Costa Rica Republic of Costa Rica Republica de Costa Rica San José Daniel M. Podgorski Costa Rica Republic of Costa Rica Republica de Costa Rica San José Daniel M. Podgorski

General Information Terrain –Costal plains separated by mountains –Mountain range includes several major volcanoes Climate –Mild in central highland –Tropical and subtropical in coastal plains Area –51,500 sq. km –Includes Isla del Coco Terrain –Costal plains separated by mountains –Mountain range includes several major volcanoes Climate –Mild in central highland –Tropical and subtropical in coastal plains Area –51,500 sq. km –Includes Isla del Coco Population (est. 2007) –4,133,884 inhabitants –Density: 80.3 per sq. km –Growth rate: 1.413% –Net migration rate:.48 migrants/1000 population Government –Democratic republic –President: Oscar Arias Sanchez Population (est. 2007) –4,133,884 inhabitants –Density: 80.3 per sq. km –Growth rate: 1.413% –Net migration rate:.48 migrants/1000 population Government –Democratic republic –President: Oscar Arias Sanchez

People Life expectancy –77.21 years –Male: years –Female: years Ethnic groups –European (including Mestizo) 94% (10-15% Nicaraguan of Mestizo origin) –Black 3% –Indigenous 1% or less –Chinese 1% –Other 1% Life expectancy –77.21 years –Male: years –Female: years Ethnic groups –European (including Mestizo) 94% (10-15% Nicaraguan of Mestizo origin) –Black 3% –Indigenous 1% or less –Chinese 1% –Other 1% Religion –Roman Catholic 76.3% –Evangelical 13.7% –Jehovah’s Witnesses 1.3% –Other Protestant 0.7% –Other 4.8% –None 3.2% Religion –Roman Catholic 76.3% –Evangelical 13.7% –Jehovah’s Witnesses 1.3% –Other Protestant 0.7% –Other 4.8% –None 3.2%

Economic Information GDP (est. 2006) –PPP: billion –Official exchange rate: $20.77 billion –Per capita (PPP): 12,000 –Per capita (official exchange rate): $5,100 –Growth rate: 4.7% –Composition 8.6% agriculture 31% industry 60.4% services GDP (est. 2006) –PPP: billion –Official exchange rate: $20.77 billion –Per capita (PPP): 12,000 –Per capita (official exchange rate): $5,100 –Growth rate: 4.7% –Composition 8.6% agriculture 31% industry 60.4% services Inflation rate: 9.43% Unemployment rate: 6.6% Government budget –Revenue: billion –Expenditure: billion –Balance: billion Outstanding public debt: 53.4% of GDP CA balance: billion Inflation rate: 9.43% Unemployment rate: 6.6% Government budget –Revenue: billion –Expenditure: billion –Balance: billion Outstanding public debt: 53.4% of GDP CA balance: billion

Trade Exports –Commodities: bananas, pineapples, coffee, melons, ornamental plants, sugar, textiles, electronic components, medical equipment, possibly electricity in the future –Partners: 42.6% USA, 16.3% EU, 6.9% Hong Kong, 6.4%, 4.2% Guatemala Imports –Commodities: raw materials, consumer goods, capital equipment, petroleum –Partners: 41.3% US, 13.1% EU, 5.6% Japan, 4.8% Venezuela, 4.8% Mexico, 4.2% Brazil, 4.2% China Exports –Commodities: bananas, pineapples, coffee, melons, ornamental plants, sugar, textiles, electronic components, medical equipment, possibly electricity in the future –Partners: 42.6% USA, 16.3% EU, 6.9% Hong Kong, 6.4%, 4.2% Guatemala Imports –Commodities: raw materials, consumer goods, capital equipment, petroleum –Partners: 41.3% US, 13.1% EU, 5.6% Japan, 4.8% Venezuela, 4.8% Mexico, 4.2% Brazil, 4.2% China

Free Trade Information Has sought to widen its economic and trade ties within and outside the Latin American region Signed free trade agreements with Canada, Chile, the Dominican Republic, Mexico, Trinidad, Tobago (negotiating with Panama) Looking to begin negotiating a regional Central American-EU free trade agreement in 2007 Active participant in discussion of setting up the Free Trade Area of the Americas (along with 34 other countries) Free trade agreement with the Caribbean Community (CARICOM) was approved in 2005 Dominican Republic - Central American Free Trade Agreement (DR- CAFTA) Has sought to widen its economic and trade ties within and outside the Latin American region Signed free trade agreements with Canada, Chile, the Dominican Republic, Mexico, Trinidad, Tobago (negotiating with Panama) Looking to begin negotiating a regional Central American-EU free trade agreement in 2007 Active participant in discussion of setting up the Free Trade Area of the Americas (along with 34 other countries) Free trade agreement with the Caribbean Community (CARICOM) was approved in 2005 Dominican Republic - Central American Free Trade Agreement (DR- CAFTA)

