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North & Central America and Caribbean
Costa Rica |
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Last reviewed: 18 August 2009 |
Country information
COSTA RICA TODAY
Country Facts
Area: 51,032 sq km; 19,652 sq miles
Population: 4.4 million (2008)
Capital City: San José (1.6 million as of 2008)
People: Only 1% of the population of Costa Rica is of indigenous extraction. Costa Rica's character is rooted in distinct local cultures, from the Afro-Caribbean province of Limon, with its Creole cuisine, games and patois to the traditional Ladino values embodied by the sabanero (cowboy) of Guanacaste.
Languages: The official language is Spanish.
Religion(s): Roman Catholic 70.5%; Evangelical Protestant 14%; Others 4%; None 11%
Currency: Colón (CRC). 1,000 CRC = $1.75 USD (July 2009)
Major Political Parties: Social Christian Unity Party (PUSC), National Liberation Party (PLN), Partido Accion Ciudadana (PAC) Movimento Libertario (ML)
Government: PLN
Head of State: President Oscar Arias Sanchez.
Minister in the Office of the President: Rodrigo Arias Sanchez
Foreign Minister: Bruno Stagno.
Membership of International Groups/Organisations: Costa Rica is a member of the UN, the OAS, the WTO (Cairns Group), the IAEA, the G77, the Central American Integration System (SICA), the Rio Group, and the Caribbean Basin Initiative (CBI). Costa Rica has signed and ratified all the key international human rights instruments and pursues a pacific policy, having abolished its own armed forces in 1949.
General
Costa Rica has the highest social indicators (in health and education) in the region. On environmental governance, over 25% of Costa Rican territory is designated national park or reserve; however insufficient funding is dedicated to enforcement and problems such as illegal logging, pollution of rivers and destruction of maritime habitats and species continue. Costa Rica still attracts immigrants ranging from North American retirees to Colombian, asylum seekers, as well as some half a million Nicaraguans seeking work.
HEALTH
Life expectancy: Men 76 years, Women 81 years (2005-2010 est)
Infant mortality rate: 11 per 1,000 (2007)
ECONOMY
Basic Economic Facts
Nominal GDP: US$26.27 billion (2007) US$35.1 billion (2008)
Nominal GDP per head: US$5,869 (2007) US$ 6,710 (2008)
Annual growth: 7.8% (2007) 3.5% (2008)
Inflation: 9.5% (May 2009) 13.9 % (2008)
Major industries: Electronic components, bananas, coffee, textiles and apparel, fruits, jewellery, small appliances, shrimp. tourism, pharmaceuticals
Exports: US$9,675m (2008)
Imports: US$153711m (2008)
Statistics
Year-end figures for 2008 showed a sharp drop in economic growth of approximately 5% on the previous year to 2.9%. The small fiscal surplus of 0.2% of GDP in 2008 is predicted to reverse to 2007 levels and deficits of 4.5% of GDP in 2009 , and overall debt is currently at $11.7 billion (including $7.4 billion of external debt).
Free Trade Agreements (FTAs): Costa Rica has FTAs with Central America (not Panama), Mexico, Chile, the Dominican Republic and Canada and with CARICOM countries of the Caribbean. Ratification of the US-Central American Free Trade Agreement (CAFTA) entered into force on 1st January 2009 although the positive effects of this have been muted by the global downturn and resultant reduced investment flows and export demand.
Although the smallest country in Central America in terms of population, Costa Rica is one of the most affluent on a GDP per capita basis. The economy has weathered low world commodity prices for traditional Costa Rican exports such as coffee, bananas and sugar by diversification. Non-traditional exports such as electronic components (particularly Intel microchips), medical supplies, textiles and tropical fruits, as well as tourism, now play a much more important role. The impact of the global increase in food prices has seen some items increase by up to 30% and will begin to have an impact on the economy. Average GDP growth was around 2.5% per year since 2000, but it rose some 4.1% in 2005 and 6.8% in 2006 and 2007 which has allowed Costa Rica to weather its high levels of internal and external debt. Interest on this debt consumes a third of the annual budget. A fiscal reform package designed to increase tax revenue and measures to regulate government spending failed to pass through the Legislative Assembly during the Pacheco administration.
