| RETURN 1TO . M. >,|_f__ AX ] -3tIFPZ=RIr} -..................R E S T R I C T E D Wl;THllNl .il. t Q . I.ONE WEEK K e p o r I N o. wH- 1 1 rA -I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ This report was prepared for use within the Bank. It may not be published nor may it be quoted as representing the Bank's views. The Bank accepts no responsibility for the accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ('TTR R W?T EGONO.'TXI POSITIONTh A^N PROSPEGTS¶ OF COSTA RICA August 29, 1961 Department of Operations Western Hemianhere CURRENCY EQUIVALEBTS Official Exchange Rate: U.S. A1.00 I GolonLe 5.615 (%) M3. mIrAllion. A 178,0n Free Market Exchange Rate: U.S. $1.00 = 0 6.65 TABLE OF CONTENTS Page No. BASIC DATA SUiHIIARY AND CONCLUSIONS ... . . . . . .. . .. i I. INTRODUCTION .D. UO. . .N. . . . .. . . . . 1 II. RECENT ECONOMIC DEVELOPIENTS . . . . . . . 2 Production and Exnorts . . . . . 2 FinanC]ial TeVeloPonrntS .. FiS Ca1 DVPeorrnmPntS. - - - - - ThPv-iu,1iwqitn qnrl TRplt MPaS1-rPS. = = 8 II. TTURE PRSPECT S 11 P sp?ct- for ProdUC tin and Export. s 11 PUb14',JiL4C QeC4-or DMvml opment P1nSt. .1 C± C1UJ 1 1C..LU IO.,U .J.L JV ..LL'.AIUO LI IS £ J.. aLI.......... . 1 T ¶7 T ,r'rT T1TT.TP\¶TI mT T rlLr'c c n 1V. Ui1iL± I WUE I nfllND.) * . *. . . . * .U APPENDIX I - Prospects for Foreign Exchange Earnings. APPENDIX II - Statistical Tables 1 - 29. 19,70() square mir.s Population: 1960 1.20 million National Income: (at curreni; p2ices) 1960 U.S$ 393 million Per Capita Income: 1960 U,S4$ 328 Balance of Pa.yments: U.S.$ millions 1959 1960 Exports (f.O.b.) 7670 85.0 Imports (f.o.b.) -93.5 -96.7 Other current items - 8.5 -11.6 Current Balance -26.0 -23.3 Donatiotns 6.8 5.3 (thniit,ql infl nw 10. 3 13 Errors amd omissions 4.9 2,0 Surplus/Deficit _ 40- 6 Co..posi+ion of Expor+s by-T, Vlune Coffee Bananas Cacao 1959 53 25 10 roreign ExchLange Rsr-ves (net): U.S,$ millions December 1960 11.5 Ratio to imports (f.o.b.) 1960 12% Gowernment Revenues and Expenditures: Budget: 1960 1961 (krm lions of colones) Current Revenues 335.6 367c9 Extraor(dinary revenues 35.4 23.4 Total revenues 371.0 391.3 Expenditures 376.1 391.3 Surplus - 5,1 - Cost of Living Index (1953 100): 1960 : 114 SL11Y4ARY AND CONC7UFTO, OT.S 1. The last economic report on Costa Rica (!IH 93a of March, 1960) noted that Costa Rica had the highest per capita income in CentvXal America and one of the highest in Latin America. The country has a favour' able climate and fertile soils, large land resources awaiting development, and a relatively even distribution of land ownership and income, a largely literate population with a highly trained professional class, and a group of enterprising business leaders. The economy is, however, greatly dependert on two major exports -- coffee and bananas -- and, with declines in the prires of both produacts, the slow-down in Costa Ricats economic growth after 1955, noted in the last report, has continued in the past two years. The pros- pects for coffee prices remain highly uncertain and the prospects for banana production are much less favourable than they were two vears ago. Tn an effort to maintain the npae of economic emnansion and to diversify the economy in the face of declines in traditional exports, the authori ties have continued in the past two years toc eneou rage new exports, especially of meat and sugar, and to stirmulate both agricultural and manu- fac+vring n-rrduction for the domestic market. In narticular, the au+hori- ties have channelled some of the government's savings as well as external loanrs to the pri vate sector to increase the credit available for agricult+ re and manufacturing. The results so far have been quite encouraging. 3. The measures taken by the government to stimulate the growth of t4hIe eco'nomy 1..JA.Lv LUx d- 4±.J7, mo ne tary poli , +ar t-I '. l Ain 1959. While some part of the increase in credit to agriculture and manu- fd acturiIng waVs IfCinanced.LU1I 1fUorL, no-inflationary sources, includin- new IoarWs from abroad, monetary expansion in both 1959 and 1960 led to increasing balance of paynnirits press-ures. Thle flUl in exchange earnings in 1959 and possibly some capital flight in 1960, together produced a 37% drop in foreign exchange reserves in tne Lace oI a contlnuea small rise in imports. In an effort to strengthen the balance of payments position of the country while pursuing a policy of economic diversification, the Costa Rican authori- ties are now proposing to introduce a partial devaluation of the colon, which will provide