For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Republic of Costa Rica

Geography
Area: 51,100 sq. km (19,730 sq. mi.) about the size of the states of Vermont and New Hampshire combined.
Cities: Capital--San Jose (greater metropolitan area pop. 2.1 million, the greater metropolitan area as defined by the Ministry of Planning and Economic Policy includes the cities of Alajuela, Cartago, and Heredia). Other major cities outside the San Jose capital area--Puntarenas, Limon, and Liberia.
Terrain: A rugged, central range separates the eastern and western coastal plains.
Climate: Mild in the central highlands, tropical and subtropical in coastal areas.

People
Nationality: Noun and adjective--Costa Rican(s).
Population (2006): 4.299 million.
Annual growth rate (2006 est.): 1.3%.
Ethnic groups: European and some mestizo 94%, African origin 3%, Chinese 1%, Amerindian 1%, other 1%.
Religion: Roman Catholic 70.5%, Evangelical Protestant 13.8%, other 4.3%, none 11.3%.
Languages: Spanish, with a southwestern Caribbean Creole dialect of English spoken around the Limon area.
Education: Years compulsory--9. Attendance--99% grades 1-6, 71% grades 7-9. Literacy--96%.
Health: Infant mortality rate--9.45/1,000. Life expectancy--men 74.61 yrs., women 79.94 yrs.
Work force (2006 est., 1.866 million; this official estimate excludes Nicaraguans living in Costa Rica legally and illegally): Agriculture--13%; industry--22%; services--64%.

Government
Type: Democratic republic.
Independence: September 15, 1821.
Constitution: November 7, 1949.
Branches: Executive--president (head of government and chief of state) elected for one 4-year term, two vice presidents, Cabinet (22 ministers, two of whom are also vice presidents). Legislative--57-deputy unicameral Legislative Assembly elected at 4-year intervals. Judicial--Supreme Court of Justice (22 magistrates elected by Legislative Assembly for renewable 8-year terms). The offices of the Ombudsman, Comptroller General, and Procurator General assert autonomous oversight of the government.
Subdivisions: Seven provinces, divided into 81 cantons, subdivided into 421 districts.
Political parties: National Liberation Party (PLN), Citizen's Action Party (PAC), Libertarian Movement Party (PML), Social Christian Unity Party (PUSC), and other smaller parties.
Suffrage: Universal and compulsory at age 18.

Economy
GDP (2007): $26.23 billion.
GDP PPP (2006 est.): $52.22 billion.
Inflation (2007 est.): 10.81%.
Real growth rate (2007 est.): 7.3%.
Per capita income (2006): $5,100. (PPP $11,862, 2006 est.)
Unemployment (2007 est.): 4.6%.
Currency: Costa Rica Colon (CRC).
Natural resources: Hydroelectric power, forest products, fisheries products.
Agriculture (8.7% of GDP): Products--bananas, pineapples, coffee, beef, sugar, rice, dairy products, vegetables, fruits and ornamental plants.
Industry (28.9% of GDP): Types--electronic components, food processing, textiles and apparel, construction materials, fertilizer, medical equipment.
Commerce, tourism, and services (62.4% of GDP): Hotels, restaurants, tourist services, banks, and insurance.
Trade (2006 est.): Exports--$8.198 billion: integrated circuits, medical equipment, bananas, pineapples, coffee, melons, ornamental plants, sugar, textiles, electronic components, medical equipment. Major markets--U.S. 38.6%, China 6.8%, Hong Kong 6.4%, Netherlands 6.1%, Guatemala 4.0%. Imports--$11.576 billion: raw materials, consumer goods, capital equipment, petroleum. Major suppliers--U.S. 39.3%, Japan 5.1%, Venezuela 5.0%, Mexico 5.2%, China 4.8%, Ireland 4.5%, Brazil 3.4%.

PEOPLE
Unlike many of their Central American neighbors, present-day Costa Ricans are largely of European rather than mestizo descent; Spain was the primary country of origin. However, an estimated 10% to 15% of the population is Nicaraguan, of fairly recent arrival and primarily of mestizo origin. Descendants of 19th-century Jamaican immigrant workers constitute an English-speaking minority and--at 3% of the population--number about 119,000. Few of the native Indians survived European contact; the indigenous population today numbers about 29,000 or less than 1% of the population.

