Country Details

Costa Rica has seen a recent increase in foreign direct investment, especially in the areas of technology, manufacturing, and infrastructure. This is mostly due to the establishment of several free zones where businesses can gain incentives and exemptions to operate. The creation of the Dominican Republic-Central America Free Trade Act (CAFTA-DR) also helps promotes stronger trade and stability throughout Costa Rica. It has a stock exchange called the Bolsa Nacional de Valores, or Bolsa for short. This exchange is extremely small, only having a dozen or so stocks listed. Investors looking for exposure to Costa Rica by using this stock market may have a tough time trying to gain access, as there isn’t much liquidity compared to most major exchanges. The two most popular stocks that are traded on the exchange are Atlas Electrica, the country’s largest electronics manufacturer, and Florida Ice and Farm, a food and beverage company. Most countries usually offer easier access for foreign investment to its stock markets through the use of an American deposit receipt or an exchange-traded fund. However, since Costa Rica has such a small stock market, there are no ADRs or Costa Rican-specific ETFs available to the public.

The economic crisis

Poverty has remained around 15%-20% for nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Unlike the rest of Central America, Costa Rica is not highly dependent on remittances as they only represent about 2% of GDP. The U.S.-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) came into force on 1 January 2009, after significant delays within the Costa Rican legislature. CAFTA-DR will likely lead to increased foreign direct investment in key sectors of the economy, including the insurance and telecommunications sectors recently opened to private investors. President Chinchilla is likely to push for fiscal reform in the coming year, seeking to boost revenue, possibly through revised tax legislation, to fund an increase in security services and education.

Costa Rica has a rich and vibrant history that first marked the history books on September 18th 1502. This date was when the land mass was first discovered by Christopher Columbus. Originally the land belonged to the four tribes of Carib, Boruca, Chibcha and Diquis Indians (The Carib met Columbus as he landed there and showed him the island). There is also further evidence to suggest that the country had human life up to 10,000 years prior. Although it cannot be pinpointed to an exact date this is the closest scientists can estimate intelligent lifeforms living in the territory. The name Costa Rica (Rich Coast) was given to the land by a Spanish man who noticed the heavy golden jewelry that the Indians wore. When the Spaniards started to move into Costa Rica to colonize the territory in 1524, many of the indigenous people died from disease or moved away. This did not lead to a huge rise in immigration because there was not many resources from the land to make a profit on. The people there lived a simple life with the bare minimum and worked to sustain themsleves. Many only moved there to further their claims in Central America where the gold and silver was heavily mined. Others used it as a stepping stone to reach Mexico, Central America and North America. Juan Vasquez De Coronado created the first city in 1562, before that it had only been small communities and towns.

Later on in 1821 Costa Rica successfully declared independence from Spain and two years later after disputes in the capitol declined to be a part of Mexico. In 1848 "Don Pepe" took charge of the country and Costa Rica became a republic. This granted voting right to minorities and established rules and regulations to check and balance the country when needed. It then hit a peaceful period which some would call "neutral." Peace and stability reigned over the land and prevented unnecessary conflicts. This is when Costa Rica constitutionally and permanently abolished its army in 1949. Finally in the 1970's the economy there took a serious hit and instead of relying on exports, the country now looks to the mass tourism it receives every year.

Famous people

The Costa Rican Colon (CRC) is the currency of Costa Rica. The symbol for the Colon is C; the currency is subdivided into 100 centimos. Many places in Costa Rica accept the US Dollar unofficially. The name of the Colon is derived from the Spanish explorer Christopher Columbus. The Colon has historically been tied to the USD based on a "crawling peg" so that exchange rates changed monthly. However, in 2006 that tie was severed as the Colon was becoming "undervalued". Now the Colon managed within a band of exchange rates relative to the USD.

In 1896, the Costa Rican Peso was replaced by the Costa Rican Colon. In 1897, new coins were issued. Between 1917 and 1919, a subunit, the centavo, was introduced at 1/100 of a Colon. The country issued 5 centavos and 10 centavos in place of centimos. During that time 50 centavo coins were minted but never distributed. From 1914 to 1938, the International Bank of Costa Rica issued and distributed 5, 10, 20, 50, and 100 Colones notes. In the same period, the National Bank of Costa Rica became the official bank for issuing paper money; they printed notes from 1937 to 1949. During the 1950s the Central Bank of Costa Rica started issuing banknotes. In 1958, the Central Bank added 1,000 colon notes to the range. In 2010, Costa Rican Colon notes were replaced by a new issue.