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Costa Rica

Background: Costa Rica is a Central American success story: since the late 19th century, only two brief periods of violence have marred its democratic development. Although still a largely agricultural country, it has achieved a relatively high standard of living. Land ownership is widespread. Tourism is a rapidly expanding industry.
Government type: democratic republic
Capital: San Jose
Currency: 1 Costa Rican colon (C) = 100 centimos

Geography of Costa Rica

Location: Middle America, bordering both the Caribbean Sea and the North Pacific Ocean, between Nicaragua and Panama
Geographic coordinates: 10 00 N, 84 00 W
total: 51,100 sq. km
land: 50,660 sq. km
water: 440 sq. km
note: includes Isla del Coco
Land boundaries:
total: 639 km
border countries: Nicaragua 309 km, Panama 330 km
Coastline: 1,290 km
Maritime claims:
exclusive economic zone: 200 nm
territorial sea: 12 nm
Climate: tropical and subtropical; dry season (December to April); rainy season (May to November); cooler in highlands
Terrain: coastal plains separated by rugged mountains
Elevation extremes:
lowest point: Pacific Ocean 0 m
highest point: Cerro Chirripo 3,810 m
Natural resources: hydropower
Land use:
arable land: 6%
permanent crops: 5%
permanent pastures: 46%
forests and woodland: 31%
other: 12% (1993 est.)
Irrigated land: 1,200 sq km (1993 est.)
Natural hazards: occasional earthquakes, hurricanes along Atlantic coast; frequent flooding of lowlands at onset of rainy season; active volcanoes
Environment – current issues: deforestation and land use change, largely a result of the clearing of land for cattle ranching and agriculture; soil erosion; water pollution (rivers); coastal marine pollution; wetlands degradation; fisheries protection; solid waste management; air pollution.
Environment – international agreements:
party to:  Biodiversity, Climate Change, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Wetlands, Whaling
signed, but not ratified: Climate Change-Kyoto Protocol, Marine Life Conservation
Geography – note: four volcanoes, two of them active, rise near the capital of San Jose in the center of the country; one of the volcanoes, Irazu, erupted destructively in 1963-65.

People of Costa Rica

Unlike many of their Central American neighbors, present-day Costa Ricans are largely of European rather than mestizo descent; Spain was the primary country of origin. However, an estimated 10% to 15% of the population is Nicaraguan, of fairly recent arrival and primarily of mestizo origin. Descendants of 19th-century Jamaican immigrant workers constitute an English-speaking minority and–at 3% of the population–number about 96,000. Few of the native Indians survived European contact; the indigenous population today numbers about 29,000 or less than 1% of the population.

Population: 4,016,173 (July 2005 est.)
Age structure:
0-14 years:  31.38% 
15-64 years:  63.37%
65 years and over:  5.25%
Population growth rate: 1.65% 
Birth rate: 20.27 births/1,000 population 
Death rate: 4.3 deaths/1,000 population 
Net migration rate: 0.53 migrant(s)/1,000 population 
Infant mortality rate: 11.18 deaths/1,000 live births 
Life expectancy at birth:
total population:  76.02 years
male:  73.49 years
female:  78.68 years 
Total fertility rate: 2.47 children born/woman 
noun: Costa Rican(s)
adjective: Costa Rican
Ethnic groups: white (including mestizo) 94%, black 3%, Amerindian 1%, Chinese 1%, other 1%
Religions: Roman Catholic 76.3%, Evangelical 13.7%, other Protestant 0.7%, Jehovah’s Witnesses 1.3%, other 4.8%, none 3.2%
Languages: Spanish (official), English spoken around Puerto Limon
definition: age 15 and over can read and write
total population: 94.8%
male: 94.7%
female: 95% (1995 est.)

History of Costa Rica

In 1502, on his fourth and last voyage to the New World, Christopher Columbus made the first European landfall in the area. Settlement of Costa Rica began in 1522. For nearly three centuries, Spain administered the region as part of the Captaincy General of Guatemala under a military governor. The Spanish optimistically called the country “Rich Coast.” Finding little gold or other valuable minerals in Costa Rica, however, the Spanish turned to agriculture.

