Trade
Stability
Fossil Fuels
Illegal Immigrants
Ecotourism
Tourism
Self Sufficient
Agriculture
Electronics
Sex Tourism
Pro US
Hydro Electricity
Foreign Investment
Energy Export
Shifting Economy
Nicaraguan Immigrants Hope for a Better Life
Living illegally in Costa Rica is not easy. And Alicia Gonzalez is illegal. She left Nicaragua for Costa Rica twelve years ago, escaping extreme poverty. “The situation in Nicaragua is much worse than here. There are days when there is no work, no food,” she said. But her current situation is pretty desperate.
Gonzalez lives in Corralillos, not far from the Nicaraguan border, with her husband and four children, ages 12, 9, 8 and 4. All live together in a small patchwork shack, originally made of wood, but now rotted areas are covered by plastic garbage bags or metal sheets (photo to left). Their home is not theirs. A kind woman lends it to them rent free. “It’s not all that nice, but it is a roof over our heads and we are thankful for her kindness,” said Gonazalez.
Neither Gonzalez or her husband have a steady job, because they are illegal. Each morning, Gonzalez gets up with the sun to cook tortillas and arroz con leche, or rice pudding, which she and her daughters sell in town. Her husband works sporadically as a machetero, cutting grass with his machete. During sugar cane season, the whole family works in the hot sun, following the plows and harvesting the sugar cane.
Gonzalez and her family are just a few of the estimated 400,000 illegal Nicaraguans living in Costa Rica, working hard to make ends meet and provide a brighter future for their children.
Agriculture represents 15 percent of Costa Rica’s gross domestic product: bananas, coffee, and sugar take up the majority of arable land. Cattle are also raised for beef in the north of the country. In addition, staple foods such as rice, beans and corn are produced for national consumption. Twenty percent of the Costa Rican population works in the agricultural sector.
Despite the fact that agriculture is still important to the economy, it no longer plays a major in Costa Rica’s finances. In 1992, agricultural exports totaled 46 percent of all money earned through exports. Today, they total about 24 percent.
Intel-ligent Exports
Electronics exports were almost non-existent before 1998. Then Intel opened a semiconductor assembly plant, and everything changed. Agriculture became of secondary importance with the microchip giant’s arrival.
Intel’s plant is just five miles from the capital of San Jose. Among the items produced are Pentium IV and Intel Xeon processors. In December 2003, the company announced plans to expand, creating 600 additional local jobs. Intel currently employs 1,750 people in Costa Rica.
In addition, Colorplast, Conair, Protek, Reliability, Remec, Sawtek, and Sensortronics have also opened manufacturing plants in Costa Rica.
Electronics exports made up 46 percent of export earnings in 2002. In 1995, total exports totaled $3.5 billion, in 2002 the amount increased to $5.3 billion, largely due to the electronics industry.
“Now our principal exports are technology and tourism,” said Abel Chinchilla, a San José lawyer, “We are no longer the ‘banana republic,’ dependent on bananas and coffee.”
Costa Rica was ranked 42nd on the human development index by the United Nations Development Program. It ranked third in the Latin American region, behind Argentina and Uruguay.
Though the country is largely middle class, about 20 percent of Costa Ricans live below poverty level (compared with 12 percent of the population in the United States).
The government guarantees each Costa Rican the right to education and health care. The education system has helped achieve a 96 percent literacy rate (as compared with 97 percent in the United States).
Education: Free For All
Teaching is one of the most respected professions in Costa Rica, where free education is a constitutional right. It is not uncommon to find computers in small country schools, as a response to President Jose Maria Figueres (1994-1998), who made computer science a mandatory subject in all of the nation’s public schools.
“One of the best things our government has done is offer our children education. Costa Rica’s future depends on today’s children,” said Lily Blanco, who teaches psychology at the University of Santa Paula in San José.
However, many schools still face challeges. “The ministry of education is going to give us new computers for our students, but first we have to build a classroom for them, and we have no funds,” lamented one teacher.
Almost 4.5 percent of the national budget is earmarked for education — most Costa Ricans say that is not enough.
Daily meals are provided at schools. “Many students in this area come to school just to eat,” said Carmen Mayela Vega Garcia, director of a 30 student school in Raizal, Upala. “If they know the cook is out sick, they won’t come to school.”
Despite the challenges, Costa Rica can boast of a 96 percent literacy rate and every child has the right to an education.
http://www.facesofcostarica.com/economics/education.htm
Costa Rica used to be known principally as a producer of bananas and coffee. (Its principal exports are still listed as coffee, bananas, cocoa, sugar, lumber and wood products and beef.) 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; Procter & Gamble, which is establishing its administrative center for the Western Hemisphere; and Abbott Laboratories 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 U.S. Tourism also is booming, with the number of visitors up from 780,000 in 1996 to more than 1 million in 1999. Tourism now earns more foreign exchange than bananas and coffee combined.
