Costa Rica - Tips

Costa Rica Bureau of Western Hemisphere Affairs
July 2007

Background Note: Costa Rica

Swimming in river near San Carlos,
Costa Rica, April 11, 2006. [© AP
Images]

Flag of Costa Rica is five horizontal bands of blue (top), white, red (double
width), white, and blue, with the coat of arms in a white elliptical disk on
the hoist side of the red band; above the coat of arms a light blue ribbon
contains the words, AMERICA CENTRAL, and just below it near the top of the
coat of arms is a white ribbon with the words, REPUBLICA COSTA RICA.

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 (2007 est.): 4.13 million.
Annual growth rate (2007 est.): 1.41%.
Ethnic groups: European and some mestizo 94%, African origin 3%, Chinese 1%,
Amerindian 1%, other 1%.
Religion: Roman Catholic 76.3%, Evangelical 13.7%, Jehovah's Witnesses 1.3%,
other Protestant 0.7%, other 4.8%, none 3.2%.
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 (15 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 (2006): $20.77 billion.
GDP PPP (2006 est.): $48.77 billion.
Inflation (2006 est.): 9.43%.
Real growth rate (2006 est.): 4.7%.
Per capita income (2006): $5,100. (PPP $12,000, 2006 est.)
Unemployment (2006 est.): 6.6%.
Currency: Costa Rica Colon (CRC).
Natural resources: Hydroelectric power, forest products, fisheries products.
Agriculture (8.6% of GDP): Products--bananas, pineapples, coffee, beef,
sugar, rice, dairy products, vegetables, fruits and ornamental plants.
Industry (31% of GDP): Types--electronic components, food processing,
textiles and apparel, construction materials, fertilizer, medical equipment.
Commerce, tourism, and services (60.4% of GDP): Hotels, restaurants, tourist
services, banks, and insurance.
Trade (2006 est.): Exports--$7.931 billion: bananas, pineapples, coffee,
melons, ornamental plants, sugar, textiles, electronic components, medical
equipment. Major markets--U.S. 42.6%, Hong Kong 6.9%, Netherlands 6.4%,
Guatemala 4.2%. Imports--$10.88 billion: raw materials, consumer goods,
capital equipment, petroleum. Major suppliers--U.S. 41.3%, Japan 5.6%,
Venezuela 4.8%, Mexico 4.8%, Ireland 4.3%, Brazil 4.2%, China 4.2%.

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 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 15-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. In the third quarter of 2007, the country is scheduled to hold its
first national referendum, on the U.S.-Central American-Dominican Republic
Free Trade Agreement (CAFTA-DR).

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 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. 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. Autonomous state agencies enjoy considerable
operational independence; they include the telecommunications and electrical
power monopoly, the state petroleum refinery, the nationalized commercial
banks, the state insurance monopoly, 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--Tomás DUEÑAS
Ambassador to the Organization of American States--Javier SANCHO Bonilla
Ambassador to the United Nations-- Jorge URBINA

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 has 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 four years of slow economic growth, the Costa Rican economy grew at
nearly 5% in 2006. Compared with its Central American neighbors, Costa Rica
has achieved a high standard of living, with a per capita income of about
U.S. $5,100, and an unemployment rate of 6.6%. During 2006 the annual
inflation rate dropped into the single digits (9.43%) for only the third time
in the last 28 years; proof that the Costa Rican Government is seriously
trying to reduce its large fiscal deficit.

Implementing CAFTA-DR, passing fiscal reform, and creating an effective
concessions process are the biggest challenges for the country's economic
policymakers. Costa Rica ranks 105th out of 175 countries in the World Bank's
2006 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.

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
nearly 1,000 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 $7.9 billion in 2006.

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. 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. The country has an extensive road system of more than
30,000 kilometers, although much of it is in disrepair. Most parts of the
country are accessible by road.

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, plus 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, and Trinidad and Tobago. It is negotiating a
trade agreement with Panama and is poised to begin negotiating a regional
Central American-EU trade agreement in 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.

