Republic of Costa Rica
República de Costa Rica
LOCATION AND SIZE.
Costa Rica is a central American nation, located between Nicaragua and Panama. Its borders span 309 kilometers (192 miles) with Nicaragua and 330 kilometers (205 miles) with Panama. Costa Rica also borders the Pacific Ocean and the Caribbean Sea, its coastline reaching across 1,290 kilometers (802 miles). The country has 51,100 square kilometers (19,730 square miles) of land, which is slightly less than the size of West Virginia, including the Isla del Coco (a small island in the Pacific Ocean).
San José, the capital, is located in a highland valley in central Costa Rica called the Meseta Central. Most of the country's population is located in this area formed by 2 basins separated by low, volcanic hills ranging from 900 to 1,500 meters above sea level. Other important cities are Cartago (the old colonial capital), Alajuela, and Heredia. The main port cities are Limón on the Caribbean Sea and Puntarenas on the Pacific.
The country's population was estimated at 3.5 million in July of 2000. It is growing at a rate of 1.69 percent, which means that the population should reach approximately 4.1 million by 2010 and should double to over 7 million by the year 2035. Over 60 percent of the population is between the ages of 15 and 64, and only 5 percent of citizens are over 65 years old. The population is young, posing a challenge for the government to provide adequate schooling and training for youngsters. About 95 percent of the population can read and write. The larger, younger generation will also require greater health and retirement services as it begins to age.
Birth rates are at 20.69 per 1,000 people and death rates are at 4.31 per 1,000 people. There are approximately 2.52 children born per woman. Infant mortality rates are 11.49 deaths per 1,000 live births. There are approximately 1.02 males for every female in Costa Rica. The average life expectancy is 75.82 years: 73.3 years for males, and 78.5 years for females.
Adding to the high birth rate, the Costa Rican population also increases due to immigration —particularly from Nicaragua and other Central American countries. Immigrants come to Costa Rica in search of work opportunities, which they usually find in the agricultural sector. They are attracted by the relatively higher standards of living that are enjoyed in the country. The immigration rate for 2000 was estimated at 0.54 immigrants per 1,000 citizens.
The population of Costa Rica is mainly white (94 percent, including mixed European and Amerindian mestizos) and Roman Catholic (85 percent). There is a small proportion of black (3 percent), Amerindian (1 percent), and Chinese (1 percent) residents, and the second most important religious group is Evangelical Protestant (14 percent).
Gold is mined on the southern Pacific Coast and northwestern regions of the country. Some controversy exists as to the ecological impact of the methods employed in these extractions. Silver is also mined— though not extensively—in the western part of the country. Deposits of manganese, nickel, mercury, and sulfur exist but remain unexplored. Petroleum deposits have been identified in the southeastern region, but their exploitation has been deemed uneconomical. Salt is produced from seawater.
Until recently, most of the country's industry consisted of small-scale light manufacturing enterprises. Intel Corporation's arrival in 1998 marked the first large-scale manufacturing venture. Coffee-drying plants, sugar mills, cheese factories, sawmills, woodworking factories, breweries, and distilleries characterize the manufacturing sector. There is a single petroleum refinery that is state owned, and several hydroelectric plants with capacity to produce close to 6 billion kilowatt hours of electricity. Factories produce petroleum products, furniture, paper, textiles, chemicals, pharmaceuticals, plastics, footwear, cigars, cigarettes, jewelry, and clothing.
About half of the 4,856 industrial firms are located in the capital, San José. Next in importance are Alajuela (20 percent), Heredia (11 percent), and Cartago (10 percent). Of these firms, 2,411 (49.6 percent) are micro-enterprises employing between 1 and 4 workers. There are 1,547 (31.9 percent) small industries with 5 to 19 employees, 624 (12.9 percent) medium industries, with 20 to 29 employees, and 274 large industries (5.6 percent) with 100 or more employees.
According to the Ministry of Commerce and Industry, 24 percent of all industrial establishments process foods, drinks, and tobacco; 21 percent are metal and mechanic shops; 15 percent process wood, furniture, or other wooden products; 14 percent produce textile or leather products; 9 percent are in paper and printing; and 8 percent are in chemicals, rubber, and plastics.
Over 50 percent of the Costa Rican workforce is employed in the service sector, producing over 60 percent of the country's GDP.
