Discovering Costa Rica

Page 5

Government

The Costa Rican government is a Democratic Republic and is ruled by a series of constitutional

checks and balances between its three branches: Executive, Judicial, and Legislative. The

Executive Branch is comprised of the President, who is supported by two Vice-presidents and

his Cabinet. The Legislative Assembly consists of 57 Congressmen who are elected every four

years. Finally, power within the legal system resides in the Judicial Branch, which enforces

compliance with the law and protects the

country’s inhabitants.

Costa Rica has a long tradition and stable

democracy, which is recognized worldwide and

has over 150 years of history. The last World

Bank survey for Global Governance Indicators

ranks Costa Rica the number one country in

Latin America for political stability. The universal

health care and education system have been the

pillars for the national stability.

Economy

Costa Rica benefits from ports on both the Pacific and Atlantic oceans. Its economy relies

heavily on the export of agriculture and electronics, although exports have become more

diversified over the past 10 years due to manufacturing technologies. Tourism is another key

component of the economy; Costa Rica represents 1% of the planet’s surface, but contains 5%

for the world’s biodiversity, making it a first-place destination for ecotourism.

Agriculture Products:

Coffee, pineapples, bananas, plantains, sugar, corn, rice, beans,

potatoes, beef, timber, melons, a variety of vegetables, ornamental plants, and fish

Exports:

Coffee, bananas, sugar, pineapples, melons, ornamental plants, electronic

components, medical equipment and seafood

Despite the relatively stable economy, poverty has remained around 20% for nearly 20 years.

Reducing inflation has been difficult because of rising import prices, labor market rigidities, and

fiscal deficits. The government also continues to wrestle with its large internal debt.

Meanwhile, foreign investors are attracted to the country’s political stability, education, and the

fiscal incentives offered in the free-trade zones. Costa Rica is committed to improving market

access for Costa Rican products by means of trade liberalization. In recent years, Costa Rica

has signed free trade agreements with Mexico, Canada, Chile, Dominican Republic, Central

America, the United States and the Caribbean Community. It recently approved the Central

American Free Trade Agreement (CAFTA) with the United States, which will bring economic

reforms and a better environment for foreign investment. Costa Rica has also started free trade

negotiations with the European Union, where it currently has preferential access through the

Generalized System of Preferences, and with China.