COSTA RICA

Republic of Costa Rica

República de Costa Rica

CAPITAL: San José

FLAG: The national flag consists of five horizontal stripes of blue, white, red, white, and blue, the center stripe being wider than the others.

ANTHEM: Himno Nacional, beginning "Noble patria, tu hermosa bandera" ("Noble native land, your beautiful flag").

MONETARY UNIT: The colón (c) is a paper currency of 100 céntimos. There are coins of 1, 5, 10, 25, and 50 céntimos and of 1, 2, 5, 10, and 20 colones, and notes of 5, 10, 20, 50, 100, 500, and 1,000 colones. c1 = $0.00209 (or $1 = c479.28) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard, but local measures also are used.

HOLIDAYS: New Year's Day and Solemnity of Mary, 1 January; Day of St. Joseph (Costa Rica's patron saint), 19 March; Anniversary of the Battle of Rivas, 11 April; Labor Day, 1 May; Day of St. Peter and St. Paul, 29 June; Anniversary of the Annexation of Guanacaste, 25 July; Feast of Our Lady of the Angels, 2 August; Assumption (Mother's Day), 15 August; Independence Day, 15 September; Columbus Day, 12 October; Immaculate Conception, 8 December; Abolition of Armed Forces Day, 1 December; Christmas, 25 December. Movable religious holidays include Holy Thursday, Good Friday, Holy Saturday, and Corpus Christi.

TIME: 6 am = noon GMT.

LOCATION, SIZE, AND EXTENT

The third-smallest country in Central America, Costa Rica has an area of 51,100 sq km (19,730 sq mi), including some small islands. Comparatively, the area occupied by Costa Rica is slightly smaller than the state of West Virginia. Its length is 464 km (288 mi) n–s, and its width is 274 km (170 mi) e–w. Costa Rica is bordered on the n by Nicaragua, on the e by the Caribbean Sea, on the se by Panama, and on the sw and w by the Pacific Ocean; the total boundary length is 1,929 km (1,199 mi), which includes the coastline of 1,290 km (805 mi). Costa Rica's capital city, San José, is located in the center of the country.

TOPOGRAPHY

Costa Rica has three main topographic regions. The central highlands, extending from northwest to southeast, reach elevations of more than 3,660 m (12,000 ft) south of San José; the highest point in the country is Chirripó Grande (3,810 m/12,500 ft). Four volcanoes, two of them active, rise near the capital city; one of these volcanoes, Irazú (3,432 m/11,260 ft), erupted destructively during 1963–65. Nestled in the highlands is the Meseta Central, with an elevation of 900–1,200 m (3,000–4,000 ft), covering some 2,000 sq km (770 sq mi) of fairly level, fertile terrain. Half of the population, the centers of culture and government, four of the six main cities, and the bulk of the coffee industry are found on the plateau.

The Atlantic coastal plain, on the Caribbean side of the highlands, comprises about 30% of Costa Rica's territory and is low, swampy, hot, excessively rainy, and heavily forested. The Pacific slope, some 40% of the country's area, resembles the Caribbean lowlands, but to the northwest is a dry area producing cattle and grain. Fifteen small rivers drain Costa Rica.

The country lies in a moderately seismic area that experiences occasional earthquakes, some of which have been severe. On 22 April 1991, an earthquake in the Limón–Pandora area caused the death of 47 people, as well as severe damage to homes, buildings, and some roads. The quake triggered minor tsunamis in the Cahuita-Puerto Viejo area and at Portobelo and Cristobal in Panama.

CLIMATE

Costa Rica has only two seasons: the wet season, from May to November, and the dry season, from December to April. There are three climatic zones. The torrid zone (tierra caliente), which includes the coastal and northern plains to an altitude of 457 m (1,500 ft), is characterized by heavy rains, almost continuous on the Atlantic watershed, and by a temperature range of 29–32°c (84–90°f). The temperate zone, including the central valleys and plateaus, has altitudes ranging from 457 to 1,524 m (1,500 to 5,000 ft), with regular rains from April through November and a temperature range of 24–27°c (75–80°f). The cold zone, comprising areas higher than 1,524 m (5,000 ft), has a temperature range of 10–27°c (50–81°f) and is less rainy but more windy than the temperate regions. The average annual rainfall for the country is more than 250 cm (100 in).

FLORA AND FAUNA

Costa Rica supports varied flora and fauna. From the coast to an altitude of about 900 m (3,000 ft) are tropical forests and savannas; oaks and chaparrals are found between 2,070 and 3,050 m (6,800 and 10,000 ft); and sub-Andean and subalpine flora characterizes the highest mountains. The dense tropical forests contain rich stands of ebony, balsa, mahogany, oak, laurel, campana, and cedar. Plant life is abundant. The country has more than 1,000 species of orchids.

Most of the wild mammals common to South and Central America, such as jaguar, deer, puma, and varieties of monkeys, are found in Costa Rica. There are over 600 species of birds and 130 species of snakes and frogs; fish and insects are plentiful.

ENVIRONMENT

Nearly all of Costa Rica was once covered by forests, but deforestation for agricultural purposes and cattle ranching has reduced forested areas to only 38% of the total area. Between 1990 and 1995, the country lost an average of 3% of its forests and woodlands annually. Most of the wood was wasted by burning or rotting, and there has been little incentive for conservation or reforestation. The result has been soil erosion and the loss of soil fertility. Another serious problem, according to the UN, has been contamination of the soil by fertilizers and pesticides used in growing important cash crops, such as bananas, sugarcane, and coffee. Costa Rica's use of pesticides is greater than that of all the other countries in Central America added together. Under the General Health Law of 1973, the Ministry of Health has broad powers to enforce pollution controls, and the Division of Environmental Health has attempted to set standards for air and water quality. However, trained personnel and equipment are lacking.

Carbon dioxide emissions from industrial sources totaled 4.6 million metric tons in 1996; in 2000, the total emissions increased to 5.4 million metric tons. As of 2001, Costa Rica has 112 cu km of renewable water resources with 80% of the total used for farming activity. Of the nation's urban dwellers 99% have safe drinking water, as do 92% of the rural population.

Costa Rica's national park system is among the most extensive and well developed in Latin America. The system, covering nearly 4% of the total land area, includes 12 parks, 6 nature reserves, 4 recreation areas, the Guayabo National Monument archaeological site in the Turrialba region, and the International Peace Park established jointly by Costa Rica and Panama on their common border. There are 3 natural UNESCO World Heritage Sites and 11 Ramsar wetland sites. Altogether, 23% of Costa Rica's total land area is protected.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 13 types of mammals, 18 species of birds, 8 types of reptiles, 60 species of amphibians, 13 species of fish, 9 species of invertebrates, and 110 species of plants. Threatened species include the red-backed squirrel monkey, tundra peregrine falcon, spectacled caiman, American crocodile, and four species of sea turtle (green sea, hawksbill, olive ridley, and leatherback). The golden toad has been listed as extinct since 2001.

POPULATION

The population of Costa Rica in 2005 was estimated by the United Nations (UN) at 4,331,000, which placed it at number 118 in population among the 193 nations of the world. In 2005, approximately 6% of the population was over 65 years of age, with another 30% of the population under 15 years of age. There were 103 males for every 100 females in the country. According to the UN, the annual population growth rate for 2005–10 was expected to be 1.3%, a rate the government viewed as satisfactory. The projected population for the year 2025 was 5,568,000. The population density was 85 per sq km (220 per sq mi).

The UN estimated that 59% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 2.49%. The capital city, San José, had a population of 1,085,000 in that year. Other large cities and their estimated populations are Alajuela, 791,900; Cartago, 475,100; Puntarenas, 397,700; Heredia, 390,400; and Limón, 380,200.

MIGRATION

In 1995, 24,600 refugees were in Costa Rica. Of these, 4,200 were from El Salvador and 19,500 were from Nicaragua. Large numbers of Nicaraguans migrate seasonally to Costa Rica seeking employment opportunities. Illegal migration is a major national concern, with estimates of people illegally in the country ranging from 300,000 to 500,000 in 1999, most of whom were thought to be from Nicaragua. In the aftermath of 1998's Hurricane Mitch, Costa Rica declared an amnesty on illegal immigration, which expired on 31 July 1999. While intended primarily for aliens from Belize and Panama, the United Nations High Commissioner for Refugees (UNHCR) secured a provision that extended the amnesty to refugees. Under the amnesty, some 160,000 people applied for permanent residence. In 2004, there were 10,413 refugees living in Costa Rica and 223 asylum seekers. The net migration rate in 2005 was estimated as. 5 migrants per 1,000 population.

ETHNIC GROUPS

The population is fairly homogeneous, primarily of European (mainly Spanish) descent. Whites and mestizos (mixed white and Amerindian) account for 94% of the total population. The remainder are blacks (3%), Chinese (1%), and Amerindians (1%). The blacks for the most part are of Jamaican origin or descent, and some mulattoes live mainly in the Limón port area. Most of the Amerindians reside on isolated reservations.

LANGUAGES

Spanish is the official language, but English is also spoken around Limón and among members of the middle class. Descendants of the Jamaican blacks speak an English dialect.

RELIGIONS

Roman Catholicism, the predominant religion, is the official religion of the state; however, the constitution guarantees religious freedom and this right is generally respected in practice. About 69% of the population is nominally Roman Catholic; only about 40% of Roman Catholics are active members. About 18% of the population belong to other Christian churches. Of these churches, the primary Protestant denominations include Methodist, Baptist, Evangelical, Episcopalian, Mormon, Jehovah's Witnesses, and Seventh-Day Adventists. There is a Mormon temple in San José which serves members from Costa Rica, Panama, Nicaragua, and Honduras. San José is also the site of the Continental Headquarters for Latin America of the Unification Church. There are small communities of Quakers, Mennonites, and Beechy Amish. Other religions include Judaism, Islam, Taoism, Hare Krishna, Scientology, Tenrikyo, and Baha'ism.

Representing the official religion of state, the Roman Catholic Church enjoys some privileges that are not automatically conferred on other religious organizations. For instance, Catholic marriages are automatically recognized by the state; couples of other faiths must have marriages legalized through a civil union. The Catholic Church also has more opportunity to be in open dialogue with the government concerning economic, social, and political causes, such as the 2003 CAFTA negotiations. Catholic holidays are celebrated as public holidays. The government does not impose any major restrictions on the activities of non-Catholic groups.

TRANSPORTATION

San José is linked to both coasts by railroad and by highway. The Inter-American Highway, 687 km (427 mi) long, connects Costa Rica with Nicaragua and Panama. Another major highway runs from San José to the Caribbean coast beyond Limón. As of 2003 there were 35,889 km (22,323 mi) of roads, of which 8,075 km (5,022 mi) were paved. Motor vehicle registrations in 2003 included 367,832 passenger automobiles and 230,048 commercial vehicles.

As of 2004, Costa Rica had 278 km (173 mi) of railroad, all of it narrow gauge.

Principal ports are Limón on the Caribbean Sea and Puntarenas, Caldera, and Golfito on the Pacific. As of 2005, Costa Rica had two merchant vessels of more than 1,000 GRT totaling 1,716 GRT. There are about 730 km (454 mi) of seasonally navigable waterways.

There were an estimated 149 airports in 2004, only 31 of which had paved runways as of 2005. Líneas Aéreas Costarricenses, S.A. (LACSA), the national airline, provides domestic and international services centered at Juan Santamaria International Airport near San José. Service was also provided by fifteen international passengers lines and 22 cargo lines. In 2003, about 781,000 passengers were carried on scheduled domestic and international flights.

HISTORY

There were about 25,000 Amerindians in the region when Columbus landed in 1502. He named the area Costa Rica ("Rich Coast"), possibly because he saw gold ornaments on some of the indigenous people. European settlement of Costa Rica began in 1522, the Spanish conquered the Ticos, as the Costa Rican natives called themselves, and Spain organized the area into a colonial province in 1540; it was eventually placed under the provincial administration in Guatemala. Cartago, the colonial capital, was founded in 1563.

When independence came to Central America in 1821, Costa Rica had fewer than 70,000 inhabitants. In the following year, it was absorbed into the short-lived Mexican Empire proclaimed by Agustín de Iturbide. Following the collapse of Iturbide's rule, Costa Rica became a member of the United Provinces of Central America in 1823. At the same time, the provincial capital of Costa Rica was moved to San José. The United Provinces fell apart in 1838, and Costa Rica proclaimed itself sovereign. In 1848, the Republic of Costa Rica was established. The new state was threatened by William Walker, a US military adventurer who invaded Central America in 1855, but his troops were repelled in 1857. In 1860 Walker was captured and executed. In 1871, General Tomás Guardia, dictator from 1870 to 1882, introduced the constitution that, though frequently modified, remained Costa Rica's basic law until 1949. Although Guardia's rule was characterized by decreased liberty and rising debt, it also brought increased sugar and coffee exports, as well as increased education.

In the late 19th and early 20th centuries, there was a series of boundary disputes with Panama and Nicaragua, in the course of which Costa Rica annexed Guanacaste Province from Nicaragua. In World Wars I and II, Costa Rica was a US ally, but not a military participant.

Meanwhile, the success of coffee cultivation, introduced in the early 1800s, had encouraged rapid population growth, progress in education, and the beginnings of modern economic development, through the construction of a coast-to-coast railroad from Limón on the Caribbean through San José to the Pacific. Banana cultivation was started in 1871, and at the turn of the century, the US-owned United Fruit Company (now United Brands) made Costa Rica a major producer of bananas.

Costa Rica's first major political crisis of the 20th century came when President Teodoro Picado Michalski annulled the 1948 elections in order to impose Rafael Ángel Calderón Guardia as president rather than the legally chosen president-elect Otilio Ulate Blanco. José Figueres Ferrer, a socialist landowner, led a civilian uprising, installed his own junta for 18 months, and restored democratic government, turning over the presidency to Ulate. The 44-day civil war was Costa Rica's bloodiest event of the 20th century, leaving 2000 dead and resulting in the prohibition of a standing army in the new constitution. Based on the constitution of 1871, the 1949 constitution reinstated free elections and banned the army, replacing it instead with a Civil Guard. However, it was not until 2000 that a professional Coast Guard was established in addition to domestic police and internal security forces.

Figueres was himself elected president by an overwhelming majority in 1952 (with women voting for the first time), and under his leadership, Costa Rica was one of the most democratic and prosperous countries in Latin America. Figueres was strongly opposed to all dictatorships, and Costa Rica proceeded to sever diplomatic relations with several Latin American countries. A socialist, Figueres nationalized the banks and threatened the holdings of the United Fruit Co. and other large-scale utilities. Border skirmishes with Nicaragua in 1955 were resolved through the mediation of the Organization of American States.

In 1958, the candidate of the opposition National Unification Party, Mario Echandi Jiménez, was elected by a bare majority vote. He was unable to enact his program of minimizing the government's role in social and economic matters because the legislature was dominated by other parties. In 1962, Francisco J. Orlich Bolmarich, a candidate of Figueres's National Liberation Party (Partido de Liberación Nacional—PLN), won the elections and continued Figueres's progressive program. Costa Rica joined the Central American Common Market (CACM) in 1963 and has benefited from Central American economic integration, especially through increasing industrialization. Figueres served as president again from 1970 to 1974 and was succeeded by the PLN candidate, Daniel Oduber Quirós. An internal split within the PLN opened the gap for a conservative, Rodrigo Carazo Odio, to be elected president in 1978. However, after facing economic and political strains from Nicaraguan refugees, as well as the destabilization from surrounding Central American conflicts and civil wars, Carazo's administration left spiking inflation and unemployment for the presidency of Luis Alberto Monge Álvarez of the PLN in 1982.

During the 1980s, Costa Ricans were confronted with a severe economic crisis and with increasing political violence in the region, including sporadic terrorist activities in San José. The Monge government, on the insistence of the World Bank and International Monetary Fund, introduced an austerity program of devaluation, budget cuts, and other fiscal contraction to help economic recovery. Monge also tried to avoid being drawn into the war in neighboring Nicaragua between the insurgents known as "contras" and the Sandinista government. Nevertheless, the government resisted pressure from the United States to support the contras or to accept US aid toward the building of a military establishment.

In February 1986, the PLN won another presidential election when Oscar Arias Sánchez defeated Rafael Ángel Calderón Fournier. An important factor in the PLN victory was Monge's popularity. As the surrounding countries of Central America descended into war, drug trafficking, corruption, and further economic distress, Arias focused on his role in international affairs, leading a peace movement to bring stability to the region. In August 1987, a peace plan for Central America was signed in Guatemala by Nicaragua, Guatemala, Costa Rica, El Salvador, and Honduras. With little support from the United States, Arias's accomplished provisions were free elections in all countries, a guarantee of basic democratic freedoms in Nicaragua, a cease-fire by both Sandinistas and contras, an end to outside aid to the contras, amnesty for the contras, repatriation or resettlement of refugees from all countries, and an eventual reduction in the armed forces of all countries. For his efforts, Arias won the Nobel Prize for Peace later that year.

In 1990, amid continued economic troubles, Rafael Angel Calderón Fournier was elected, and his Social Christian Unity Party (Partido Unidad Social Cristiana—PUSC) won a paper-thin majority in the Legislative Assembly. Although he campaigned on a platform of liberalization, economic equality, and welfare reform, little change was accomplished. The economy nevertheless rebounded, with peace settlements easing some of Costa Rica's demographic problems.

On 6 February 1994, Costa Ricans returned the PLN to power, as José María Figueres Olsen, son of former president Figueres, was elected president of Costa Rica, though the PLN failed to win an outright majority in the assembly. In response to the nation's weakening economy, Figueres introduced an economic reform package in 1995 that focused on government-spending cuts and the privatization of state-owned enterprises. These measures, which represented a reversal of the traditional policies of Figueres's PLN ruling party, drew stiff opposition from labor leaders, who feared cutbacks in Costa Rica's large public sector, and touched off a month-long strike by the nation's teachers. Although the government responded by modifying some of its proposed plans, public support for Figueres plummeted as the nation's economy continued to slip, officially entering a recession in 1996. The economic crisis led to cooperation between the PLN and PUSC in order to enact fiscal reform. In December 1996 Figueres announced plans to raise taxes, privatize parts of the state-owned banking and telecommunications systems, and end the state insurance monopoly. Costa Rica's economic issues increased with the damage caused by Hurricane Cesar.

Elections were held again in February of 1998 and Social Christian (PUSC) leader Miguel Angel Rodríguez won with 46.9% of the vote, narrowly defeating National Liberation Party candidate José Miguel Corrales who obtained 44%. Rodríguez's party also won 29 of out 49 seats in the unicameral Congress. The sweeping Social Christian Union Party victory was attributed to popular discontent with Figueres's administration between 1994 and 1998. Rodríguez was a popular president and his government had some important achievements in an environment of increased tourism and foreign investment. That helped PUSC candidate Abel Pacheco de la Espriella win the 2002 presidential election with 58% of the vote; however, the previous two-party political system was toppled with the arrival of three presidential candidates, with no candidate garnering at least 40% of the vote. Therefore, Pacheco was the first president since 1948 to have to win a runoff election for the presidency, and the Citizen Action Party (Partido Acción Ciudadana—PAC) won 14 seats in the Legislative Assembly, denying an overall majority to either the PLN or the PUSC. In 2003 the Supreme Court annulled the 1969 constitution amendment limiting presidents to a single four-year term, which reverted back to the 1949 rule enabling a former president to be elected again after an eight-year period out of office.

Although it has a reputation as one of the most stable and least corrupt countries, Costa Rica has not been immune to government corruption and profiteering amidst the current trend of worldwide corporate and government depravity. In October 2004, former presidents Miguel Angel Rodriguez and Rafael Angel Calderón Fournier, along with several top government officials, were implicated in a corruption scandal involving a multimillion-dollar "commission" from a pharmaceutical company. Both were incarcerated in 2004, and released to house arrest in March 2005, with the former obliged to step down as secretary general of the Organization of American States. That same month former president José Maria Figueres was also forced to resign as executive director of the World Economic Forum in Geneva. This led to investigations in 2005 of corruption and illegal receiving of gifts, including free airline tickets, by President Pacheco and other government officials.

Because of the corruption tainting their government, Costa Rican voters approached the 2005 presidential election lacking enthusiasm. The candidates were former president and Nobel laureate Oscar Arias, who was not among the politicians implicated in the 2005 investigation. His opponent, Otto Solis, was the candidate of the PAC. Arias won, in one of the closest elections in Costa Rica's history. Arias and his vice president, Laura Chinchilla took office 8 May 2006

GOVERNMENT

For the most part, Costa Rica has held to a tradition of orderly, democratic rule. The nation is a republic organized under the constitution of 1949, based on the constitution of 1871. A president, two vice presidents, and a unicameral congress (the Legislative Assembly) of 57 members (in 2003), apportioned by provinces, are all directly elected for four-year terms. Runoff provisions are in place in case no candidate wins an outright majority in the first round vote. The cabinet (composed of 15 members in 2005) is appointed by the president, who may also remove any of its members. For every three assembly deputies, one substitute deputy (suplente ) is elected to obviate any subsequent need for by-elections. After each population census, the Supreme Electoral Tribunal proportions the number of deputies for each province. This body, consisting of three magistrates elected by the Supreme Court for six-year terms, also supervises all other aspects of the electoral process. Suffrage is universal and obligatory for all persons of 18 years or more.

