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U.S. Department of State Background Note

Costa Rica

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Costa Rica

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 October 2007, the country held a 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 final results of the October 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--Peter M. Brennan
Political Counselor--David E. Henifin
Economic Officer--Mark Kissel
Consul General--David Dreher
Management Counselor--Brian Wilson
Public Affairs Counselor--Magda Siekert
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
OFDA Director--Tim Callaghan 

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 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.

Revised: Oct. 2007

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