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ate May saw an announcement by Intel that it would be investing $80 million in Costa Rica production plants during 2006. In addition it will be adding 500 jobs to its normal operations, bringing total payroll in the tiny Caribbean nation to 4,000 and total amount invested in the country since it arrived in 1997 to $732 million.
   One hundred and fifty of those jobs will be at the company's new shared services center, opened in 2005 in San Jose. According to a presentation at a Shared Services Week conference in Wales last year given by Tim Whitrow, EMEA accounting manager for Intel, the San Jose operation is one of two the company has recently opened, the other being in Penang, Malaysia.
   Whitrow said the primary reason for consolidating at these two SSCs was critical mass, which drove the company, with 85,000 global employees and 38 legal entities within EMEA alone, to go global with its shared services operation in 2004. San Jose was chosen in large part because of being in the right time zone. Some of the new operation is consolidated from offices in Portland, Ore. The company has also begun to base some of its engineering services for Latin America in the country.
   Whitrow's presentation was shortly followed by one from Procter & Gamble. P&G also had chosen San Jose as one of its SSC sites, in addition to sites in Manila and Newcastle, U.K. The SSC strategy came out of the firm's 1999 corporate restructuring, which included partnering with IBM in servicing its global business services organization.
   HP, with 18 shared services centers opened over the past 15 years, had also opened one in Costa Rica that employs between 200 and 300 in transaction processing. Among the attributes noted by Sanjay Singh in his presentation was the four-language capability of HP's Costa Rica SSC. His colleague Konstantin Mudrack, director of global shared service operations for EMEA, said the company's overall SSC consolidation has helped cut costs by 80 percent in a mere one-and-a-half years.
   HP has announced further expansion in Costa Rica to the tune of tripling its services work force to 3,500 within the next two years. In its November 2005 announcement that it was first growing from 500 to 1,000 at its service center there, the company said it had decided to expand operations in Costa Rica "due to its geographic location, working hours, capacity of its human resources, social stability and lower costs compared to other countries."
   Washington Mutual, which has recently moved thousands of jobs to Texas, is also moving some to Costa Rica. As reported by The Los Angeles Times earlier this year, the reasons are simple but multiple: "lower costs, an educated, bilingual workforce, political stability, fat tax incentives and its location." Other recent services entrants include PeopleSupport, with a $5-million, 500-seat call center serving Latin America, and Fujitsu Consulting with a 400-person center.
   The fact of its Central Time Zone is not a small one. That not only suits Intel, but other manufacturers who'd like to offshore without traveling to another hemisphere. Surgical tool maker MedTech Group and Texas-based Arthrocare, among others, have recently made that move, part of a wave of more than $100 million invested by the medical device sector in 2005. That included Boston Scientific, Hospira and Smith Sterling, the dental prosthesis maker that pledged in November 2005 to invest $30 million in its Costa Rica operations over the next decade.
   The Costa Rican Investment Promotion Agency (CINDE) reports that 34 different corporations have established SSCs or similar services operations. That puts Costa Rica third, behind China and India, in competitiveness for outsourced services, according to the Global Outsourcing Report prepared by Going Global Ventures and Horasis. CINDE is capitalizing on that ranking: Already this year, it's met with 38 corporate investors interested in possible service operations in the country. All told already, some 30,000 of the nation's 4 million inhabitants work for 300 companies in the IT and medical fields.
   Like its Caribbean neighbors, Costa Rica has diversified its economy because it had to, offering tax breaks and special economic zones to manufacturers in order to break away from too much dependence on agriculture and tourism. But now those tax-free zones have been declared by the World Trade Organization to be an illegal export subsidy, and must be phased out by 2009. The need to develop an alternate path for business comes at the same time that the nation considers ratification of the Central American Free Trade Agreement (DR-CAFTA) that will affect the entire Caribbean basin.
   Labor unions have opposed DR-CAFTA ratification. But in its favor is none other than Oscar Arias, the Nobel Peace Prize winner installed on May 8 as Costa Rica's president, having also served in that post from 1986-1990. He has pledged new fiscal incentives, with the stated goal of tripling corporate investment in the country.
   Looming large in his sights is the country's corporate tax rate of 30 percent, which, while smaller than that of the U.S., needs trimming if the nation is to resemble Ireland, a country Costa Rica in many ways aspires to emulate. That country has a 12.5-percent rate, though its policies have come under fire from the EU. One paper in Costa Rica, La Nacion, has reported that Arias is considering zones with rates below 10 percent. Meanwhile a 15-percent rate is under scrutiny by the nation's Congress, and Arias has floated the idea of a flat tax.    A Caribbean Nearshore report issued in early 2006 by Zagada Markets showed 108-percent growth over the previous two years in outsourced call center services throughout the market, led by Jamaica and the Dominican Republic.
