Costa Rica

Republic of Costa RicaRepublica de Costa Rica

San José

Daniel M. Podgorski

Costa Rica

Republic of Costa RicaRepublica de Costa Rica

San José

Daniel M. Podgorski

General InformationGeneral Information

• Terrain– Costal plains separated by

mountains– Mountain range includes

several major volcanoes

• Climate– Mild in central highland– Tropical and subtropical in

coastal plains

• Area– 51,500 sq. km– Includes Isla del Coco

• Terrain– Costal plains separated by

mountains– Mountain range includes

several major volcanoes

• Climate– Mild in central highland– Tropical and subtropical in

coastal plains

• Area– 51,500 sq. km– Includes Isla del Coco

• Population (est. 2007)– 4,133,884 inhabitants

– Density: 80.3 per sq. km

– Growth rate: 1.413%

– Net migration rate: .48 migrants/1000 population

• Government– Democratic republic

– President: Oscar Arias Sanchez

• Population (est. 2007)– 4,133,884 inhabitants

– Density: 80.3 per sq. km

– Growth rate: 1.413%

– Net migration rate: .48 migrants/1000 population

• Government– Democratic republic

– President: Oscar Arias Sanchez

PeoplePeople

• Life expectancy– 77.21 years– Male: 74.61 years– Female: 79.94 years

• Ethnic groups– European (including Mestizo)

94% (10-15% Nicaraguan of Mestizo origin)

– Black 3%– Indigenous 1% or less– Chinese 1%– Other 1%

• Life expectancy– 77.21 years– Male: 74.61 years– Female: 79.94 years

• Ethnic groups– European (including Mestizo)

94% (10-15% Nicaraguan of Mestizo origin)

– Black 3%– Indigenous 1% or less– Chinese 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%

• Religion– Roman Catholic 76.3%

– Evangelical 13.7%

– Jehovah’s Witnesses 1.3%

– Other Protestant 0.7%

– Other 4.8%

– None 3.2%

Economic InformationEconomic Information

• GDP (est. 2006)– PPP: 48.77 billion

– Official exchange rate: $20.77 billion

– Per capita (PPP): 12,000

– Per capita (official exchange rate): $5,100

– Growth rate: 4.7%

– Composition• 8.6% agriculture

• 31% industry

• 60.4% services

• GDP (est. 2006)– PPP: 48.77 billion

– Official exchange rate: $20.77 billion

– Per capita (PPP): 12,000

– Per capita (official exchange rate): $5,100

– Growth rate: 4.7%

– Composition• 8.6% agriculture

• 31% industry

• 60.4% services

• Inflation rate: 9.43%

• Unemployment rate: 6.6%

• Government budget– Revenue: 3.134 billion

– Expenditure: 3.475 billion

– Balance: -.341 billion

• Outstanding public debt: 53.4% of GDP

• CA balance: -1.176 billion

• Inflation rate: 9.43%

• Unemployment rate: 6.6%

• Government budget– Revenue: 3.134 billion

– Expenditure: 3.475 billion

– Balance: -.341 billion

• Outstanding public debt: 53.4% of GDP

• CA balance: -1.176 billion

TradeTrade

• Exports– Commodities: bananas, pineapples, coffee, melons, ornamental plants,

sugar, textiles, electronic components, medical equipment, possibly electricity in the future

– Partners: 42.6% USA, 16.3% EU, 6.9% Hong Kong, 6.4%, 4.2% Guatemala

• Imports– Commodities: raw materials, consumer goods, capital equipment,

petroleum

– Partners: 41.3% US, 13.1% EU, 5.6% Japan, 4.8% Venezuela, 4.8% Mexico, 4.2% Brazil, 4.2% China

• Exports– Commodities: bananas, pineapples, coffee, melons, ornamental plants,

sugar, textiles, electronic components, medical equipment, possibly electricity in the future

– Partners: 42.6% USA, 16.3% EU, 6.9% Hong Kong, 6.4%, 4.2% Guatemala

• Imports– Commodities: raw materials, consumer goods, capital equipment,

petroleum

– Partners: 41.3% US, 13.1% EU, 5.6% Japan, 4.8% Venezuela, 4.8% Mexico, 4.2% Brazil, 4.2% China

