Intel in Costa Rica
Big questions
1. What is globalization? How does it operate? What is FDI? Does it help poor countries, hurt them, or have no impact?
2. What are some of the alternative forms of development that don't involve globalization? How effective? Examples of success and failure?
3. Why do some people get so angry about globalization?
4. How does Intel's investment in Costa Rica fit into these conclusions about globalization?
5. What does Intel do? Importance of Intel's products? Is Intel important because it has so much money?
6.Are all TNCs alike? Anaconda Copper, United Fruit, Exxon, Intel?
7. Value chain of Intel? What kind of plant is in Costa Rica? Is this plant an example of exploitation of Costa Rica?
8. What was the process of getting Intel into Costa Rica? Did the government give away too much?
9. What kind of work force does Intel want for its plant in Costa Rica? Is it likely that Intel will pack up and leave if labor costs rise?
10. What are the main criteria used by Intel to locate an ATP? Are these criteria an indication of exploitation?
low cost, highly trainable work force, non union
low turnover
highly qualified engineers
stable economic and political conditions
Costa Rican commitment to economic openness and economic liberalization
Costa Rican commitment to electronics sector
transparent operating and legal environment
reasonable cost structure
pro-business environment
Effective international logistics
fast track permits
11. Based on the process, what seemed to affect Intel executives about Costa Rica when they visited? What are some of the most importantr concerns they expressed?
Intel was too big for Costa Rica - whale in swimming pool
Education system was inadequate - technical training
Incentives were too low
12. Some important terms for evaluating Intel's economic impact:
spillover effects
industry clusters
sustainable source of comparative advantage
free trade zonecompare textiles, bananas, microprocessors-electronics
13. Some areas of Intel exploitation of Costa Rica
non-union
education demands
change government into corporate stooge
force the press into silence
low wages
keep big knowledge of fabrication and design to themselves
force farmers to become laborers
huge electricity demands - force lower rates for high energy users
tax breaks are unfair
anti-local culture - force Yankee time onto locals who prefer tico time
push for CAFTA
forces global competition on locals
damage environment with roads, bigger airport, demands on services
attracts other TNCs who just magnify these bad effects
brings McDonalds to Costa Rica and other Yankee imperialist firms - damage local culture
14. Recent Events:
New Intel plant here
starts making chipsets
June 11, 2004By the A.M. Costa Rica staff
President Abel Pacheco Thursday helped inaugurate a new Intel/Costa Rica plant where computer parts called chipsets will be manufactured.
The Costa Rican plant is the third in the world to produce this tiny device. The country joins China and Malaysia.
The plant is a $110 million investment and creates 600 new jobs.
Right now Intel employs some 2,000 Costa Ricans and reports that the turnover rate of 6 percent is the lowest of its plants. Also made here are nearly all the world’s Xeon and Titanium processors and a third of the Pentium 4 processors for computers.