The constitution bars all high government officials from running for the legislature or the presidency while already in office. The president, cabinet ministers, and all government employees are forbidden to interfere with or to participate in election campaigns or to hold party office. The constitution guarantees equality before the law, as well as freedom of speech, assembly, press, and organization. In addition, it guarantees foreigners the same rights as Costa Rican citizens. However, foreigners may not participate in political affairs, nor may members of the clergy. In the presidential election held 5 February 2005 Oscar Arias Sanchez of the Partido de Liberación Nacional—National Liberation Party (PLN) was elected president in a close contest, winning 40.9% or the vote to the PAC's Otto Solis's 39.8%. Arias and his vice president, Laura Chinchilla, took office 8 May 2006.

POLITICAL PARTIES

The largest political grouping is the PLN (Partido de Liberación Nacional—National Liberation Party), a reformist party that has been the nation's leading party since its formation in 1948. The other major party is the more conservative Social Christian Unity Party (Partido Unidad Social Cristiana—PUSC), which held the presidency during 1978–82, 1990–1994, and was in power during the 1998–2002 period. The PUSC has ties to Christian Democratic parties in the Western Hemisphere and Europe. Toward the end of the 20th century and the beginning of the 21st, elections were closer than in the past, and saw the rise of additional political parties. In the 1994 elections, José María Figueres of the PLN was elected president with 49.7% of the vote, to 47.5% for PUSC candidate Miguel Angel Rodriguez. In 1998, Rodríguez became president with 46.9% of the vote, defeating PLN's José Miguel Corrales. The PUSC also won a majority in Congress with 29 seats, followed by the PLN with 22, the remaining 6 seats went to small and provincial parties. In 2002, however, the PUSC presidential candidate, Abel Pacheco, obtained only 38.6% of the vote in the first round due to the increased presence of other parties. Pacheco won 58% in the runoff election on 7 April 2002 to become president. The PUSC only clinched 19 of the 57 seats of the National Assembly, with the PLN with 17 and the Citizen Action Party (Partido Acción Ciudadana—PAC) 14, depriving Pacheco of a legislative majority. Legislative elections left the composition of the assembly as of January 2005 with the PUSC holding 19 seats, the PLN 16, PAC 8, the PML (Libertarian Movement Party) with 5, and the PRC (Costa Rican Renovation Party), 1. PUSC's power dropped significantly in the legislative assembly after elections held 5 February 2005; PUSC lost 15 seats, winning just 4. The election also resulted in the PLN gaining 8 seats (for a total of 25); PAC gaining 3 (for a total of 18); and PML gaining 1 (for a total of 6). Oscar Arias Sanchez of the PLN was narrowly elected president in that same election with 40.9% or the vote to the PAC's Otto Solis's 39.8%. Arias and his vice president, Laura Chinchilla, took office 8 May 2006.

LOCAL GOVERNMENT

Costa Rica is divided into seven provinces, which are further subdivided into 81 cantons and 429 districts. The governor of each province is appointed by the president and is responsible to the minister of government. There are no provincial assemblies, and no elected provincial officials. The chief city of each canton elects a council (municipalidad ), which possesses legislative powers and cooperates with a presiding officer appointed by the national executive. In December 2002, the first mayoral elections in Costa Rican history were held; prior to 2002 the office of mayor did not exist. A police agent appointed by the national government oversees each district.

JUDICIAL SYSTEM

The judiciary consists of justices of the peace, lower courts, labor courts, a court of cassation, two civil courts of appeal, two penal courts of appeal, and the Supreme Court, the highest court in the land. The Supreme Court is composed of 22 justices chosen for renewable eight-year terms by the Legislative Assembly. A Constitutional Chamber of the Supreme Court was established in 1989 to review the constitutionality of legislation, executive decrees, and habeas corpus warrants. Justices are automatically reelected for an additional eight-year term unless the Legislative Assembly votes to the contrary by a two-thirds majority. The Assembly also names 25 alternates from a list of 50 names submitted by the Supreme Court, and vacancies on the court are then filled by lot from the list of alternates. Relatives of incumbent justices are ineligible for election. The Supreme Court, by a two-thirds majority, can declare legislative and executive acts unconstitutional. Justices of lower courts are appointed by the Supreme Court, but justices of the peace are appointed by the minister of government acting for the president. Capital punishment has been abolished. The judiciary is independent of the legislative and executive branches and assures fair public trials. Public security forces generally observe procedural safeguards established by law and the 1949 constitution. The constitution prohibits arbitrary interference with privacy, family, home, or correspondence. Judges may approve use of wiretaps in limited cases, primarily to combat narcotics trafficking.

ARMED FORCES

The 1949 constitution prohibits the establishment of military armed forces. However, the country did have an 8,400 member paramilitary force in 2005. This force included the 4,400 member Civil Guard, the 2,000 member Border Security Police, and the Rural Guard which had 2,000 members. The security budget was $101 million in 2005.

INTERNATIONAL COOPERATION

Costa Rica is a charter member of the United Nations, having joined on 2 November 1945, and participates in ECLAC and several nonregional specialized agencies. It is one of five members of the Central American Bank for Economic Integration (BCIE) and the Central American Common Market (CACM). In 2004, Costa Rica, the United States, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic signed the US–Central America Free Trade Agreement (CAFTA). The agreement must be ratified by all participating countries before it enters into force. Costa Rica also participates in G-77, the Inter-American Development Bank, the Latin American Economic System (LAES), the Río Group, the Association of Caribbean States (ACS), and OAS. The nation has observer status in the Latin American Integration Association (LAIA) and the Nonaligned Movement.

Costa Rica is part of the Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (OPANAL) and the Organization for the Prohibition of Chemical Weapons. San José is the seat of the Inter-American Human Rights Court. In August 1987, a peace plan for Central America proposed by Costa Rica was signed by Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. In 1999, the United States and Costa Rica signed the Maritime Counter-Drug Agreement as a cooperative effort to stop drug trafficking through Costa Rican waters. It is first of its kind in Central America. The country is a signatory of the 1947 Río Treaty, an inter-American security agreement.

In environmental cooperation, Costa Rica is part of the Basel Convention, Conventions on Biological Diversity and Whaling, Ramsar, CITES, the London Convention, the Kyoto Protocol, the Montréal Protocol, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change, and Desertification. Costa Rica is also signatory to the Central American-US Joint Declaration (CONCAUSA).

ECONOMY

The economy of Costa Rica, like that of all other countries in Central America, was originally based on the production of tropical agricultural commodities for export. There is some forestry in Costa Rica but very little mining, although steps have been taken to exploit bauxite, sulfur, and petroleum. Since about 1961 there has been a significant expansion of manufacturing activity, but most industrial plants remain small, concentrating on simple consumer goods to displace more expensive imports. Government efforts to promote diversification of agricultural production have resulted in notable expansion of cattle and dairy farming, second in value only to coffee among agricultural sectors. The opening of an Intel chip-making factory in 1998 spurred high growth rates and an influx of high technology companies, and increasing tourism revenues supported the growing economy. GDP growth, based on increases in tourism and industrial output, rose to 8.2% in 1999, while the official unemployment fell to 5.6%. There is relatively little underemployment in Costa Rica. From 2000 to 2002, however, economic growth turned sluggish, averaging a little under 2% per year, the result of both a weakened external environment— in which tourism, export demand, and foreign investment were all declining—and slackness in the domestic economy, reflected an average yearly inflation rate of 10.4% and a yearly combined government deficit amounting, on average, to 4.7% of GDP. Costa Rica's unemployment rate, however, has remained at a relatively unproblematic 6%. (with underemployment estimated at 7.8% for 2002), which relieves some of the pressure for reform.

Through the 1960s, prospects for economic expansion were promising, particularly in view of progress toward economic integration in Central America. However, in the 1970s, increases in import prices for raw materials (particularly oil) and finished goods caused an inflationary surge (reaching 100% in 1982), to which some internal policies, such as credit expansion and wage increases, also contributed significantly. Chiefly because of a decline in coffee prices in 1978 and the doubling of oil import costs in 1979, the economic growth rate fell sharply from 8.9% in 1977 to -8.8% in 1982. Costa Rica normally spends the whole of its export revenues from coffee on importing petroleum.

Positive growth rates averaging 3.8% resumed in 1983 and continued through 1985, largely due to government-imposed austerity under IMF standby agreements. Unemployment declined from an official high of 9.1% in 1982 to 6.7% in 1986, the year world oil prices finally collapsed. The annual inflation rate dropped from 90% to 11.8% in the same period. Foreign debt, rescheduled in 1983 and 1985, remained high at $3.67 billion at the end of 1985. The overall growth rate between 1978 and 1988 was 4.1%.

Although per capita income slipped in the early 1990s, Costa Ricans still enjoyed the highest per capita income in Central America. Following a structural adjustment period, real GDP grew by 7.3% in 1992. In 1993, however, economic growth slowed to 4.5%; continually declining until the rate hit -0.8% in 1996. The decline was attributed to lingering negative expectations in the private sector, adverse effects of increasing international competition, and unfavorable weather. Tight fiscal and monetary policies adopted under an IMF standby agreement April 1993–February 1994 also contributed to the mild recession. The government entered into another standby agreement with the IMF, which ran from November 1995 to February 1997. By 1998, annual inflation was down to 12%, a significant improvement on the 22.5% recorded in 1995, and GDP growth rose to 6.2%, above the 3.7% recorded in 1997, reflecting increased tourist and export trade, and new investment activity. Inflation dropped to 10.1% in 1999, the year of Costa Rica's strongest recent growth. In 2000 GDP growth fell to 2% and in 2001 to 1.1%. In 2002, GDP growth was estimated at 2.8% and inflation at 10%.

In 2004, the economy expanded by 4.2%, down from 6.5% in 2003; in 2005, the GDP growth rate was estimated at 2.7%. The inflation rate was fairly stable, but in 2004 it grew to 12.3%, and was expected to continue this trend in 2005 (increasing to 13.6%). The unemployment rate was also stable, and remained under the 7% marker. The main economic growth engines remain agriculture, tourism, and electronics exports. Costa Rica's economy is attractive for investors as it is framed within a stable political system; it benefits from high education levels and a booming tourism sector. However, the government has to struggle with substantial internal and external deficits, and a sizable internal debt.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Costa Rica's gross domestic product (GDP) was estimated at $40.3 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $10,000. The annual growth rate of GDP was estimated at 3.2%. The average inflation rate in 2005 was 13.8%. It was estimated that agriculture accounted for 8.6% of GDP, industry 28.3%, and services 63.1%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $321 million or about $80 per capita and accounted for approximately 1.8% of GDP. Foreign aid receipts amounted to $28 million or about $7 per capita and accounted for approximately 0.2% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Costa Rica totaled $11.72 billion or about $2,925 per capita based on a GDP of $17.5 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 4.2%. It was estimated that in 2004 about 18% of the population had incomes below the poverty line.

LABOR

As of 2005, Costa Rica's labor force was estimated at 1.82 million workers. In 2003, the services sector accounted for 62.1% of the workforce, followed by industry at 22.2%, agriculture at 15.1%, and various other occupations at 0.6%. Unemployment was estimated at 6.6% in 2005.

The law provides workers with the right to join and form unions, although this is limited in practice. Unionization was about 9% of the total workforce in 2005. Solidarismo (solidarity associations), a Costa Rican alternative to traditional trade unions, have grown popular and have around 330,000 workers, 95% of whom are in the private sector. Solidarismo are nondues collecting associations and work to promote cooperative labor/management relations by offering workers practical benefits (like credit unions), in exchange for which workers renounce their striking and collective bargaining rights. Solidaristas are established with mutual contributions from the employer and the workers, so that the fund serves as savings plan, benefits, and severance pay. Private sector workers have the right to strike, but public employees are prohibited from striking.

A minimum wage is set up by a National Wage Council. The private sector minimum wage ranged from $150 per month for domestic servants to $588 for university graduates in 2005. The workweek was set at 48 hours. Overtime pay is required for work in excess of that. Occupational health and safety standards are inconsistently enforced, especially outside of San José. Although child labor remains a problem, the government is working to eradicate abuses. The minimum working age is 15 years, while minors between the ages of 15 and 18 may work up to six hours per day and 36 hours per week. Night work and overtime for minors are prohibited.

AGRICULTURE

About 10.3% (525,000 hectares/1,297,000 acres) of the total land area is used for crop production. Nearly half of all farms average less than 10 hectares (25 acres) in size. Over 326,000 persons, or about 19% of the economically active population, were engaged in farming in 2003.

Corn and sugar crops are usually sufficient to meet domestic needs, but beans and rice must be imported from time to time. Agriculture accounted for about 9% of the GDP in 2004. The principal cash crops are coffee, bananas, cocoa, and sugar. Coffee and bananas together accounted for 12% of exports in 2004, with values of $199.5 million and $545.4 million, respectively.

Over 85% of coffee properties belong to Costa Ricans. The banana industry has been producing more than one million tons of bananas annually since the 1970s. The principal marketer of Costa Rica's bananas is Standard Fruit Co. Corn, rice, potatoes, beans, sisal, cotton, citrus fruits, pita (used to make hats, baskets, and mats), yucca, vegetables, pineapples and other fruits, tobacco, abaca (hemp), and vegetable oils (especially African and coconut palms) are produced primarily for domestic consumption. Estimated crop production in 2004 (in tons) was sugarcane, 3,945,000; bananas, 2,230,000; rice, 222,000; coffee, 126,000; corn, 12,000; dry beans, 10,500; and cocoa, 700. In 1999, agricultural output was 26% higher than the annual average during 1989–91. During 2002–04, it was 20% higher than during 1999–2001.

ANIMAL HUSBANDRY

About 46% of Costa Rica's total land area was devoted to livestock raising in the early 1990s as the result of a major conversion of land to pasturage during the 1970s. In the past, Costa Rica had to import meat, but improvements in animal husbandry have made the country self-sufficient and provided a surplus for export. However, low productivity, low international prices, and high domestic interest rates affected profitability of the beef cattle sector in 1993 and 1994. National milk production in 2004 was an estimated 790,000 tons, enough to permit exports of excess production. Exports of meat were worth $37.3 million in 2004. In 2004, there were an estimated 1,080,000 head of cattle, 550,000 hogs, 115,000 horses, and 19,500,000 chickens.

FISHING

Fish abound in Costa Rican waters, particularly in the Pacific Ocean, where 89% of the annual harvest is caught. Tuna, herring, and shrimp are the most valuable commercial fish; they are caught, processed, and shipped abroad by US firms. A small native fishing industry contributes to the domestic food supply and exports shark, mollusks, and live lobsters. Pearl fishing, once an important industry on the Pacific coast, has declined. In 2003, the total volume of fish landed was an estimated 29,327 tons. Aquacultural production added another 20,546 tons to the 2003 total.

FORESTRY

Costa Rica's forestland has declined from about 75% of the total land area in 1940 to 39% in 2000. About 18% of the area still forested is lightly exploited, while 82% is virgin forest. Varieties of commercial woods include laurel, cedar, oak, quina, espavel, campana, cristobal, pochote, maca wood, cedro macho, cedar, and caoba (mahogany). In the Golfo Dulce rain forest of the southern Pacific coast, 135 families of trees embracing some 1,315 species in 661 genera have been identified. Forest products include rubber, chicle, ipecac, roots, medicinal plants, seeds, and other plant products. Although lumber exports have declined, overall timber output increased to 5.1 million cu m (181 million cu ft) of roundwood cut in 2003, of which about 67% was used for fuel. Forestry product exports in 2003 totaled $21.7 million.

MINING

The production of minerals contributed less than 1% to the GDP. Mineral production in 2003 included cement, 1.3 million tons; common clays, 420,000 metric tons; sandstone, 3.25 million tons; and limestone, 920,000 tons. Diatomite, lime, pumice, silver, marine salt, crushed stone, and sand and gravel were also mined in 2003. Except for clays, fertilizers, and lime, most mineral commodities were produced for domestic use. In May 2002, the president of Costa Rica issued a decree that placed a moratorium on oil exploration, open pit mining, and cyanide processing. While the moratorium was not expected to affect the open-pit heap-leach Bellavista and Cerro Crucitas gold projects, which were approved prior to the moratorium, other gold projects could be severely affected. Gold production in 2003 totaled 110 kg, up from 100 kg in 2002.

ENERGY AND POWER

Costa Rica, with no proven reserves of oil, natural gas, or coal, relies heavily upon electric power to meet the bulk of its energy needs. In 2002, the country had an electric power generating capacity of 1.715 million kW, with production and consumption for that same year at 7.360 billion kWh and 6.420 billion kWh, respectively. The nation's generating capacity, and output is primarily hydroelectric. Hydropower accounted for 1.226 million kW or 71.4% of generating capacity, and for 5.871 million kWh or almost 80% of the power produced in 2002. Additional capacity and production comes from geothermal/other and conventional thermal sources. In 2002, geothermal/other sources accounted for 0.207 million kW or 12% of capacity, and 1.374 billion kWh or 18.6% of production. Conventional thermal sources accounted for 0.282 million kW or 16.4% of capacity, and 0.115 billion kWh or 1.5% of production. Costa Rica has no nuclear power generating capacity

Costa Rica relies mostly on imports to meet its hydrocarbon-based needs. All crude oil is imported. In 2002, crude imports averaged 9,680 barrels per day. Costa Rica however, does have limited refining capacity. According to data from the Energy Information Administration, updated as of October 2005, of the seven countries that comprise Central America, Costa Rica is among only three (El Salvador and Nicaragua are the others) to have refining capacity. Of the three, Costa Rica's refining capacity is the largest, at 24,000 barrels per day, and is handled by a single refinery, the Limón facility. In 2002, refinery output totaled 9,280 barrels per day and consisted of: distillates (2,920 barrels per day); residual product (4,500 barrels per day); liquefied petroleum gas (800 barrels per day); and unspecified products (1,780 barrels per day). However the country's demand for refined product far outstrips the capacity of this single facility, so imports are necessary. In 2002, demand for refined petroleum products averaged 39,670 barrels per day. Costa Rica must also import all of the coal it consumes. In 2002, these imports consisted of hard coal and amounted to 54,000 tons.

INDUSTRY

Costa Rica is one of the most industrialized countries in Central America, although industries are predominantly small-scale and primarily involve assembling or finishing imported semifinished components. Of the few larger-scale manufacturing enterprises, the majority are in chemical fertilizers, textiles, coffee and cocoa processing, chemicals, plastics, electronics, and computer chips. The Intel Corporation opened a chip-manufacturing plant in 1998. The garment assembly and tuna processing industries are important. Other manufacturing projects include aluminum processing, a petrochemical plant at Moin, a tuna-processing plant at Golfito, and an oil refinery at Limón with a production capacity of 15,000 barrels per day. Major infrastructure construction projects were planned as of 2002, but with the exception of road repair, most had not progressed. Industry represented 37% of GDP in 2000. The Costa Rican Investment and Development Board (CINDE), is designed to attract high quality foreign investment oriented toward exports.

The share of industry in the GDP decreased to 28.3% in 2005, and was bested by services with a 63.1% share (which was also the country's largest employer). The industrial production growth rate was 2.6%, similar to the GDP growth rate in the same year—an indicator of unspectacular development in this sector. Manufacturing and mining continue to account for most of the industrial output.

SCIENCE AND TECHNOLOGY

The principal scientific policymaking body in Costa Rica is the General Directorate of Geology, Mining, and Petroleum (founded in 1951). Several institutes specialize in tropical sciences, including the Organization for Tropical Studies in San Pedro, the Tropical Science Center in San José, and the Tropical Agronomy Center in Turrialba, as well as medicine, nuclear energy, technology, geology, agriculture, and meteorology. The University of Costa Rica in San José, founded in 1843, has faculties of agronomy, science, pharmacy, engineering, medicine, microbiology, and dentistry. The National University in Heredia, founded in 1973, has faculties of exact and natural science, earth and sea sciences, and health sciences. The Technological Institute of Costa Rica in Cartago, founded in 1971, has numerous attached research centers. In 1987–97, science and engineering students accounted for 20% of college and university enrollments.

For the period 1990–2001, there were 530 researchers per million people engaged in research and development (R&D). In 2002, high technology exports by Costa Rica were valued at $1.146 billion, which accounted for 37% of manufactured exports. In 2000, R&D expenditures totaled $131.417 million, or 0.39% of GDP.

DOMESTIC TRADE

San José is the commercial center, and most importers, exporters, and manufacturers' agents operate there. Though there are a number of small merchants and traditional public markets; modern shopping centers, malls, supermarkets, and franchise outlets are becoming the norm. E-commerce is slowly becoming popular but has been hindered by the lack of appropriate telecommunications.