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

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

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

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

With more than 2,000 dead, the 44-day civil war resulting from this uprising was the bloodiest event in 20th-century Costa Rican history, but the victorious junta drafted a constitution guaranteeing free elections with universal suffrage and the abolition of the military. Figueres became a national hero, winning the first election under the new constitution in 1953. Since then, Costa Rica has held 14 presidential elections, the latest in 2006.

GOVERNMENT
Costa Rica is a democratic republic with a very strong system of constitutional checks and balances. Executive responsibilities are vested in a president, who is the country's center of power. There also are two vice presidents and a 20-plus member cabinet. The president and 57 Legislative Assembly deputies are elected for 4-year terms. In April 2003, the Costa Rican Constitutional Court annulled a 1969 constitutional reform which had barred presidents from running for reelection. As a result, the law reverted back to the 1949 Constitution, which permits ex-presidents to run for reelection after they have been out of office for two presidential terms, or eight years. Deputies may run for reelection after sitting out one term, or four years. On January 1, 2009, the U.S.-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) entered into force in Costa Rica.

The electoral process is supervised by an independent Supreme Electoral Tribunal--a commission of three principal magistrates and six alternates selected by the Supreme Court of Justice. Judicial power is exercised by the Supreme Court of Justice, composed of 22 magistrates selected for renewable 8-year terms by the Legislative Assembly, and subsidiary courts. A Constitutional Chamber of the Supreme Court (Sala IV), established in 1989, reviews the constitutionality of legislation and executive decrees and all habeas corpus warrants. The next national elections will take place in February 2010.

The offices of the Comptroller General of the Republic, the Solicitor General, and the Ombudsman exercise oversight of the government. The Comptroller General's office has a statutory responsibility to scrutinize all but the smallest public sector contracts and strictly enforces procedural requirements. Along with the Sala IV, these institutions are playing an increasingly prominent role in governing Costa Rica.

There are provincial boundaries for administrative purposes, but no elected provincial officials. Costa Rica held its first mayoral elections in December 2002, whereby mayors were elected to 4-year terms by popular vote through general elections. Prior to 2002, the office of mayor did not exist, and the president of each municipal council was responsible for the administration of his/her municipality. The most recent nationwide mayoral elections took place in December 2006. Autonomous state agencies enjoy considerable operational independence; they include the telecommunications and electrical power monopoly and the state insurance monopoly (sectors opened to competition by CAFTA-DR), the state petroleum refinery, the nationalized commercial banks, and the social security agency. Costa Rica has no military and maintains only domestic police and security forces. A professional Coast Guard was established in 2000.

Principal Government Officials
President--Oscar ARIAS Sanchez
Foreign Minister--Bruno STAGNO Ugarte
Ambassador to the United States--Luis Diego ESCALANTE Vargas
Ambassador to the Organization of American States--Jose Enrique CASTILLO Barrantes
Ambassador to the United Nations-- Jorge URBINA Ortega

Costa Rica maintains an embassy in the United States at 2114 S Street NW, Washington, DC 20008 (tel. 202-234-2945 and 202-234-2946).

POLITICAL CONDITIONS
Costa Rica has long emphasized the development of democracy and respect for human rights. The country's political system has steadily developed, maintaining democratic institutions and an orderly, constitutional scheme for government succession. Several factors have contributed to this trend, including enlightened leadership, comparative prosperity, flexible class lines, educational opportunities that have created a stable middle class, and high social indicators. Also, because Costa Rica has no armed forces, it has avoided military involvement in political affairs, unlike other countries in the region.

In May 2006, President Oscar Arias of the National Liberation Party (PLN) assumed office, defeating principal rival Ottón Solis of the Civil Action Party by roughly 2% of the vote. Arias listed passage of the CAFTA-DR, along with fiscal reform, infrastructure improvements, improving education, and improving security as primary goals for his presidency. The 57-member unicameral Legislative Assembly has four principal party factions, with the governing party, PLN, having a 25-seat plurality.

ECONOMY
After experiencing 8.8% growth in 2006, the Costa Rican economy settled down to an estimated 7.3% in 2007. Compared with its Central American neighbors, Costa Rica has achieved a high standard of living, with a per capita income of about U.S. $5,800, and an unemployment rate of 4.6%. Consumer price inflation is high but relatively constant at about a 10% annual rate in the last decade. Both the central government and the overall public sector ran fiscal surpluses in 2007.