Free Trade InformationFree Trade Information

• Has sought to widen its economic and trade ties within and outside the Latin American region

• Signed free trade agreements with Canada, Chile, the Dominican Republic, Mexico, Trinidad, Tobago (negotiating with Panama)

• Looking to begin negotiating a regional Central American-EU free trade agreement in 2007

• Active participant in discussion of setting up the Free Trade Area of the Americas (along with 34 other countries)

• Free trade agreement with the Caribbean Community (CARICOM) was approved in 2005

• Dominican Republic - Central American Free Trade Agreement (DR-CAFTA)

• Has sought to widen its economic and trade ties within and outside the Latin American region

• Signed free trade agreements with Canada, Chile, the Dominican Republic, Mexico, Trinidad, Tobago (negotiating with Panama)

• Looking to begin negotiating a regional Central American-EU free trade agreement in 2007

• Active participant in discussion of setting up the Free Trade Area of the Americas (along with 34 other countries)

• Free trade agreement with the Caribbean Community (CARICOM) was approved in 2005

• Dominican Republic - Central American Free Trade Agreement (DR-CAFTA)

Fiscal PolicyFiscal Policy

• Large internal and external deficits and large internal debt

• Budget balances (% GDP):– -3.1% 2003

– -2.5% 2004

– -1.6% 2005

– -2.6% est. 2006

– -2.6% projected 2007

• Comprehensive tax reform goals resulting in:– Sustained increases in social and capital expenditure

– Improved reduction in debt

• Large internal and external deficits and large internal debt

• Budget balances (% GDP):– -3.1% 2003

– -2.5% 2004

– -1.6% 2005

– -2.6% est. 2006

– -2.6% projected 2007

• Comprehensive tax reform goals resulting in:– Sustained increases in social and capital expenditure

– Improved reduction in debt

Monetary and ER PolicyMonetary and ER Policy

• Currency: Costa Rican colon (CRC)

• Exchange rates (colones per US dollar)– 511.3 (2006), 477.79 (2005), 437.91 (2004), 398.66 (2003), 359.82

(2002)

– Central bank recently modified the exchange band

• Inflation– Fell below 10% in 2006

– Exchange rate modification should help reduce inflation permanently

– Reduction is challenging• Rising import prices

• Fiscal deficits

• Currency: Costa Rican colon (CRC)

• Exchange rates (colones per US dollar)– 511.3 (2006), 477.79 (2005), 437.91 (2004), 398.66 (2003), 359.82

(2002)

– Central bank recently modified the exchange band

• Inflation– Fell below 10% in 2006

– Exchange rate modification should help reduce inflation permanently

– Reduction is challenging• Rising import prices

• Fiscal deficits

Social PoliciesSocial Policies

• Unemployment– 14.2% for those 12-24 and 4.3% for those 25-40

– Reforms aimed to create jobs

• Education– Constitution provides for free and compulsory education

– Literacy rates exceed 90%

– Goal of dedicating 8% of GDP

• Social security– Costa Rica Social Security Fund

– Voluntary retirement accounts (1996)

– Private individual saving mandatory as of 2000

• Unemployment– 14.2% for those 12-24 and 4.3% for those 25-40

– Reforms aimed to create jobs

• Education– Constitution provides for free and compulsory education

– Literacy rates exceed 90%

– Goal of dedicating 8% of GDP

• Social security– Costa Rica Social Security Fund

– Voluntary retirement accounts (1996)

– Private individual saving mandatory as of 2000

External RelationsExternal Relations

• Long emphasized democracy and respect of human rights

• Permanent neutrality (1993)• Concern over Venezuela’s

democratic institutions• Nicaragua

– Helped end civil war during Arias first term in office

– Problems Nicaraguan immigration

– Heavy demands on social welfare system

– Rio San Juan

• Long emphasized democracy and respect of human rights

• Permanent neutrality (1993)• Concern over Venezuela’s

democratic institutions• Nicaragua

– Helped end civil war during Arias first term in office

– Problems Nicaraguan immigration

– Heavy demands on social welfare system

– Rio San Juan

• US relations– Historically close and friendly

– Supports international views

– Most important trading partner

– Private American citizens• Issues with expropriation

• Investment disputes

• US relations– Historically close and friendly

– Supports international views

– Most important trading partner

– Private American citizens• Issues with expropriation

• Investment disputes

ReferencesReferences

• Bladex. (2006). Costa Rica. Retrieved May 20, 2007, from http://www.blx.com/paginasInfoLatam.aspx?PAG_ID=26&CAT_ID=5

