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U.S. Department of State

Background Notes: Costa Rica, July 1998

Released by the Bureau of Inter-American Affairs.

OFFICIAL NAME: Republic of Costa Rica

PROFILE

Geography

Area: 51,032 sq. km. (19,652 sq. mi.); about twice the size of the state of Vermont.
Cities: Capital--San Jose (metropolitan area pop. 1.2 million). Other major cities--Alajuela (250,000), Puntarenas (300,000), Limon (150,000), Cartago (150,000).
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 (July 1995)

Nationality: Noun and adjective--Costa Rican(s).
Population: 3.3 million.
Annual growth rate: 2.4%.
Ethnic groups: European and some mestizo 94%, African origin 3%, indigenous 1%.
Religion: Roman Catholic approx. 85%, Evangelical Protestant approx. 15%, others less than 1%.
Languages: Spanish, with Jamaican dialect of English spoken around Puerto Limon.
Education: Years compulsory--9. Attendance--nearly 100%. Literacy--94%.
Health: Infant mortality rate--13/1,000. Life expectancy--men 72 yrs., women 76 yrs.
Work force (1995, 1.2 million): Services--45%. Agriculture--22%. Industry--17%. Construction--6%. Transportation--5%. Banking and finance--4%.

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 four-year term, two vice presidents, Cabinet (19 ministers). Legislature--57-deputy unicameral Legislative Assembly elected at four-year intervals. Judicial--Supreme Court of Justice (22 magistrates elected by Legislative Assembly for renewable eight-year terms).
Subdivisions: Seven provinces, divided into 81 cantons, subdivided into 421 districts.
Political Parties: Social Christian Unity Party (PUSC), National Liberation Party (PLN), Democratic Force (FD), Agricultural Labor Action Party (PALA), Costa Rican Renovation Party (PRC), Libertarian Movement (ML), National Integration Party (PIN).
Suffrage: Obligatory at 18.

Economy

GDP (1997): $9.5 billion.
Real growth rate (1997): 3.2%.
Per capita income (1997): $2,900.
Natural resources: Hydroelectric power.
Industry (22% of GDP): Products--food processing, textiles and clothing, construction materials, fertilizer, petroleum refining.
Agriculture (19% of GDP): Products--bananas, coffee, beef, sugar cane, rice, dairy products, vegetables, ornamental plants, and fruits.
Commerce and tourism (40% of GDP): Hotels, restaurants, tourist services, banks, and insurance.
Foreign trade (1996): Exports--$2.7 billion: bananas, coffee, beef, textiles and apparel, fruits, sugar, flowers and ornamental plants. Major markets--U.S. 42%, Europe 32%, Central America 16%, Japan 1%. Imports--$3.4 billion: machinery, vehicles, consumer goods, chemicals, petroleum products, foods, fertilizer. Major suppliers--U.S. 48%, Europe 28%, Japan 15%, Central America 5%.
Currency exchange rate (March 1998): 247 colones=U.S.$1.

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, and other shared values. During the crisis in Central America in the 1980s, Costa Rica and the United States worked for the restoration of peace and the establishment of democracy on the isthmus. Costa Rica works cooperatively with the United States and other nations in the international fight against narcotics trafficking.

In May 1997, President Clinton met with Costa Rican President Jose Maria Figueres and other heads of state from Central America and the Dominican Republic in San Jose. The leaders signed the Declaration of San Jose, pledging to strengthen democratic institutions and international cooperation. As a follow-up to the summit, regional Public Security and Justice ministers met with Secretary of State Madeleine Albright, Attorney General Janet Reno, and National Drug Control Policy Director Barry McCaffrey in Washington in August to discuss cooperation against drug trafficking and other transnational crimes. In November 1997, Labor Secretary Alexis Herman met with Labor ministers from Central America and the Dominican Republic to discuss ways to strengthen labor ministries and promote greater respect for workers' rights.

