separated in order to create parastatal institutions: INVU (Instituto Nacional de Vivienda y Urbanismo) - a housing authority, came out of the mortgage department of BNCR in 1954; and CNP (Consejo Nacional de Produccion), an agricultural goods price support mechanism, evolved from the agricultural lending department of BNCR. Other institutions were mandated by international organizations as conditions for Costa Rican membership: ITCO (Instituto de Tierras y Colonisacion) -- later called IDA (Instituto de Desarrollo Agrario) by the Alliance for Progress effort of the Kennedy Administration that considered land redistribution an imperative in Costa Rica and a condition for receiving aid from the U.S.; and AyA (Instituto Costarricense de Acueductos y Alcantarillados), the waterworks, for receiving financing from the World Bank for potable water systems. Some parastatals were created as solutions to specific political problems during the depression between WWI and WWII, or in order to buy out foreign monopolies: the Atlantic coast railroad; ICE (Instituto Costarricense de Electricidad), the electricity and telephone monopoly; and RECOPE (Refinadora Costarricense de Petroleo), the state petroleum refinery. It was with the creation of CODESA (Corporacion Costarricense de Desarrollo) in 1972, that the post-WWII scheme of state-driven development was put into practice in Costa Rica. CODESA subsequently became a discredited form of accelerating economic growth. CODESA was designed to create enterprises to be sold later to the public -- in accordance with schemes that were popular in development (ECLA, World Bank) and academic circles in the 1950s and 1960s. India, Indonesia, Japan and China were considered models. CODESA was an unmitigated failure. Between 1979 and 1991, the company lost 25 billion colones (approximately 300 million dollars) at 1992 prices. The government was persuaded to liquidate or sell most of CODESA's assets only as a result of a conditionality provision attached to assistance of USAID during the debt crisis of the early 1980s. Even the best companies (CEMPASA, ALUNASA, the Stock Exchange) were sold at bargain prices to the private sector. The sale of CODESA's assets continues, but is heavily conditioned on political pressures -8- aimed at encouraging trade unions, associations and private Costa Rican share purchases rather than foreign buy-outs. Attempts to effect ESOPS and CSOPS buy-outs have largely failed, however, and most former CODESA companies have been sold to private investors -- foreign and local -- facilitated by FINTRA, a trust set up by USAID to help with the liquidation of CODESA. By February 1994, efforts to liberalize the Costa Rican economy switched from efforts to privatize state enterprises to attempts to repeal the state monopolies on fuel (RECOPE), demand deposits (which only the four state-owned banks are allowed to offer), insurance (Instituto Nacional de Seguros (INS)), and electricity and telecommunications (ICE), to allow competition in these sectors from private (mostly foreign) companies. Unfortunately, both the privatization of state entities and the opening up of these sectors to competition require broad political backing in the Legislative Assembly -- non-existent at present. While foreign banks may establish branches in Costa Rica, they are subject to the same limitations as other private banks. Although they may offer certificates of investment and international transaction services, such as providing letters of credit, they cannot currently offer demand deposits. The Costa Rican Legislative Assembly is studying the possibility of allowing private banks to offer demand deposits, but a final decision regarding this issue has not yet been made. Additionally, private banks, both domestic and foreign, are unable to access Central Bank rediscount facilities, except when the resources are provided with foreign donor funds, e.g. IBRD, IDB, and USAID. Then-President-elect Jose Maria Figueres announced in April 1994 plans to strenghthen and modernize, rather than sell, the state enterprises in order to boost their competitiveness. A primary reason for the government's wish to retain control of certain profitable state enterprises is that they yield a substantial surplus to the consolidated public sector budget, which is substantially in deficit. But for the profits from the state banks and the two large and powerful monopolies RECOPE and ICE, the government would be unable to finance its operations without obtaining from the Legislative Assembly a significant tax increase or without subjecting the country to substantially higher inflation. On May 18, 1994, the Legislative Assembly enacted the long- awaited Hydrocarbons Law, which permits private parties, including foreign companies, to explore for and eventually to extract petroleum, provided they are granted concessions or reach other contractual agreement with the Government of Costa Rica. To date, the few attempts made to find oil in Costa Rica have been unsuccessful. 