modest additional incentives to export producers and will damp down the demand for imports. Simultaneously, new tax measures have been proposed to help close a fiscal deficit which, wqhile not the major source of past monetary expansion, could get out of hand in view of the large investment plans of the public sector in the years ahead. Lh. Taking into account the effects of the proposed devaluation, the growth of exports over the next b or 5 years is likely to be between 3% and 4% a year but might be lower if coffee prices were to decline rapidly. Production for the domestic market is likely to continue to increase at a faster rate. To meet this expansion provision must be made for expanding basic economic services, particularly power and transport, and the social services, s-uch as education, health and housing. Considerable progress has been made in the past 18 months in the preparation of plans to expand plblic investment, and foreign loans are now being actively sought to help finance power, highways, nort facilities, housing, sewerage and agricultural and industrial credit. There are good prospects that public investment over th,: next few years will increase very substantially, perhaps even doublinr the rate of' .nvestment of the recenL past. The contribution of' the central government alone to the financin,g of public development projects in the next few years seems unlikely to be less than 10U million a year arud tle contribution of state entities will also probably be substantial. Disburse- ments on foreign loans already arranged or in prospect may be between :;',9 and 4U0 million a year. Tne Costa Rican contribution towards financing development projects in the public sector will thus probably be not less than one half'. In addition, some government savings should continue to be available to help finance investment in the private sector, particularly if the tax measures proposed are adopted. 5. (Given the prospects for production and exports and the fairly substantial increase projected in public investment, it should be nossible to maintain over the next several years a rate of growth of output in excess of the very f'ast rate of growth of population, now almost h-% a year. How- ever, Costa Rica's long-term economic growth prospects will not be assured until efforts to develop new exports and to strengthen the competitive position of local producers bear fruit and can be adequately assessed. 6. Servicing on the existing public debt, which has increased by 50% over the past, two years, will be equivalent to about 9% of foreign exchange earnings in 1.962, the peak year. Borrowing plans of the public sector, in- cluding new foreign loans for channeling to the private sector, would almost double Costa Rica's external debt within two years. WJith service on the existing debt falling quite rapidly in the next few years, a substantial part of the rLew external obligations cauld be serviced on conventional terms in viewr of Costa Rica's prospects for economic growth. If, however, al- the new loans were to be on c_nventi,onnl terms debt service would rise to about 6.1 million by 1965, equivalent to 11%' of estimated foreign exchange earnings in that year and al.m.st _)0% above the 1962 peak. SChh a sharp in- crease in debt seMvIPe within a brief period would be imprudent in view of the uncertair.t" surrounding Costa .ia's slonger=term economic outlook, in- cluding the continuinguncertainty in the outlook for coffee. Some part of Costa Ct.ca's external capi requiremments md,7Vi t thus be appropriately supplied on special terms. I. INTRODUCTION 1. The most recent economic report on Costa Rica (WH-9" revi,ewed the progress of the economy from the end of the Second llorld WTar to the early months of 1959. The report noted that Costa Rica had the highest per capita income in Central America. and one of the highest in latin America. The country has a favourable climate and fertile soils, large land resources awaiting development, a relatively even distribution of land ownership and of income, a largely literate population with a highly trained professional class, and a group of enterprising business leaders. Agriculture provides about 90% of exports and ).