The country has not discovered sources of fossil fuels–apart from minor 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. Costa Rica exports electricity to Central America and 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.
http://www.experiencefestival.com/a/Economy_of_Costa_Rica_-_Exports_and_jobs/id/5008567
Costa Rica has initiated numerous inventive programs to promote sustainable development. One such project, organized by FUNDECOR (Foresta Project of the Foundation for the Development of the Central Volcanic Mountain Range), works to sustainably manage more than 13,000 hectares (30,000 acres) of forest by developing forest management plans for landowners. Not only do the landowners end up with more money in their pockets, but operations also do less damage to the forest as they remove valuable trees.
Eco-tourism has become one of the most important sources of revenue for Costa Rica. The country is considered an ideal introduction to the rainforests for its biodiversity, its excellent and accessible parks system, and its relative safety for tourists. In some areas, tourism has proved a little too much for the environment and some parks now have restrictions on the number of visitors allowed at any given time. Further, the construction of hotels in some locations has proved ecologically controversial. Still, Costa Rica serves as a prime example to other developing countries that economic well-being is compatible with forest preservation.
Costa Rica is looking to capitalize on its forests in ways other than eco-tourism. In 2005, Costa Rica joined a coalition of tropical developing countries that proposed a “rainforest conservation for emissions” deal at the December United Nations summit on climate change in Montreal. The plan, which was accepted by the UN, called for wealthy nations to compensate poor nations for rainforest conservation. Costa Rica already had a similar program in place which protected rainforest by selling allowances to emit greenhouses gases. In 1999, the program generated some $20 million.
http://rainforests.mongabay.com/20costarica.htm
This investment-friendly climate and government policy of making Costa Rica “the Silicon Valley of Latin America” has enticed commercial leaders such as Acer, Microsoft, GE, Abbot Laboratories, Continental Airways and Intel Corporation to make sizable investments here, both financially and physically, with major production and distribution facilities. Western Union has chosen Costa Rica to host its Latin American regional operations center. In 1998, for the first time ever, Costa Rica is poised to earn more from high technology exports than from coffee or bananas or even its lucrative, thriving tourism industry.
http://www.businesscostarica.com/
Costa Rica’s basically stable economy depends on tourism, agriculture, and electronics exports. Exports have become more diversified in the past 10 years due to the growth of the high-tech manufacturing sector, which is dominated by the microprocessor industry and the production of medical devices. Tourism continues to bring in foreign exchange, as Costa Rica’s impressive biodiversity makes it a key destination for ecotourism. Foreign investors remain attracted by the country’s political stability and relatively high education levels, as well as the fiscal incentives offered in the free-trade zones. Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America. Poverty has remained around 20% for nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Immigration from Nicaragua has increasingly become a concern for the government. The estimated 300,000-500,000 Nicaraguans in Costa Rica legally and illegally are an important source of – mostly unskilled – labor, but also place heavy demands on the social welfare system. Under the ARIAS administration, the government has made strides in reducing internal and external debt – in 2007, Costa Rica had its first budget surplus in 50 years. Reducing inflation remains a difficult problem because of rising commodity import prices and labor market rigidities, though lower oil prices will decrease upward pressures. The Central Bank is moving towards a more flexible exchange rate system to focus on inflation targeting by 2010. The US-Central American Free Trade Agreement (CAFTA) entered into force on 1 January 2009, after significant delays within the Costa Rican legislature. Nevertheless, economic growth has slowed in 2009 as the global downturn reduced export demand and invesment inflows.
Agriculture – products:
bananas, pineapples, coffee, melons, ornamental plants, sugar, corn, rice, beans, potatoes; beef, poultry, dairy; timber
Industries:
microprocessors, food processing, medical equipment, textiles and clothing, construction materials, fertilizer, plastic products
Costa Rica remains one of the safest and most attractive country for foreign investment in Latin America. The Costa Rican government, its ministries and financial institutions maintain a decidedly pro-U.S. and continental stance in regard to financial security and tax laws. The stated aim is to entice primarily high-tech corporations to take advantage of Central America’s most educated, computer literate and disciplined workforce, along with the modern production infrastructure the country is currently creating. The economy is being transformed from its long-time dependence on coffee, bananas and cattle raising to one centered on microprocessor production and high-tech telecommunications services.
https://www.cia.gov/library/publications/the-world-factbook/geos/cs.html
For China, Costa Rica represents an important diplomatic tie, opening a gateway to strengthen its presence in the region, said Manuel Orozco, an analyst at the Washington-based Inter-American Dialogue. A deal would provide Costa Rican consumers with a host of Chinese-made goods and help the country diversify its exports.
But as Costa Rica inches closer to that FTA, a fierce opposition is mounting here.
In political terms, these countries’ relationship is only just beginning to bud. In June 2007, Costa Rican President Oscar Arias turned on longtime ally Taiwan and set up diplomatic ties with that country’s neighboring rival, the People’s Republic of China.
Costa Rica’s move to become China’s first diplomatic friend in Central America did not come without Chinese gratitude: The Asian giant bought $300 million in Costa Rican bonds and pledged millions more in aid and projects, including San Jose’s new national stadium and its first Chinatown.