In recent years, the economy has made a major shift from agricultural production and exports, primarily of bananas and coffee, to high-tech industries and tourism. As of 1999, 58% of the work force was employed in service industries. In 1998, the opening of an Intel Corporation microprocessor assembly and testing plant accounted for half of the nation's economic growth the following year. Subsequent large foreign investment companies include Abbott Laboratories and Procter and Gamble.

Shops are open on weekdays from 8:30 to 11:30 am and from 2 to 6 pm, and on Saturday in the morning only. Business hours are from 8 am to 12 pm, and 2 to 6 pm, Monday through Friday. Normal banking hours are 9 to 11 am and 1:30 to 3 pm, Mondays through Friday, and 8 to 11 am on Saturday. Advertising agencies in Costa Rica, all located in San José, offer advertising services through newspapers, radio, television, and direct mail.

FOREIGN TRADE

Among Costa Rica's major exports are coffee, bananas, sugar, cocoa, and cattle and meat products—all commodities vulnerable to world market prices. The major markets for Costa Rican exports are the United States, the United Kingdom, Germany, Italy, Guatemala, El Salvador, Honduras, and Belgium.

Imports consist mainly of raw materials for industry and mining, followed by consumer goods and capital goods for industry, mining, and transportation. Major suppliers include the United States, Mexico, Venezuela, Japan, Spain, Guatemala, and Germany.

In 1996, falling terms of trade due to lower international prices for coffee, beef, and sugar, and the drop in banana production, caused traditional exports to perform less well than in previous years. However, the growth of nontraditional exports picked up part of the slack, despite some adverse effects from much-enhanced competitiveness of competing Mexican exports. Despite the economic recession, the value of imports of goods increased by 16% in 1996, well above the 8% for the previous year. A major factor was the substantial increase in international fuel prices and a relatively strong local currency. As a result, the trade deficit worsened from 1995 by almost 117% to $76 million.

The value of imports continued to rise into 1998; after 1997 the value of imports as compared to exports was balanced. Exports in 1999 climbed above imports because of the sale of computer chips, but in 2000 the trade deficit returned.

Costa Rica relied mostly on agriculture to sustain its commodity export market in 1996. Fruits and nuts made up almost a third of exports (30%) and coffee was the second-largest export (15%). Other agricultural exports included nonedible vegetable oils (4.6%), fruit (2.5%), edible vegetables (2.4%), meat (2.0%), and sugar (1.5%). Small amounts of medicines and gold were exported from Costa Rica (2.1% and 1.7%).

In 2005, exports reached $7 billion (FOB—Free on Board), while imports grew to $9.7 billion (FOB). In 2004, the bulk of exports went to the United States (46.9%), the Netherlands (5.3%), and Guatemala (4.4%). Imports included raw materials, capital goods, and consumer goods, and mainly came from the United States (46.1%), Japan (5.9%), Mexico (5.1%), and Brazil (4.2%).

BALANCE OF PAYMENTS

Costa Rica has traditionally experienced balance-of-payments difficulties because of the vulnerability of its main sources of exchange earnings to fluctuations in world markets. The nation's payments problems in the late 1970s were aggravated by domestic inflationary policies and rising trade imbalances, despite increases in foreign capital receipts. The deficit on capital accounts declined in the mid-1980s due to increases in capital investment from foreign loans and credits and favorable renegotiation of the foreign debt. During the early 1990s, an unfavorable trade balance resulted from fluctuating coffee prices and high oil prices, but the balance of payments leveled out by 1999. Costa Rica's chronic trade and current account deficits have been offset by foreign direct investment in the form of capital goods, which is reflected in the offsetting figures for the current and capital accounts. The US Central Intelligence Agency (CIA) reported that in 2001 the purchasing

power parity of Costa Rica's exports was $5 billion while imports totaled $6.5 billion resulting in a trade deficit of $1.5 billion.

The International Monetary Fund (IMF) reported that in 2001 Costa Rica had exports of goods totaling $4.91 billion and imports totaling $6.12 billion. The services credit totaled $2.05 billion and debit $1.28 billion.

The current account balance was negative in 2004, slightly improving from -$967 million in 2003 to -$960 million in 2004. Foreign exchange reserves (including gold) decreased to $1.4 billion in 2004, covering almost two months of imports.

BANKING AND SECURITIES

The Central Bank (Banco Central de Costa Rica), an autonomous governmental body established in 1950, issues currency, holds the nation's gold reserves, formulates general banking policy, and regulates commercial banks. Three commercial state banks, which dominate the banking system, are operated as autonomous government corporations: the Banco Nacional de Costa Rica, Banco de Costa Rica, and Banco Crédito Agrícola de Cartago. The banking monopoly was surrendered in 1995. There are also nearly 70 private banks and financial groups operating in Costa Rica.

Costa Rican residents can own and deal in gold, own foreign securities and foreign currencies, maintain foreign bank balances, import and export national bank notes, and import goods from abroad, but they must repatriate export earnings. Costa Ricans traditionally put their savings into real property rather than securities, but on several occasions during the 1960s and 1970s, the government successfully floated bond issues within the country. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $2.2 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $6.1 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 28.75%.

Stock sales and foreign currency transactions are handled by the Bolsa Nacional de Valores in San José. The Superintendency of Financial Markets (SUGEVAL) is in charge of the stock exchange.

INSURANCE

Only the government's National Insurance Institute (Instituto Nacional de Seguros—INS), founded in 1924, may write insurance in Costa Rica. It handles all types of insurance, the most important being life, fire, automobile, and workers' compensation. One of the more popular features of life insurance policies is that the holder may borrow up to the full face value of the policy after paying premiums for only two years. In 1996, the insurance monopoly was reformed to allow private agents to sell policies, while the INS continued to hold all underwriting rights. The INS does, however, reinsure its risks with private, foreign insurers. In 2003, the value of all direct premiums written totaled $318 million, of which nonlife premiums accounted for $290 million. In 2002, the INS' gross written nonlife premiums (including personal accident) totaled $313.5 million.

PUBLIC FINANCE

The central government budget is passed upon by the Legislative Assembly. Municipal budgets are of minor importance, and local

government funds are mainly grants from the national government. The financial range of the public sector extends to a large number of publicly owned entities. Interest costs on the accumulated government debt consume a huge 16.8% of the government's revenues. Approximately 42% of the 2001 national budget was financed by public borrowing.

The US Central Intelligence Agency (CIA) estimated that in 2005 Costa Rica's central government took in revenues of approximately us$2.7 billion and had expenditures of us$3.1 billion. Revenues minus expenditures totaled approximately -us$473 million. Public debt in 2005 amounted to 56.2% of GDP. Total external debt was us$3.633 billion.

The International Monetary Fund (IMF) reported that in 2003, the most recent year for which it had data, central government revenues in colones were c1,579.4 billion and expenditures were c1,691 billion. The value of revenues in US dollars was us$3.97 million and expenditures us$4.24 million, based on a market exchange rate for 2003 of us$1 = c398.66 as reported by the IMF. Government outlays by function were as follows: general public services, 22.2%; public order and safety, 7.5%; economic affairs, 9.7%; health, 20.9%; recreation, culture, and religion, 0.8%; education, 21.6%; and social protection, 17.3%.

TAXATION

Indirect taxes, such as import duties, contribute about three-quarters of government revenues.

Both individuals and businesses residing in Costa Rica are subject to income tax only on income derived from sources within the country. The corporate tax rate is 30%. Incentives are available for new industries and for engaging in the export of nontraditional products. Personal income taxes range from 10–25% for employed persons and 10–20% for self-employed persons. The personal exemption level is equal to only 80% of Costa Rica's average income, and the threshold for the highest tax rate is less than four times the average. The main indirect tax is Costa Rica's value-added tax (VAT) introduced in January 1975 at a standard rate of 10%, which was reduced to 8% during the 1990s, and then raised to 13% in 2001. Items exempted from the VAT include inputs for dwelling construction, food, medicines, educational supplies and books. Electric power to homes is subject to a 5% rate. There is also a property tax, a franchise tax, a real estate transfer tax, and a selective-consumption tax levied on luxury items, with rates ranging from 10–75%.

CUSTOMS AND DUTIES

Initially, the import tariff was primarily for revenue raising purposes, but in 1954 it was increased to protect Costa Rican industry. In 1962, tariffs were raised so high that they virtually prohibited foreign competition in certain fields. Import duties usually included a specific duty on the gross weight in kilograms and ad valorem duties of varying percentages of the CIF (cost, insurance, and freight) value of the imported goods.

Since Costa Rica's entry into GATT, tariffs have been lowered. As of 2002, customs duties range from 1–15%. However, food tariffs were between 14% and 19%. Import duties on raw materials, bulk grains, and oilseeds were reduced to 1% in 1996. Capital goods and most finished products have a tariff of 1% and 10–15% respectively. There is a 13% value-added tax (VAT). Excise taxes range from 5–75%, applying to about half of all products imported. For example, arms and munitions are taxed at 75%; costume jewelry, fireworks, and whiskey at 50%; wine and beer at 40%.

Costa Rica has a bilateral free trade agreement with Mexico and was planning future agreements in 1999 with Dominican Republic, Panama, Chile, and Trinidad and Tobago. Costa Rica is also a member of the Central American Common Market (CACM) with El Salvador, Guatemala, Honduras, and Nicaragua. The CACM has a common external tariff of 5–20% for most products.

FOREIGN INVESTMENT

Foreign investment, which is welcomed in Costa Rica, is concentrated in manufacturing (45%) and agriculture (25%, mainly banana and coffee interests). Other investments are placed in the railways, tobacco, communications, airlines, government bonds, and real estate. The United States, Costa Rica's major foreign investor (78% in 1998), has interests chiefly in computer chip manufacturing, agriculture, petroleum refining, and distribution, utilities, cement, and fertilizers. The continued high level of trade with the United States has been conducive to private foreign investment, especially in export industries. Investment incentives include constitutional equal treatment guarantees and free trade zones. Foreign direct investment in Costa Rica in 1998 was $530 million, or 5% of GDP.

Liberalization of Costa Rica's trade and investment regimes, resolution of the internal debt problem, and passage of legislation expanding private sector investment in energy, telecommunications, roads, ports, and airports have boosted opportunities for foreign and local investors and increase Costa Rica's prosperity. In 1998, the Public Concessions Law defined the ways in which foreigners could invest in Costa Rica's public sector. Still, in the energy sector, foreign ownership may not exceed 65%, and a long list of activities are reserved for the state. The government had no privatization programs in 1999, but in 2000 investment was promoted by the government in the electricity and telecommunications parastatals.

Costa Rica has sought to widen its economic and diplomatic ties, including outside the region. Costa Rica has maintained connections with the United States, the EU, along with the other Central American states, through periodic ministerial consultations. The country is a founding member of the WTO and has actively participated in the follow-up to the Summit of the Americas to bring about the Free Trade Area of the Americas by the year 2005.

In 2003, total capital inflows reached $587 million, down from $662 million in 2002, but up from $454 million in 2001. The United States' stock of foreign investment decreased by $75 million in 2003, reaching $1.6 billion. In August 2004, Costa Rica (together with El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic) signed a free trade agreement with the United States. Through this agreement, Costa Rica has committed itself to open up two sectors that are currently state monopolies—telecommunications and insurance. Costa Rica is also a beneficiary of the US Caribbean Basin Trade Partnership Act (CBTPA).

ECONOMIC DEVELOPMENT

Despite trying to remain neutral, Costa Rica was affected adversely by regional political turmoil in the late 1970s and the 1980s. Instability in neighboring Nicaragua and Panama discouraged new investment and tourism in Costa Rica. Many displaced Nicaraguans and Salvadorans sought refuge in Costa Rica, further burdening the country's educational and health facilities. An oil shock and debt crisis also made economic recovery difficult.

Following an economic crisis in the early 1980s, Costa Rica made significant progress toward macroeconomic stability, structural adjustment, and growth through increasingly diversified exports. Gross domestic product (GDP) growth averaged 4% from 1988 to 1998. Nontraditional exports and tourism have increased rapidly and account for almost 60% of foreign currency earnings. Impressive growth after 1998 was recorded, in part due to the investments of the Intel Corporation. Although that and other North American corporations remain crucial to the success of the economy, since 2000, growth slowed to around 2%, unemployment remained at 6%, and inflation remained at 10%.

The government faced a large budget deficit in 2002 (it was 6% of GDP, up from 3.8% in 2001); 42% of the 2001 national budget was financed by public borrowing. The public debt was 52% of GDP in 2002. In 2000, an effort to privatize the telecommunications sector failed, and important economic sectors remain controlled by large public enterprises. The government in 2003 planned to implement tax reform to broaden the tax base, and to improve the condition of the financial system. Costa Rica is a supporter of the Free Trade Area of the Americas.

In 2005, the economy expanded at an overall slower pace than in 2004. This deceleration was reflected in all sectors of the economy, save agriculture and utilities. Government spending also went down, holding down growth in government consumption. Domestic demand was sluggish, with the exception of fixed investment. The fastest-growing sectors were transport and communications.

SOCIAL DEVELOPMENT

A national social insurance and mandatory private insurance system provides old age, disability and survivorship benefits for employed persons. There is also a voluntary program for the self-employed. All employed persons have coverage for sickness and maternity cash benefits, and all residents get medical care. A family allowance program provides pensions for persons, employed or not, that are not covered under the national social insurance system. The social security program is compulsory for all employees under 65 years of age. Pensions are generally set at 60% of average earnings during the last five years of coverage.

The government is taking action to protect women against domestic violence and abuse, including passing laws and providing services to victims. Domestic abuse is considered a major society problem. Women have equal rights under the law. The Law for the Promotion of the Social Equality of Women further obligates the government to promote political, economic, social, and cultural equality. Although women remain underrepresented in senior government positions, progress has been made. The law stipulates that women receive equal pay for equal work, but men usually have higher earnings. The Women's Council and the Women's Delegation, two government agencies, act as advisors and advocates for women who have suffered abuse or harassment. Child prostitution remains prevalent. However, the government is committed to children's rights and adequately funds pubic education and medical care.

Prisons are overcrowded, but conditions are generally considered to be humane. The judicial process tends to be slow, resulting in some lengthy pretrial detentions. Human rights are respected by the government.

HEALTH

Health standards have steadily improved in Costa Rica. The infant mortality rate, 166.7 per 1,000 live births in 1927, was 62.3 in 1968 and 9.95 in 2005. The decreases in mortality rates were attributed to improvements in sanitary and medical facilities under the national health program administered by the Ministry of Health. The fertility rate was 3.1 in 1994, a 1.3% yearly reduction since 1984, and was reduced further to 2.5 as of 2000. The use of contraceptives is one of the highest in Latin America and the Caribbean. In the mid-1990s, 75% of married females aged 15–49 were using a form of contraception. During 2005, life expectancy at birth was an average of 76.84 years.

Hospitals are located in the principal cities and about 95% of the hospital beds are in urban areas. In 2004, Costa Rica had an estimated 172 physicians, 245 nurses, 42 dentists, and 34 pharmacists per 100,000 people.

Health services for the rural population are generally inadequate and the refugee problem has severely taxed urban services. However, there are sanitary units and dispensaries to care for the health needs of the poor. During the 1980s, the greatest health problem was protein-calorie malnutrition, particularly among infants and children. Diseases of the circulatory system are the leading cause of death. Almost 100% of the population had access to safe water. Costa Rica immunized children up to one year old as follows: diphtheria, pertussis, and tetanus, 91%; measles, 99%; polio, 93%; and tuberculosis, 91%. The incidence of tuberculosis was 17 per 100,000 in 1999.

The HIV/AIDS prevalence was 0.60 per 100 adults in 2003. As of 2004, there were approximately 1,200 people living with HIV/ AIDS in the country. There were an estimated 900 deaths from AIDS in 2003.

HOUSING

In 2004, there were approximately 1,082,662 housing units in the country. About 646,806 (59.7%) were detached houses. About 74% of all dwellings were owner occupied. About 84.5% of all dwellings were listed in good or average condition and 88% were listed as having access to all basic services.

Sources for housing mortgages include private funds, the Central Bank, the Social Security Fund, and the national banking system. In 2002, the cost of building a home was about $315 to $540 per square meter. The National Institute of Housing and Urban Affairs, established in 1954, administers a national low-cost housing program.

In 1986, the National Bamboo Project was launched as a way to introduce new building technology aimed at preventing deforestation throughout the country. The project focuses on the use of bamboo for building material in indigenous housing projects. In 1995, FUNBAMBU (The Bamboo Foundation) was established to take over the program. To date, at least 3,000 low-cost homes have been built through this program and about 200 hectares of bamboo have been cultivated for future use. FUNBAMBU plans to build another 1,500 homes per year, about 6% of all housing construction per year.

EDUCATION

Primary education lasts for six years followed by three years of secondary education. Either a two-year academic course of study or a three-year technical course of study follows. Primary and secondary education is free, and primary-school attendance is compulsory.

Primary school enrollment in 2003 was estimated at about 90% of age-eligible students. The same year, secondary school enrollment was about 53% of age-eligible students. It is estimated that about 94% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 23:1 in 2003; the ratio for secondary school was about 19:1.

The country has 39 universities, including an open university. The University of Costa Rica (founded in 1843) is supported by the government. The Open University (1977) in San José operates 28 regional centers for all students who apply. There are also the Autonomous University of Central America (1976) in San José and the National Autonomous University of Heredia (1973), among others. In 2003, about 19% of the tertiary age population were enrolled in some type of higher education program. The adult literacy rate for 2004 was estimated at about 95.8%, with fairly even rates for men and women.

As of 2003, public expenditure on education was estimated at 5.1% of GDP, or 22.4% of total government expenditures.

LIBRARIES AND MUSEUMS

The National Library at San José, founded in 1888, is a reference library that contained about 255,000 volumes in 2002. Other important libraries in San José are the National Archives, with 8,500 volumes, and the library of the University of Costa Rica, which contains about 439,000 volumes. The Inter-American Institute of Agricultural Sciences, in Turrialba, has a library of over 90,000 volumes. The Legislative Assembly maintains a library of 35,000 volumes and the Indigenous Museum (1890) holds 40,000 volumes. The Tropical Science Center in San José sponsors the L.R. Holdridge Documentation and Information Center, which specializes in research materials on nature conservation and management.

The National Museum of Costa Rica in San José, founded in 1887, is a general museum with collections of pre-Columbian, colonial, republican, and religious art, a herbarium, and bird displays. The Museum of Costa Rican Art was founded at San José in 1977. There are several other art museums in the capital as well, including the Indigenous Museum, the Museum of Pre-Colombian Gold, and the Museum of Jade.

MEDIA

Costa Rican telephone, telegraph, and radio systems are owned and operated by both governmental and private firms. In 2003, there were an estimated 251 mainline telephones for every 1,000 people; about 15,800 people were on a waiting list for telephone service installation. The same year, there were approximately 111 mobile phones in use for every 1,000 people.

There were 65 AM and 51 FM radio stations in 2002. The same year, there were 20 television stations in Costa Rica. Many stations are privately owned. The Commission on Control and Rating of Public Performances has the authority to restrict radio and television broadcasts, as well as films and live theater productions that may contain violent or explicitly sexual content. In 2003, there were an estimated 816 radios for every 1,000 people. The number of televisions was unavailable in the same survey.

The major daily newspapers, all published in San José, (with 2004 circulations except as noted) include Diario Extra, an independent morning paper (120,000); La Nación, an independent morning paper (125,000); La República, an independent morning journal (60,000 in 2002); Al Dia, an independent morning paper (65,000); and La Prensa Libre, an independent evening paper (56,000). There are several periodicals and magazines available, the most popular of which is the general interest weekly Esta Semana, with a 1995 circulation of 27,000.

Freedom of speech and the press is guaranteed by the constitution and observed in practice. Print and electronic media are largely privately owned.

ORGANIZATIONS

Consumer cooperatives purchase, sell, and distribute goods among the membership. The cooperative credit societies procure loans for agriculture, stock raising, and industrial development, and cooperative housing associations provide low-cost housing facilities. There are chambers of commerce and of industry in San José. In addition, there are about 50 employers' and industrial organizations, including the National Coffee Chamber. An unusual organization, combining features found in credit unions, company unions, and building and loan societies, is the Movimiento Solidarista, which advocates harmony between employers and workers. Professional associations are also available.

The Central American Health Institute is a multinational organization based in San José. There are also several organizations concerned with environmental issues and conservation. Volunteer service organizations, such as the Lions Clubs and Kiwanis International, are also present.

National women's organizations include the Association of University Women, The Center of Feminist Information and Action, and the National Institute of Women. There are two major student unions, the Federation of University Students of Costa Rica (FEUCR) and The Nation Federation of University Students (FEUNA). The Association of Guides and Scouts of Costa Rica and the YMCA are also active youth organizations. There are several sports organizations representing a variety of interests, such as tae kwon do, badminton, tennis, and football (soccer), to name a few. There is an active organization of the Special Olympics.