The most dynamic portion of the service sector is tourism. Costa Rica pioneered ecotourism (the practice of touring natural habitats in a manner that minimizes ecological impact). Because of its great biodiversity the country enjoys a natural advantage in this sort of activity. The number of tourists visiting Costa Rica has increased steadily during the 1990s, at an average rate of 15 percent per year. During 1999 over 1 million people visited the country, and the Costa Rican tourist board estimates that number increased by over 10 percent in 2000. Since 1986 a flow of investment exceeding US$800 million has been devoted to developing the sector. In 2001 there were over 13,400 rooms available for tourists. In 1998 US$883 million was generated by the tourist industry. This amount was over twice the revenue generated by coffee and 1.3 times that of banana exports. The government promotes the development of tourism through the Instituto Costarricense de Turismo (ICT), or tourist board, which prepares a yearly development plan. ICT runs specialized educational facilities to train workers in hotel management and other tourism-related activities.
Retailers currently employ about 20 percent of the active workforce. Most retail firms are small to medium companies, although large discount retailers and hypermarkets have established themselves in the market during the past 2 years. There are 4 main supermarket chains—Automercados, MasxMenos, Super2000, and Perifericos—as well as a number of one-location markets of considerable size. Coverage of retail stores is limited to the Central Valley, although some have made inroads into the provinces during recent years. The oldest and largest department stores are La Gloria, with significant coverage in the Central Valley, and Llobet, located mainly in Alajuela.
About 5 percent of the workforce is employed in financial services. The sector generates about 3.6 percent of GDP. Banking was a state monopoly until 1987, when private institutions were allowed to coexist legally with the state banks, although they were limited to offering time deposits and were not allowed to offer checking or savings deposits. Reforms in the 1990s allowed private banks to offer the entire range of financial services, virtually eliminating the previous state monopoly. The only difference that persists between private and public banks is that the latter enjoy unlimited deposit guarantee from the state whereas private deposits are un-secured. There are 3 public banks—Banco Nacional, Banco de Costa Rica, and Banco Crédito Agrícola de Cartago—which represent 41 percent of total credit, and 20 private banks which represent 35 percent of total credit (2000). Other financial institutions include a workers' bank known as the Banco Popular y de Desarrollo Comunal which is capitalized through mandatory payroll contributions from workers and employers, a public funding agency for mortgage financing known as the Banco Hipotecario de la Vivienda, savings and loan cooperatives, mutual fund companies, and finance companies. The social security fund also engages in long-term mortgage financing. Insurance is presently a state monopoly; all insurance business is handled by the Instituto Nacional de Seguros.
There is a private stock exchange, the Bolsa Nacional de Valores (BNV), which is the oldest and largest in Central America. Its current annual volume is approximately US$28 billion, but over 80 percent of the volume traded is in public instruments. Only a small fraction of this volume (under 1 percent) is in equities . Some international transactions are also handled through the exchange. There are 27 brokerage companies currently participating at the exchange.
There are 3 regulatory entities in the financial sector: the Superintendencia de Entidades Financieras (Financial Superintendence), regulating banks, credit cooperatives, and other financial institutions; the Superintendencia de Pensiones (Pension Superintendence), regulating pension administrators; and the Superintendencia de Valores (Securities Superintendence), regulating securities and exchanges. All 3 entities are governed by a national board or commission, the Consejo Nacional de Supervisión Financiera.
A burgeoning sector in Costa Rican services is the production of computer software. The National Chamber of Software Producers estimates the country currently boasts the highest number of per capita software producers in the world. About 85 percent of these firms, all nationally owned, export their products with yearly revenues of over US$50 million. The sector is estimated to have generated over 1,500 jobs in 1998. The high level of education and technical expertise available in the population favors the development of this industry, which is expected to continue growing.
Costa Rica has no territories or colonies.
Colón (C). One colón is composed of 100 céntimos, but céntimos are no longer used. The smallest unit of money in circulation is the 5 colón coin, followed by the 10, 25, 50, and 100 colón coin. Bills circulate in denominations starting at 1,000 colones, and are available in 2,000, 5,000, and 10,000 colones.
Coffee, bananas, sugar, textiles, electronic components, electricity.
Raw materials, consumer goods, capital equipment, petroleum, electricity.
GROSS DOMESTIC PRODUCT:
US$26 billion (purchasing power parity, 1999 est.).
BALANCE OF TRADE:
Exports: US$6.6 billion (1999 est.). Imports: US$5.9 billion (1999 est.).