About the CBI
October 2005
Background Note: Costa Rica

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.
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 (July 2005 est.): 4.02 million.
Annual growth rate (2005 est.): 1.48%.
Ethnic groups: European and some mestizo 94%, African origin 3%, Chinese 1%,
indigenous 1%, other 1%.
Religion: Roman Catholic 76.3%, Protestant approx. 15.7%, others 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--9.95/1,000. Life expectancy--men 74.26 yrs.,
women 79.55 yrs.
Work force (2004 est., 1.81 million): Services--71.3%; agriculture--14.6%;
industry--14%.

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, one
of whom also is vice president). 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: Social Christian Unity Party (PUSC), National Liberation
Party (PLN), Citizen's Action Party (PAC), Libertarian Movement Party (PML),
Costa Rican Renovation Party (PRC), and other smaller parties.
Suffrage: Universal and compulsory at age 18.

Economy
GDP (2004): $18.4 billion.
GDP PPP (2004 est.): $37.97 billion.
Inflation (2005 est.): 14%.
Real growth rate (2004 est.): 3.9%.
Per capita income (2004): $4,670. (PPP $9,600--2004 est.)
Unemployment (2004 est.): 6.6%.
Currency: Costa Rica Colon (CRC).
Natural resources: Hydroelectric power, forest products, fisheries products.
Agriculture (8.5% of GDP): Products--bananas, coffee, beef, sugarcane, rice,
dairy products, vegetables, fruits and ornamental plants.
Industry (29.7% of GDP): Types--electronic components, food processing,
textiles and apparel, construction materials, cement, fertilizer.
Commerce and tourism (61.8% of GDP): Hotels, restaurants, tourist services,
banks, and insurance.
Trade (2004 est.): Exports--$6.18 billion: Integrated circuits, bananas,
pineapples, optical/medical equipment, knit and woven apparel, coffee, fish
and seafood. Major markets--U.S. 44.1%, Europe 21%, Central America 9%.
Imports--$7.84 billion: electronic components, machinery, vehicles, consumer
goods, raw materials, chemicals, petroleum products, foods, and fertilizer.
Major suppliers--U.S. 45.9%, Europe 10%, Mexico 3.7% Central America 5%,
Japan 4.8%, Venezuela 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 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 13 presidential elections, the latest in
2002.

GOVERNMENT
Costa Rica is a democratic republic with a 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 constitutional reform enacted by the legislative assembly in 1969
barring presidents from running for reelection. The law reverted back to the
1949 Constitution, which states that ex-presidents may 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.

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, 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.

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 by popular vote through general elections.
Prior to 2002, the office of mayor did not exist and the president of the
municipal council was responsible for the administration of each
municipality. The most significant change has been to transfer the governing
authority from a position filled via an indirect popular vote to one filled
by a direct popular vote. Municipal council presidents are elected through
internal elections conducted by council members each year, but mayors are
elected directly by the populace through general elections. All council
members are elected in a general election process. 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 for internal security. A professional
Coast Guard was established in 2000.

Principal Government Officials
President--Abel PACHECO
Foreign Minister--Roberto TOVAR Faja
Ambassador to the United States--Tomás DUEÑAS
Ambassador to the Organization of American States--Javier SANCHO Bonilla
Ambassador to the United Nations--Bruno STAGNO Ugarte

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. Until recently, the country's political system has contrasted
sharply with many of its Central American neighbors; it has steadily
developed and maintained democratic institutions and an orderly,
constitutional scheme for government succession. Several factors have
contributed to this tendency, including enlightened government leaders,
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 the possibility of political
intrusiveness by the military that other countries in the region have
experienced.