The United States is Costa Rica's most important trading partner, and over 200 American companies produce a variety of goods in Costa Rica. The two countries share growing concerns for the environment and want to use wisely 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, 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.

As many as 35,000 American private citizens, mostly retirees, reside in the country, and an estimated 150,000 to 200,000 American citizens visit Costa Rica annually.

There have been some vexing issues in the U.S.-Costa Rican relationship, principal among them long-standing expropriation and other U.S. citizen investment disputes, which have hurt Costa Rica's investment climate and produced bilateral tensions. During 1994 and 1995, significant progress has been made in resolving some expropriation cases. However, several important cases remain outstanding. Land invasions from organized squatter groups who target foreign landowners have also 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 allowed U.S. citizens to be threatened and their land taken without timely compensation, and the Rodriguez Government has promised to address the matter.

Principal U.S. Embassy Officials

AMB--Thomas J. Dodd
DCM--Richard L. Baltimore III
POL/ECON--Mark G. Davison
COM--Frank Foster
CON--Kathleen M. Daly
ADM--Arnold N. Munoz
RSO--Nace B. Crawford
PAO--Gary McElhiney
IMO--Janette M. Corsbie
ODR--Col. Mark Wilkins
AGR--Charles Bertsch
APHIS Region V--Chris Hofman
APHIS Region VI--Mark Knez
Environmental Hub--Lawrence Gumbiner

The U.S. Embassy in Costa Rica is located in Pavas at Boulevard Pavas and Calle 120, San Jose, tel. (506) 220-3939.

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
Home Page: http://www.ita.doc.gov

Costa Rica 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

PEOPLE AND HISTORY

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. Few of the native Indians survived European contact; the indigenous population today numbers about 29,000 or 1% of the population. Descendants of 19^th century Jamaican immigrant workers constitute an English-speaking minority and--at 3% of the population--number about 96,000.

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 wealth.

In 1821, Costa Rica joined other Central American provinces 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 20^th century Costa Rican history, but the victorious junta drafted a constitution guaranteeing free elections with universal suffrage and the abolition of the army. Figueres became a national hero, winning the first election under the new constitution in 1953. Since then, Costa Rica has held 11 presidential elections, the latest in 1998.

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 19-member Cabinet (that includes one of the vice presidents). The president and 57 Legislative Assembly deputies are elected for four-year terms. A constitutional amendment approved in 1969 limits presidents and deputies to one term, although a deputy may run again for an Assembly seat after sitting out a term.

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 eight-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 country's seven provinces are headed by governors appointed by the president, but they exercise little power. There are no provincial legislatures. Autonomous state agencies enjoy considerable operational independence; they include 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.

Principal Government Officials

President--Miguel Angel RODRIGUEZ Echeverria
Foreign Minister--Roberto ROJAS Lopez
Ambassador to the U.S.--Jaime DAREMGLUM
Ambassador to the OAS--Hernan CASTRO
Ambassador to the UN--Berndt NIEHAUS

Costa Rica maintains an embassy in the United States at 2114 S. Street NW, Washington, DC 20008 (tel. 202-328-6628).

POLITICAL CONDITIONS

Costa Rica long has 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 and Caribbean 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, and 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 some neighboring countries have experienced.

In the February 1998 national election, Social Christian Unity Party (PUSC) candidate Miguel Angel Rodriguez won the presidency over National Liberation Party (PLN) nominee Jose Miguel Corrales. President Rodriguez assumed office May 8, 1998. The PUSC also obtained 27 seats in the 57-member Legislative Assembly, for a plurality, while the PLN gained 23, and five minor parties seven.

Social Christian in philosophy, the PUSC generally favors free-market principles, conservative fiscal policies, and government reform. President-elect Rodriguez has pledged to reduce the country's large internal debt, attract additional foreign investment, impose greater control over public-sector spending, and promote the creation of jobs with decent salaries.

