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COSTA RICA: Headhunting First-World Seniors

Posted: 2010-03-12
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The Costa Rican government has declared retirement communities, aimed at attracting U.S. pensioners, to be ``of national interest`` Plans to create ``retirement clusters`` providing complete health services for older adults are seen as a profitable prospect for this Central American country.

By Daniel Zueras, SAN JOSÉ, Mar 8, 2010 (IPS) -- Old people as a business: this is the bottom line of the government and private sector's new project.

Noting the rapid development of the "health cities" in Mexico and Panama, Costa Rican officials and entrepreneurs are poised to tap into the perceived gold mine among middle and upper-middle class senior citizens of industrialised countries.

The concept is simple, and includes slashing red tape to the minimum by providing one-stop residence permits at the Migration Directorate, so that foreigners, especially the well-heeled, can come to live in the country.

Tax exemptions on real estate and vehicles are on offer, and a promotional campaign aimed at older adults abroad will be run by the Costa Rican Institute of Tourism (ICT).

The government will also boost training of human resources such as health personnel through the Costa Rican Social Security system, and seek to attract investment.

The Competitiveness Ministry has already identified eight locations for retirement clusters in Costa Rica, in areas of natural beauty with plenty of tourist attractions, and close to large hospital complexes.

Promoting Costa Rica as a retirement haven includes much more than boosting real estate sales or medical tourism. "It includes the hotel sector, travel, hospitals and research. Costa Rica will benefit from it," Competitiveness Minister Jorge Woodbridge told IPS. Patients and their relatives are likely to travel all over the country, staying at hotels and engaging tour operators and so on.

Every 10,000 retirees are expected to generate employment for 40,000 people a year, 10,000 of them in direct jobs and 30,000 indirectly.

The average income of the target population (middle and upper-middle class U.S., Canadian and Spanish citizens) is 3,500 dollars a month.

The main Costa Rican medical centres are already building two major hospital complexes in the city of Liberia in Guanacaste province, the top tourist destination in the country.

They will comprise a hospital and residential zone, where services will be provided for four levels of care: active retirement, independent living, assisted living and skilled nursing, in increasing order of patient need.

A small retirement community for 12 people, the country's only operational cluster so far, has opened on the slopes of the Poas volcano.

The owner, Ronald García, told IPS that "coming to Costa Rica has economic advantages" for foreign pensioners. "They pay for accommodation and medical care, and a family visit from home once a month, and it costs less than paying for medical services back home," he said. His customers pay 1,600 dollars a month, whereas in the United States they would have to pay 4,500 dollars a month for comparable services.

"We want to attract 10,000 pensioners a year," Woodbridge said. Estimated annual foreign exchange earnings per 10,000 retirees are 340 million dollars, "so in five years, the total would be 1.7 billion dollars," he calculated.

In any case, the plan will take at least five years to take off as a national strategy, Foreign Trade Minister Marco Vinicio Ruiz told IPS.

Other Latin American countries have a head start on Costa Rica. Mexico, which has been developing its policy for over 20 years, is now home to 700,000 pensioners from the United States who are living in Mexican retirement communities.

Its other rival is Panama, which has been advancing in this direction for about a decade. Panama has five retirement communities at present, with another 42 currently being licensed and built.

But the government authorities are optimistic. The climate, enormous biodiversity, security, stability, and polls describing Costa Rica as "the happiest country in the world," are factors that will work in its favour, according to Woodbridge.

Costa Rica's reputation as "the Switzerland of Central America" will also help.

Not everyone is in favour of the creation of this new market, however. "It will affect the rights of the people of Costa Rica," said Carlos Páez with the National Union of Social Security Fund Employees (UNDECA).

Páez said "if this is put into practice, doctors and nurses will go into private medicine," which could bring about a crisis in the Costa Rican public health system, presently stretched to the limit. "There is already a lack of specialists and health personnel," and the flight of these workers to private clinics and hospitals will only increase the shortage, said the UNDECA trade unionist.

"The first thing the country should do is to solve the crisis in the social security fund, before opening the market to additional demands," Páez argued.

Every day, some 6,000 people reach the age of 65 in the United States. The baby boomer generation, born between 1945 and 1964, controls 77 percent of the available financial resources of that country.

Forty-six million people in the United States have no medical insurance, a fact that Costa Rica plans to use to attract U.S. older adults to its shores.
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