Figure 1.--This is a scene from the center of San José, the capitalin the early-20th century. Note that there is electricity, but not a motor vehicle in sight and this is the center of the city. Also note the oxcart. It has an all wooden wheel, rather than spokes, that may speak to extremely rough roads. We are not sure what the building is, perhaps the Legislative Assembly. A new building was built in the 1930s. Click on the image for a blowup of the boys and cart.

The pre-Colombian economy was primarily hunter gathering by primitive Native American tribes. The modern territory of Costa Rica was beyond the extent of the Maya to the north. There are no important Mayan sites in Costa Rica. There must have been, however, trade connections. The name Costa Rica means 'rich coast' in Spanish. However most of the country's population don't live near the coast. The coast of Central America was the Columbus' first land fall on the mainland of the Americas. The name was based on the Spanish seeing gold jewelry being worn by the the natives they spotted along the coast. Costa Rica was the first Central American country to achieve a modicum of stability. In this, Costa Rica is different than much of Central America which has been defected in the economy. The economy as in other Central American countries has been based on agricultural commodities. Coffee is especially important. farmers benefited from the volcanic enriched soil. There were large coffee plantations, but the land was less dominated by a few large family plantations/haciendas than elsewhere in Central America/Mexico as well as the rest of Latin America. Costa Rica launched a land reform effort (1961). The Lands and Colonization Act, targeted 'socially unproductive' land for redistribution. This as led by an agency now known as INDER (formerly ITCO/IDA). The reform effort sought to reduce inequality by settling peasants, although some large farms continued to exist. Further reforms (2020) focus on agricultural regulations, while the country's national policy emphasizes ecological sustainability. Since World War II, tourism has begun to become increasingly important along with foreign retirees. Here stability is an important factor. Unlike many other Latin American countries, Costa Rica does not have important natural resources like oil or metals. Tourism has become an important part of the country's economy. Among the activities that tourists enjoy is whale watching. They are also attracted by the country's biodiversity, in part because of the large protected areas. Costa Rica is a very small country. It has just about 0.1 percent of the world's total area, but 5 percent of the biodiversity. Costa Rica is an important exporter of agricultural products, especially bananas and coffee. Despite the country's small area, it accounts for 10 percent of the total exports of banana worldwide. That is the second place just behind Ecuador, another small country. Costa Rica is also the biggest producer of pineapple worldwide. Costa Rica is developing a mixed economy. It is one of the world's biggest producer of medical equipment,e specially body prosthesis. Several companies of the industry like St Jude Medical, Boston Scientific, among others manufacture their products here which are then exported to the rest of the world. Since the Great Recession 2010, Costa Rica has impressive if not spectacular economic growth, 3.8 percent (2017). The major exports are still bananas, coffee, sugar, and beef. Exports of industrial and processed agricultural products are diversifying export shipments to include value-added goods. A bright spot is medical devices. Costa Rica's impressive biodiversity also makes it a key destination for ecotourism. Foreign investors are attracted by the country's political stability and high educational levels compared to other countries in the region. The Government has offered incentives such as free-trade zones. Investors face many of the same issues impacting the political culture of the region which prevent Latin American countries from replicating the success of the Asian Tigers, including inadequate infrastructure, high energy costs, a complicated and unfriendly bureaucracy, weak investor protection, and unreliable contract enforcement. There is also rising fiscal deficit, mounting public debt, and relatively low levels of domestic revenue.

Created: 5:18 AM 2/9/2019
Last updated: 8:01 PM 5/2/2026