Helping the Inefficient Means Punishing Good Businesspeople

In Costa Rica a law has been proposed that would benefit tourism businesses suffering from financial problems - caused by the 2008 crisis!! -, readjusting their debts and repurchasing and returning their lost assets.

Monday, May 11, 2015

EDITORIAL

Beyond the dark aspects of the bill - among them that it is not known who the beneficiaries are - its purpose seems rude and unfair to entrepreneurs who managed to overcome the crisis of the last decade through proper management and undoubtedly a lot of sacrifice, and who today have healthy companies.

"Helping" entrepreneurs who one way or another were less efficient than others in their management, creates distortions in the market, allowing for prices and conditions to be offered giving recipients an advantage over those who are not receiving such assistance.

If you want to help tourism, the "help" - which whatever form it comes in is always paid for from taxpayers pockets - should be granted to all operators, without distinguishing between those who were effective in the management of their companies, and those who were not. The opposite is corporate handouts, which is not acceptable in a free enterprise economy.

A healthy corporate culture of a country is demonstrated by determination and ability to adapt in the face of adversity, not the practice of holding out a hand to beg help from other people: good entrepreneurs with the ability to pay taxes, and - one way or another - all citizens regardless of their economic status.



More on this topic

The Real Causes of 1.2% Reduction in Poverty in Costa Rica

October 2016

Despite what the government has publicized, in-depth analysis of data in the 2016 National Household Survey confirms that welfarism was not the reason for the decline in poverty.

EDITORIAL


Without glossing over concepts that are politically expedient for a government that is in particular need of demonstrating some sort of achievement in its management, Diego Fernandez, Data Scientist at CentralAmericaData.com, thoroughly investigated the complex interplay of factors that determine poverty, confirming what is already known: direct assistance to families works better as a method of political patronage than as a tool for sustainable improvement of their income.

Costa Rica: Promotion of SMEs centralized

December 2015

In an attempt to reduce costs and improve the use of resources devoted to the subject, a bill proposes integrating into a single institution the organizations dedicated to promoting entrepreneurship.

The aim of the bill is for the current bodies DIGEPYME, INAPYME, PRONAMYPE, FODEMIPYME, PROPYME and CONICIT to be integrated into a single entity and a with single fund to maximize resources, reduce paperwork and costs.

Delta Bank Gets $6 million From IFC

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IFC, a member of the World Bank Group, will provide a loan to Banco Delta for lending to micro and small entrepreneurs in Panama.

From a press release by the International Finance Corporation (IFC):

IFC, a member of the World Bank Group, has awarded to Banco Delta SA the largest microfinance institution in Panama, a five-year loan for $6 million to support micro and small entrepreneurs who have little access to formal financial services. This is IFC's first investment in the microfinance sector of Panama, one of the most underdeveloped countries in Central America.

Less Government More Market

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Costa Rica is beginning to suffer the consequences of a Keynesian policy applied by the government to lessen the effects of the economic crisis.

"If there are no jobs in the private sector, let the State offer them. It is a simple remedy and especially beneficial for political parties in power as a tool to win votes and stay in power.”

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FEDECATUR

Promote the sustainable development of the tourism sector in Central America and the strengthening of the touristic business businesses in Central America.
Operates in Costa Rica, Guatemala, Honduras, Nicaragua and Panama
Phone: (504) 2232 6425

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