• O Country Reports. (2004). Costa Rica. Retrieved May 17, 2007, from http://gpn.org/data/costarica.html• Energy Information Administration. (2006). Central America Regional Factsheet. Retrieved May 16, 2007,

from http://www.eia.doe.gov/emeu/cabs/Central_America/Background.html• External Relations. (2006). The EU’s Relations with Costa Rica. Retrieved May 21, 2007, from http://ec.

europa.eu/external_relations/costarica/intro/index.htm • Federal Reserve Bank of Atlanta. (2005). The Effect of the Privatization of Pension Plans on Financial

and Regulatory Systems in Latin America. Retrieved May 16, 2007, from http://www.frbatlanta.org/filelegacydocs/pensions_whitepaper05.pdf

• International Information Programs. (2006). Costa Rica’s Economy Strong, Says International Monetary Fund. Retrieved May 21, 2007 from http://usinfo.state.gov/xarchives/display.html?p=washfile-english&y=2006&m=August&x=200608041048221xeneerg4.751223e-02

• International Monetary Fund. (2007). IMF Staff Statement at the Conclusion of a Visit to Costa Rica. Retrieved May 20, 2007 from http://www.imf.org/external/np/sec/pr/2007/pr0727.htm

• South Florida Business Journal. (2003). U.S. works on CAFTA, without Costa Rica. Retrieved May 18, 2007, from http://southflorida.bizjournals.com/southflorida/stories/2003/12/15/daily44.html

• The World Bank. (2006). Costa Rica Country Brief. Retrieved May 16, 2007, from http://go.worldbank.org/KO0ABHBMH0

• The World Factbook. (2007). Costa Rica. Retrieved May 16, 2007, from http://www.cia.gov/library/publications/the-world-factbook/geos/cs.html

• U.S. Department of State. (2007). Background Note: Costa Rica. Retrieved May 16, 2007, from http://www.state.gov/r/pa/ei/bgn/2019.htm

• Bladex. (2006). Costa Rica. Retrieved May 20, 2007, from http://www.blx.com/paginasInfoLatam.aspx?PAG_ID=26&CAT_ID=5

• O Country Reports. (2004). Costa Rica. Retrieved May 17, 2007, from http://gpn.org/data/costarica.html• Energy Information Administration. (2006). Central America Regional Factsheet. Retrieved May 16, 2007,

from http://www.eia.doe.gov/emeu/cabs/Central_America/Background.html• External Relations. (2006). The EU’s Relations with Costa Rica. Retrieved May 21, 2007, from http://ec.

europa.eu/external_relations/costarica/intro/index.htm • Federal Reserve Bank of Atlanta. (2005). The Effect of the Privatization of Pension Plans on Financial

and Regulatory Systems in Latin America. Retrieved May 16, 2007, from http://www.frbatlanta.org/filelegacydocs/pensions_whitepaper05.pdf

• International Information Programs. (2006). Costa Rica’s Economy Strong, Says International Monetary Fund. Retrieved May 21, 2007 from http://usinfo.state.gov/xarchives/display.html?p=washfile-english&y=2006&m=August&x=200608041048221xeneerg4.751223e-02

• International Monetary Fund. (2007). IMF Staff Statement at the Conclusion of a Visit to Costa Rica. Retrieved May 20, 2007 from http://www.imf.org/external/np/sec/pr/2007/pr0727.htm

• South Florida Business Journal. (2003). U.S. works on CAFTA, without Costa Rica. Retrieved May 18, 2007, from http://southflorida.bizjournals.com/southflorida/stories/2003/12/15/daily44.html

• The World Bank. (2006). Costa Rica Country Brief. Retrieved May 16, 2007, from http://go.worldbank.org/KO0ABHBMH0

• The World Factbook. (2007). Costa Rica. Retrieved May 16, 2007, from http://www.cia.gov/library/publications/the-world-factbook/geos/cs.html

• U.S. Department of State. (2007). Background Note: Costa Rica. Retrieved May 16, 2007, from http://www.state.gov/r/pa/ei/bgn/2019.htm