Intel Pulls out of Costa Rica, Leaving a Primary Export of a Developing Country Dead in the Water
Back when Intel first entered the scene at Costa Rica, it jump started the country's Tech Industry. It also gave Costa Rica a much needed boost out of the shadows of its neighboring countries, and into the lime light. Infact Intel was seen proclaiming on more than one occasion how its presence had increased the Tech exports of said country by such a large amount that the traditional primary export of coffee. Now with Intel closing shop and laying off 1500 workers, this comes as nothing short of a miniature financial crisis for the Costa Rican Republic.
Intel lays of 1500 workers and closes operation in Costa Rica - Could result in a miniature financial crisis for the Republic
Intel's Microprocessors account for roughly 25% of the exports of the Republic of Costa Rica and roughly 5% of its GDP. You don't need to be an Economist to see how big a chunk of its wealth will go missing after Intel departs Costa Rica. The Bank of America, probably following Intel's cue and sensing the changing tide, immediately layed of 1400 workers after this announcement. I am tempted to quote a well known movie phrase but I will restrain myself, however the fact remains that such a major decision will have tidal consequences. Interestingly this means that Intel is actively scaling down. This is probably one of the most alarming signs that actually put some weight on the claims that the PC Market is shrinking.
Intel recently halted work on its Fab 42 and now it seems it has closed shop in Costa Rica too. I remember that the Costa Rican batch of processors was being favored a few years back and this shows how much intrinsic value this fab had to Intel. Closing it down cannot be good in any way. Unless, the rumors are correct and Intel is headed for China. China has cheap labor. And if Intel is truly chasing cheap rates per hour then I must express my distaste. Not that the Chinese market shouldn't be entered but the way in which it is being entered is borderline unethical.
Ofcourse Intel remains nothing less than an absolute giant in the PC Market. One thing is sure, none of us should ever wish for Intel to fail, because that will have probably irreparable effects on the PC Industry not to mention Gaming. However Investors seem to realize the same because Intel's stock actually closed above and remains Bullish as ever. As a consoling gesture Intel announced 200 jobs in its Costa Rica department but this is just too little too late and probably unwanted now.
Costa Rica, another cautionary tale in letting an MNC hold too much of your economy. http://t.co/a4H4HcE7FA
— Usman Pirzada (@usmanpirzada) April 12, 2014
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