Costa Rica has chapters of Amnesty International, the Society of St. Vincent de Paul, and the Red Cross. A national organization, the Arias Foundation for Peace and Human Progress, is based in San José. The Arias Foundation works to build peace and justice in Central America and operates the Center for Peace and Reconciliation, the Center for Human Progress, and the Center for Organized Participation. The Commission for the Defense of Human Rights in Central America and the Inter-American Institute of Human Rights are multinational groups based in San José.

TOURISM, TRAVEL, AND RECREATION

Popular tourist sights in San José are the National Museum, National Theater, and the Central Bank's gold exhibition. Other attractions include the Irazú and Poás volcanoes, brief jungle excursions, and the Pacific beaches. Popular recreations are bird-watching, mountain climbing, swimming, water-skiing, and deepsea fishing. Football (soccer) is the national sport; there are matches every Sunday morning in San José from May through October. Horseback riding is widely available.

Visitors to Costa Rica must have passports and an onward/return ticket. In 2003, Costa Rica received 1,238,692 tourists, of whom 82% were from the United States. There were 35,003 hotel rooms that year. Tourism receipts reached $1.4 billion.

In 2005, the US Department of State estimated the daily cost of staying in Costa Rica at $171.

FAMOUS COSTA RICANS

José María Castro was Costa Rica's first president (1847–49, 1866–68). Juan Rafael Mora Porras, the second president of the republic (1849–59), successfully defended the country against the invasion of US military adventurer William Walker. General Tomás Guardia (1832–82) led a revolt against the government in 1870, became a dictator, and in 1871 introduced the constitution that remained in force until 1949. José Figueres Ferrer (1906–90), president during 1953–58 and 1970–74, is regarded as the father of the present constitution. Oscar Arias Sánchez (b.1940), president 1986–90 and elected again in 2005, won the Nobel Prize for peace in 1987 for his plan to bring peace to Central America. Ricardo Fernández Guardia (1867–1950) is regarded as Costa Rica's greatest historian. Joaquín García Monge (1881–1958) founded the literary review Repertorio Americano. Maribel Guardia (b.1960) is a Costa Rican singer, actress, and model famous throughout Latin America.

DEPENDENCIES

Cocos Island—26 sq km (10 sq mi), about 480 km (300 mi) off the Pacific coast, at 5°32′n and 87°2′w—is under Costa Rican sovereignty. It is mainly jungle, with a maximum elevation of 850 m (2,788 ft). There is no permanent population, but the island is popular with transient treasure hunters. Cocos Island has two harbors and is of strategic importance because of its position along the western approach to the Panama Canal.

BIBLIOGRAPHY

Calvert, Peter. A Political and Economic Dictionary of Latin America. Philadelphia: Routledge/Taylor and Francis, 2004.

Costa Rica and Uruguay. New York: Oxford University Press, 1993.

Creedman, Theodore S. Historical Dictionary of Costa Rica, 2nd ed. Metuchen, N.J.: Scarecrow Press, 1991.

Daling, Tjabel. Costa Rica: A Guide to the People, Politics and Culture. Brooklyn, N.Y.: Interlink, 2002.

Health in the Americas, 2002 edition. Washington, D.C.: Pan American Health Organization, Pan American Sanitary Bureau, Regional Office of the World Health Organization, 2002.

Helmuth, Chalene. Culture and Customs of Costa Rica. Westport, Conn.: Greenwood Press, 2000.

Longley, Kyle. The Sparrow and the Hawk: Costa Rica and the United States During the Rise of José Figueres. Tuscaloosa: University of Alabama Press, 1997.

Mesa-Lago, Carmelo. Market, Socialist, and Mixed Economies: Comparative Policy and Performance: Chile, Cuba, and Costa Rica. Baltimore: Johns Hopkins University Press, 2000.

COSTA RICA

Republic of Costa Rica

República de Costa Rica

COUNTRY OVERVIEW

LOCATION AND SIZE.

Costa Rica is a central American nation, located between Nicaragua and Panama. Its borders span 309 kilometers (192 miles) with Nicaragua and 330 kilometers (205 miles) with Panama. Costa Rica also borders the Pacific Ocean and the Caribbean Sea, its coastline reaching across 1,290 kilometers (802 miles). The country has 51,100 square kilometers (19,730 square miles) of land, which is slightly less than the size of West Virginia, including the Isla del Coco (a small island in the Pacific Ocean).

San José, the capital, is located in a highland valley in central Costa Rica called the Meseta Central. Most of the country's population is located in this area formed by 2 basins separated by low, volcanic hills ranging from 900 to 1,500 meters above sea level. Other important cities are Cartago (the old colonial capital), Alajuela, and Heredia. The main port cities are Limón on the Caribbean Sea and Puntarenas on the Pacific.

POPULATION.

The country's population was estimated at 3.5 million in July of 2000. It is growing at a rate of 1.69 percent, which means that the population should reach approximately 4.1 million by 2010 and should double to over 7 million by the year 2035. Over 60 percent of the population is between the ages of 15 and 64, and only 5 percent of citizens are over 65 years old. The population is young, posing a challenge for the government to provide adequate schooling and training for youngsters. About 95 percent of the population can read and write. The larger, younger generation will also require greater health and retirement services as it begins to age.

Birth rates are at 20.69 per 1,000 people and death rates are at 4.31 per 1,000 people. There are approximately 2.52 children born per woman. Infant mortality rates are 11.49 deaths per 1,000 live births. There are approximately 1.02 males for every female in Costa Rica. The average life expectancy is 75.82 years: 73.3 years for males, and 78.5 years for females.

Adding to the high birth rate, the Costa Rican population also increases due to immigration —particularly from Nicaragua and other Central American countries. Immigrants come to Costa Rica in search of work opportunities, which they usually find in the agricultural sector. They are attracted by the relatively higher standards of living that are enjoyed in the country. The immigration rate for 2000 was estimated at 0.54 immigrants per 1,000 citizens.

The population of Costa Rica is mainly white (94 percent, including mixed European and Amerindian mestizos) and Roman Catholic (85 percent). There is a small proportion of black (3 percent), Amerindian (1 percent), and Chinese (1 percent) residents, and the second most important religious group is Evangelical Protestant (14 percent).

OVERVIEW OF ECONOMY

Costa Rica has a mixed economy in which both public and private companies play an important role. The government has supported socialist policies for decades. The emphasis in the economy has been placed on the governmental promotion of human development and welfare, while still allowing private companies to operate in some industries. These efforts were intensified in the 1950s, when political and social forces supported a method of economic development (planned growth) that was heavily dependent upon the state.

The biggest indication of the government's socialist ideology was its purchasing of goods and companies that were in trouble. When the state bought an interest in key industries such as banking, electricity, telecommunications, insurance, medicine, and education during the second half of the 1900s, the economy underwent nationalization . Under government control, Costa Rica achieved a relatively high standard of living.

However, this strategy relied on deficit spending, which meant that the Costa Rican government was spending money that it did not have. Even worse, the government also financially supported import substitution industrialization (ISI) policies during the 1960s and 1970s. Such policies were supposed to make the country more self-sufficient in industrial production, but ISI policies put Costa Rica deeper in debt.

The worldwide recession of the 1980s helped cause a Latin American debt crisis. Facing a devalued currency and an inflation rate of over 100 percent, Costa Rica experienced the most severe recession since the 1930s. The country was forced to make economic reforms and to liberalize the economy. This process began with a currency stabilization program (to stop inflation ), and led to a structural adjustment program (SAP) that tried to reduce government intervention in the economy.

The government sold many companies in which it had invested, but state control of the main industries persisted, with the exception of the banking industry. The people of Costa Rica preferred a state-run economy, and chose to finance their debt through the attraction of foreign direct investment . Public funds continued to be directed towards the manufacture and export of industrial goods. In spite of an increase in taxes, deficit spending continued, and the public debt grew. Interest payments on this debt absorbed a third of public accounts annually, making the economy unstable. Foreign direct investment helped the growth of local supply networks and supported export growth. The Intel Corporation opened a microprocessing plant in Costa Rica in 1998. The country has also been successful at promoting tourism, which has become an important source of foreign investment, has increased employment, and has generated substantial exchange revenue.

High levels of gross domestic product (GDP) growth achieved during 1998 and 1999—around 8 percent—proved unsustainable in 2000 when the demand for microprocessors plummeted. GDP growth during 2000 fell to a mere 1.5 percent. Economic policy focused on controlling inflation (at a historically low 10 percent), but the fiscal deficit remained above 4 percent, limiting economic growth.

POLITICS, GOVERNMENT, AND TAXATION

Costa Rica differed from other Spanish colonies in that it never developed a system of large land holdings. Agricultural production was limited to the size of families, and the distribution of land and other resources was relatively equal. Independence from Spain came without violence in 1821. After joining the Mexican Empire briefly in 1822, the Central American colonies— Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica—created a federated republic in 1823, which collapsed in 1829. Costa Rica is a democratic republic organized under the 1949 constitution. The president, 2 vice-presidents, and single-chamber congress (the Legislative Assembly) are directly elected for 4-year terms. The Supreme Court justices are elected by the Legislative Assembly for 8-year terms.

Liberal political reforms in the late 1800s facilitated the expansion of democratic institutions and processes. The middle class of Costa Rica flourished along with the development of commerce, services, and manufacturing. As economic conditions worsened through the Great Depression of the 1930s, the role of the state increased, and the citizens of Costa Rica demanded economic reform. Much of the country's character was defined in the 1950s through the abolition of the army, the nationalization of the main industries, and the construction of a social welfare system .

The main political forces in the country since the introduction of the social welfare system have been the Social Democrats (Liberación Nacional) and the Christian Democrats (Unidad Social Cristiana). Both Social and Christian Democrats have pursued an active involvement of the state in economic affairs. As a result, Costa Rica is a country in which the public sector plays a major role. The wave of privatization that has shaken most Latin American countries has not been significant in Costa Rica. The state continues to control key industries such as electricity, telecommunications, banking, insurance, health, oil refinery, and alcohol distillation. This situation has resulted more from public opposition to privatization than from government policy. As a result, the state has focused on administrative reforms that attempt to improve the efficiency of public companies.

Although there has been an increase in the level of participation of the private sector , the state is still in control. Banking is no longer a state monopoly , but the 3 largest banks are state owned. Medicine is also practiced privately, but the largest and most modern hospitals are owned and operated by the government's social security system. A law passed in 2000 allows the handling of oldage pensions by private companies, but the majority of pensions are still under state control.

The central government has a significant impact on the economy with its expenditures totaling over 30 percent of GDP in 1998. This is much higher than the level of expenditures in Canada (24.7 percent of GDP), the United States (21 percent) or the East Asian countries (10.4 percent), but is lower than the level in France (46.6 percent), Italy (44.6 percent), the U.K. (37.9 percent), Spain (36.1 percent), or Germany (32.9 percent). According to Central Bank figures (1999), the main sources of government revenue were import duties (42 percent), income taxes (22 percent), sales taxes (16 percent), and consumption taxes (5 percent).

Since tax revenues are lower than 23 percent of GDP, the government finances its expenditures through debt. This creates a deficit that in 1996 amounted to 4 percent of GDP and, although it was lowered to levels closer to 3 percent during 1998, has resurged during the past 2 years. Public debt has risen as a result, to a point where it represents more than the total of goods and services produced by the country, and thus represents a major source of economic instability. Interest payments on the debt absorb up to a third of the national budget, restricting the amount of funds that can be devoted to building schools, roads, and hospitals. The country's Central Bank has a limited ability to control the money supply and to fight inflation.

In spite of these negative trends, the government devotes over 5 percent of GDP to education and almost 7 percent of GDP to health. This compares well to the Latin American averages of expenditure in education and health, at 4.5 percent and 3.1 percent, respectively, and is comparable to international levels. The result of this policy has been an educated, skilled workforce.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

One of the greatest challenges facing the country is the maintenance of its infrastructure . Investments in this area have not kept pace with economic growth. There is more traffic than the old roads and ports can safely

handle, and the communication and power networks are not strong enough for the country's demands. A law was passed in 1998 to allow the development and administration of the infrastructure through private contracts, but by 2000 not one contract had been granted.

Costa Rica's communication infrastructure is less advanced than other Latin American countries. For example, in 1998 telephone lines per 1,000 inhabitants were at 172, better than the Latin American average of 118. But cellular phones per 1,000 inhabitants were at 28, caompared with 43 for all of Latin America, while Internet hosts were at 0.85 per 1,000 inhabitants compared to 4.85 for Latin America. Television sets were at a level of 387 per 1,000 inhabitants, compared to 255 per 1,000 for Latin America, but cable subscribers were at 13.8 per 1,000, compared to 28.3 per 1,000 for Latin America.

The country has over 35,705 kilometers (22,187 miles) of roads, of which 20 percent corresponds to national highways and 80 percent to local roads. About 56 percent of the national roads and 12 percent of the local roads are paved. Two major projects were underway by the end of 2000 to improve the carrying capacity of the main roads connecting the capital to the Pacific Coast.

Electric power generation and telecommunications are handled by a state monopoly, the Instituto Costarricense de Electricidad (ICE). Efforts to open these sectors to competition and privatization sparked riots and public protests in early 2000. The government claimed that it needed help from the private sector in order to service demand. Rioters were afraid that privatization would result in higher rates and the neglect of rural locations. The country's power source is mostly hydroelectric, although geothermal and wind sources are also used. The Costa Rican Congress was discussing a restructuring of the ICE in 2000-01 that would allow the establishment of joint ventures for the development of energy and telecommunication projects. It would, however, fall short of allowing competition by private participants in these sectors.

An index compiled by the Instituto Centroamericano de Administración de Empresas (INCAE), the Harvard Institute for International Development, and the Central American Bank for Economic Integration shows Costa Rican infrastructure lagging behind that of other Central American and East Asian countries. Values assessed ranged from 1 to 7 with higher values representing better infrastructure conditions. Costa Rica obtained a value of 2.29 compared to 3.46 for Guatemala, 3.56 for Nicaragua, 4.55 for South East Asia, and 4.64 for the United States, Japan, Ireland, Sweden, and China. This means that Costa Rican business faces greater challenges to compete against other nations.

ECONOMIC SECTORS

The Costa Rican economy is concentrated in the service sector, with 60.5 percent of its 1998 GDP represented in this category. The main service activity in the country is tourism, with over 1 million visitors in 1999. Industry is the second most important sector, representing 24 percent of GDP in 1998, followed by agriculture, which represents 15.2 percent of GDP.

The amount that industry contributes to GDP in Costa Rica is average for Latin America but is low when compared to that of East Asia (44 percent of GDP), the Arab nations (40 percent of GDP), and Eastern Europe (35 percent). However, it has become an area of aggressive growth through government stimulus. Efforts to build a high technology park through foreign direct investment have attracted firms like Intel Corporation, Baxter Medical, Microsoft, Abbot Laboratories, Conair, and Alcoa.

Government policies have attempted to reduce dependence on agriculture as a source of employment, production, and foreign exchange revenue. This has reduced the relevance of agriculture from close to 40 percent of GDP in the 1950s to its current 15.2 percent level. However, it still employs about 20 percent of the labor force .

AGRICULTURE

Costa Rica's temperate (warm) climate and fertile soils are suitable to agricultural production. There is an abundance of water—yearly rainfall averages 4 meters— and irrigation has been successfully applied to develop more arid (dry) regions. The government supports growers through research, training, and technical assistance.

The agricultural sector in Costa Rica has been declining in importance since the 1950s, but in 1998 still accounted for 15 percent of GDP and employed one-fifth of the labor force. Almost 10 percent of the country's land is used for agriculture. Agriculture is still an important contributor to foreign trade. Excluding free zone companies, agricultural exports represent approximately 60 percent of export flows. Traditional crops, like coffee and bananas, have been the staples of agricultural production since the 18th century. However, a wide range of nontraditional products has appeared since the 1980s that have begun a revival in agricultural exports.

Coffee is the country's oldest agricultural product and has been exported since the 1790s. In the 1820s the Costa Rican government stimulated its production by distributing free coffee plants and offering tax exemptions to interested families. This approach resulted in a group of small producers that, in spite of the existence of large-scale growers, has managed to remain in existence. Costa Rican coffee has been characterized by its high quality and efficient production, boasting some of the highest area yields in the world. In 1999 the country produced 147,000 metric tons of coffee. Although for many years coffee was the country's main source of foreign exchange, low international prices eroded its importance. Production for 1994-99 averaged 2.9 million bags (133,000 metric tons) with revenues of US$370 million annually. While such revenue represented about 11 percent of total export earnings in 1994, it only amounted to 4 percent of total export earnings in 2000.

Banana production surpassed coffee as the main agricultural product in 1992. Local farmers have cultivated it for over a century on the country's coasts, although primarily multinational corporations handle its export and sale. Production grew constantly during the 1990s, and prices remained steady. Exports for 1994-99 averaged 2,045,000 metric tons with revenues of US$624 million. This represented almost twice the revenue generated by coffee. Costa Rica devotes 50,000 hectares to growing bananas, almost 1 percent of its territory. It is the second largest producer in the world with an annual crop of approximately 115 million boxes sold in the United States and Europe. Growers estimate that their industry generates over 40,000 direct jobs and 100,000 indirect jobs. Workers in banana production enjoy the highest salaries and benefits in the Costa Rican agricultural sector.

Costa Rica is also an important producer of sugar. Yearly export volumes average 130,000 metric tons per year, with revenues of US$39 million. However, unlike coffee or bananas, sugar production is largely for local consumption, which exceeds 2.6 million metric tons. Over 48,000 hectares of land are dedicated to the production of sugar.

Nontraditional agricultural goods have been rising in importance over recent years. Most of them are export oriented and linked to various forms of agroindustry. Examples are African palm used for the extraction of vegetable cooking oil, and oranges processed for their juice and exported as fluid or concentrate. Although African palm has been cultivated since the 1970s, its period of strong growth began in the 1990s. By 1996 over 27,000 hectares were in production generating a volume of 422,000 metric tons. Orange production began in earnest as recently as 1990, spurred by the construction of 2 processing plants. Production areas doubled in 6 years, reaching 23,500 hectares and 165,000 metric tons. Other important nontraditional agricultural products are hearts of palm, ornamental plants, and macadamia nuts.

INDUSTRY

Costa Rican industry expanded in the 1960s and 1970s through government investment and protection. Sizable industrial investments were undertaken by the state through its development agency, CODESA. The investments aimed at reducing foreign dependence. However, the halt of foreign competition through trade protection resulted in inefficiency and products of poor quality. The strategy was abandoned in the mid-1980s as the government initiated a process of trade liberalization.

Industrialization policies since then have supported nontraditional exports. They have relied on direct subsidies such as the CAT (Certificado de Abono Tributario— a tax refund certificate) program; and indirect subsidies such as income tax exemptions, preferential import duties, and streamlined import-export facilities.

The result has been a sustained increase in the flow of industrial exports that has more than doubled their dollar value in less than 10 years, from US$518 million in 1991 to US$1.1 billion in 1999. Since 1996, industrial exports have contributed over 40 percent of all exports, excluding those from the free zone. About 15 percent of the workforce is employed in manufacturing activities.

Industry has also been promoted through the attraction of foreign investment. The country's industrial policy has been successful in attracting high technology companies, the most noteworthy being Intel Corporation, which invested over US$200 million in the construction of microprocessor production facilities in 1998. Total export volumes nearly doubled as a result of these investments, from US$3.5 billion in 1995 to US$6.6 billion in 1999. The export volume of the free zone sector was greater than the combined revenues of the normal export sector.

Because small industry is rarely eligible for free zone benefits but is subject to all forms of regulation and taxes—including payroll taxes that can reach up to 50 percent of workers' salaries—a growing number of establishments have been appearing in the informal sector . The Costa Rican Chamber of Industry estimates that 84 percent of all the industrial firms established in the 1990-98 period belonged to the informal sector.

MINING.

Gold is mined on the southern Pacific Coast and northwestern regions of the country. Some controversy exists as to the ecological impact of the methods employed in these extractions. Silver is also mined— though not extensively—in the western part of the country. Deposits of manganese, nickel, mercury, and sulfur exist but remain unexplored. Petroleum deposits have been identified in the southeastern region, but their exploitation has been deemed uneconomical. Salt is produced from seawater.

MANUFACTURING.

Until recently, most of the country's industry consisted of small-scale light manufacturing enterprises. Intel Corporation's arrival in 1998 marked the first large-scale manufacturing venture. Coffee-drying plants, sugar mills, cheese factories, sawmills, woodworking factories, breweries, and distilleries characterize the manufacturing sector. There is a single petroleum refinery that is state owned, and several hydroelectric plants with capacity to produce close to 6 billion kilowatt hours of electricity. Factories produce petroleum products, furniture, paper, textiles, chemicals, pharmaceuticals, plastics, footwear, cigars, cigarettes, jewelry, and clothing.

