Costa Rica - Infrastructure, power, and communications

One of the greatest challenges facing the country is the maintenance of its infrastructure . Investments in this area have not kept pace with economic growth. There is more traffic than the old roads and ports can safely

Country Newspapers Radios TV Sets a Cable subscribers a Mobile Phones a Fax Machines a Computers Personal a Internet Hosts b Internet Users b
1996 1997 1998 1998 1998 1998 1998 1999 1999
Costa Rica 94 271 387 13.8 28 2.3 39.1 10.41 150
United States 215 2,146 847 244.3 256 78.4 458.6 1,508.77 74,100
Mexico 97 325 261 15.7 35 3.0 47.0 23.02 1,822
Nicaragua 30 285 190 40.2 4 N/A 7.8 2.21 20
a Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.
b Data are from the Internet Software Consortium ( ) and are per 10,000 people.
SOURCE: World Bank. World Development Indicators 2000.

handle, and the communication and power networks are not strong enough for the country's demands. A law was passed in 1998 to allow the development and administration of the infrastructure through private contracts, but by 2000 not one contract had been granted.

Costa Rica's communication infrastructure is less advanced than other Latin American countries. For example, in 1998 telephone lines per 1,000 inhabitants were at 172, better than the Latin American average of 118. But cellular phones per 1,000 inhabitants were at 28, caompared with 43 for all of Latin America, while Internet hosts were at 0.85 per 1,000 inhabitants compared to 4.85 for Latin America. Television sets were at a level of 387 per 1,000 inhabitants, compared to 255 per 1,000 for Latin America, but cable subscribers were at 13.8 per 1,000, compared to 28.3 per 1,000 for Latin America.

The country has over 35,705 kilometers (22,187 miles) of roads, of which 20 percent corresponds to national highways and 80 percent to local roads. About 56 percent of the national roads and 12 percent of the local roads are paved. Two major projects were underway by the end of 2000 to improve the carrying capacity of the main roads connecting the capital to the Pacific Coast.

Electric power generation and telecommunications are handled by a state monopoly, the Instituto Costarricense de Electricidad (ICE). Efforts to open these sectors to competition and privatization sparked riots and public protests in early 2000. The government claimed that it needed help from the private sector in order to service demand. Rioters were afraid that privatization would result in higher rates and the neglect of rural locations. The country's power source is mostly hydroelectric, although geothermal and wind sources are also used. The Costa Rican Congress was discussing a restructuring of the ICE in 2000-01 that would allow the establishment of joint ventures for the development of energy and telecommunication projects. It would, however, fall short of allowing competition by private participants in these sectors.

An index compiled by the Instituto Centroamericano de Administración de Empresas (INCAE), the Harvard Institute for International Development, and the Central American Bank for Economic Integration shows Costa Rican infrastructure lagging behind that of other Central American and East Asian countries. Values assessed ranged from 1 to 7 with higher values representing better infrastructure conditions. Costa Rica obtained a value of 2.29 compared to 3.46 for Guatemala, 3.56 for Nicaragua, 4.55 for South East Asia, and 4.64 for the United States, Japan, Ireland, Sweden, and China. This means that Costa Rican business faces greater challenges to compete against other nations.

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