The small landowners’ relative poverty, the lack of a large indigenous labor force, the population’s ethnic and linguistic homogeneity, and Costa Rica’s isolation from the Spanish colonial centers in Mexico and the Andes all contributed to the development of an autonomous and individualistic agrarian society. An egalitarian tradition also arose. This tradition survived the widened class distinctions brought on by the 19th-century introduction of banana and coffee cultivation and consequent accumulations of local wealth.

Costa Rica joined other Central American provinces in 1821 in a joint declaration of independence from Spain. Although the newly independent provinces formed a Federation, border disputes broke out among them, adding to the region’s turbulent history and conditions. Costa Rica’s northern Guanacaste Province was annexed from Nicaragua in one such regional dispute. In 1838, long after the Central American Federation ceased to function in practice, Costa Rica formally withdrew and proclaimed itself sovereign.

An era of peaceful democracy in Costa Rica began in 1899 with elections considered the first truly free and honest ones in the country’s history. This began a trend continued until today with only two lapses: in 1917-19, Federico Tinoco ruled as a dictator, and, in 1948, Jose Figueres led an armed uprising in the wake of a disputed presidential election.

With more than 2,000 dead, the 44-day civil war resulting from this uprising was the bloodiest event in 20th-century Costa Rican history, but the victorious junta drafted a constitution guaranteeing free elections with universal suffrage and the abolition of the military. Figueres became a national hero, winning the first election under the new constitution in 1953. Since then, Costa Rica has held 12 presidential elections, the latest in 1998.

Costa Rica Economy

Costa Rica’s economy showed strong aggregate growth in 1998-1999. The Central Bank attributes almost half of 1999 growth to the production of Intel Corporation’s microprocessor assembly and testing plant. The strength in the nontraditional export and tourism sector is masking a relatively lackluster performance by traditional sectors, including agriculture. Inflation, as measured by the Consumer Price Index, was 11% in 2001, up from 10.3% the year before. The central government deficit increased to 3.0% of GDP in 2001, up from 2.2% from the year before. On a consolidated basis, including Central Bank losses and parastatal enterprise profits, the public sector deficit was 2.8% of GDP.

Controlling the budget deficit remains the single biggest challenge for the country’s economic policymakers, as interest costs on the accumulated central government consumes the equivalent of 30% of the government’s total revenues. Approximately 42% of the 2001 national budget was financed by public borrowing. This limits the resources available for investments in the country’s deteriorated public infrastructure.

Costa Rica’s major economic resources are its fertile land and frequent rainfall, its well-educated population, and its location in the Central American isthmus, which provides easy access to North and South American markets and direct ocean access to the European and Asian Continents. One-fourth of Costa Rica’s land is dedicated to national forests, often adjoining picturesque beaches, which has made the country a popular destination for affluent retirees and ecotourists.

Costa Rica used to be known principally as a producer of bananas and coffee. In recent years, Costa Rica has successfully attracted important investments by such companies as Intel Corporation, which employs nearly 2,000 people at its $300 million microprocessor plant; Proctor and Gamble, which employs nearly 1,000 people in its administrative center for the Western Hemisphere; and Abbott Laboratories and Baxter Healthcare from the health care products industry. Manufacturing and industry’s contribution to GDP overtook agriculture over the course of the 1990s, led by foreign investment in Costa Rica’s free trade zone. Well over half of that investment has come from the U.S. Dole and Chiquita have a large presence in the banana industry. Tourism also is booming, with the number of visitors up from 780,000 in 1996 to more than 1.1 million in 2001. Tourism is now the largest foreign exchange earner.