About half of the 4,856 industrial firms are located in the capital, San José. Next in importance are Alajuela (20 percent), Heredia (11 percent), and Cartago (10 percent). Of these firms, 2,411 (49.6 percent) are micro-enterprises employing between 1 and 4 workers. There are 1,547 (31.9 percent) small industries with 5 to 19 employees, 624 (12.9 percent) medium industries, with 20 to 29 employees, and 274 large industries (5.6 percent) with 100 or more employees.

According to the Ministry of Commerce and Industry, 24 percent of all industrial establishments process foods, drinks, and tobacco; 21 percent are metal and mechanic shops; 15 percent process wood, furniture, or other wooden products; 14 percent produce textile or leather products; 9 percent are in paper and printing; and 8 percent are in chemicals, rubber, and plastics.

SERVICES

Over 50 percent of the Costa Rican workforce is employed in the service sector, producing over 60 percent of the country's GDP.

TOURISM.

The most dynamic portion of the service sector is tourism. Costa Rica pioneered ecotourism (the practice of touring natural habitats in a manner that minimizes ecological impact). Because of its great biodiversity the country enjoys a natural advantage in this sort of activity. The number of tourists visiting Costa Rica has increased steadily during the 1990s, at an average rate of 15 percent per year. During 1999 over 1 million people visited the country, and the Costa Rican tourist board estimates that number increased by over 10 percent in 2000. Since 1986 a flow of investment exceeding US$800 million has been devoted to developing the sector. In 2001 there were over 13,400 rooms available for tourists. In 1998 US$883 million was generated by the tourist industry. This amount was over twice the revenue generated by coffee and 1.3 times that of banana exports. The government promotes the development of tourism through the Instituto Costarricense de Turismo (ICT), or tourist board, which prepares a yearly development plan. ICT runs specialized educational facilities to train workers in hotel management and other tourism-related activities.

RETAIL.

Retailers currently employ about 20 percent of the active workforce. Most retail firms are small to medium companies, although large discount retailers and hypermarkets have established themselves in the market during the past 2 years. There are 4 main supermarket chains—Automercados, MasxMenos, Super2000, and Perifericos—as well as a number of one-location markets of considerable size. Coverage of retail stores is limited to the Central Valley, although some have made inroads into the provinces during recent years. The oldest and largest department stores are La Gloria, with significant coverage in the Central Valley, and Llobet, located mainly in Alajuela.

FINANCIAL SERVICES.

About 5 percent of the workforce is employed in financial services. The sector generates about 3.6 percent of GDP. Banking was a state monopoly until 1987, when private institutions were allowed to coexist legally with the state banks, although they were limited to offering time deposits and were not allowed to offer checking or savings deposits. Reforms in the 1990s allowed private banks to offer the entire range of financial services, virtually eliminating the previous state monopoly. The only difference that persists between private and public banks is that the latter enjoy unlimited deposit guarantee from the state whereas private deposits are un-secured. There are 3 public banks—Banco Nacional, Banco de Costa Rica, and Banco Crédito Agrícola de Cartago—which represent 41 percent of total credit, and 20 private banks which represent 35 percent of total credit (2000). Other financial institutions include a workers' bank known as the Banco Popular y de Desarrollo Comunal which is capitalized through mandatory payroll contributions from workers and employers, a public funding agency for mortgage financing known as the Banco Hipotecario de la Vivienda, savings and loan cooperatives, mutual fund companies, and finance companies. The social security fund also engages in long-term mortgage financing. Insurance is presently a state monopoly; all insurance business is handled by the Instituto Nacional de Seguros.

There is a private stock exchange, the Bolsa Nacional de Valores (BNV), which is the oldest and largest in Central America. Its current annual volume is approximately US$28 billion, but over 80 percent of the volume traded is in public instruments. Only a small fraction of this volume (under 1 percent) is in equities . Some international transactions are also handled through the exchange. There are 27 brokerage companies currently participating at the exchange.

There are 3 regulatory entities in the financial sector: the Superintendencia de Entidades Financieras (Financial Superintendence), regulating banks, credit cooperatives, and other financial institutions; the Superintendencia de Pensiones (Pension Superintendence), regulating pension administrators; and the Superintendencia de Valores (Securities Superintendence), regulating securities and exchanges. All 3 entities are governed by a national board or commission, the Consejo Nacional de Supervisión Financiera.

COMPUTER SOFTWARE.

A burgeoning sector in Costa Rican services is the production of computer software. The National Chamber of Software Producers estimates the country currently boasts the highest number of per capita software producers in the world. About 85 percent of these firms, all nationally owned, export their products with yearly revenues of over US$50 million. The sector is estimated to have generated over 1,500 jobs in 1998. The high level of education and technical expertise available in the population favors the development of this industry, which is expected to continue growing.

INTERNATIONAL TRADE

Following a period of protectionism during the 1960s and 1970s, Costa Rica has slowly opened to greater foreign investment. The result has been an increase in import and export activity. Whereas imports and exports each barely amounted to US$200 million in 1969, in 1998 they had reached levels of US$6.2 and US$5.5 billion, respectively. The bulk of this growth occurred during the

1990s. In the case of imports it took the country from 1977 to 1990 to double its import volume from US$1 to US$2 billion, but only 8 years (1990-98) to triple that level to US$6.2 billion. The main sources of these imports in 1998 were the United States (41 percent), Japan (8.1 percent), Mexico (7.3 percent), and Venezuela (4 percent). In the case of exports it took from 1980 to 1992 (12 years) to double its export volume around the US$2 billion level, but only 6 years (1992-98) to more than double again and reach US$5.5 billion. The country's main export destinations in 1999 were the United States (49 percent), the European Union (22 percent), and other Central American nations (10 percent).

This growth has been accompanied by an important shift in the composition of trade. The importance of agricultural exports has diminished in favor of industrial exports. From 1991 to 1999, industrial goods went from 49 percent to 77 percent of total exports, whereas agricultural goods fell from 51 percent to 23 percent, respectively. This shift was largely the result of policies conducted to promote direct foreign investment and stimulate exports. These investments were carried out in free zone areas and their contribution to exports grew from 22 percent in 1991 to 60 percent in 1999. During the same period, local industry reduced its contribution to exports from 27 percent to 17 percent.

This growth of exports was driven by the arrival of foreign manufacturers—most importantly, the Intel Corporation. With its arrival in 1997, free zone exports shot up by a factor of 4, from US$891 million to US$3.6 billion. The relevance of Intel's exports can be gauged by their impact on the total volume of country exports, which rose from US$4.2 billion in 1997 to US$6.6 billion in 1999.

Since Costa Rica relies heavily on imports of raw materials and capital goods , industrial export growth has been accompanied by a substantial growth in imports. The country has carried a deficit in its balance of trade for every year since 1995, except 1999. However, the deficit has shrunk from over 33 percent of total exports in 1995 to just over 7 percent of total exports in 2000. This trade deficit has been financed by foreign capital flows, which have totaled US$2.4 billion in the past 5 years. Income from the service sector, particularly from tourism, has also helped finance the trade deficit.

The country's dependence on foreign capital flows to sustain imports is one of its recognized weaknesses. Although so far it has managed to attract sufficient levels of investment through its aggressive promotion policies, its stable social and political circumstances, and its highly educated workforce, the inability to generate sufficient foreign exchange through exports alone makes the country vulnerable to changes in international circumstances. Investment attraction policies have also been

criticized as expensive and fiscally unsustainable since they require substantial subsidies and tax exemptions.

MONEY

Costa Rica has suffered from chronic inflation during the last 25 years. Inflation rates exceeded 100 percent at the height of the debt crisis in the early 1980s, but monetary authorities have successfully managed to bring the inflation rate under control. Inflation rates at the end of the 1990s varied from 10 percent to 15 percent annually.

The country's high level of social spending generated fiscal deficits that were financed through the Central Bank. An administrative structure that provided for government control of the Central Bank allowed its easy manipulation. Although subsequent reforms granted the Central Bank more freedom from the government, it still carries the burden of high debt. Since interest payments on the public debt represent as much as 30 percent of the spending budget, total debt is increasing, requiring ever larger amounts of public funds and limiting the ability of the government to spend in other areas such as health and education. The government's inability to balance the fiscal budget has led to inflationary pressures.

The persistence of inflation has led to periodic currency devaluation in order to protect the competitiveness of Costa Rican exports. The government's policy aims at maintaining a neutral currency value by comparing domestic inflation to an index of international inflation rates. The goal is to maintain the local currency at its 1992 level, adjusting for inflation so that its purchasing power is neither greater nor lower than what it was at that date. Devaluation rates typically follow inflation rates, and are currently at a 10 percent to 12 percent annual level. The exchange rate for January 2001 was approximately 320 colones to the dollar.

Although the legal currency is the colón, dollar-denominated transactions are legal and widespread. This practice developed in the 1980s as people tried to protect themselves against inflation and devaluation. Legalization took place in the early 1990s. Convertibility of the colón to the dollar is unrestricted and can be done at every bank and financial institution. Loans and investments can be contracted in dollars, and rent contracts are typically denominated in dollars.

POVERTY AND WEALTH

Costa Rica has a large, professional middle class, and a relatively equal distribution of wealth. For the years between 1987 and 1998, the poorest 20 percent of the population held 4 percent of total income, whereas the richest 20 percent held 52 percent of total income. Approximately 9.6 percent of the population was reported under the World Bank poverty line (PPP US$1 a day) in 1998, compared to an average of 15.6 percent for Latin America and the Caribbean. The country had a per capita income (at purchasing power parity ) of US$7,100 in 1999.

The GINI coefficient is an index of inequality that measures the distance between a perfectly equitable distribution of income and the actual distribution across the population. A coefficient of 0 entails perfect equality, and a coefficient of 1 entails perfect inequality. Costa Rica's GINI coefficient for 1996, as reported by the World Bank, was 0.4607. This compared favorably with the distribution of income for its neighboring countries: El Salvador (0.052), Guatemala (0.0596), Honduras (0.537), Nicaragua (0.503), and Panama (0.485). The United States had a GINI coefficient of 0.408.

The Economic Commission for Latin America and the Caribbean classifies countries according to the incidence of inequality as measured by 5 risk factors: urban income inequality, urban poverty, urban unemployment, percentage of youngsters between 13 and 17 that are out of school, and the percentage of children that have not completed 6 years of schooling by age 15. Costa Rica is classified as having a low incidence of income inequality, measured as a ratio no greater than 8 between the richest 10 percent and the poorest 40 percent. It is also considered to have low incidence of poverty, measured

as a maximum of 20 percent of urban households classified as poor. In the other 3 categories Costa Rica is classified as having a median incidence of inequality: urban unemployment between 6 percent and 10 percent, between 8 percent and 15 percent of youngsters from 13 to 17 out of school, and between 10 percent and 20 percent of children under 15 that have not completed 6 years of schooling.

Costa Rica has also been classified by the United Nations Development Program as a country with medium human development in the 2000 report. The Human Development Index (HDI) is a composite index that measures different aspects of development, such as life expectancy at birth, education, and income. Costa Rica was ranked 47th in the world according to the HDI report 2000.

The Costa Rican government provides a comprehensive safety net through its social security system. Although coverage is far from universal and the system is plagued by high rates of evasion, payroll taxes insure a majority of the working population and their families. There is no unemployment insurance, but the law requires employers to pay up to 8 months of severance to dismissed employees. A legal reform passed in 2000 requires employers to pay monthly contributions into pension and severance funds that will be at the disposal of employees when required. Education is mandatory and free at the primary and secondary levels, and public universities provide high quality, low cost education at the undergraduate and graduate level. High quality medical attention is available and open to all citizens in the national hospitals.

Despite these achievements certain tendencies have started to erode the benefits of social services, creating a growing gap between the higher and lower sectors of the population. The quality of private education, for example, has surpassed that of public education. Service at public clinics and hospitals is poor, and there are long waits for medical appointments and procedures that tend to exclude those most in need. Public pensions are low and lag behind inflation. Reform efforts are underway that will attack these situations, but until they are passed, governmental authorities will continue to be challenged by these problems. Although government spending in these areas has not been reduced, critics believe that even higher amounts are required. The reforms partly hinge on this matter, but also aim at increasing the efficiency and effectiveness of administrators.

WORKING CONDITIONS

The labor force was estimated to be 1.377 million in 1998, with 5.6 percent unemployment and 7.5 percent underemployment (employment that does not require all the skills held by the employee). Working conditions are regulated in Costa Rica by a Labor Code (Código de Trabajo), and by administrative directives issued through the Ministry of Labor. Among the basic stipulations in effect are a minimum salary, a maximum workday with overtime stipulations, minimum safety and health requirements at the workplace, paid vacations and resting days, severance pay, a mandatory Christmas bonus, and maternity leave. Wage statistics published by the Inter-american Development Bank show that, although real minimum wages in Costa Rica fell by 1.4 percent between 1990 and 1992, they rose by 15 percent between 1992 and 1998.

Enforcement of the laws and regulation is conducted by Labor Ministry inspectors and through the labor courts. All employers are required to insure their workers against job-related injuries. Coverage is provided exclusively through the National Insurance Company (INS), and covers medical expenses, lost wages, and compensation in case of disability. Costa Rica has ratified, to date, 48 of the International Labor Organization (ILO) Conventions.

Labor unions have existed legally in Costa Rica for a long time and there are at least 4 national labor organizations or confederations: Confederación de Trabajadores Rerum Novarum (CTRN), Central del Movimiento de Trabajadores Costarricenses (CMTC), Confederación de Trabajadores de Costa Rica (CTCR), and Confederación Unitaria de Trabajadores (CUT). The influence of labor is greatest in the public sector.

During the 1990s, fiscal constraints led the government to curtail some of the privileges of public sector employees. These privileges were considered excessive and disproportionate to the benefits of workers in the private sector. Among the privileges that were discontinued were shortened workweeks, extended vacation periods, wage premiums linked to seniority and not productivity, and severance bonuses. This resulted in strikes held by public sector employees. Inability to solve the disputes led unions to process claims of labor rights violations at the International Labor Organization. During the 1990s, the ILO reports that strikes and lockouts averaged 18.5 per year, with the worst year being 1990. About 70 percent of these occurred in the public sector.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1502. Columbus lands on Costa Rica.

1522. Spanish colonizing expedition led by Gil Gonzalez Davila names the area Costa Rica, or "Rich Coast" because of the large amounts of gold given to them by the natives.

1562. Establishment of first permanent settlement, Cartago, by Juan Vázquez de Coronado "the true conqueror of Costa Rica," who acts as governor.

1821. Costa Rica gains independence from Spain, and votes to join the Mexican empire.

1823. Costa Rica joins the United Provinces of Central America, with Guatemala City as the capital.

1824. Juan Mora Fernández elected to be the first head of state. He presides over 9 years of stable progress.

1838. Costa Rica withdraws from Central American federation and declares complete independence.

1840s. Great wealth comes to several coffee growers, called "coffee barons."

1870-82. Investment in railroads and public works during the military rule of Tomás Guardia.

1871. Minor Copper Keith, the eventual founder of the United Fruit Company, comes to Costa Rica to manage production of the railway.

1873. Keith begins growing bananas to feed railway workers.

1889. Democracy established in Costa Rica.

1920-30s. Economic depression. Public calls for government reform culminate with communist -led strike against United Fruit Company.

1940-44. Rafael Angel Calderón Guardia continues the reformist movement as president by creating the social security system and introducing a labor code. He also founds the University of Costa Rica.

1948. A 40-day civil war kills 2,000 people; José Mariá Figueres Ferrer becomes head of the government, founds the Partido de Liberacion Nacional (PLN), and nationalizes the banks and insurance companies. (He dies a national hero in 1990.)

1950-60s. Period of expansion in government intervention in the economy and creation of a welfare state and public school system.

1980. Economic crisis due to inflation, currency devaluation, high oil prices, low prices for coffee, bananas, and sugar, high costs of the welfare state, and the disruption caused by the war in Nicaragua. Costa Rica has the world's highest per capita debt.

1981-84. The United States and IMF pour US$3 billion in aid into the Costa Rican economy.

1987. Costa Rican president Oscar Arias Sanchez wins Nobel Peace Prize for his efforts to establish peace in Central America.

1990. Rafael Angel Calderón Fournier, son of Calderón Guardia and opposition leader, is elected president. He promotes reform of the tax codes.

1994. José María Figueres Olsen, son of Figueres Ferrer and Liberación Nacional leader, is elected president. He initiates policies to attract direct foreign investment in high technology.

1998. Conservative economist and opposition leader Miguel A. Rodríquez is elected president. His narrow victory at the polls leads to an experiment with "Concertación" (an effort to consult civil society on national problems), especially on the issue of privatization.

FUTURE TRENDS

Economic policy in Costa Rica will hinge upon institutional reforms that will alter the balance between the state and the private sector. Although popular sentiment is antagonistic to privatization of public companies, there is a growing awareness of the need for these companies to achieve greater efficiency and effectiveness. At the same time, the budgetary constraints faced by the country in the year 2000 are restricting its ability to invest in infrastructure, health, and education. Since future competitiveness relies on these investments, a reassessment of public finances will be inevitable.

Recent revisions of the methodology employed by the Central Bank to calculate GDP revealed that national production figures reported in past years have been understated. This has led critics to point out that the tax burden—measured by tax revenues as a percentage of GDP—in the country is inordinately low. A reform of the tax code could ameliorate the fiscal constraints of the government. Reform is also required to adjust accounting for the effects of inflation, which reduces the effective tax rates. However, these effects will probably not materialize in the short term because of the political challenges they pose.

DEPENDENCIES

Costa Rica has no territories or colonies.

BIBLIOGRAPHY

"Balance preliminar de las economías de América Latina y elCaribe, 2000." Comisión Económica Para América Latina y el Caribe, 2000.

Banco Central de Costa Rica. "Indicadores Económicos." <http://websiec.bccr.fi.cr>. Accessed January 2001.

Bolsa Nacional de Valores de Costa Rica. "Estadísticas." <http://www.bnv.co.cr/estadist/>. Accessed January 2001.

Cámara de Industrias de Costa Rica. "Crecimiento de las empresas industriales formales e informales." <http://www.cicr.com/indicadores>. Accessed 15 January 2001.

Corporación Bananera Nacional. "Realidad bananera en CostaRica." <http://www.corbana.co.cr/realidad.htm>. Accessed January 2001.

Costa Rica Tourist Board. <http://www.tourism-costarica.com>. Accessed January 2001.

Diamond, Larry, Jonathan Hartlyn, Juan J. Linz, and SeymourMartin Lipset, editors. Democracy in Developing Countries, second edition. Boulder, Colorado: Lynne Rienner Publishers Inc., 1999.

"El 2000: un mal año." La Nación. 19 December 2000.

"Equidad, desarrollo y ciudadanía." Comisión Económica ParaAmérica Latina y el Caribe, 2000.

"Estabilidad resiste: Golpes del 2000." La Nación. 20 December 2000.

Instituto Costarricense de Turismo (ICT). "Area Estadísticas."

International Coffee Organization. "Coffee Export Statistics."<http://www.ico.org/>. Accessed 10 January 2001.

International Labor Organization. "International Labor Statistics."<http://database.iadb.org/>. Accessed 14 February 2001.

International Monetary Fund. International Financial Statistics Yearbook 2000. Washington, D.C.: International Monetary Fund, 2000.

Ministerio de Agricultura y Ganadería, Costa Rica. "Estadísticas Agropecuarias." <http://www.infoagro.go.cr/estadisticas>. Accessed 10 January 2001.

Ministerio de Planificación Nacional y Política Económica (MIDEPLAN). "Sistema de Indicadores sobre Desarrollo Sostenible (SIDES)." <http://www.mideplan.go.cr/sides>. Accessed January 2001.

La Nación Digital/Revista Viva. "Programas de software a la tica." <http://www.nacion.co.cr/viva/1997/julio/14/compu1.html>. Accessed 15 January 2001.

La Nación Digital/TecnoAvances #1. "Software con calidad de Exportación." <http://www.nacion.co.cr>. Accessed 15 January 2001.

Naranjo, Fernando. "Economía en picada." La Nación. 17December 2000.

Organización Internacional del Trabajo. "ILOLEX: Las NormasInternacionales del trabajo." <http://ilolex.ilo.ch:1567/public/50normes/ilolex>. Accessed 14 February 2001.

"Programa de las Naciones Unidas para el Desarrollo." InformeSobre Desarrollo Humano, 2000.

United Nations. Human Development Report 2000. New York and Oxford: Oxford University Press, 2000.

U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed April 2001.

World Bank. 2000 World Development Indicators. Washington, D.C.: World Bank, 2000.

—Ludovico Feoli

CAPITAL:

San José.

MONETARY UNIT:

Colón (C). One colón is composed of 100 céntimos, but céntimos are no longer used. The smallest unit of money in circulation is the 5 colón coin, followed by the 10, 25, 50, and 100 colón coin. Bills circulate in denominations starting at 1,000 colones, and are available in 2,000, 5,000, and 10,000 colones.