Moves towards regional economic integration in Central America are continuing. In early 2004, the 5 Central American countries concluded negotiations with the USA on the Central American Free Trade Agreement (DR-CAFTA). Known in Spanish as the TLC (Tratado de Libre Comercio), the agreement was signed between the USA and Costa Rica, Guatemala, El Salvador Honduras, Nicaragua and the Dominican Republic. El Salvador was the first country to ratify the agreement in December 2004, followed by Honduras and Guatemala. Violent protests greeted the ratification in Guatemala and Honduras.
On 7 October 2007 Costa Ricans went to the polls, in the first ever referendum in their history, to determine whether Costa Rica should ratify the Central American Free Trade Agreement (DR-CAFTA). The result was 51.6% to 48.4% in favour of the free trade deal with the US. The 60% electoral turnout was widely hailed as a triumph for democracy and public engagement.
Costa Rica continues to attract foreign investment because of the basic stability and security of the country. 2007 was a record year in foreign investment reashing US$1,884.6 million, driven by investment in tourism and construction. The Colon has been devaluing against the US Dollar on average 10-11% per year since 2000 except in 2007 when the rate was reduced to only 1.5%.
HISTORY
Pre-Columbian period - Costa Rica was at the crossroads of the 2 great areas of cultural influence: the Meso-American groups (including Mayans and Aztecs) and the South American groups. The territory did not belong directly to any of the major kingdoms and the populations were distributed in small disperse tribes with no important population concentrations. The descendents of these indigenous tribes exist today, the main ones being the Bri Bri, Cabecar, Brunca, Guaymi and Huetar people.
1502 - Christopher Columbus first sets foot in Costa Rica, (Rich Coast) on his fourth and last voyage to the New World, but disease and resistance by the local population delay the establishment of a permanent settlement for nearly 60 years.
1561 - Spain's Juan de Cavallon leads the first successful colonisers into Costa Rica.
1540 onwards - Costa Rica is part of the vice-royalty of New Spain.
1821 - Central America gains independence from Spain. A dispute ensues over whether Costa Rica should join an independent Mexico or a confederation of Central American states.
1823 - Costa Rica joins the United Provinces of Central America, which also embraces El Salvador, Guatemala, Honduras and Nicaragua.
1838 - Costa Rica becomes fully independent.
1849-59 - Under the leadership of Juan Rafael Mora, Costa Rica takes the lead in organising Central American resistance against William Walker, the US adventurer who took over Nicaragua in 1855.
1859 - Mora ousted in a bloodless coup.
1870-82 - Under the leadership of Tomas Guardia Costa Rica encourages intensive foreign investment in railways.
1874 - US businessman Minor Cooper Keith introduces banana cultivation and starts the United Fruit Company.
1917 - Federico Tinoco ousts the elected president, Alfredo Gonzalez, but is himself deposed 2 years later.
1940-44 - President Rafael Angel Calderon Guradia, founder of the United Christian Socialist Party (PUSC), introduces liberal reforms, including recognition of workers' rights and minimum wages.
1948 - 6-week civil war over a disputed presidential election result.
1949 - Jose Figueres Ferrer, co-founder of National Liberation Party (PLN), elected president and begins ambitious socialist programme, including introducing a social security system and nationalising banks. Armed forces abolished and replaced by Civil Guard.
1958-73 - Costa Rica governed by mainly conservative administrations.
1974 - Daniel Oduber (PLN) elected president and pursues socialist policies.
1978 - Rodrigo Carazo, a conservative, elected president amid a sharp deterioration in the economy.
1982 - Luis Alberto Monge (PLN) elected president and introduces harsh austerity programme. Meanwhile, Costa Rica comes under pressure from the US to weigh in against the Sandinistas in Nicaragua.
1985 - US-trained anti-guerrilla force begins operating from Honduras and Costa Rica following clashes with Sandinista troops.
1986 - Oscar Arias Sanchez (PLN) elected president on a neutral platform.
