Costa Rica
Costa Rica is a Central American success story; since the late 19th century, only two brief periods of violence have marred its democratic development. It has no standing army, and its citizens enjoy one of the highest life expectancy levels in the Western hemisphere and higher living standards than their war-torn neighbors.
The rapidly-expanding tourism industry is Costa Rica's main source of foreign exchange earnings. Visitors are attracted by the tropical forests with abundant flora and fauna, including 1,000 species of orchid and 850 species of birds such as macaws and toucans. The Caribbean coast with swamps and sandy beaches is also a big draw. However, the country is trying to shake off its reputation as a destination for sex tourists.
Costa Rica is still a largely agricultural country, and land ownership is widespread. Although traditionally dependent on coffee, banana and beef exports (and thus vulnerable to the effects of low world coffee and banana prices), Costa Rica has made progress in diversification, and has managed significantly to increase exports. The opening of a large computer chip plant in the late 1990s boosted the national economy, but the fortunes of the industry have been subject to the fluctuating worldwide demand for microchips.
President Abel Pacheco won a run-off presidential election in 2002, guaranteeing his ruling conservative Social Christian Unity Party (PUSC) its second term in office. Pacheco vowed to continue free market reforms and to govern with austerity. He also pledged to create "at least 40,000 jobs a year.” Three years into his presidency he acknowledged that his administration has faced difficulties in living up to its promise to overcome poverty. Pacheco pointed to inefficiencies and a lack of coordination in the public sector as the main problems.
In mid-2004 several of Pacheco's ministers and senior officials resigned in opposition to a deal negotiated to end roadblocks and other protests by transport and public sector workers. The country has also been rocked by corruption scandals involving senior political and public figures, the most damaging of which concern the Social Security Institution.
Presidential and parliamentary elections are due in February 2006.
There are currently no known threats to expatriates traveling to or conducting business in Costa Rica, which has remained a stable and relatively safe destination.
While relatively free of crime, Costa Rica has been used increasingly as a transit country for South American cocaine, and there have been allegations of drug-tainted money financing the two principal political parties. The country's self-image was badly shaken in 2004 when allegations of high-level corruption led to the imprisonment of two former presidents on graft charges.
Costa Rica has not been spared from the growing Central American problem of gang crime. The gangs, known "maras" have their roots in inner-city gangs in the United States and have been imported into Central America. While Costa Rica has been spared the worst violence, gang muggings can occur even in daylight on busy streets. Be particularly vigilant in popular tourist locations/destinations.
Demonstrations and strikes, related to labor disputes or other local issues, occur occasionally in Costa Rica. Demonstrations can result in port closures, roadblocks, and sporadic gasoline shortages. Protests do not target foreign visitors or expatriates and are typically non-violent.
Foreigners taking photographs, particularly of children and women, are often regarded by locals with suspicion (related to sex tourism) and this has resulted in violence. Visitors should seek permission from an adult before taking photographs of, or talking to, children.
Other contentious issues affecting the business climate involve property ownership. Expropriation, the Government taking of private property (usually undeveloped land) without adequate compensation, has been an important negative factor affecting the business climate for over 20 years. However, significant progress has been made in recent years toward resolving many of the outstanding cases, including one submitted to international arbitration and Costa Rica has been able to attract private investment from large multinational companies.
A related problem involves the invasion and occupation foreign-owned properties by sometimes-violent squatters. In some cases, the Costa Rican police and judicial system have failed to deter or to peacefully resolve such invasions.