CHIEF EXPORTS:

Coffee, bananas, sugar, textiles, electronic components, electricity.

CHIEF IMPORTS:

Raw materials, consumer goods, capital equipment, petroleum, electricity.

GROSS DOMESTIC PRODUCT:

US$26 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$6.6 billion (1999 est.). Imports: US$5.9 billion (1999 est.).

Costa Rica

Basic Data

Background & General Characteristics

Costa Rica is a nation of 3.7 million people that boasts a long history of democracy, no army, and relatively peaceful political development, which is in stark contrast with the war-torn legacies of most of its Central American neighbors. Long thought a stellar democracy wherein the press basked in unlimited freedom, the murder of a popular radio journalist in 2001 revealed a darker side to the country that has often been referred to as the Switzerland of Central America.

Costa Rica covers 51,000 square kilometers and is divided into seven provinces. The nation's capital, San José, is home to one-third of all Costa Ricans. The vast majority, 97 percent, of Costa Ricans are of European or mestizo (mixed European and Native American) descent, although a growing number of immigrants from neighboring Nicaragua are slowly beginning to transform the nation's homogenous demographics. Roman Catholicism is the dominant religion but evangelical Protestantism is growing at a rapid pace. In San José, the number of evangelicals doubled in the 1980s and it is estimated that by 2010, 20 percent of the population will be Protestant.

In July 2001 the murder of the popular radio journalist, Parmenio Medina, shocked the nation. Medina was murdered the night he was to receive an award from a Costa Rican nonprofit organization for defending freedom of expression. He was shot three times at close range and died on the way to the hospital. Medina, Colombian by birth, was well known for his 28-year-old radio program, La Patada (A Kick in the Pants) that often denounced official corruption. Medina's muckraking approach to journalism left him with many potential enemies. He had recently aired accusations about alleged fiscal improprieties at a local Catholic radio station, Radio María. His reporting led to the station's closure and an investigation into the actions of its former director. Some believed that Medina could have been killed for investigating money-laundering activities by a large drug-smuggling cartel. A year after his murder no one has yet been brought to trial although national TV and newspapers have reported that four members of a criminal gang are suspected of having been paid to assassinate Medina.

A survey taken by the nation's leading newspaper, La Nación a month before Medina's murder, found that 55 percent of the 97 journalists polled said they had received some kind of threat during their careers. Though some threats were physical, most journalists were threatened with defamation suits. Some journalists have said that they are reluctant to investigate important cases, such as Medina's murder, because Costa Rica has a harsh penal code that could lead to imprisonment or heavy fines.

These recent events are a strict departure from the typical belief that Costa Rica is an oasis of peace and stability in the historically war-torn and impoverished region of Central America. Latin America's longest-standing democracy, Costa Rica is more known for its eco-tourism trips, as a U.S. retirement community, and the Nobel Peace Prize-winning former president, Oscar Arias, than for political violence. The nation has had little violence despite its proximity to Guatemala, El Salvador, and Nicaragua, all countries that suffered from devastating civil wars in the 1980s. Costa Rica has one of the highest literacy rates in the region with 95 percent of the adult population considered to be literate. Indeed, Costa Rica has a historical precedent for supporting education, beginning universal free public education in 1879. It has the region's highest standard of living, and a life expectancy comparable to that of the United States. In general, an educated public with higher per capita average than the region's norm at US$3,960 has enabled the rapid development and expansion of all forms of media.

Although Columbus stopped over briefly on Costa Rica's Caribbean coast in 1502, for most of the colonial era, Costa Rica remained a forgotten backwater since it had little that the Spanish colonialists were looking for, namely, a significant labor supply and/or mineral wealth. An isolated and neglected province of the kingdom of Guatemala, Costa Rica did not have much in the way of publishing. Guatemala was the center of publishing for two hundred years having had its first press installed there in 1641.

In 1824 an elected congress chose Juan Mora Fernandez as the first chief of state. The first newspaper appeared shortly after his re-election in 1829 although a local citizen had to subsidize the purchase of an English printing press. The first regular weekly newspaper, Noticioso Universal, was issued on January 4, 1833. Noticioso Universal closed after two years because the early development of the press in Costa Rica had three strikes against it: there was not a sufficient literate and economically viable audience to sustain a local newspaper; the weekly in existence had to compete with the more established newspapers arriving from Guatemala and South America; and finally, there was little available and affordable paper on which to print the news. Between 1833 and 1860, ten different newspapers existed in Costa Rica, none of them lasting for more than two years. The government began operating its own press in 1837, primarily printing decrees, orders, and laws.

It was not until the introduction of coffee in 1808 that Costa Rica began to attract a significant population. Coffee brought wealth, a class structure, and linked the nation to the world economic system. The coffee barons, whose growing prosperity led to rivalries between the wealthiest family factions, vied with each other for political dominance. In 1849, members of the coffee industry elite conspired to overthrow the country's first president, José María Castro, who had established a newspaper and a university. The President believed that ignorance was the root of all evil and that freedom of the press was a sacred right. Unfortunately, Castro's rule was interrupted by William Walker, the U.S. citizen who believed in the manifest destiny of the United States to rule other peoples. Walker already controlled Nicaragua in 1855 and he invaded Costa Rica the following year. His unintended role in Costa Rican history was to help unite its people, who roundly ousted him the same year.

During the 1880s the national leadership was under the helm of the liberal elite who stressed the values of the enlightenment, although charismatic leaders often held sway over political ideologies and programs. The free press, however, increasingly guided public opinion, and Costa Ricans became accustomed to hearing critical discussions of ideas as well as the ideas of political candidates. Yet political rivalries often resulted in moments where the press was repressed. For example, in 1889 the new president Jose Joaquin Rodriguez, caught between the country's liberal and conservative factions, suspended civil liberties, including the closure of opposition papers. He dissolved congress in 1892 and imprisoned a number of journalists. Rafael Iglesias, Rodriguez's successor, did much to beautify the capital, but he also declared that the violently critical newspapers had turned his people against him and he clamped down on the press, even going so far as to flog some of his detractors publicly. During the first century of the country's independence, the freedom and the power of the press was seen as a double-edged sword by many of the nation's leaders. In this context, in 1902 one of the nation's longest lasting press laws was established which protected the "honor" of individuals from being attacked in the press.

The intertwined role of the media and politics is a strong theme in recent Costa Rican history. For example, a 1942 speech broadcast on radio by future president, José Figueres, against the communist-affiliated president, Rafael Calderón, proved to be pivotal to the latter's political demise. The press was generally critical of Calderón's successor, Teodoro Picado, and frequently charged his government with tyranny and oppression. The press remained free to the point that newspapers even printed personal attacks against the president with little repercussions. The publisher of the daily newspaper Diario de Costa Rica, Otilio Ulate, was politically prominent and served as president in the 1950s. Ever since the presidencies of Figueres and Ulate, the position has rotated between the country's two primary parties: the PLN (National Liberation Party) and the PUSC (Social Christian Unity Party).

Costa Rica has six daily newspapers nationwide. The total circulation is 88 papers per one thousand inhabitants. The largest newspaper, La Nación, was started in 1946 and represented the commercial interests of the business elite. La Nación was close to the Nicaraguan Contras and served as a voice for their cause during the U.S.-backed Contra-Sandinista war of the 1980s. La Nación distributed a weekly supplement called Nicaragua Hoy, directed from Miami, Florida, by Pedro Joaquín Chamorro, son of the murdered editor of the Nicaraguan daily, La Prensa.La Nación also publishes a number of magazines including Perfil, Rumbo, and Ancora. The paper had a circulation of 110,000 in 1997.

The nation's two other dailies, La Prensa Libre and La República share the conservative tendencies of La Nación. Both newspapers were originally seen as alternatives to the nation's premiere daily, but both have moved to the right since their founding. The morning paper, La República was founded in the 1950s and was sympathetic to President Figueres, and for years represented a true counterpart to the ideological stance of La Nación. In the mid-1990s it had a circulation of 55,000 and is known for being only slightly less conservative than La Nación.La Prensa Libre is an afternoon paper with a circulation of about 45,000. It was founded in the 1960s. One of the only newspapers to originate outside of San José is El Sol de Osa, a general interest newspaper published in Puerto Jimenez.

Some smaller papers offer a more liberal view but their influence is limited by their relatively small circulation. Semanario Universidad, is the official paper of the University of Costa Rica and it has gained an international reputation for its coverage of politics and the arts. It is characterized by a leftist editorial perspective. In late 1988 the newsweekly Esta Semana appeared. All of these publications originate in San José, Costa Rica's capital. A number of supplements are published on a weekly basis. These include Sunday's Revista Dominical, an events showcase with interviews of local personalities. An educational supplement Zurqui appears on Wednesdays and targets a younger audience; on Thursdays two other supplements appear. En forma (In Shape) reports on health and wellness issues; and Tiempo libre (Free Time) lists the calendar of social events in the capital. Other daily newspapers include El Heraldo and Extra.

The nation's primary English language newspaper, the Tico Times, was founded by Elisabeth Dyer in 1956. According to the paper's first editorial, it was "begun in order that young people interested in journalism could receive practical, on the job training, and in so doing to provide the English speaking public of Costa Rica with a newspaper of special interest to the American and British colonies and Costa Ricans who know, or are learning, English." For its first four years, the Times was a volunteer effort, produced by members of the English-speaking community, including high school students. The paper's circulation has grown to 14,500 and is printed in Costa Rica and California and distributed free. The paper remains a training ground for journalists and for those who want work experience in Latin America, and many of its former volunteers have gone on to influential media positions in the United States and Europe.

By 1980, the Times was respected internationally for its investigative journalism and its coverage of Central America, especially of the Nicaraguan revolution and the Iran-Contra affair. The Times' reporter Linda Frazier was among those killed in the May 1984 bombing of the Nicaraguan contra leader Edén Pastora's press conference on the Nicaraguan border and the paper campaigned vigorously to expose the truth behind the bombing. With civil unrest diminishing in Central America the paper's special interests have centered on tourism and environmental concerns, at times an uneasy balance, as much of the paper's advertising revenue is from real estate developers.

Costa Rica's relative prosperity in Latin America provides a large and literate audience to sustain a number of magazines, whose topics range from glossy tourism monthlies, to evangelical Christian publications, to conservation issues. Eco-tourism publications have acquired a growing number of international subscribers. Gente 10, a magazine that targets a gay and lesbian audience, was founded in 1995. Scholarly journals are also published, including Káñnina (past tense of "to dawn" in the indigenous Bribrí language) published by the University of Costa Rica, which showcases scholarship in fine arts, the humanities, and the social sciences.

San José has long dominated Costa Rican society and the vast majority of the nation's publications originate there. Radio, however, is more important than daily newspapers outside of the nation's capital as the primary way in which people receive information. All of the newspapers follow the tabloid-sized format.

Economic Framework

Costa Rica's economy is based primarily on agriculture, light industry, and tourism. Traditionally considered to the strongest economy in Central America, Costa Rica's gross domestic product in 2001 grew only 0.3 percent and inflation stood at around 11 percent, triggered by low world coffee prices. The last 20 years have seen Costa Rica move away from its social welfare past and into the free market reforms of present-day Latin America. The nation has also faced economic crises and increasing distance between the social classes. In the mid-1980s, for example, the top 10 percent of society received 37 percent of the wealth while the bottom 10 percent had 1.5 percent. Costa Rica became the first underdeveloped country to suspend debt payments in 1981. The worst of the crisis was over by 2002, but the nation continued its "structural adjustments." From 1982 to 1990 the U.S. Agency for International Development gave over 1.3 billion U.S. dollars to Costa Rica. The foreign aid and economic recovery came with the imposition of harsh austerity measures, a restructuring of financial priorities, and a revamped development model.

The last four presidents, despite coming from two different political parties, have followed the same path of economic liberalism, stressing free trade, export promotion, and less money for the public sector. Hurricanes have also damaged the economy in recent years beginning with César in July 1996 that caused several dozen deaths and cut off much of southern Costa Rica from the rest of the country. The Inter-American Highway was closed for about two months and the overall damage was estimated at about US$100 million. In November of 1998 Hurricane Mitch caused substantial damage to Costa Rica, although not as much as in the northern-most Central American countries, Nicaragua and Honduras. That same year, the Social Christian Unity Party's Miguel Angel Rodríguez won the presidency. A conservative businessman who made the economy his priority, he went on to privatize state companies and encourage foreign investments in an effort to create jobs. By the time of the February 2002 elections, Costa Ricans were displeased with the lack of government transparency and the questionable deals between political figures. These misgivings resulted in a "no win" election, and voters returned in April 2002, choosing Abel Pacheco, also of the PUSC.

The majority of the media in Costa Rica is privately owned and there are a few media conglomerates that own the majority of the media in the entire nation. La Nación stockholders also hold interests in the daily paper, La República, as well as the popular radio stations, Radio Monumental and Radio Mil. The owners of the major media tend toward conservative politics and their power as media owners allows the news to lean to the conservative side of issues.

In the 1980s there was a good deal of concern that the ownership of the media in Costa Rica might have a tendency to deliver politically-biased news accounts. The discussion was brought to the forefront as the nearby war between the U.S.-backed Contras and the Marxist-inspired Sandinistas escalated in Nicaragua. Four of the five privately owned major TV stations broadcast a barrage of sensationalized news reports warning of the sandino-comunista threat. Analysis of news coverage in the 1980s found that national stations rarely ever interviewed Nicaraguan officials yet they gave considerable coverage to the Reagan administration's viewpoint. Former Nicaraguan contra leader Edgar Chamorro also testified in the World Court that CIA money was used to bribe journalists and broadcasters in both Costa Rica and Honduras.

Many journalists in Costa Rica argue that the media owners and the media in general are considerably to the right of the general population, but that alternative media has not been able to develop because of the conglomerate nature of the media. One journalist who tried to start up an alternative newspaper, commented that his efforts were hampered since media and business owners were "one and the same."

Press Laws

While the constitution provides for freedom of speech and the press, and the government largely respects these rights, a number of outmoded press laws have caused controversy as well as internal and international pressure for reform. In 1999, President Miguel Angel Rodríguez presented a bill to congress that attempted to make improvements in press legislation. Specifically, it proposed the abolishment of Article 7 of the old Press Law from 1902 which makes publishers liable for offences by third persons in their news outlets. It would also increase to 15 days the time allowed to respond to a lawsuit and include a provision that exempts from responsibility those who have only provided the material means for publication or sale of slanderous, libelous or defamatory reports. The proposed changes also pushed for removing the burden of proof from the journalists to demonstrate that their published information is true.

In 2001 the murder of Parmenio Medina re-focused attention on the need to revamp the nation's antiquated press laws. But this was not the only event to spur legislative change since a few months before his murder, the Inter-American Press Association (IAPA) analyzed the Costa Rican constitution in light of the Chapultepec Declaration of 1994 (also known as the Declaration of Free Speech for the Western Hemisphere) and found that four of the ten points recommended for guaranteeing freedom of the press were absent in Costa Rica. In effect, IAPA found that there was insufficient legal support for journalists to protect their sources, harsh repercussions for journalists who criticized public officials, restrictions on the free flow of information and censorship.

The most controversial aspect of Costa Rican legislation has been the long-standing desacato or "insult" law which protects public figures from critical journalists. The Legislative Assembly voted on March 26, 2002 to eliminate Article 309 of the Criminal Code which made it a crime to "insult" the dignity of the president and other public officials. This aligns the code with the "actual malice" standard, first articulated by the U.S. Supreme Court in 1964. This standard requires plaintiffs to prove not only that published information about them is false, but also that the journalists knew or should have known it was false at the time of publication. Until the change in this law, journalists faced potential jail sentences of anywhere from a month to two years in prison, or as much as three years in prison if the offended party is a higher-ranking official such as the President.

The legislation also contains a neutral reporting standard, which says that journalists cannot be sued for accurately reproducing information from an explicitly mentioned source. For years, the international and local press communities and the Inter-American Commission on Human Rights had urged elimination of "insult" laws. The elimination of the law suggests greater press freedom will follow since journalists are no longer threatened with jail time for reporting on political or powerful personages in a less than flattering manner.

The World Free Press Committee (WFPC) is still pushing for the following changes in the Costa Rican legal code:

• Article 149, which establishes the "evidence of truth" (prueba de la verdad ) as a necessary standard for journalists to prove. The WFPC recommends that the article should be revised to bring it into conformity with press freedom principles.
• Article 151, which as it currently stands establishes some "exclusions" of responsibilities to people who have been accused. Reform would increase the number of such exclusions.
• Article 152, which as it stands is most restrictive, penalizes the "reproduction of offenses." The WFPC suggest introducing instead the principle of "faithful reproduction," which is recognized by the Inter-American Commission on Human Rights.

Although the desacato law had been invoked infrequently, journalists say its existence had a chilling effect on news reporting. In 2001 another San José criminal court ordered Rogelio Benavides, editor of La Nación's TV supplement Teleguía, to pay a fine equivalent to 20 days' wages or face a jail sentence. Enrique González Jiménez, a beauty pageant promoter, sued Benavides based on a review of the pageant that appeared in a 1999 issue of Teleguía (TV Guide). While article 151 of the Penal Code holds that press reviews cannot be characterized as "offenses against honor" the court nonetheless convicted Benavides of libel and ordered that its ruling be published in Teleguía.

While welcoming repeal of the desacato law, many Costa Rican journalists say it is a minor obstacle to press freedom in Costa Rica. There is concern that repeal will lead lawmakers to claim that enough was done toward reform, and that officials will fail to act on the nation's far more troublesome and complex libel, slander, and defamation laws. Unlike those in most other democracies, Costa Rica's defamation laws are criminal, rather than civil statutes. This means that journalists can receive prison sentences and heavy monetary fines for convictions.

While not common, these statutes have been employed far more often than journalists would like. Up until the repeal of the desacato law, news media in Costa Rica had more than a dozen criminal defamation actions pending, with penalties totaling thousands of dollars. In June 2001, for example, the Costa Rican Supreme Court upheld a libel verdict against three journalists from La Nación. The case stemmed from a 1997 article reporting that a former justice minister had been accused of appropriating state-owned weapons and an official car for his personal use. The politician was awarded damages of US$34,000. The decision also required that La Nación publish the first seven pages of the decision in their entirety. One of the arguments used to justify such a large fine was that the articles were available on the Internet, and therefore reached a larger audience for a longer period of time. The court also ordered La Nación to remove all links from its web site that could lead the reader to the contested articles. The judges ruled that the journalist had shown malicious intent by continuing to investigate the case despite testimony from two former Costa Rican presidents who vouched for the politician's integrity.

Other problematic legislation includes the "right of response" law passed by congress in 1996. This law provides persons criticized in the media with an opportunity to reply with equal attention and at equal length. While the print and electronic media continued to criticize public figures, the law has proven difficult for media managers to administer. On occasion, some media outlets delayed printing responses because submissions were not clearly identified as replies to previously published items.

Costa Rica's government has also tried to foster political tolerance and dialogue through laws like the one that requires broadcasters to accept political ads during campaign periods. During the highly charged political climate of the 1980s, Costa Rica managed to maintain its democratic political tradition during the presidential campaign. With a battle raging in bordering Nicaragua, Costa Rica's right-wing candidate Rafael Angel Calderón Fournier, a godson of former Nicaraguan dictator Anastasio Somoza García, was shown talking one-on-one with Ronald Reagan, Margaret Thatcher, and Pope John Paul II in televised advertisements. His opponent, Oscar Arias Sánchez, brought in liberal American consultants, who used polling to identify what was worrying the large bloc of undecided voters and refocus the campaign appropriately. By promising jobs, housing, and peace, Arias was able to overcome Calderón's wide lead in early polls to win the presidency in February. The fact that Arias was allowed to advertise on television indicates that the Costa Rican media carry a wider range of views than those of less democratic countries. There have been times, however, when there have been unconfirmed allegations that the government withheld advertising from some publications in order to influence or limit reporting.

Censorship

While little outright censorship exists, reports that journalists and editors are forced to monitor what they write and publish have been increasingly frequent. Editors say they censor themselves and their reporters routinely, for fear of incurring penalties that could mean imprisonment, loss of their jobs, or corporate bankruptcy. A survey done by La Nación which asked journalists a number of questions about their profession showed that many of them practiced some sort of self-censorship. Limiting access to information can be seen as a subtle form of information control and a number of journalists complained that public officials were not forthcoming in this regard. For example, a majority of the journalists interviewed said that while they had direct access to public officials, there were many ways in which these sources avoided their attempts to interview them. Often, it was difficult for journalists to make it through the "screen" of intermediaries (press secretaries, secretaries, assistants, and others). If an interview was obtained journalists complained that public officials pled ignorance or claimed confidentiality agreements prohibited an answer.