1987 - Leaders of Nicaragua, El Salvador, Guatemala and Honduras sign regional peace plan devised by Oscar Arias Sanchez, who in turn wins the Nobel Peace Prize for the plan.
1990 - Rafael Calderon, of the centrist PUSC, elected president.
1994 - Jose Maria Figueres Olsen (PLN) elected president.
1998 - Miguel Angel Rodriguez (PUSC) elected president.
2002 – Abel Pacheco (PUSC) elected president
2006 – Dr Oscar Arias Sanchez (PLN) elected President for a second term.
2007 - Costa Ricans vote in favour of the DR-CAFTA free trade agreement with the US in the country’s first ever referendum
BBC News Country Timeline: Costa Rica
INTERNATIONAL RELATIONS
Relations with Neighbours
In recent years Costa Rica has been trying to improve its relationship with its northern neighbour Nicaragua. The number of Nicaraguans living and working in Costa Rica (mainly illegally) is estimated at about 500,000 (but some say it may be closer to 1 million). The relationship has been strained because of the territorial dispute over the right to free navigation of the San Juan River and in particular, the right of Costa Rican patrols to carry arms (a number of Costa Rican communities are only accessible from the river). The disagreement had been put on hold by the 2 governments and the case sent to the International Court of Justice in The Hague for arbitration, who ruled in July 2009 that Costa Rica did have navigational rights but their police forces were not allowed to carry arms. The outcome was deemed a success by both sides and this may help improve relations between the two countries. Costa Rica is an active member of the Central American Integration System (SICA) but continues to play no part in the Central American Parliament –(PARLACEN). The recently established Central American Customs Union is progressing well with Costa Rican participation. Negotiations to join the US CAFTA were completed in January 2004 and the Agreement entered into force between the US and Costa Rica in January 2009.
An FTA between Costa Rica and Caribbean Countries (CARICOM) was agreed in 2004 and ratified in 2005. DR-CAFTA (including the Dominican Republic) faced more opposition but was ratified in Costa Rica through a national referendum in October 2007. Costa Rica is currently negotiating FTAs with Singapore, China and is leading the negotiations for an Association Agreement between Central America and the European Union. Costa Rica also acts as the depository for a Maritime Co-operation Agreement with the Caribbean countries and others to control drug trafficking.
Relations with the International Community
Costa Rica is an active member of the international community and supports efforts to protect the environment; promotes human rights and sustainable development, and advocates peaceful settlement of disputes. Costa Rica is host to a number of international institutions, including the Inter-American Court of Human Rights and the UN University for Peace.
Negotiations on an Association Agreement with the European Union began in June 2007 in Costa Rica and have continued with subsequent rounds in Belgium and El Salvador. The sixth round of negotiations were held in Brussels, Belgium from 26th to the 30th of January 2009 and as of the 24th April 2009 are set to continue. However negotiations are currently suspended because of the constitutional crisis in Honduras.
Costa Rica joined the Coalition on Iraq in 2003 but withdrew in September 2004 after the Constitutional Court ruled that decision was unconstitutional. Nevertheless the Foreign Ministry reconfirmed that Costa Rica remains committed to the fight against terrorism.
Costa Rica has been an active member of the United Nations Security Council since January 2008 and ends its tenure after the 31st December 2009.
Relations with the UK
Bilateral relations were established over 150 years ago and have always been good. The UK helped to develop the market for Costa Rican coffee and the UK firm, Northern Railway, ran the railway service from the coast.
There have been high level visits in both directions. The most recent Ministerial visit was by the then Minister for Latin American Affairs in the Foreign and Commonwealth Office, Dr Denis MacShane, for the inauguration of President Pacheco in May 2002. The UK's Ambassador to Costa Rica attended the inauguration of President Oscar Arias in May 2006.
Cultural Relations with the UK
At least 1 Chevening scholarship is awarded every year to Costa Rican students for study at postgraduate level at institutes of higher education in the UK. (See Chevening Scholarships: Costa Rica) A private institution called the British Institute in San Jose offers courses and examinations of British educational Boards. For more information, see the Instituto Britanico. There is a privately-run British school in San Jose at which pupils sit GCSE examinations - British School of Costa Rica. The British Council in Mexico City has a watching brief in Costa Rica. For more information, see the British Council website:
British Council
Several prominent Costa Rican figures, including President Oscar Arias Sanchez, Kevin Casas and 2006 Presidential candidate Otton Solis, are ex-scholars of British Universities.