The country has not discovered sources of fossil fuels–apart from minor coal deposits– but its mountainous terrain and abundant rainfall have permitted the construction of a dozen hydroelectric power plants, making it largely self-sufficient in most energy needs, except oil for transportation. Costa Rica exports electricity to Nicaragua and has the potential to become a major electricity exporter if plans for new generating plants and a regional distribution grid are realized. One challenge will be how to secure payment for these exports. Mild climate and trade winds make neither heating nor cooling necessary, particularly in the highland cities and towns where some 90% of the population lives.

Costa Rica’s infrastructure has suffered from a lack of maintenance and new investment. The country has an extensive road system of more than 30,000 kilometers, although some of it is in disrepair. Most parts of the country are accessible by road. The main highland cities in the country’s Central Valley are connected by paved all-weather roads with the Atlantic and Pacific coasts and by the Pan American Highway with Nicaragua and Panama, the neighboring countries to the North and the South. Costa Rica’s ports are struggling to keep pace with growing trade. They have insufficient capacity, and their equipment is in poor condition. The railroad does not function, with the exception of a couple of spurs reactivated by a U.S.-owned banana company. The government opened the ports and the railroad to competitive bidding opportunities for private investment and management but U.S. companies chose not to participate in this process.

Costa Rica has sought to widen its economic and trade ties, both within and outside the region. Costa Rica signed a bilateral trade agreement with Mexico in 1994, which was later amended to cover a wider range of products. Costa Rica joined other Central American countries, plus the Dominican Republic, in establishing a Trade and Investment Council with the United States in March 1998. Costa Rica has signed trade agreements with Canada, Chile, the Dominican Republic, and is negotiating trade agreements with Panama, and Trinidad and Tobago. Costa Rica and its Central American neighbors are discussing the possibility of negotiating a free trade agreement with the U.S. Costa Rica also is an active participant in the negotiation of the hemispheric Free Trade Area of the Americas, a process that the Costa Rican Government chaired in preparation for the April 1998 Summit of the Americas in Santiago, Chile. It also is a member of the so-called Cairns Group which is pursuing global agricultural trade liberalization in the World Trade Organization.

GDP: purchasing power parity – $25 billion (2000 est.)
GDP – real growth rate: 7% (1999 est.), 3% (2000 est.)
GDP – per capita: purchasing power parity – $6,700 (2000 est.)
GDP – composition by sector:
agriculture:  12.5%
industry:  30.7%
services:  56.8% (1999)
Population below poverty line: 20.6% (1999 est.)
Household income or consumption by percentage share:
lowest 10%: 1.3%
highest 10%: 34.7% (1996)
Inflation rate (consumer prices): 10.8% (1999 est.), 11% (2000 est.)
Labor force: 1.9 million (1999)
Labor force – by occupation: agriculture 20%, industry 22%, services 58% (1999 est.)
Unemployment rate: 5.2% (2000 est.)
revenues:  $1.95 billion
expenditures:  $2.4 billion (2000 est.)
Industries: microprocessors, food processing, textiles and clothing, construction materials, fertilizer, plastic products
Industrial production growth rate: 24.5% (1999), 4.3% (2000)
Electricity – production: 5.805 billion kWh (1999)
Electricity – production by source:
fossil fuel:  2.41%
hydro:  83.32%
nuclear:  0%
other:  14.27% (1999)
Agriculture – products: coffee, bananas, sugar, corn, rice, beans, potatoes; beef; timber
Exports: $6.4 billion (f.o.b., 1999 est.), $6.1 billion (f.o.b., 2000 est.)
Exports – commodities: coffee, bananas, sugar; pineapples; textiles, electronic components, medical equipment
Exports – partners: US 49%, EU 22%, Central America 10% (1999)
Imports: $6.5 billion (c.i.f., 1999 est.), $5.9 billion (f.o.b., 2000 est.)
Imports – commodities: raw materials, consumer goods, capital equipment, petroleum
Imports – partners: US 56.4%, EU 9%, Mexico 5.4%, Japan 4.7%, (1999)
Debt – external: $4.2 billion (2000 est.)
Currency: Costa Rican colon (CRC)

Map of Costa Rica

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