Costa Rica: $7 billion Poorly Used

While essential infrastructure projects lack funding, the capital accumulated in pension funds only serves as a source of funding for state coffers.

Wednesday, January 8, 2014

In a country where the need for funds for projects that promote economic development is increasing, the resources managed by pension operators have to be invested in obsolete investment schemes, ensuring only low returns for contributors.

These outdated guidelines not only prevent contributors from achieving better returns so that they can enjoy larger pensions in their old age, but also hinder the country's development by not allowing the use of these funds in long-term projects for infrastructure, telecommunications and other sectors of importance to the country.

In this way, 62% of the country's pension balances are invested in debt of the Central Bank or the Government, which, while offering low levels of risk, also generate low returns.

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