State-Press Relations

As mentioned before, many of the laws governing the press in Costa Rica have been designed to protect the honor of public officials, complicating the relationship between the state and the press. The ability of the press to be critical of the state without repercussions is not secure. The strict libel laws, for example, resulted in the firing of two reporters who investigated fraudulent business deals related to PLN President-elect José María Figueres in 1993: one reporter from Channel 7 was reportedly dismissed from her job because of pressure from the PLN after she reported on private sector corruption; a reporter from La República said that he had left his editorial position because of alleged pressure from officials close to the President-elect. The reporter had been working on several articles that linked Figueres to alleged fraudulent mining deals.

In 1995 the Tico Times reported that the popular television program, "Diagnóstico" had been cancelled by the government-run National Radio and Television System (SINART). Critics of the decision to cancel the program, which aired weekly on Channel 13 and had been running for 10 years, alleged that it was one of the few shows where guests felt free to discuss a number of important issues in Costa Rica. The show's host, a politician named Alvaro Montero, referred to it as the most liberal program in the country and said that he had to struggle for years to keep it on the air. According to the Tico Times, the administration of President Rafael Angel Calderón Jr. first tried to shut down the program by terminating an airing in mid show. The Figueres administration SINART officials reportedly tried to end the program by cutting off its funding. Montero financed the show out of his own pocket for two years. The government claimed the show was cancelled out of a conflict of interest given that Montero was a potential candidate for president in the 2002 elections.

Attitude toward Foreign Media

The nation's democratic political structure, tourism industry, and large retirement community from the United States make it very receptive to foreign media. The international station, Radio For Peace International (RFPI), has studios and transmitters located in El Rodeo, Costa Rica, and with the revocation of the colegio law in 1995, there are no longer any restrictions on foreign journalists working in Costa Rica. The end of civil wars in Central America has also made the entire region safer for foreign journalists reporting there.

Until 1994 there were legal limits to the ownership of national media by foreigners. After the government revoked this law, it opened up the way for the Hollinger group, headquartered in Canada, to buy the newspaper La República. Foreign ownership, however, is subject to a number of bureaucratic constraints.

With the advent of cable, satellite dishes, and the Internet, foreign media entered Costa Rican society with substantial force over the last two decades of the twentieth century. Foreign-funded periodicals have left their imprint on Costa Rican media. Primarily sponsored by aide organizations, such publications have made an important contribution to the dissemination of information. The merging of local and foreign media is representative of many joint ventures here. For example, in 1994 an international council began funding a far-reaching demographic analysis of Costa Rican society and the resulting publication appears annually as Estado de la Nación (State of the Nation) and appears on the Internet. Costa Ricans watch Venezuelan and Mexican soap operas, soccer matches, and dubbed U.S. programs on commercial channels. Despite a law limiting imported programs to 75 percent of broadcast schedules, about 90 percent are imports. In addition, U.S. programs dominate the cable channel offerings in parts of the capital, San José.

News Agencies

There are a number of news services that operate in Costa Rica. These include Agence France Presse, Telenoticias, Rainforest Alliance, Diario La Nación, and the Tico Times. The Internet also provides rapid information access to news desks.

Broadcast Media

Radio is extremely popular in Costa Rica and is especially important for those Ticos who live outside of the capital city. In 2002 about 130 radio stations existed. Daily radio programming included talk shows and soap operas, political and social commentary, educational and religious programming, and sports coverage. Until Medina's murder, La Patada was one of the most popular radio programs in Costa Rica. It generally provided a light-hearted perspective on the news mixed with humor and political criticism. Another show, La Opinion, offers serious news commentary and is broadcast on Radio Reloj.

Evangelical Christian stations have blossomed since the 1980s. American missionaries were the first to broadcast the Protestant message by radio and television. The radio station Faro del Caribe, for example, has been broadcasting since the 1940s and includes programs targeted for the instruction and entertainment of children, mothers, and young people through Bible study, radio theater, advice, and music. Radio programming has also fulfilled other goals. In 1993 the government established the Costa Rican Institute of Radio Education in an effort to provide access to education to residents in rural areas. Programs such as "The Teacher in Your House" are broadcast from 12 noncommercial stations and complement correspondence courses in public schools. Lessons in English are also immensely popular.

Of the many radio stations in Costa Rica, Radio Reloj has the most listeners and it is also fairly conservative in nature. The news station Radio Monumental is also quite conservative and reflects the right-leaning opinions of its owners. Many radio stations carry Voice of America (VOA) and other U.S. Information Service programs including Radio Costa Rica which devotes about half its broadcast time to VOA programming. VOA's "Buenos Dias, America" feeds to 28 radio stations in Costa Rica. The most liberal station currently broadcasting is Radio America Latina which has proved responsive to the concerns of the popular movement.

Costa Rican television transmission began in the 1950s and today there are a dozen commercial stations and one government-run station. The most viewed stations are Channel 4 Multimedia, Channels 6 and 9 Repretel, Channel 7 Teletica, and Channel 2 Univisión. The Picado family owns the cable network, Cable Tica, and Channel 7. Angel Gonzalez, who is based in Florida, partially backs Channels 4 and 9. The other channels are privately owned with the exception of the national television network which is publicly owned and SINART (Channel 13), a government-controlled cultural channel.

Over 90 percent of Costa Rican households have at least one television set. Cablecolor, the local cable service, broadcasts the U.S. government's daily program as well as CNN's 24-hour news service. Channel 7 leads the others in terms of viewers, and is trying to assert full control of the medium through the professionalization of its "Telenoticias" news program. Channel 7, formerly owned by ABC, is of the same ideological stripe as the major print media. Channel 4 has gained in popularity over the last few years, perhaps due to offering a left-leaning political perspective, and hence, a contrast to the majority of Costa Rican media. A public station founded by the PLN during a previous period in power, Channel 13 offers a more liberal take on current events and offers a wide array of cultural programming. Costa Rican television also broadcasts programs from the rest of Latin America.

There has been little interference with the operation of television stations, with some exceptions. A Costa Rican court decision made in 2001 required a privately owned station to invite all 13 presidential candidates to appear, rather than just the frontrunners. The Inter-American Press Association called the court order a "fla-grant interference in the news media's editorial and journalistic independence." The order was issued by a majority of justices of the Costa Rica Supreme Electoral Tribunal, upholding a request for injunction filed by three minority political party candidates to the Costa Rican presidency who had not been invited to take part in a debate scheduled to be aired by the privately-owned Channel 7 TV. The station only invited the four leading candidates, who between them were estimated to account for 95 percent of the public vote.

Electronic News Media

By 2000 about 150,000 people in Costa Rica, or 3.9 percent of the population, were Internet users, accessing it through either one legal or two illegal Internet service providers. Most of the important newspapers also have an online presence, as do many of the national magazines.

La Nación publishes an online summary of news events in English and has news archived since 1995. AM Costa Rica is a website updated Monday through Friday targeting the English-speaking retired community in Costa Rica. It is published by Consultantes Río Colorado, S.A., a Costa Rican corporation.

The following newspapers and magazines have web-sites:

• La Nación: www.lanacion.co.cr
• La República: www.larepublica.co.cr
• Tico Times: http://www.ticotimes.co.cr
• AM Costa Rica: http://www.amcostarica.com
• Diario Extra: http://www.diarioextra.com
• El Heraldo: http://www.elheraldo.net
• La Prensa Libre: http://www.laprensalibre.co.cr

These radio stations are broadcast over the Internet:

• Radio Columbia (primarily sports coverage): http://www.columbia.co.cr
• Radio Monumental: http://www.monumental.co.cr
• Radio Reloj: http://www.rpreloj.co.cr

Education & TRAINING

To professionalize its media Costa Rica passed a law in 1969 that required national news reporters to graduate from the University of Costa Rica's journalism school (colegio de periodismo ). The so-called colegio law has been controversial almost from the outset since it acts, at times, as a restrictive licensing measure. Furthermore, during the first few years after the law's inception, the University of Costa Rica did not have a journalism program in operation making the law impossible to uphold. As a result, journalists were allowed to be members of the colegio if they had at least five years of consecutive journalistic experience or ten years intermittent experience.

The colegio system has been controversial throughout Latin America since it has been interpreted as a professional licensing board that can curtail the freedom of individual journalists to exercise their profession. In 2001 La Nación published an article detailing the history of thecolegio and its many failures to support journalists over the last 25 years. Most of the charges included instances of aggression against the press when the colegio failed to back individual journalists, radio and television stations, and newspapers, motivated by the licensing board members' conservative political alliances with the national government.

In 1994 the colegio began lobbying for passage of a constitutional amendment to permanently ensure its ability to define who exercises journalism in the country. The amendment would have protected the colegio from international criticism such as that issued by the inter-American Human Rights Court which ruled the licensing practice a violation of press freedom. Colegio leadership argues that the body serves to create professional standards, minimize cultural imperials and protect journalists' rights. The colegio has a code of ethics with 17 articles that was approved by the organization's general assembly in October 1991.

The Tico Times successfully took a case to the Inter-American Court of Human Rights over a Costa Rican law requiring the licensing of journalists. The Times claimed harassment by the colegio for over 20 years even though the colegio admitted it was unable to supply enough qualified journalists. In 1995, the Costa Rican Supreme Court addressed the problems inherent to the colegio system and declared the licensing of journalists unconstitutional. This was seen as a major victory for advancing legislative support of freedom of expression in the country.

Journalism degrees are awarded by the University of Costa Rica and the Latin University of Costa Rica. In addition a number of organizations sponsor seminars and conferences related to the practice of journalism. Costa Rica is one of the most popular spots for international journalistic conferences dealing with Latin America. The International Center for Journalists sponsored seminars on the media and freedom of expression in the Americas in Costa Rica. The Costa Rican colegio also organized conferences and workshops on social communication, human rights and the media, taking place frequently in San José. The city often hosts special courses to train media specialists in radio and television. A radio station from the Netherlands, Radio Hilversum, held a series of such workshops in San José open to all Latin American and Caribbean journalists. The World Bank Institute's Governance and Finance Unit and Radio Nederland Training Center, located in Costa Rica, also organized a course in investigative journalism conducted over the Internet.

Summary

The Costa Rican mass communications industry can support both pessimistic and optimistic predictions. For the pessimist, it is easy to point out that a popular muck-raking journalist was killed in cold-blood and that his attackers have yet to be officially identified or tried. Costa Rica's press freedom and development is also limited by the concentration of the media in the hands of a powerful few, and an increase in U.S. influence in the country, both economically and also culturally. For the optimist, the openness with which La Nación conducts and publishes interviews with journalists about their profession suggests that there is indeed a greater level of freedom of expression than one would imagine given the survey's critical findings. Also, during most of the 1990s, the media in Costa Rica was becoming more aggressive in its interrogation of government officials suspected of incompetence, corruption, and influence peddling. In addition, the repeal of the colegio law in 1995 and the recent repeal of the "insult" law also suggests that the protection of the rights of journalists to practice their profession without the fear of being fined, imprisoned, or expelled is being institutionalized.

Historically, the nation's emphasis on both education and freedom of the press have resulted in a great resistance to any attempt to restrict these rights and even greater resilience to bounce back quickly from those moments when such rights have been constrained. Medina's murder has resulted in greater discussion about freedom of the press and changes to provide the legislative teeth to ensure those freedoms. The nation's literacy rate, the public's increasing access to the Internet, and the rich opportunities for journalists and other media professionals to receive on-going training, suggests that the press in Costa Rica will endure.

Significant Dates

• 1995: Costa Rican Supreme Court issues a decision saying that the licensing of journalists was unconstitutional.
• 1996: Legislative Assembly passes "right of response" law which provides persons criticized in the media with an opportunity to reply with equal attention and at equal length. The law has proven difficult to enforce and administer.
• 1999: President Miguel Angel Rodríguez proposed a bill to the Costa Rican legislature, the Law to Protect Press Freedom, intended to make important improvements in press legislation.
• 2001: Popular radio journalist Parmenio Medina was murdered in what is assumed to have been retaliation for Medina's investigative journalism. No one had been arrested for his murder as of 2002. The tragedy sent shockwaves through the nation and spurred on legislative attempts to update outmoded legislation.

Bibliography

Alemán, Eduardo, Ortega, José Guadalupe, and Wilkie, James W., eds. Statistical Abstract of Latin America. Los Angeles: UCLA Latin American Center Publications, 2001.

Attacks on the Press: A Worldwide Survey. New York: Committee to Protect Journalists, 1994.

Baldivia, Hernán, ed. La formación de los periodistas en América Latina: México, Chile, Costa Rica. México D.F.: CEESTEM, 1981.

Biesanz, Mavis Hiltunen, Biesanz, Richard and Biesanz, Karen Zubris. The Ticos: Culture and Social Change in Costa Rica. Boulder and London: Lynne Rienner Publishers, 1999.

Borders Without Frontiers, Costa Rica Annual Report 2002.

Helmuth, Chalene. Culture and Customs of Costa Rica. Westport, CT and London: Greenwood Press, 2000.

IPI Report, The International Journalism Magazine (November/December 1995).

Lara, Silvia, with Barry, Tom, and Simonson, Peter. Inside Costa Rica: The Essential Guide to its Politics, Economy, Society, and Environment. Albuquerque, New Mexico: Resource Center Press, 1995.

Marshall, Oliver. The English-Language Press in Latin America. London: Institute of Latin American Studies, University of London, 1997.

Martínez, Reynaldo. "Sociedad Interamericana de Prensa (SIP) considera que en nuestro país se violentan cuatro principios que garantizan este derecho." La República, July 2, 2001.

Skidmore, Thomas E. and Smith, Peter H. Modern Latin America. New York and Oxford: Oxford University Press, 1997.

Solano Carboni, Montserrat. "The Silence: A Year Later the Murder of a Popular Costa Rican Journalist Remains Unsolved." New York: Committee to Protect Journalists, July 2, 2002.

Uribe, Hernán O. Ética Periodística en América Latina: Deontología y estatuto professional. México D.F.: Universidad Naciónal Autónoma de México, 1984.

Vega Jiménez, Patricia. De la Imprenta al Periodico: Los inicios de la comunicación impresa en Costa Rica 1821-1850. San José, Costa Rica: Editorial Porvenir, 1995.

World Press Freedom Review, 2000.

Kristen McCleary

Costa Rica

Official name : Republic of Costa Rica

Area: 51,100 square kilometers (19,730 square miles)

Highest point on mainland: Cerro Chirripó (3,810 meters/2,500 feet)

Lowest point on land: Sea level

Hemispheres: Northern and Western

Time zone: 6 a.m. = noon GMT

Longest distances: 464 kilometers (288 miles) from north to south and 274 kilometers (170 miles) from east to west

Land boundaries: 639 kilometers (399 miles) total boundary length; Nicaragua 309 kilometers (193 miles); Panama 330 kilometers (206 miles)

Coastline: Total: 1290 kilometers (805 miles); Caribbean Sea 212 kilometers (132 miles); Pacific Ocean 1,016 kilometers (633 miles); Cocos Island (Isla de Coco) 62 kilometers (40 miles)

Territorial sea limits: 22 kilometers ( 12 nautical miles)

1 LOCATION AND SIZE

Costa Rica is located in Central America, which is between the North and South American continents. Nicaragua lies to the north, the Caribbean Sea to the east, Panama to the southeast, and the Pacific Ocean to the southwest and west. With an area of about 51,100 square kilometers (19,730 square miles), it is the second-smallest Central American country, slightly smaller than the state of West Virginia. Costa Rica is divided into seven provinces.

2 TERRITORIES AND DEPENDENCIES

Cocos Island is a dependency of Costa Rica. It is located approximately 480 kilometers (300 miles) off the Pacific coast.

3 CLIMATE

Most of Costa Rica has two seasons: the wet season from May to November (winter months) and the dry season from December to April (summer months). Although the country lies completely within the tropics, elevation plays a role in the variations of its climate. Temperature is also determined by proximity to the coasts. The area known as the tierra caliente (hot country) in the coastal and northern plains, experiences daytime temperatures between 29 and 32°C (85 to 90°F). The tierra templada (temperate country), including the central valleys and plains, has average daytime temperatures from 24 to 27°C (75 to 80°F). The tierra fría (cold country) composes the land above 1,524 meters (5,000 feet) and has daytime temperatures from 24 to 27°C (75 to 80°F), but nighttime temperatures of 10 to 13°C (50 to 55°F).

The tierra caliente is characterized by heavy rains; the tierra templada receives regular rains from April through November; and the tierra fría is less rainy but more windy than the temperate regions. The average rainfall for Costa Rica is more than 250 centimeters (100 inches). Natural disasters that befall the country include occasional earthquakes, hurricanes along Atlantic coast, frequent flooding of lowlands at the beginning of the rainy season, landslides, and volcanic eruptions.

4 TOPOGRAPHIC REGIONS

The landscape of Costa Rica varies from seasonally snow-capped mountains to seasonal marshlands to lush rain forests. The central highlands extend from northwest to southeast. The Atlantic and Pacific coastal lowlands are low, swampy, and heavily forested.

5 OCEANS AND SEAS

Seacoast and Undersea Features

Costa Rica is bordered on the east by the Pacific Ocean and on the west by the Caribbean Sea. The country sits at the boundary where the Cocos Plate in the Pacific—a piece of Earth's crust about 510 kilometers (316 miles) wide—meets the tectonic plate underlying the Caribbean Sea. The Cocos Plate moves east at a rate of about 10 centimeters (4 inches) per year, causing occasional earthquakes in the country.

Sea Inlets and Straits

Though there are a number of small inlets along the shore of the Pacific Ocean, the two major ones are the Nicoya Gulf (Golfo de Nicoya) in the north and the Dulce Gulf (Golfo Dulce) in the south.

Islands and Archipelagos

Cocos Island is an uninhabited dependency of Costa Rica. This volcanic island, located about 480 kilometers (300 miles) southwest of Costa Rica in the Pacific Ocean, is covered with tropical rainforests.

There are a number of small sedimentary islands within the Nicoya Gulf, several of which are protected as wildlife refuges for roosting and nesting birds. Caño Island, located near the mouth of the Nicoya Gulf, is a 300-hectare (740-acre) wildlife refuge island that is covered with tropical rainforest and surrounded by coral platforms.

Coastal Features

Along the coasts, mainly where the rivers empty into the ocean, there are extensive mangrove forests and swamps. The rest of the coastline offers numerous beaches. The Caribbean coast of Costa Rica is flat and open, with gray or black sand beaches, while the Pacific coast is irregular with hilly or mountainous peninsulas, coastal lowlands, bays, and deep gulfs.

6 INLAND LAKES

With a surface area of about 85 square kilometers (33 square miles), the man-made Lake Arenal is the largest lake in Costa Rica. It is located in the northern part of the country near the Arenal volcano in the Arenal National Park.

Lake Cachí is another man-made lake located at the eastern end of the Reventazón River (Río Reventazón).

Lake Hule, south of San Miguel, is a natural lake set in a dormant volcanic crater. Lake Caño Negro is a seasonal lake (appearing during the wet season) near Costa Rica's northern border that is fed by the fresh waters of the Frío River (Río Frío).

7 RIVERS AND WATERFALLS

The longest river in Costa Rica is the San Juan. It flows from Lake Nicaragua in Nicaragua along the border with Costa Rica to the Caribbean Sea, covering a total length of about 220 kilometers (140 miles). Tributaries to the San Juan rise in the volcanic highlands of Costa Rica. Although the San Juan River lies within Nicaraguan territory, Costa Rica has, by treaty, full rights of navigation.

The San Carlos and Chirripó Rivers, located near the border with Nicaragua, commonly flood during the wet season, turning the surrounding landscape into swampy marshlands.

8 DESERTS

There are no desert regions in Costa Rica.

9 FLAT AND ROLLING TERRAIN

The northern lowlands are broad and flat and, in some areas, they are cut off from the highlands by a virtually impassible hardwood forest. The region is made up of two separate llanuras (low-lying plains), the Llanura de los Guatusos in the west and the San Carlos Plains (Llanura de San Carlos) farther east. The llanuras make up one-fifth of Costa Rica's land area, and extend along the entire length of the San Juan River.

The Caribbean lowlands are covered with tropical evergreen rainforest. The Pacific lowland forests are typically dry, particularly in the northwest.

The most important area of Costa Rica is the Meseta Central. It contains two upland basins separated by low volcanic hills and is home to half of the population. Located in the temperate country, it lies between the Cordillera Central to the north and low mountains and hills to the south. The land surface of the Meseta is generally level or rolling, which is acceptable for agriculture.

The General Valley, drained by the General River, lies between the Cordillera de Talamanca to the north and the coastal mountains of the southwest. Almost as large as the Meseta Central, the General Valley is a relatively isolated structural depression that ranges in elevation from 183 to 1,066 meters (600 to 3,500 feet). River flood plains, terraces, rolling hills, and savannahs dominate the landscape.

10 MOUNTAINS AND VOLCANOES

Extending north and south throughout the center of Costa Rica are several distinct mountain ranges called "cordilleras." The Cordillera de Guanacaste, Cordillera Central, Cordillera de Tilarán, and Cordillera de Talamanca are all part of the Andean-Sierra Madre chain that runs along the western shore of the Americas.

