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Country Profile

Costa Rica

Country profile: Costa Rica

Where is Costa Rica? Costa Rica doesn’t feel like a Central American republic. People worry about mortgages rather than death squads; taxi drivers remind you to fasten your seat belt. Strolling around a busy shopping mall at the weekend, you could have been transported to suburbville, USA.

The ‘Switzerland of Central America’ gained its enviable reputation for stability, even dullness, by taking the inspired step of abolishing the army in 1948, embarking on a three-decade love affair with the welfare state which left Costa Ricans better fed, educated and healthier than almost any other nation in Latin America. Pensions and social security cover most of the population. While other Central American regimes called in the army at the first sign of opposition, Costa Rica’s governments generally preferred to compromise and listen to pressures from below – though they were occasionally prepared to use force to crush independent opposition.

By the early 1980s, however, the welfare-state bubble was ready to burst. Governments had covered growing deficits by borrowing abroad, precipitating a debt crisis in the early 1980s which forced Costa Rica into the arms of the IMF and World Bank and their free-market programme of ‘structural adjustment’. In return for their support, Costa Rica rapidly became a model adjuster, cutting state spending and shifting the emphasis from the public sector to private enterprise, using massive tax breaks to encourage multinational companies to export fruit, vegetables and textiles.

The result was an export boom, at the cost of the erosion of many of the gains made since 1948. Costa Rica is starting to look Central American again. Inequality is on the rise, as the burgeoning private-health and education sectors skim off wealthy citizens from the state system, and the Government cuts social support for the poor. As Costa Rica polarizes, malnutrition and obesity are both on the rise. A more positive angle to ‘Central Americanization’ is the recent growth of independent peasant and trade-union movements.

One of the growth areas of the economy is tourism, which is attracting large numbers of ecotourists to the country’s world-famous system of national parks and forest reserves. But the country is an environmental Jekyll and Hyde. Despite its record on conservation, it has one of the highest deforestation rates in the world, as much of its rainforest is hacked down for cattle ranching and the ‘hamburger connection’, sending convoys of refrigerated containers northwards to the fast-food chains of the US. Other exports, such as bananas, have seriously damaged the environment by dumping tons of pesticides into the waterways.

Pessimists fear that unleashing market forces will destroy the Costa Rican model, turning it into just another Central American economic and social ‘basket case’. The country’s fate hinges on its ability to keep the IMF and other creditors and investors happy (or at least at bay), while responding to the growing public opposition to structural adjustment, especially privatization. The signs are that the Government is at least trying to attempt this difficult balancing act – President Figueres recently suspended the privatization programme in response to a wave of strikes and protests.

Duncan Green


Costa Rica

LEADER: President José María Figueres

ECONOMY: GNP per capita $2,150 (US $24,740)
Monetary Unit: Colón
Main exports: Bananas, tourism, coffee, garments. Bananas and tourism make up over half export earnings.
Main imports: Primary commodities (49%), consumer goods (22%).
External debt: $4.5 billion, or $1,360 per man, woman and child

PEOPLE: 3.4 million. Population growth rate: 2.7% per annum.

HEALTH: Infant mortality is 14 per 1,000 live births, approaching rich-world standards and just a quarter that in neighbouring Nicaragua.

CULTURE: Overwhelmingly white and mixed race (mestizo). A small (30,000) indigenous population live on 22 government reserves, while black Afro-Caribbean people on the Caribbean coast make up a further 2% of the population.
Religion: Roman Catholicism is dominant. Although the number of protestant evangelical sects is spreading, they have made nowhere near the same progress as in Honduras or Guatemala.
Languages: Spanish, plus some indigenous languages

Sources World Development Report 1995, World Bank; Economist Intelligence Unit; CEPAL Panorama Económica de América Latina; Inside Costa Rica; The State of the World’s Children 1996, UNICEF; Americas Review 1996.

Previously profiled September 1983


[image, unknown] INCOME DISTRIBUTION [image, unknown] [image, unknown] [image, unknown]
Good by Latin American standards, but worsening under the impact of structural adjustment
1983 [image, unknown] [image, unknown] [image, unknown] [image, unknown]
[image, unknown] LITERACY [image, unknown] [image, unknown] [image, unknown] [image, unknown] [image, unknown]
93% for both adult men and women. One of the highest in the hemisphere.
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[image, unknown] SELF-RELIANCE [image, unknown] [image, unknown]
Food security has been abandoned in the pursuit of export markets for bananas and pineapples. Heavily reliant on the IMF and World Bank.
1983 [image, unknown] [image, unknown]
[image, unknown] FREEDOM [image, unknown] [image, unknown] [image, unknown] [image, unknown]
Minor human-rights abuses in a stable democracy underwritten by the abolition of the military in 1948.
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[image, unknown] POSITION OF WOMEN [image, unknown] [image, unknown] [image, unknown] [image, unknown]
Some of the most advanced legislation in the Americas, including laws against the sexist use of women’s bodies in advertising.
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[image, unknown] LIFE EXPECTANCY [image, unknown] [image, unknown] [image, unknown] [image, unknown] [image, unknown]
76 years - the same as in the UK and the US, and one year higher than Aotearoa/New Zealand.
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[image, unknown] NI ASSESSMENT [image, unknown] [image, unknown] [image, unknown] [image, unknown]
A stable democracy in which governments are willing to listen and compromise to preserve social stability. There is little ideological difference between the ruling National Liberation Party and the opposition Social Christian Unity Party. Party leaderships are dominated by political families like the Calderons and Figueres.

NI star rating

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[image, unknown] Issue 281 Contents

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©Copyright: New Internationalist 1996

New Internationalist issue 281 magazine cover This article is from the July 1996 issue of New Internationalist.
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