ECONOMY

Costa Rica's economy emerged from recession in 1997 and is poised for relatively healthy growth in 1998. Preliminary national account statistics from Costa Rica's Central Bank indicate a 1997 gross domestic product (GDP) of 2.2 trillion colones (USD 9.5 billion at the average exchange rate for the year), up 3.2% in real terms (measured in constant 1966 colones) from the year before, when GDP declines. Inflation, as measured by the Consumer Price Index, was 11.2%, less than the 12.5% that was forecast. The central government deficit decreased to 3.7% of GDP in 1997, down from 5.1% from the year before, but still above the 3.0% target. Controlling the budget deficit remains the single biggest challenge for the country's economic policy makers, as servicing the accumulated public sector debt consumes approximately 30% of the government's budget and limits the amount of resources available for needed investments in 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 accessibility to North and South American markets and direct ocean access to the European and Asian continents. With one-fourth of its land dedicated to national forests, often adjoining picturesque beaches, the country has also become a popular destination for affluent retirees and eco-tourists.

The country has not discovered sources of fossil fuels (apart from minuscule coal deposits), but its mountainous terrain and abundant rainfall have permitted the construction of a dozen hydroelectric power plants, making it self-sufficient in all energy needs, except oil for transportation. Mild climate and trade winds make neither heating nor cooling necessary, particularly in the highland cities and towns where approximately 90% of the population lives.

Costa Rica 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. The main highland cities in the center of the country are connected by paved all-weather roads with the Atlantic and Pacific coasts and by the Pan American Highway with Nicaragua and Panama, the neighboring countries to the North and the South. Costa Rica needs to complete the Pacific coastal highway (and repair large sections of existing highway), build a new road along the Atlantic coast, and possibly construct a coast-to-coast highway across the northern plains of the country. These are probably the most pressing infrastructural needs of the country. A decision is also needed to sell or repair the now-defunct railroad from San Jose to Limon.

Tourism, which has overtaken bananas as Costa Rica's leading foreign exchange earner, is once again growing after stagnating in the mid-1990s. Earnings for 1997 from an estimated 812,000 visitors are reported at $750 million, up from $684 million the year before. The number of visitors in 1996 was 781,000. The numbers also show that tourists spend nearly $1,000 per person per visit. Based upon early projections from visitors arriving over the holiday season, the Ministry of Tourism is projecting a 4%-5% increase in arrivals for 1998.

Costa Rica is also aggressively pursuing investment in the high technology sector. Largely due to the personal efforts of former President Figueres to attract new investment in the sector, Intel corporation began construction of a plant in 1997 to produce Pentium II microchips with an investment that will reach $200 million by the end of 1998. Intel's total planned investment is $400-$500 million over the next 2-3 years. A number of other high technology companies were already present in Costa Rica, and more are expected to follow.

Reflecting the evolution away from agriculture, 1997 growth was strong in the construction sector (16.4%), in industry (4.5%), and in commerce, restaurants and hotels (4.0%). Agriculture declined by 0.7%. Preliminary statistics for 1997 indicate a widening of the trade deficit and an increase of the current account deficit from roughly 1.1% of GDP in 1996 to 4.5% of GDP in 1997. During 1996, roughly 40% of total trade was with the U.S. As usual, bananas led the list of merchandise exports, but tourism earned more foreign exchange. However, despite the current account deficit, strong private capital inflows brought international reserves to over $1 billion, a level approximating three months of imports.

Costa Rica has sought to widen its economic and diplomatic ties, both within and outside of the region. Costa Rica signed a bilateral trade agreement with Mexico in 1994, and President Rodriguez has begun discussions with Mexico's president on accelerating further the liberalization of trade between the two countries. On March 20, 1998, Costa Rica joined other Central American countries, plus the Dominican Republic, in establishing a Trade and Investment Council with the United States. Costa Rica is also actively lobbying for greater access to the U.S. market, be it by joining the North American Free Trade Agreement, through enhancement of the United States Caribbean Basin Initiative, or through negotiation of the hemispheric Free Trade Area of the Americas, a process that the Costa Rican Government chaired in preparation for the April 1998 Summit of the Americas in Santiago, Chile.