4. BALANCE OF PAYMENTS SITUATION During 1993, Costa Rica's balance of payments continued to improve, despite a historically large trade deficit. While exports FOB reached USD 1,944.6 million, imports CIF amounted to USD 2,869.2 million, yielding a trade deficit of USD 924.6 million. However, USD 452 million accrued to the capital portion of the balance of payments, primarily as a consequence of foreign investment and Costa Rican repatriation of capital. USD 687 million accrued to the services and transfers account, due largely to the monumental growth in tourism. Preliminary figures indicate that, according to IMF methodology, the foreign exchange reserves at the end of 1993 amounted to USD 470 million, equivalent to about two months of imports. During 1993, Costa Rica paid USD 386 million in foreign debt service (up from USD 315 million in 1992) and successfully rescheduled USD 167 million in foreign debt. The outlook for the next few years remains uncertain. This is due to uncertainty in the international coffee market, the burden of foreign debt obligations, the rising internal debt level and the need to reduce public sector spending to match modest increases in revenue. 5. TRADE AND INVESTMENT BARRIERS In general, Costa Rica has a relatively open international trade and investment regime. However, state monopolies in public utilities, insurance, bank demand deposits, the production and distribution of electricity, hydrocarbon and radioactive minerals extraction, refining and the wholesale distribution of petroleum and operation of ports and airports limit investment opportunities in these sectors. The Goverment of Costa Rica has reduced customs tariffs in accordance with the open, free-market goals of the Central American Common Market (CACM). However, some popular items (e.g. vehicles, apparel, arms, munitions and custom jewelry) are still subject to relatively high tariffs. The sale of cement also continues to experience barriers to efficient service provision. Import permits required for dairy products, pork and poultry meat, rice, beans, potatoes, onions, wheat, and sorghum can act as de facto bans on U.S. exports of some of these products. A notable exception is wheat -- a crop not produced in Costa Rica-- which is almost exclusively imported from the U.S. Trade prospects in the agricultural area should improve when non-tariff barriers such as import permits are transformed into tariffs in accordance with Costa Rica's GATT accession agreement. Other limitations include the careful regulation of solvents and precursor chemicals to prevent illegal use. Surgical and dental instruments and machinery can be sold only to licensed importers and health professionals. All food products, medicines, toxic substances, chemicals, insecticides, pesticides and agricultural inputs must be registered and certified by the Ministry of Health prior to any sale. Several regulations which create barriers to U.S. exports have been imposed by the Costa Rican Ministry of Health. Each issue has been addressed individually after a U.S. company has been negatively affected. In general, however, any pharmaceutical product must be presented to the Ministry of Health, preferably by the U.S. company's assigned importer. The Ministry of Health will render a decision on the acceptability of the product often based on the judgment rendered by the U.S. Food and Drug Administration or the equivalent entity in the European Union. The Central Bank no longer licenses imports. All imports and exports are registered for statistical purposes only. Foreign companies and persons may legally own equity in Costa Rican companies, including real estate. Recognizing the impossibility of public financing of large scale infrastructure projects, the Costa Rican Legislative Assembly recently passed a law allowing private construction and operation of public projects on a concession basis. Such facilities would revert back to the state after an agreed upon period. Many service industries are so rigorously controlled that foreign participation is practically impossible. Medical practitioners, lawyers, certified public accountants, engineers, architects, teachers and other professionals must be members of local guilds or associations which stipulate residency, examination and apprenticeship requirements that can only be met by long-time residents of Costa Rica. Investment in such private sector activities as newspapers and radio and television stations and customs brokerage firms are limited to Costa Rican citizens. The Government encourages the development of non-traditional exports and tourism, provides incentives for foreign investment (e.g. free trade zones, etc.), and does not restrict foreign equity participation. The share of foreign workers in an enterprise is limited by law, but the Ministry of Labor generally grants permission for foreigners to work. All available information indicates that permits for foreign participation in management have always been granted. No requirements exist for foreign owners to work in their own companies. There are no restrictions on the repatriation of profits and capital. The government and other state institutions make procurements through open public bidding, but the law allows private tenders and direct contracting of goods and services in limited quantities or in case of emergency with the consent of the Contraloria (General Accounting Office). Public bidding is -11- complicated and foreign bidders are frequently