Costa Rica’s tourist-friendly climate and natural beauty have benefited its national economy and attracted extensive foreign investment. In addition, the Central American nation has enjoyed a level of political and social stability rare in its region, and it has provided investment incentives based on free trade to overseas corporations. Although the global economic downturn of the late 2000s caused Costa Rica’s economy in 2009 to shrink by 1.3 percent, recovery stood at 4.5 percent annually by the 2010-2012 cycle.
Costa Rica continues its significant exports of agricultural products such as coffee, meats, sugar, and fruit, and it has expanded in recent years into high-technology fields such as microchip manufacturing.
As a member of the U.S.-Central America-Dominican Republic Free Trade Agreement, Costa Rica has brought in new levels of private foreign investment to its economy, particularly in the communications and insurance sectors.
Yet in recent years, the social safety protections in place for the country’s citizens have begun to decrease because of financial restrictions placed on the national government. Today, approximately one-fifth of Costa Rica’s population lives in poverty, the same rate attained for decades. Additionally, an influx of both documented and undocumented workers from neighboring Nicaragua has put even more strain on Costa Rica’s social welfare infrastructure.
As its economy continues to recover, Costa Rica will need to focus on the maintenance and expansion of its infrastructure, increasing government efficiency, and dealing with concerns related to unemployment.
Steven Guynn has worked with international business clients operating in the energy, telecommunications, retail, and technology sectors.