Implementing CAFTA-DR, passing fiscal reform, pursuing responsible monetary policy, and creating an effective concessions process are the biggest challenges for the country's economic policymakers. Costa Rica ranks 115th out of 175 countries in the World Bank's Doing Business Index. This hampers the flow of investment and resources badly needed to repair and rebuild the country's deteriorated public infrastructure.

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

Costa Rica used to be known principally as a producer of bananas and coffee, but pineapples have surpassed coffee as the number two agricultural export. In recent years, Costa Rica has successfully attracted important investments by such companies as Intel Corporation, which employs nearly 2,000 people at its $300 million microprocessor plant; Proctor and Gamble, which employs about 1,200 people in its administrative center for the Western Hemisphere; and Hospira and Baxter Healthcare from the health care products industry. Manufacturing and industry's contribution to GDP overtook agriculture over the course of the 1990s, led by foreign investment in Costa Rica's free trade zone. Well over half of that investment has come from the United States. Dole and Chiquita have a large presence in the banana and pineapple industries. Two-way trade between the U.S. and Costa Rica exceeded $8 billion in 2007.

Costa Rica has oil deposits off its Atlantic Coast, but the Pacheco administration (2002-2006) decided not to develop the deposits for environmental reasons. The country's mountainous terrain and abundant rainfall have permitted the construction of a dozen hydroelectric power plants, making it largely self-sufficient in electricity, but it is completely reliant on imports for liquid fuels. Costa Rica has the potential to become a major electricity exporter if plans for new generating plants and a regional distribution grid are realized. Its mild climate and trade winds make neither heating nor cooling necessary, particularly in the highland cities and towns where some 90% of the population lives.

Costa Rica's public infrastructure has suffered from a lack of maintenance and new investment. Most parts of the country are accessible through an extensive road system of more than 30,000 kilometers, although much of the system has fallen into disrepair. Contamination in rivers, beaches, and aquifers is a matter of rising concern. Just 3.5% of the country's sewage is managed in sewage treatment facilities and the Water and Sewage Institute (AyA) estimates that perhaps 50% of septic systems function. In 2007, Costa Rica experienced nationwide blackouts resulting from a severe dry season (which limited hydroelectric resources) and the state electricity monopoly's inadequate investment in maintenance and capacity increases.

Costa Rica has sought to widen its economic and trade ties within and outside the region. Costa Rica signed a bilateral trade agreement with Mexico in 1994, which was later amended to cover a wider range of products. Costa Rica joined other Central American countries, and the Dominican Republic, in establishing a Trade and Investment Council with the United States in March 1998. Costa Rica has signed trade agreements with Canada, Chile, the Dominican Republic, Mexico, Panama, and several Caribbean Community countries. It began negotiating a regional Central American-EU trade agreement in October 2007. Costa Rica was an active participant in the negotiation of the hemispheric Free Trade Area of the Americas and is active in the Cairns Group, which is pursuing global agricultural trade liberalization within the World Trade Organization.

FOREIGN RELATIONS
Costa Rica is an active member of the international community and, in 1993, proclaimed its permanent neutrality. Its record on the environment and human rights and advocacy of peaceful settlement of disputes give it a weight in world affairs far beyond its size. The country lobbied aggressively for the establishment of the UN High Commissioner for Human Rights and became the first nation to recognize the jurisdiction of the Inter-American Human Rights Court, based in San Jose. In 2007 Costa Rica was elected for the third time to serve as a non-permanent member of the United Nations Security Council (January 2008-December 2009).

During the tumultuous 1980s, then-President Oscar Arias authored a regional peace plan that served as the basis for the Esquipulas Peace Agreement. Arias' efforts earned him the 1987 Nobel Peace Prize. Subsequent agreements, supported by the United States, led to the Nicaraguan election of 1990 and the end of civil war in Nicaragua. Costa Rica also hosted several rounds of negotiations between the Salvadoran Government and the Farabundo Marti National Liberation Front (FMLN), aiding El Salvador's efforts to emerge from civil war and culminating in that country's 1994 free and fair elections. Costa Rica has been a strong proponent of regional arms limitation agreements. President Arias has publicly supported self-determination in Cuba and expressed concern about eroding democratic institutions in Venezuela. In 2007 Costa Rica established diplomatic ties with China, ending nearly 60 years of diplomatic relations with Taiwan.