disqualified for failure to comply with the detailed procedures. The lengthy and costly appeal process has often caused losses due to interim price changes while bidders cannot alter their bids. However, the government is considering legislation which would shorten and rationalize the appeal process. Costa Rican customs procedures are legendary for their cost, complexity, inefficiencies and pervasive corruption. The Costa Rican Customs Service has resisted computerization for years, despite U.S. AID and other private entities' many attempts to modernize the system. Consequently, most large enterprises are forced to have customs specialists on the payroll, in addition to obtaining the services of customs brokers. Customs brokers must be bonded Costa Rican companies and enjoy a monopoly on the handling of imports. All importers and exporters, including U.S. companies, suffer from defective customs procedures, poor administration, theft, graft and inadequate facilities. The government's expropriation policy is a disincentive to U.S. investment in Costa Rica. The government has expropriated large amounts of land for national parks, biologic and indigenous reserves, and squatters without providing the prompt, adequate and effective compensation required by international law. Some unpaid U.S. expropriation claims date back over 25 years. While it is theoretically possible to obtain compensation through the court system, the time, cost and frustration of litigating against the government greatly diminish the value of such efforts. The government has made some efforts to resolve expropriation cases. However, several U.S. citizens with long- standing claims have not yet received prompt, adequate or effective compensation. In addition, the compensation offered to some U.S. claimants has been inadequate in part due to payment in depreciated local currency, so that actual compensation was reduced over time. The U.S. government, through extraordinary means such as freezing aid money or delaying international loans, has been able to force progress in some individual cases. Claimants also theoretically have had recourse to international arbitration through the International Center for the Settlement of Investment Disputes (ICSID) since early 1993 (when the Government of Costa Rica ratified the necessary convention), but no disputes have yet been submitted to ICSID. Claimants have had access to a local arbitration procedure since 1991, but the results obtained from local arbitration have at best been mixed, with at least one clearly inadequate arbitral award in which the arbitral panel employed non-market interest and exchange rates -- contrary to a ruling of the Supreme Court. Landowners in Costa Rica -- especially in the area of Pavones, but also in other regions -- also run the risk of losing their property to squatters, who are organized and increasingly violent. Costa Rican land tenure laws favor squatters, and in recent years police protection of landowners in rural areas has been poor to non-existent. 6. LABOR FORCE (1993) Labor force, civilian 1,131,000 Employment, civilian 1,085,000 Employment, in industry 19.0 percent Employment, in agriculture 24.0 percent Employment, in services 49.0 percent Unemployment rate 4.1 percent Underemployment rate 8.7 percent (estimated) Minimum wage rate 24,450 colones/month Average hours worked per week 48 hours Unionization of labor 15 percent MAJOR LOCAL & THIRD COUNTRY COMPETITORS IN SPECIFIC SECTORS In the area of automobile parts and service equipment the unqualified competitor, since the 1960s, is Japan. Since the 1980s Korea and Brazil have emerged as strong competitors. American cars have only recently started to carve out an important niche in this very dynamic market. Due to high import tariffs used cars are the most important automobile import. The most preferred used cars are American. France, Japan and Germany are the major third country competitors in telecommunications equipment while Spain, El Salvador, South Korea, Brazil, Japan, Columbia and Guatemala are the major competitors in hotel and restaurant equipment. In the area of medical equipment, Germany and Japan are providing competition to American products while in the area of security and safety equipment Brazil, Germany, Israel, Italy and Taiwan are major competitors. In the new area of pollution control equipment Japan and Switzerland are the major third country competitors; in port and shipbuilding equipment, Taiwan and Japan are major competitors, and in airport and ground support equipment Japan is the major competitor. In the 8 sector export prospects Taiwan, Korea, Germany, Italy, Brazil, Japan, Venezuela, Mexico, Spain, China and most Central American countries, including Panama, are other major competitors. Costa Rica has large Spanish, German, Israel, Chinese and American-resident communities all which contribute greatly to commercial development from those countries. In the agricultural areas, local production of rice and some processed foods such as canned fruits and vegetables, juices and snack food provides competition. Guatemala is an important competitor in the area of breakfast cereals and some sources of condiments. Chile provides competition in the areas of fresh fruits, especially