Recent Inward Visits
Various Costa Rican ministers and government officials visited the UK in 2006.
President Arias visited the UK in 2008 and met HRH The Prince of Wales at Balmoral to discuss climate change related issues.
Recent Outward Visits
Prince Michael of Kent visited Costa Rica in 2006.
GEOGRAPHY
Costa Rica covers 51,060 sq km and is bordered by Nicaragua to the north and Panama to the south-east. To the east lies the Caribbean Sea with approximately 200km of coastline, while to the west lies the Pacific Ocean with around a 1,000km of coastline. A volcanic mountain range extends the length of the country, splitting it in 2 from north to south. The Central Valley lies in the middle of these highlands which contain several active volcanoes. On either side of the range lie coastal lowlands.
TRADE AND INVESTMENT
Trade and Investment with the UK
UK exports to Costa Rica in 2007 (figures from January - September) totalled £30.8 million. UK imports from Costa Rica in 2007 totalled £371 million. In 2007, the top exports to Costa Rica were (FOB, UK): Road vehicles £8.4 million, specialised industrial machinery £4.8 million, telecommunications equipment £2.1 million and general industrial machinery £1.09 million. The main products imported from Costa Rica were (CIF, UK): office machinery and ADP equipment £231.5 million, vegetable and fruit £94.1 million, electrical machinery £38.1 million, crude animal & vegetable materials £1.4 million.
UK Development Assistance
Costa Rica benefits from a number of regional programmes administered by the British Department for International Co-operation (DFID) and from a number of small grants from the Foreign and Commonwealth Office (FCO) administered by the British Embassy in San Jose. The British community in Costa Rica also collects funds annually for local good causes. But the bulk of UK development assistance for Costa Rica is channelled through the European Commission, of which the UK’s share is 16%, and by means of the British contribution to other multilateral organisations that provide funding. The UK will also be funding a number of small projects focused on the environment.
The Small Grants Scheme, through which the British Embassy in San Jose used to help through micro-projects, ended in 2004.
POLITICS
Costa Rican politics has been dominated by 2 main parties, the National Liberation Party (PLN) and Social Christian Unity Party (PUSC), which have generally tended to succeed each other in power every 4 years. However, recent elections have shown the emergence of new parties, including the Citizens Action Party (PAC) and the Libertarian Movement (ML). The most recent elections, held in February 2006, saw the PLN regain power, but the PAC became the official opposition with the ML in third place. The PUSC, has been left very much as a minority party. The 2006 elections saw the PLN’s candidate, Dr Oscar Arias Sanchez, elected in the tightest election in Costa Rican history, separated from his rival by just 0.4% of the vote.
President Arias was inaugurated on 8 May 2006 and has vowed to improve health, education and law and order, whilst promoting free trade and international peace.
The country remains rocked by corruption scandals involving senior political and public figures, the most damaging of which concern the Social Security Institution (CCSS or Caja) and Costa Rican Electricity Institute(ICE). Two former Presidents, Miguel Ángel Rodríguez and Rafael Ángel Calderón were arrested on corruption charges and their trial began on November 3rd 2008. In spite of this Calderón has officially announced his candidacy for the Presidenial elections, which are due in February 2010. The leading candidates are Otton Sollis (PAC) and Laura Chinchilla (PLN), previously Vice-President in the current Arias administration.
HUMAN RIGHTS
As the seat of important regional institutions, including the Inter American Human Rights Court and Institute, Costa Rica enjoys prestige in the field of human rights and has made human rights a priority in the conduct of its foreign policy. Costa Rica is vulnerable to criticism on child prostitution and the growing problem of sex tourism, failure to recognise certain ILO conventions, and a judicial system which is slow. Nevertheless, Costa Rica can still boast an enviable record in the region.