U.S.-COSTA RICAN RELATIONS
The United States and Costa Rica have a history of close and friendly relations based on respect for democratic government, human freedoms, free trade, and other shared values. The country generally supports the U.S. in international fora, especially in the areas of democracy and human rights.

The United States is Costa Rica's most important trading partner. The U.S. accounts for almost half of Costa Rica's exports, imports, and tourism, and more than two-thirds of its foreign investment. The two countries share growing concerns for the environment and want to preserve Costa Rica's important tropical resources and prevent environmental degradation. In 2007, the United States reduced Costa Rica's debt in exchange for protection and conservation of Costa Rican forests through a debt for nature swap under the auspices of the Tropical Forest Conservation Act. This is the largest such agreement of its kind to date.

The United States responded to Costa Rica's economic needs in the 1980s with significant economic and development assistance programs. Through provision of more than $1.1 billion in assistance, the U.S. Agency for International Development (USAID) supported Costa Rican efforts to stabilize its economy and broaden and accelerate economic growth through policy reforms and trade liberalization. Assistance initiatives in the 1990s concentrated on democratic policies, modernizing the administration of justice, and sustainable development. Once the country had graduated from most forms of U.S. assistance, the USAID Mission in Costa Rica closed in 1996. However, USAID completed a $9 million project in 2000-01 to support refugees of Hurricane Mitch residing in Costa Rica.

For decades, Peace Corps volunteers have provided technical assistance in the areas of environmental education, natural resources, management, small business development, microfinance, basic business education, urban youth, and community education.

Between 30,000-50,000 private American citizens, including many retirees, reside in the country and more than 700,000 American citizens visit Costa Rica annually. A few vexing expropriation and U.S. citizen investment disputes have hurt Costa Rica's investment climate and have occasionally produced bilateral friction.

The U.S.-Costa Rica Maritime Cooperation Agreement, the first of its kind in Central America, entered into force in late 1999. The agreement, which facilitates cooperation between the Coast Guard of Costa Rica and the U.S. Coast Guard, has resulted in a growing number of narcotics seizures, illegal migrant rescues, illegal fishing seizures, and search-and-rescue missions. Bilateral Costa Rican law enforcement cooperation, particularly against narcotrafficking, has been exemplary.

Principal U.S. Embassy Officials
Charge d'Affaires--Peter M. Brennan
Political/Economic Counselor--David E. Henifin (replacement is Julie Schechter-Torres, arrival August 2009)
Economic Officer--Mark Kissel
Consul General--Paul Birdsall
Management Counselor--Brian Wilson
Public Affairs Counselor--Magda Siekert (replacement is Mark S. Tauber, arrival September 2009)
Defense Representative--Major Mauricio Nieto, USMC (acting)
Commercial Attache--Bryan Smith
Agricultural Attache--Kevin Smith
APHIS--Eric Hoffman
Environmental Hub--Timothy Lattimer
Regional Security Officer--S. Wade DeWitt
Drug Enforcement Administration--Paul Knierim (replacement is Phil Springer, arrival July 2009)
Food and Drug Administration--Paul Seligman
Peace Corps Director--Terry Grumley (replacement is Steven Dorsey, arrival July 2009)
OFDA Director--Tim Callaghan

The U.S. Embassy in Costa Rica is located in Pavas at Boulevard Pavas and Calle 120, San Jose, tel. (506) 519-2000 or (506) 220-3127.

Other Contact Information
U.S. Department of Commerce
Trade Information Center
International Trade Administration
14th and Constitution Avenue, NW
Washington, DC 20320
Tel: 800-USA-TRADE
www.trade.gov

Costa Rican American Chamber of Commerce
c/o Aerocasillas
P.O. Box 025216, Dept 1576
Miami, Florida 33102-5216
Tel: 506-22-0-22-00
Fax: 506-22-0-23-00
Email: Amchamcr@sol.racsa.co.cr

[This is a mobile copy of Costa Rica (07/09)]