   "American companies have become both catalyst and partners in more than doubling the region's call center agent positions from just over 11,000 in 2002 to almost 25,000 as of the end of 2004," said the report. That comes despite what Zagaza termed non-competitive telecom costs in some quarters and a dominant hospitality-oriented media and business perspective.
   "Regional contact center operators and economic development agency promoters are successfully using their thee 'P's advantages of proximity (nearshore), proficiency (English and Spanish) and preparedness(education and U.S cultural alignment) to buttress these challenges as the region emerges into a competitive nearshore CRM provider to U.S corporate buyers," said Zagada.
   The total call center count includes 35 in the DR and 16 in Jamaica, together employing some 22,000 agents and adding over 6,000 positions over the previous year. But the biggest growth has been in Barbados, which has seen growth from three to 10 centers in that two-year span. All told, the 50,000-position benchmark could be reached by the end of 2006.
   "The combined Central American and Caribbean agent count now stands at 53,410 and is projected to top 75,000 by the close of 2006," said a separate February release from Zagada. "These numbers do not include an additional 17,000 workers engage in back office, center office and IT related business process outsourcing (BPO) tasks. Stated in outsourcing terms, the Central American and Caribbean market currently employs over 70,000 BPO workers as of the end of 2005."
   The report gave "particularly high site selection, operational and business development best practices marks to the economic development agencies of Jamaica (JAMPRO), St. Lucia (SLDC), Barbados (BIDC) and Puerto Rico (PRIDCO)."    In Puerto Rico, the pharmaceutical industry is of two minds. The recent shutdown of the Puerto Rican government did nothing to calm corporate portfolios, but some are expanding there in any case.
   GlaxoSmithKline was already pulling some aspirin production out of Puerto Rico in order to expand in Aiken, S.C. Schering-Plough announced in early June it would be closing its plant in Manati, putting 550 out of work. Another 50 will lose their jobs at another Schering-Plough plant in Las Piedras, where 475 people will continue to be employed in the manufacture of hepatitis, allergy and cholesterol drugs.
   But in that same city, Bristol-Myers Squibb, in addition to its blockbuster new project in Massachusetts, is in the process of investing $200 million in expanding biologics production, adding 100,000 sq. ft. (9,290 sq. m.) and renovating 30,000 sq. ft. (2,787 sq. m.) for the filling and finishing of the company's sterile products and biologic compounds, including ORENCIA and Coumadin.
   In the Dominican Republic, some leaders expect exports to come from two business parks: the Dominican Republic Cyber Park and the Santo Domingo Cyber Park. Perhaps helping that along is a new organization launched in May, the Dominican-American Business Initiative (DABI), a consortium of Dominican and Florida business leaders focused on "fostering business, real estate initiatives and trade between the U.S. and the Dominican Republic." DR-CAFTA comes into effect in June after being passed by the Dominican Republic Congress.
   While much of the focus is on hospitality and retail, infrastructure and industrial will get its share too. The republic's secretary of state for urban development, Joaquin Geronimo, said at DABI's launch at its headquarters in West Palm Beach that a port is being built in the DR's northeast in Samana, and a new road will make the resort area accessible to Santa Domingo in just over one hour.
   Lena Ciccone, on the board of directors of the National Urban Development Council, said DR-CAFTA is "going to be the big door for foreign investment. Our country is unique. In 2005, the economy grew at 9.3 percent, not very usual in Latin America or any part of the world. In 2006, we expect growth of not less than 5.5 percent."
   Several conditions point to prime development on the horizon: "We have a lot of land that can be developed," for one, said Ciccone. Mortgage rates have come down as dramatically as inflation. And the debut of pension funds in the DR in 2002 has shown promise too, as they are obligated to invest 25 percent of their funds in new construction.
   Infrastructure development is coming along, highlighted by a pair of 600-megawatt coal-fired power plants coming online, and the opening of a new cement plant from Italy's Colacem SpA in November 2005.
   Fiscal infrastructure is also central to the story. Ciccone said inflation went from 42.66 percent in 2003 to 7.44 percent in 2005, and less than 6 percent is expected for 2006. Fitch Investors Service upgraded the country rating for the Dominican Republic from B- to B+, and, she said, "The president of the World Bank pointed out the Dominican Republic as having similar growth opportunities to Singapore."