grapes. INFRASTRUCTURE SITUATION RE: GOODS/SERVICE DISTRIBUTION Costa Rica has a 15,000 mile road system in various stages of repair. All major areas of the country and all major cities are accessible by road however only a percentage of these roads are well-paved. The Pan American Highway, the only highway which runs continuously from the Nicaraguan to the Panamian borders is paved but in poor condition. This major highway, with only 2 lanes, is used by all 18 wheel trucks traveling from the U.S. and other Central American countries to Costa Rica, Panama and South America. As of June 1994 only the Juan Santamaria International airport, outside San Jose, is approved for use by U.S. air carriers. Since 1993, tourism has been Costa Rica's major industry surpassing bananas. It is estimated that over 700,000 tourists will visit Costa Rica in 1994. Another airport, near Liberia (in the Guanacaste region, a potential and emerging tourist hub), about 270 Km Northwest of San Jose, has a runway for international jets but is not fully operational. This airport will become increasingly important if and when the many hotel and resort projects planned by numerous foreign investors are successfully built. There are nearly 100 small airports throughout the country (San Jose, Limon, Puntarenas, and Liberia, for example) capable of receiving small jets. Other even smaller airstrips throughout the country are served by Servicios Aereos Nacionales (SANSA), the national internal airline. On the Pacific coast lie the ports of Caldera and Fertica. Caldera, the newest port, has container and roll-on, roll-off cargo facilities for three ships as well as general cargo and bulk grain handling. Caldera's annual growth is between 15 to 18%. As well, Caldera has become important as a cruise ship landing point and has developed a duty free area for cruise ship shoppers. The increase in grain being imported through Caldera (700,000 MT), along with the inefficient grain unloading equipment and the absence of silos at the port has increased congestion significantly at Caldera. Total annual tonnage passing through Caldera and Fertica is: 1,500,000 MT and 150,000 MT respectively. Also on the Pacific Coast is Punta Morales, a port specializing in bulk loading and unloading of sugar, grain and cement. Quepos and Golfito on the Pacific Coast, used mainly for fishing and tourism, can also handle small international cargo. Golfito is extremely controversial to the Costa Rican business community because it sells a large array of goods at reduced costs. Costa Ricans are known to purchase major appliances at Golfito cheaper than in San Jose. Annual tonnage figures for Punta Morales is 175,000. On the Caribbean coast, Limon and Moin can handle container and roll-on, roll-off cargo. Moin also handles crude oil imports. Banana exports go through Limon and Moin to Europe and the East coast of the U.S. Total tonnage for Limon and Moin is 5,000,000 annually (annual growth is 9%). Ten major shipping lines (seven are U.S. shipping companies: Sea Land Service, Inc., Crowley Caribbean Transport, Inc., Seaboard Marine, Inc., Thompson Shipping Co. Ltd., King Ocean, Nebor Shipping and Dole Fruit Company provide regular transport services to and from Costa Rica. Major ports of entry into the U.S. are: Miami, Tampa, New York, New Orleans and Houston. Both the Calderon administration and the new Figueres administration are aware of the urgent need to upgrade Costa Rica's airports and ports. See MAJOR INFRASTRUCTURE PROJECTS UNDERWAY for descriptions on these upgrades. As well, a private international consortium, lead by Americans, is working on a the dry canal project, worth over USD$ 1.1 billion to help ease the congestion at the Panama Canal. This controversial project was presented to President Figueres in late June 1994. MAJOR INFRASTRUCTURE PROJECTS UNDERWAY This is a partial list of some of the most important major projects. It reflects projects whose planning was begun during the Calderon administration (1990-1994). Other, important Figueres administration projects such as those in the areas of education and waste management will be explored in upcoming IMIs from Costa Rica. ANGOSTURA HIDROELECTRIC PROJECT: (Executing Agency: Costa Rican Institute of Electricity -ICE) This project consists of the construction of a 36 meter high dam, a tunnel of 6,221.6 meters long and reinforced tubed conduction of 537.7 meters long to the machine house, two surplus spillways and one bottom discharge. The machine house will have three vertical shaft francis type turbines of 59,000 KW power each. One hundred seventy-seven (177) MW power will be installed. Annual average energy estimation for the whole project is 970 GWH. This project has an estimated cost of USD 350 million, and will be funded by the Interamerican Development Bank -IDB. Public tenders for this project will be published starting in September/October 1994. TEJONA AEOLIC PROJECT: (Executing Agency: Costa Rican Institute of Electricity -ICE) This project consists of the production of 20 MW wind power with the installation of 40 to 100 wind turbines in Tejona, Guanacaste Province. The project has an estimated cost of USD 40 million and will be funded by the Interamerican Development Bank -IDB. (A new Costa Rican law permits the establishment of private energy power of up to 20 MW.) ENLARGEMENT OF PORT OF LIMON PIERS: (Executing Agency: Costa Rican Administration for the Development of the Atlantic Ports -JAPDEVA) This project consists of: the expansion and upgrading of loading docks in Limon and Moin and the construction of additional terminals for vessels, such as the Roll-on/Roll-off terminal. This Project has an estimated cost of USD 30.0 million and it is partially funded by the World Bank. ENLARGEMENT OF JUAN SANTAMARIA AIRPORT PROJECT: (Executing Agency: Costa Rican Ministry of Public Works and Transportation -MOPT) The project consists of the construction of 3 additional airline gates, the enlargement of the cargo terminal and passengers arrival/departure areas, the resurfacing of the air strip, and the installation of security systems. The project has an estimated cost of USD 14.0 million. CIUDAD COLON/OROTINA HIGHWAY PROJECT: (Executing Agency: Costa Rican Ministry of Public Works and Transportation -MOPT) Worth USD 90.0 million this project consists of the construction of a highway from Ciudad Colon in San Jose, to Orotina in Puntarenas. SEWAGE FOR THE GREAT METROPOLITAN AREA AND 12 MAJOR CITIES PROJECT: (Executing Agency: Costa Rican Institute of Aqueducts and Sewage Systems -AYA) This project has an estimated cost of USD 180 million (funded by the Interamerican Development Bank -IDB) will consist of the design and construction of a modern sewage network for the great metropolitan area and for 12 major cities of Costa Rica. CONCLUSION OF LIBERIA AIRPORT PROJECT: (Executing Agency: Costa Rican Ministry of Public Works and Transportation -MOPT) The Liberia Airport Project consists of finishing of the terminal building and of the construction of 2 additional aircraft gates. Estimated cost USD 2.4 million. Radar instrumentation, airport vendors and numerous other facilties will be needed. PAPAGAYO TOURISM PROJECT: (Executing Agency: Costa Rican Tourism Institute -ICT) This tourism project started in August 1979, under auspices of the Intituto Costarricense de Turismo -ICT, consists of the development for tourism purposes, of the Gulf of Papagayo, located in the Northern Pacific coast of Costa Rica. This project includes the development of 15 beaches, (a total of 2,000 hectareas, approximately 4,940 acres), from Punta Cabuyal to Punta Cacique in the Guanacaste Province. The ICT will permit the private construction of two story hotels/resorts which cannot affect the eco-system of that specific area. Presently the ICT has approved 15 permits (concessions) to local and foreign firms that have decided to invest in this area. The ICT expects that local and foreign firms will invest some USD 1,000 million, mostly in infraestructure during the next 15 years. Estimated year of completion of this project is 2010. WASTE MANAGEMENT FOR 12 MUNICIPALITIES (Executing Agency: National Commission for Emergencies, 13 municipal entities, Ministry of Public Works) Costa Rica must address the emergency situation that exists in the handling of waste for 13 municipalities including San Jose. Numerous projects and sites have been proposed over the last year and a half. In November of 1993 a consortium of Costa Rican and Mexican companies were granted this waste management contract however the newly-elected Figueres Administration has decided not to proceed with the previous Administration's program. It is estimated that a garbage processing plant could cost USD$140-160 million. Other costs to include land and reimbursements to the municipality which will house the landfill, etc. could mount to over USD$3 million. COSTA RICAN INTEROCEANIC CANAL (DRY CANAL) (Executing Agency: Ferrocarriles de Costa Rica) This project consists of the construction of an interoceanic railway from the Atlantic coast to the Pacific for the trans- shipment of containers whose vessel cannot cross the Panam Canal. This project is estimated in USD 1,200 million and the Government of Costa Rica would give it under concession for a period of approximately 30 years to any company of consortium that could build the railway and the tow port facilities with own financing. MIRAVALLES II - GEOTHERMAL PROJECT (Executing Agency: Instituto Costarricense de Electricidad (ICE) Miravalles I, Costa Rica's first geothermal project became operational on March 25, 1994. Three American companies, NABORS- LOFFLAND, AIRDRILLING and HALLIBURTON, had major roles in the completion of this project which, after many years of appeals by various bidding entities, was begun in 1991. NABORS-LOFFLAND has every intention of bidding on MIRAVALLES II, Costa Rica's second geothermal project which should be open for bidding within the next 12 months. As well, American companies (i.e. General Electric) should consider the turbines for MIRAVALLES II. The 55kw turbine engines at MIRAVALLES I were provided by Marubeni; funding was provided by the Japanese government. Other funding for MIRAVALLES I was provided by the Overseas Economic Cooperation Fund and IDB. The U.S. Department of Energy recently brought a team of American businesses, academics and financial people to Costa Rica to analyze the potential for American geothermal companies at MIRAVALLES II.