FOREIGN RELATIONS

Costa Rica is an active member of the international community and, in 1993, proclaimed its permanent neutrality. Its record on human rights and advocacy of peaceful settlement of disputes give it a weight in world affairs far beyond its size. The country lobbied strenuously for the establishment of the United Nations 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 1987, 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.

With the establishment of democratically elected governments in all Central American nations by the 1990s, Costa Rica turned its focus from regional conflicts to the pursuit of democratic and economic development on the isthmus. It was instrumental in drawing Panama into the Central American development process and participated in the multinational Partnership for Democracy and Development in Central America.

Regional political integration has not proven attractive to Costa Rica. Under former President Calderon, the country debated its role in the Central American integration process. Costa Rica has been a cautious partner--looking for concrete economic ties with its Central American neighbors rather than political institutions--and has not become a member of the Central American Parliament. President Figueres promoted a higher profile for Costa Rica in regional and international fora. In 1995, Costa Rica gained election as President of the Group of 77 in the United Nations. That term ended in 1997 with the South-South Conference held in San Jose. Since 1997, Costa Rica has occupied a non-permanent seat in the Security Council and has exercised a leadership role in confronting crises in the Middle East and Africa, as well as in the former Republic of Yugoslavia.

Costa Rica broke relations with Cuba in 1961 to protest Cuban support of leftist subversion in Central America and has not renewed formal diplomatic ties with the Castro regime. In 1995, Costa Rica established a migration office in Havana.

Costa Rica strongly backed efforts by the United States to implement United Nations Security Council Resolution 940, designed to facilitate the departure of Haiti's de facto authorities from power. The country agreed to contribute civilian medical personnel to the Multinational Force, which restored the democratically elected Government of Haiti in October 1994.

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides Travel Warnings and Consular Information Sheets. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Consular Information Sheets exist for all countries and include information on immigration practices, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the country.

Public Announcements are issued as a means to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas which pose significant risks to the security of American travelers. Free copies of this information are available by calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-on-demand system: 202-647-3000. Travel Warnings and Consular Information Sheets also are available on the Consular Affairs Internet home page: http://travel.state.gov and the Consular Affairs Bulletin Board (CABB). To access CABB, dial the modem number: (301-946-4400 (it will accommodate up to 33,600 bps), set terminal communications program to N-8-1 (no parity, 8 bits, 1 stop bit); and terminal emulation to VT100. The login is travel and the password is info (Note: Lower case is required). The CABB also carries international security information from the Overseas Security Advisory Council and Department's Bureau of Diplomatic Security. Consular Affairs Trips for Travelers publication series, which contain information on obtaining passports and planning a safe trip abroad, can be purchased from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954; telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225. For after-hours emergencies, Sundays and holidays, call 202-647-4000.

Passport Services information can be obtained by calling the 24-hour, 7-day a week automated system ($.35 per minute) or live operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648).

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at (404) 332-4559 gives 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.

Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S. (for this country, see "Principal Government Officials" listing in this publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register at the U.S. embassy upon arrival in a country (see "Principal U.S. Embassy Officials" listing in this publication). Registering with the embassy may help you to replace lost identity documents or help family members contact you in case of an emergency.

Further Electronic Information:

Department of State Foreign Affairs Network. Available on the Internet, DOSFAN provides timely, global access to official U.S. foreign policy information. Updated daily, DOSFAN includes Background Notes; Dispatch, the official magazine of U.S. foreign policy; daily press briefings; Country Commercial Guides; directories of key officers of foreign service posts; etc. DOSFAN's World Wide Web site is at http://www.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual basis by the U.S. Department of State, USFAC archives information on the Department of State Foreign Affairs Network, and includes an array of official foreign policy information from 1990 to the present. Contact the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department of Commerce, the NTDB contains a wealth of trade-related information, including Country Commercial Guides. It is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more information.

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