Costa Rica concluded negotiations with the U.S. to participate in CAFTA-DR in
January 2004. The Legislative Assembly began debate in October 2005, but
Costa Rica is the only CAFTA-DR partner not to have yet entered the agreement
into force. Ratification and implementation are pending the 2007 referendum.
Once implemented, CAFTA would bring about the partial opening of the state
telecommunications monopoly and a substantial opening of the state-run
insurance sector.

FOREIGN RELATIONS
Costa Rica is an active member of the international community and, in 1993,
proclaimed its permanent neutrality. Its record on the environment, 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.

During the tumultuous 1980s, then President Oscar Arias authored a regional
peace plan in 1987 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 spoken out in public for self-determination
in Cuba and expressed concern about eroding democratic institutions in
Venezuela.

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.

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. The USAID Mission in Costa Rica closed in 1996, once
the country had graduated from most forms of U.S. assistance, but 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. There have been some vexing issues in the U.S.-Costa Rican
relationship, principal among them longstanding expropriation and other U.S.
citizen investment disputes, which have hurt Costa Rica's investment climate
and produced some bilateral friction.

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

Principal U.S. Embassy Officials
Ambassador--Mark Langdale
Deputy Chief of Mission--David Henifin, Acting
Political Counselor--Dorian Hurtado, Acting
Economic Officer--Whitney Witteman
Consul General--David Dreher
Management Counselor--Scott McAdoo
Public Affairs Officer--Elaine Samson, Acting
Defense Representative--Chief-Commander Mark Camacho, USCG
Commercial Attaché--James McCarthy
Agricultural Attaché--Katherine Nishiura
APHIS--vacant
Environmental Hub--Bernard Link
Regional Security Officer--Kevin Mann, Acting
Drug Enforcement Administration--Paul Knierim
Peace Corps Director--Terry Grumley

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

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans
traveling and residing abroad through Consular Information Sheets, Public
Announcements, and Travel Warnings. Consular Information Sheets exist for all
countries and include information on entry and exit requirements, currency
regulations, health conditions, safety and security, crime, political
disturbances, and the addresses of the U.S. embassies and consulates abroad.
Public Announcements are issued to disseminate information quickly about
terrorist threats and other relatively short-term conditions overseas that
pose significant risks to the security of American travelers. Travel Warnings
are issued when the State Department recommends that Americans avoid travel
to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad
should regularly monitor the Department's Bureau of Consular Affairs Internet
web site at http://www.travel.state.gov, where the current Worldwide Caution,
Public Announcements, and Travel Warnings can be found. Consular Affairs
Publications, which contain information on obtaining passports and planning a
safe trip abroad, are also available at http://www.travel.state.gov. For
additional information on international travel, see http://www.usa.gov/
Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S citizens who traveling or residing
abroad to register via the State Department's travel registration website or
at the nearest U.S. embassy or consulate abroad. Registration will make your
presence and whereabouts known in case it is necessary to contact you in an
emergency and will enable you to receive up-to-date information on security
conditions.

Emergency information concerning Americans traveling abroad may be obtained
by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular
toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of
State's single, centralized public contact center for U.S. passport
information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service
representatives and operators for TDD/TTY are available Monday-Friday, 7:00
a.m. to 12:00 midnight, Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for
Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP
(877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the
most recent health advisories, immunization recommendations or requirements,
and advice on food and drinking water safety for regions and countries. A
booklet entitled "Health Information for International Travel" (HHS
publication number CDC-95-8280) is available from the U.S. Government
Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://
www.state.gov, the Department of State web site provides timely, global
access to official U.S. foreign policy information, including Background
Notes and daily press briefings along with the directory of key officers of
Foreign Service posts and more. The Overseas Security Advisory Council (OSAC)
provides security information and regional news that impact U.S. companies
working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market
information offered by the federal government and provides trade leads, free
export counseling, help with the export process, and more.
STAT-USA/Internet, a service of the U.S. Department of Commerce, provides
authoritative economic, business, and international trade information from
the Federal government. The site includes current and historical
trade-related releases, international market research, trade opportunities,
and country analysis and provides access to the National Trade Data Bank. ***********************************************************
See http://www.state.gov/r/pa/bgn/ for all Background notes
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