The Cordillera de Guanacaste is volcanic in origin and stretches for 112 kilometers (70 miles) from the western border with Nicaragua to the Cordillera Central. The highest peak in the Guanacaste chain is the Miravalles volcano at 2,024 meters (6,640 feet).

To the southeast, the Cordillera de Tilarán is home to the Arenal volcano, one of the world's most active volcanoes. To the east lies Cordillera Central, which contains four volcanoes and the Meseta Central (which is also home to the capital city). Cordillera de Talamanca rises in the south, housing the country's highest point, Cerro Chirripó.

Lying at the heart of one of the most active volcanic regions on Earth, Costa Rica is home to seven active volcanoes, and sixty dormant or extinct ones. The active volcanoes of Irazú, Poás, Barba, and Turrialba rise near the capital city of San José. The remaining active to semi-active volcanoes are: Arenal, Miravalles, and Rincon de la Vieja.

11 CANYONS AND CAVES

The Caves of Venado are located south of Arenal Lake and Volcano. These seven-million-year-old caves were formed as water currents penetrated through the surrounding limestone rocks. About 2.5 kilometers (1.5 miles) in length, the caves contain at least four different species of bats and numerous types of spiders, many of which are endemic to the area.

About forty caves are located within the Barra Honda National Park in northern Costa Rica. The largest is Santa Ana Cave at 240 meters (787 feet) deep. The most popular among tourists are La Terciopelo, La Trampa, and La Santa Ana. These caverns house a large number of stalagmites, stalactites, pillars, cave earls, helicities, and other rock formations. The Barra Honda National Park was created specifically to protect these natural wonders.

12 PLATEAUS AND MONOLITHS

There are no plateau regions in Costa Rica.

13 MAN-MADE FEATURES

The man-made Lake Arenal was formed by construction of the Sangregado dam, located at the southeast end of the lake. The hydroelectric power created by this dam accounts for about 33 percent of Costa Rica's total electrical capacity.

Lake Cachí Dam, located at the eastern end of the Reventazón River, supplies hydroelectric power to San José, the capital city.

DID YOU KNOW?

Cloud forests—lush forests at high elevations where the heavy mist and clouds almost always hang in the air—occur on Costa Rica's mountaintops. Monte Verde Biological Cloud Forest Preserve covers twenty-six thousand acres of forest, and houses two thousand plant species, four hundred bird species, and one hundred different animal species.

14 FURTHER READING

Books

Baker, Christopher. Costa Rica Handbook. 3rd ed. Chico, CA: Moon Publications, Inc., 1999.

Creedman, Theodore S. Historical Dictionary of Costa Rica. 2nd ed. Metuchen, NJ: Scarecrow Press, 1991.

Dunlop, Fiona. Fodor's Exploring Costa Rica. 3rd ed. New York: Fodor's Travel Publications, 2001.

Web Sites

LonelyPlanet.com . http://www.lonelyplanet.com (accessed February 26, 2003).

Tourism-CostaRica.com . http://www.tourismcostarica.com (accessed February 27, 2003).

Costa Ricans

PRONUNCIATION: COHSS-tah REE-kuhns

ALTERNATE NAMES: Ticos

LOCATION: Costa Rica

POPULATION: 3.1 million

LANGUAGE: Spanish; English

RELIGION: Roman Catholicism (over 90 percent)

1 • INTRODUCTION

In 1502, Christopher Columbus became the first European to arrive in what is now Costa Rica, on his fourth and last voyage. Although they named the region "rich coast," it was never a source of great wealth for the Spanish. Costa Rica became an independent nation in 1838. Around that time, coffee became an all-important export and source of national wealth; bananas, introduced in 1871, also became a major export crop. Costa Rica's political life has generally been tranquil. However, in 1948, thousands died in a civil war. Since then, Costa Rica has held to a tradition of orderly, democratic rule.

2 • LOCATION

Costa Rica is about the size of the state of West Virginia. Mountain ranges run the length of the country, reaching as high as 12,500 feet (3,810 meters) above sea level. The lowlands along the Pacific and Caribbean coasts are hot and rainy, with swamps and abundant forests.

Costa Rica has a population of over 3 million.

3 • LANGUAGE

Spanish is the universal language. Costa Ricans call themselves "Ticos." Vos is often used in place of tú as the singular familiar pronoun. Costa Rican Spanish is influenced by Mexican television.

4 • FOLKLORE

Amerindians (native people) in Costa Rica see the world as created by Sibu (God) and controlled by good and evil spirits. Traditional healers who cure with herbs and chants are called brujas (witches). They are always female and at least fifty years old.

Catholic folklore is plentiful. As in all of Latin America, saints are prayed to as a link with God. Statues and pictures of saints in the home are believed to confer good luck.

5 • RELIGION

More than 90 percent of the population are baptized Roman Catholics. The constitution recognizes Catholicism as the national religion. A Catholic marriage is the only type of religious ceremony the state recognizes as binding. However, Costa Ricans generally do not observe rigid conformity to the doctrines and rules of the church.

6 • MAJOR HOLIDAYS

Most of Costa Rica's fifteen public holidays are religious. Some businesses close for Holy Week, the week before Easter. Falling in late March or early April, it is commemorated with religious processions. Christmas Eve (December 24) is celebrated with visiting, drinking, dancing, and gift-giving as well as midnight Mass. The feast day of Our Lady of the Angels, Costa Rica's patron saint, occurs on August 2. On this day, La Negrita, a small black stone image of the Virgin, is carried in a solemn procession.

The most important secular holiday is Independence Day, on September 15.

7 • RITES OF PASSAGE

Parents of newborn children receive gifts from relatives and neighbors. The godparents traditionally take the infant to church to be baptized. A child's first birthday is also a great occasion. Children enter school at age seven. A middle-or upper-class girl's fifteenth birthday is a special occasion (called the quince). It is marked by a large, elaborate party. Most adult Costa Ricans let their birthdays pass unnoticed. Couples celebrate their silver (twenty-five-year) and golden (fifty-year) wedding anniversaries.

Funerals are required by law to be held within twenty-four hours of death. Whenever possible, a church ceremony is held, and mourners then proceed to the cemetery for the burial.

8 • RELATIONSHIPS

Foreign visitors have described Costa Ricans as hospitable and gracious. Much socializing goes on in clubs or bars, or at fiestas or other community celebrations. However, many Costa Ricans socialize primarily with relatives.

Dating is not common. In rural areas and among more traditional urban families, girls under eighteen must still be chaperoned (accompanied by an adult) at night. If a boy and girl go out on a date even once, they are generally thought to be novios (boyfriend and girlfriend) who do not date anyone else.

9 • LIVING CONDITIONS

Costa Rica and Panama enjoy the highest standard of living in Central America. Most Costa Ricans live in small wooden or cement-block houses. The floors are of wood or tile, and the roofs of zinc or corrugated iron. The urban poor generally live in overcrowded, usually rented, slum dwellings. Squatters' shanties (shacks) can be found on the fringes of the cities.

10 • FAMILY LIFE

The extended family is the basis of Costa Rican society. Several generations may live under the same roof. Much of Costa Rican social life consists of visiting relatives on Sundays and joining them on special occasions. Family size has dropped sharply since 1960 because of birth control. Women form a growing proportion of the labor force. Divorce, once seen as a disgrace, occurs more frequently than in the past. However, separation and desertion remain far more common. Many women are also victims of domestic violence.

11 • CLOTHING

Costa Ricans wear modern, Western-style clothes. Clean, unwrinkled clothing is very important to urban working-class people. Many will skimp on food to buy stylish clothing. Jeans and tee-shirts are everyday wear for young people of all classes. Girls wear school uniforms.

Traditional women's clothes include a sheer, low-cut, frilly white blouse and a flowered, full cotton skirt. A fringed silk or cotton rebozo (shawl) is draped around the shoulders or over the head. Traditional men's clothes generally consist of dark trousers and a long-sleeved white shirt with a red knotted handkerchief at the neck and a colored sash around the waist

12 • FOOD

The Costa Rican diet is based on rice, beans, tortillas or bread, fried plantains, and strong black coffee. The midday meal is the main one.

Olla de carne, the traditional stew, is made with beef, potatoes, corn, plantains, squash, yucca, and other vegetables. Other popular main dishes include paella and zarzuelas (spicy seafood stews).

13 • EDUCATION

Elementary education is compulsory between the ages of six and fifteen. However, many graduates enter college unable to read or write well enough to meet the college standard. Well-to-do parents usually send their children to private schools, where instruction is at a higher level.

The main institutions of higher learning are the University of Costa Rica and the National Autonomous University.

14 • CULTURAL HERITAGE

Costa Rica has a national orchestra, opera house, and dance company. Alejandro Monastel is a classical composer who employs native folk themes. Among popular performers are Los Talolingas, who wrote "La Guaria Morada," regarded as the nation's "second national anthem."

Francisco Amighetti and Richard Kliefoth are among the nation's painters and graphic artists. Costa Rica's best writers have been mostly essayists and poets, including Justo Facio, Roberto Brenes Mesén, and Joaquín García Monge.

15 • EMPLOYMENT

About three-quarters of all Costa Ricans are members of the working class. These include farm and domestic workers, gardeners, and janitors. As in most Latin American societies, work is seen as a necessity but not an end in itself. The work week is often cut short on Friday afternoon, and there are many holidays.

16 • SPORTS

Soccer is the national sport—or even national mania—of Costa Rica. Even the smallest village is likely to have at least one team. It is also by far the chief spectator sport. Like soccer, bicycling, boxing, and wrestling are popular working-class sports. Basketball, volleyball, and tennis are played mostly by upper-and upper-middle-class boys, and tennis and golf are played by their fathers.

17 • RECREATION

Films are extremely popular, but most moviegoers are under twenty-five years of age. Portable radios are operated everywhere, most often tuned to stations playing popular music. Even the poorest homes are likely to have TV sets. Favorite programs include cartoons and old movies from the United States, and Mexican telenovelas (soap operas).

18 • CRAFTS AND HOBBIES

Because it has only a small native (Amerindian population), Costa Rica has little in the way of native arts and crafts. Elaborately painted wooden oxcarts, only crafted since about 1900, are decorated with brightly colored geometric patterns or designs such as flowers. Similar designs are painted on some storefronts.

19 • SOCIAL PROBLEMS

Costa Rica has maintained democracy, avoiding the armed conflicts and dictatorships that have gripped other Central American countries. However, poverty grips as much as one-third of Costa Rica's population. Most farmers own only tiny plots of land or none at all. Crime-control is hampered by the lack of a professional police force.

The environment is threatened by slash-and-burn agriculture and the cutting of forests. Slash-and-burn agriculture involves clearing land by cutting down all the trees, and then burning anything that is left to allow crops to be planted.

20 • BIBLIOGRAPHY

Biesanz, Richard, et al. The Costa Ricans. 2d ed. Englewood Cliffs, N.J.: Prentice-Hall, 1987.

Foley, Erin. Costa Rica. New York: Marshall Cavendish, 1997.

Haynes, Tricia. Let's Visit Costa Rica. Bridgeport, Conn.: Burke Publishing, 1985.

WEBSITES

Amerisol. Costa Rica. [Online] Available http://www.amerisol.com/costarica.html, 1998.

Costa Rica Handbook. [Online] Available http://photo.net/cr/moon/cr-handbook.html, 1998.

Green Arrow Advertising. Costa Rica. [Online] Available http://www.greenarrow.com/costa/cr.htm, 1998.

World Travel Guide. Costa Rica. [Online] Available http://www.wtgonline.com/country/cr/gen.html, 1998.

Costa Rica , officially Republic of Costa Rica, republic (2005 est. pop. 4,016,000), 19,575 sq mi (50,700 sq km), Central America. It is bounded on the north by Nicaragua, on the east by the Caribbean Sea, on the southeast by Panama, and on the south and west by the Pacific Ocean. The capital and largest city is San José . In addition to the capital, other important cities are Alajuela , Heredia , Puntarenas , and Cartago .

Land and People

The coastal plains are low, hot, and heavily forested. Bananas, cocoa, and sugarcane are cultivated there. In the northwest is the Nicoya peninsula, a semiarid plain where cattle and grain are raised. A massive cordillera, with peaks over 12,000 ft (3,658 m) high, cuts the country from northwest to southeast. Within it, under the shadow of volcanoes such as Irazú , lies the Central Valley, with a perennially springlike climate. This valley is the heart of the country, where coffee is cultivated and most of the population and market facilities are located.

One of the most stable countries in Latin America, Costa Rica has a long democratic tradition and no regular military forces. The population is largely of Spanish and mestizo descent. The official language is Spanish, and English is also spoken. About 75% of the people are Roman Catholics; there is a large Protestant minority.

Economy and Government

Costa Rica is an agricultural country, although tourism and industry are being developed at a moderate pace. Industries include food processing and the manufacture of electronic components, textiles and clothing, construction materials, fertilizer, and plastics. Bananas, pineapples, coffee, melons, sugar, and beef are exported, as well as manufactured goods such as textiles, electronics, and medical equipment. Raw materials, consumer goods, capital equipment, and petroleum are imported. The United States is the largest trading partner.

The country is governed under the 1949 constitution. The president, who is both the chief of state and head of government, is elected to a single four-year term. Members of the unicameral 57-seat Legislative Assembly are also elected for four years. Administratively, the country is divided into seven provinces.

History

Early History through the Nineteenth Century

Although Columbus skirted the Costa Rican coast in 1502, resistance by the indigenous inhabitants and disease prevented the Spanish from establishing a permanent settlement until 1563, when Cartago was founded. The region was administered as part of the captaincy general of Guatemala. Few of the native inhabitants survived, and the colonists, unable to establish a hacienda system based on slave labor, generally became small landowners. From Cartago, westward expansion into the plateau began in the 18th cent.

Costa Rica became independent from Spain in 1821. From 1822 to 1823 it was part of the Mexican Empire of Augustín de Iturbide. It then became part of the Central American Federation until 1838, when the sovereign republic of Costa Rica was proclaimed. In 1857, Costa Rica participated in the defeat of the filibuster William Walker , who had taken over Nicaragua.

The cultivation of coffee, introduced in the 19th cent., led to the creation of a landed oligarchy that dominated the country until the administration of Tomás Guardia (1870–82). In 1874, Minor Cooper Keith founded Limón and introduced banana cultivation. Keith also started the United Fruit Company. Later many tracts had to be abandoned because of leaf blight. Costa Rica's history of orderly, democratic government began in the late 19th cent.

The Twentieth Century

The orderly pattern was broken in 1917, when Federico Tinoco overthrew the elected president, Alfredo González. The majority of Costa Ricans, as well as the United States, opposed Tinoco, and he was deposed in 1919. Costa Rica cooperated with the United States during World War II and after the war joined the United Nations and other international organizations. Following the war, United Fruit started new plantations on the Pacific coast.

In 1948 there was a second breakdown of the political system. In a close presidential election Otilio Ulate appeared to have defeated a former president, Dr. Rafael Calderón. But the incumbent, Teodoro Picado, accused Ulate's supporters of fraud and obtained a congressional invalidation of the election. A six-week civil war ensued, at the conclusion of which a junta led by José Figueres Ferrer, a backer of Ulate, assumed power. Picado was exiled and the armed forces were disbanded, to be replaced by a civil guard. Forces from Nicaragua backed Picado, and the Organization of American States (OAS) was called upon to mediate between the two countries.

In 1949 a new constitution was adopted, and the junta transferred power to Ulate as the elected president. Figueres was elected his successor in 1953. In UN-supervised elections in 1958, Mario Enchadi Jiménez defeated Figueres's candidate. Politics remained stable in the 1960s. The Irazú volcano erupted in 1963–64 and caused serious damage to agriculture; another volcano, Arenal, erupted in 1968 for the first time in hundreds of years, killing many. Figueres was again elected president in 1970, and Daniel Oduber Quiros was elected president in 1974, but the ruling National Liberation Party (PLN) lost its majority in the legislature for the first time in 25 years. In the late 1970s the country entered a recession and found itself surrounded by increasingly unstable neighbors.

In the early 1980s the PLN returned to power. Oscar Arias Sánchez , the PLN candidate elected in 1986, worked to preserve his nation's neutrality. The economy continued to worsen, however, and in 1990 Rafael Angel Calderón Fournier of the Social Christian Unity party (PUSC) was elected to the presidency by a 3% margin. José María Figueres Olsen, the PLN candidate and son of José Figueres Ferrer, was elected president in 1994. In 1998, Miguel Ángel Rodríguez Echeverría of the PUSC won the presidency; he was succeeded by fellow party member Abel Pacheco de la Espriella in 2002.

The country was shaken in 2004 by charges that Presidents Calderón and Rodríguez had received illegal kickbacks from government contracts and that, after leaving office, President Figueres had received large consulting fees relating to government contracts. Calderón was convicted of embezzlement in 2009. Former president Oscar Arias Sánchez was elected to a second term in 2006. In Oct., 2007, Costa Ricans approved joining the Central American Free Trade Agreement (signed in 2004), but its accession was delayed until after legislation was enacted (Nov., 2008) that brought the nation into compliance with the accord.

In Feb., 2010, Arias Sánchez's vice president, Laura Chinchilla Miranda , was elected president. A center-leftist who is conservative on many social issues, Chinchilla was Costa Rica's first woman president. Tensions flared with Nicaragua in late 2010 over a disputed island at the San Juan River's mouth when Nicaraguan troops were sent there; the troops were not removed despite the Organization of American States' call for both sides to withdraw. Costa Rica subsequently brought the issue before the International Court of Justice; a 2011 interim ruling called on both sides to avoid the disputed area.

Bibliography

See R. Fernández Guardia, History of the Discovery and Conquest of Costa Rica (1913); J. P. Bell, Crisis in Costa Rica: The 1948 Revolution (1971); H. D. Nelson, ed., Costa Rica, a Country Study (1984); C. Hall, Costa Rica (1985); M. Edelman and J. Kenen, ed., The Costa Rica Reader (1989).

Costa Rica The second smallest Central American state, it is often referred to as the ‘Switzerland of Central America’ owing to its geography, its political stability, and the absence of a standing army. The working of the 1871 Constitution was considerably helped by the existence of a relatively homogeneous and educated farming population. The political order was challenged in 1917 by the establishment of a military dictatorship by the Minister of War, Federico Tinoco Granados, but US hostility and domestic opposition forced a return to democracy in 1918. It was the only Central American country to maintain a democratic government throughout World War II, though a serious challenge to its system appeared when the government tried to annul the 1948 elections. After a popular uprising led by Figueres, stability was restored and a new Constitution was passed in 1949, which abolished the army, introduced universal suffrage, and strengthened the presidential democracy.

Since then, the dominant political force has been the centre-left social democratic Partido de Liberación Nacional (Party of National Liberation, PLN), which attempted to reduce US influence without provoking the US government or scaring US investors. Thus it allowed, for example, the stationing of US-backed Contras for the Civil War in Nicaragua in the 1980s while promoting its own solutions for the region's stability. This culminated in the Arias Peace Plan, for which its author, President Arias, received the Nobel Peace Prize. From 1983, the centre-right Partido Unidad Social Cristiana (United Christian Social Party, PUSC) emerged, which subsequently became the second major national party. It obtained power under President Rafael Calderón Fournier (1990–4) and Miguel Ángel Rodríguez Echeverría (1998–2002). Under President J. M. Figueres (PLN, 1994–98) and Echeverría, the government was struggling to fight the drugs trade, which used the country for transit. It continued in its efforts to liberalize the country's telecoms structure and promoting tourism. These were seen as ways of combating the country's high foreign debts and low world prices for its major exports, bananas and coffee. In 2002 Abel Pacheco of the PUSC was elected to the Presidency.

Costa Rica The Republic of Costa Rica (República de Costa Rica) since 1848. It was named the ‘Rich Coast’ by Christopher Columbus^† in 1502, possibly in the (erroneous) belief that gold would be found here, given that the natives were wearing gold ornaments; he did not know that the gold was imported. However, the coast may have been rich in timber, fruit, and water. The name Costa Rica was officially conferred in 1539 and the next year, although there would be no permanent Spanish settlement until 1561, it became part of the Viceroyalty of New Spain; in 1568 it was included in the newly established Kingdom of Guatemala, remaining so until it declared its independence in 1821 and joined the Mexican Empire. Two years later it was a founding member of the United Provinces of Central America. In 1824 it took the name of the Free State of Costa Rica. In 1838 it left the Federation and struck out on its own, formally becoming an independent republic ten years later.

Costa Rica

The population of Coast Rica is primarily of Spanish descent, with a small mestizo (mixed white and native or Amerindian) minority (about 7 percent). The remainder are blacks (3 percent), East Asians (2 percent), and Amerindians (1 percent). The blacks are mostly of Jamaican descent.

Costa Rica declared war on the Axis powers in December 1941 and was the first American state to declare war on Japan, anticipating the declaration of the USA by a few hours. It was one of the original signatories of the United Nations Declaration. The USA established an emergency air base there. See also Latin America.

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