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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
|(…) data not available or not significant.|
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%).
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
|Balance on goods||-1,169.6|
|alance on services||838.6|
|Balance on income||-848.6|
|Direct investment abroad||-26.9|
|Direct investment in Costa Rica||576.7|
|Portfolio investment assets||-91.6|
|Portfolio investment liabilities||-304.5|
|Other investment assets||170.6|
|Other investment liabilities||329.1|
|Net Errors and Omissions||68.0|
|Reserves and Related Items||219.5|
|(…) data not available or not significant.|
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.
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.
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.
The central government budget is passed upon by the Legislative Assembly. Municipal budgets are of minor importance, and local
|Revenue and Grants||1,579.4||100.0%|
|General public services||375.6||22.2%|
|Public order and safety||127.6||7.5%|
|Housing and community amenities||0.5||<1.0%|
|Recreational, culture, and religion||13.2||0.8%|
|(…) data not available or not significant.|
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%.
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%.
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, 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).
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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