In May 2002, President Abel Pacheco of the Social Christian Union Party
(PUSC) assumed office after defeating National Liberation Party (PLN)
candidate Rolando Araya in the first-ever second-round runoff election. The
April 2002 runoff election was necessitated by the failure of any one
candidate to obtain the constitutionally required 40% of the popular vote in
the February first-round election. Pacheco continues to seek a fiscal reform
package and can count the successful negotiation of a U.S.-Central America
Free Trade Agreement (U.S.-CAFTA) and an improved economy among his
significant accomplishments. The 57-member unicameral Legislative Assembly
has five principal party factions, with the governing party, PUSC, having
only a 19-seat plurality. As a result, legislative action has been slow.

ECONOMY
After four years of slow economic growth, the Costa Rican economy grew at
nearly 4% in 2004. Compared with its Central American neighbors, Costa Rica
has achieved a high standard of living, with a per capita income of about
U.S. $4,700, and an unemployment rate of 6.6%. The annual inflation rate
hovers around 14% as the Costa Rican Government seeks to reduce a large
fiscal deficit.

Controlling the budget deficit remains the single-biggest challenge for the
country's economic policymakers, as interest costs on the accumulated central
government consumed the equivalent of 32.1% in 2003 of the government's total
revenues. About 18.9% of the national budget was financed by public
borrowing. This limits the resources available for investments in 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 industry. Two-way trade
exceeded U.S. $6.6 billion in 2004.

Costa Rica has oil deposits off its Atlantic Coast, but the Pacheco
administration 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 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, both 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, and is negotiating trade agreements
with Panama, and Trinidad and Tobago. Costa Rica concluded negotiations with
the U.S. to participate in the U.S.-Central America Free Trade Agreement
(U.S.-CAFTA) in January 2004. CAFTA is expected to bring about the partial
opening of the state telecommunications monopoly and a substantial opening of
the state-run insurance sector. While CAFTA has been ratified by the U.S. and
four other countries, the president of Costa Rica has yet to send it to the
Costa Rican legislature so that the debate can begin. Costa Rica is an active
participant in the negotiation of the hemispheric Free Trade Area of the
Americas as well as a member of 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, 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.

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 consistently supports the U.S. in
international fora, especially in the areas of democracy and human rights.
Costa Rica co-sponsored the Resolution on Cuba at the 60th session of the UN
Commission on Human Rights. Law enforcement cooperation, particularly efforts
to stem the flow of illegal drugs to the U.S., has been exemplary.

The United States is Costa Rica's most important trading partner. The U.S.
accounts for over 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.

For decades, Peace Corps Volunteers have provided technical assistance in the
areas of environmental education, natural resources, management, small
business development, basic business education, urban youth, and community
education. USAID completed a $9 million project in 2000-01 to support
refugees of Hurricane Mitch residing in Costa Rica.

Upwards of 20,000 private American citizens, including many retirees, reside
in the country and more than 600,000 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 bilateral tensions. Land invasions from organized squatter
groups who target foreign landowners also have occurred, and some have turned
violent. The U.S. Government has made clear to Costa Rica its concern that
Costa Rican inattention to these issues has left U.S. citizens vulnerable to
harm and loss of their property.

The United States and Costa Rica signed the bilateral Maritime Counter-Drug
Agreement, the first of its kind in Central America, which entered into force
in late 1999. The agreement permits bilateral cooperation on stopping drug
trafficking through Costa Rican waters. The agreement has resulted in a
growing number of narcotics seizures, illegal fishing cases, and
search-and-rescue missions.

Principal U.S. Embassy Officials
Ambassador--Mark Langdale
Deputy Chief of Mission--Russell Frisbie
Political Counselor--Frederick Kaplan
Economic Officer--Whitney J. Witteman
Consul General--David Dreher
Management Counselor--Scott McAdoo
Public Affairs Officer--Laurie Weitzenkorn
Defense Representative--Chief-Commander Alwyn Young
Commercial Attaché--James McCarthy
Agricultural Attaché--Katherine Nishiura
APHIS--John Stewart
Environmental Hub--Bernard Link
Regional Security Officer--Michael Wilkins
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.ita.doc.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