Fiscal Policy Large internal and external deficits and large internal debt Budget balances (% GDP): –-3.1% 2003 –-2.5% 2004 –-1.6% 2005 –-2.6% est –-2.6% projected 2007 Comprehensive tax reform goals resulting in: –Sustained increases in social and capital expenditure –Improved reduction in debt Large internal and external deficits and large internal debt Budget balances (% GDP): –-3.1% 2003 –-2.5% 2004 –-1.6% 2005 –-2.6% est –-2.6% projected 2007 Comprehensive tax reform goals resulting in: –Sustained increases in social and capital expenditure –Improved reduction in debt

Monetary and ER Policy Currency: Costa Rican colon (CRC) Exchange rates (colones per US dollar) –511.3 (2006), (2005), (2004), (2003), (2002) –Central bank recently modified the exchange band Inflation –Fell below 10% in 2006 –Exchange rate modification should help reduce inflation permanently –Reduction is challenging Rising import prices Fiscal deficits Currency: Costa Rican colon (CRC) Exchange rates (colones per US dollar) –511.3 (2006), (2005), (2004), (2003), (2002) –Central bank recently modified the exchange band Inflation –Fell below 10% in 2006 –Exchange rate modification should help reduce inflation permanently –Reduction is challenging Rising import prices Fiscal deficits

Social Policies Unemployment –14.2% for those and 4.3% for those –Reforms aimed to create jobs Education –Constitution provides for free and compulsory education –Literacy rates exceed 90% –Goal of dedicating 8% of GDP Social security –Costa Rica Social Security Fund –Voluntary retirement accounts (1996) –Private individual saving mandatory as of 2000 Unemployment –14.2% for those and 4.3% for those –Reforms aimed to create jobs Education –Constitution provides for free and compulsory education –Literacy rates exceed 90% –Goal of dedicating 8% of GDP Social security –Costa Rica Social Security Fund –Voluntary retirement accounts (1996) –Private individual saving mandatory as of 2000

External Relations Long emphasized democracy and respect of human rights Permanent neutrality (1993) Concern over Venezuela’s democratic institutions Nicaragua –Helped end civil war during Arias first term in office –Problems Nicaraguan immigration –Heavy demands on social welfare system –Rio San Juan Long emphasized democracy and respect of human rights Permanent neutrality (1993) Concern over Venezuela’s democratic institutions Nicaragua –Helped end civil war during Arias first term in office –Problems Nicaraguan immigration –Heavy demands on social welfare system –Rio San Juan US relations –Historically close and friendly –Supports international views –Most important trading partner –Private American citizens Issues with expropriation Investment disputes US relations –Historically close and friendly –Supports international views –Most important trading partner –Private American citizens Issues with expropriation Investment disputes

References Bladex. (2006). Costa Rica. Retrieved May 20, 2007, from O Country Reports. (2004). Costa Rica. Retrieved May 17, 2007, from Energy Information Administration. (2006). Central America Regional Factsheet. Retrieved May 16, 2007, from External Relations. (2006). The EU’s Relations with Costa Rica. Retrieved May 21, 2007, from Federal Reserve Bank of Atlanta. (2005). The Effect of the Privatization of Pension Plans on Financial and Regulatory Systems in Latin America. Retrieved May 16, 2007, from International Information Programs. (2006). Costa Rica’s Economy Strong, Says International Monetary Fund. Retrieved May 21, 2007 from english&y=2006&m=August&x= xeneerg e-02 english&y=2006&m=August&x= xeneerg e-02 International Monetary Fund. (2007). IMF Staff Statement at the Conclusion of a Visit to Costa Rica. Retrieved May 20, 2007 from South Florida Business Journal. (2003). U.S. works on CAFTA, without Costa Rica. Retrieved May 18, 2007, from The World Bank. (2006). Costa Rica Country Brief. Retrieved May 16, 2007, from The World Factbook. (2007). Costa Rica. Retrieved May 16, 2007, from U.S. Department of State. (2007). Background Note: Costa Rica. Retrieved May 16, 2007, from Bladex. (2006). Costa Rica. Retrieved May 20, 2007, from O Country Reports. (2004). Costa Rica. Retrieved May 17, 2007, from Energy Information Administration. (2006). Central America Regional Factsheet. Retrieved May 16, 2007, from External Relations. (2006). The EU’s Relations with Costa Rica. Retrieved May 21, 2007, from Federal Reserve Bank of Atlanta. (2005). The Effect of the Privatization of Pension Plans on Financial and Regulatory Systems in Latin America. Retrieved May 16, 2007, from International Information Programs. (2006). Costa Rica’s Economy Strong, Says International Monetary Fund. Retrieved May 21, 2007 from english&y=2006&m=August&x= xeneerg e-02 english&y=2006&m=August&x= xeneerg e-02 International Monetary Fund. (2007). IMF Staff Statement at the Conclusion of a Visit to Costa Rica. Retrieved May 20, 2007 from South Florida Business Journal. (2003). U.S. works on CAFTA, without Costa Rica. Retrieved May 18, 2007, from The World Bank. (2006). Costa Rica Country Brief. Retrieved May 16, 2007, from The World Factbook. (2007). Costa Rica. Retrieved May 16, 2007, from U.S. Department of State. (2007). Background Note: Costa Rica. Retrieved May 16, 2007, from