[O% of the national income. Bananas and coffee account for about 90% of agricultural exDorts. The economic wellbeing of Costa Rica is therefore, largely dependent on these two crops. This dependence was no disadvantage during the period to the middle 1950's, for with a doubling in the volume of banana exports and the great rise in coffee prices after 19L9 the value of exports almost quad- rupled. The accompanying growth of the internal market provided the op- portunity for the expansion of domestic production; the output of staple food crops increased and new manufacturing industries wJere established. Government revenues exnanded ranidlv. making nossible an exnansinn in government services, particularly in health and education, and in public investment. esneciallv in transnortation. electric nmowr and hoiusinv. During these years of prosperity, the real national income is estimated to have riseXn by rather more than 6~ a year, wThicrh wi+i1h anr annual tTo,t of population of approximately 32%O permitted a steady rise in average per capi ta inco!tle0 2. The great dependence. on coffee fand banarnas .eras a Airanra after 1955. A sharp decline in the volume of banana production and the fall in cof4ee and banana prices aftcr 1956 brought trl^+ period of p-"i'7 economic expansion to an end. By 1958 the prices of bananas and coffee were 23Jand. O26&%Q respec"ive]-- below, 4h leesof15.) In ,H f hJ price falls the value of exports rose to a peak in 1958, principally because of a great increase in hle volumle of coffee shipmeu- wicUh, inL that year, were almost double the level of the mid-1950's. This increase in volume wa bnot, hever, suffiien to; maitai the -4ate4 4of- -row_ in -.41-_-4 v Las U no 1-) V ± UL±.Lk;LUL1U UV I?laL LLI UaJLL Uliz -lut- V. L t4LUIrju _L L! AJU values, and, with a slower growth in the export sector, production for the domestic_ market also grew mtore slowl-y. Thus, despite tne maintenancze of a high rate of investment at about 20% of the gross national product, the impact of the decline in export prices was to reduce the rate of growth of real national income to less than 3% annually between 1955 and 9508, only half the growth rate from i950 to i955 and less than the rate of growth of population. -2 - T ~ T 1-- . ~1 bN TTr'IT rmn v~-r TY'r l- 1 L. pUrXI I £U'JUrLL t 2 U V , I! Production and Exports 3. During the past two years the unfavorable marketing conditions for Costa Ricals principal eyports nave continued. hne average price oI Costa Rican coffee declined by a further 135/: between 1958 and 1960; the price of cacao, the third principal export, fell by 35, and altnough there was a modest recovery in banana prices the latter were still substantially below the levels of the mid-1950ts. Despite the price fall, coffee produc- tion continued to increase: rising yields resulted from the adoption of improved techniques and there was an increase in output from new plantings made during the years of high prices. In 1960 production at 1.2 million quintals was 100,000 quintals greater than the previous peak reached in 1958. This increase in production has not, however, been accompanied by an equivalen-t increase in exports as retentions have been necessary under the terms of the international coffee agreements. Cocoa production re- sponded to the sharp price rise of 1958 and output increased by 50'% to 11,500 tons in 1959. In 1960 there was a further slight increase despite the drop in prices over the past -two years. Banana production was sharply reduced in 1959 as a result of severe "blow-doTns" at the plantations of the United Fruit Company, but with the new plantations of the Standard Fruit Company coming into production there was some recovery in 1960 and exports last year were only moderately below the 1958 level. This was, however, still 20%9 less than the 1950/1955 average. L. Faced with a continuinr decline in coffee pnrices and reduced earnings from the country's traditional exports, the Costa Rican author- ities have endeavoured to encourage ner exports, wvith at.tent.in belng focused principally on the expansion of the cattle industry and, more recently, of sflarn production. W!ith lnrge areas of the country suitable for livestock production, a program to expand cattle herds was started about eight years ago. It developed sloq wly at first, but in the past t years bank loans for investment in the cattle industry have more than doubled and production has increased bay appro-r-tely one third. -el orts of cattle and meat have risen rapidly in recent years, though until now this trade has been based mainly on cattle imported frno Nicaraua andn Honduras for slaughter in Costa Rica. 5, Sugar exports had been very small until 1960, but the inter- ruption of sples from Cuba proide the opprt nity -or e a4 -. -Y~-''--~' ''ik'- ~~~ J U. .'JO.U ~ F91 'V .L"K-UA UiLI VV I.pJ UULII.LU~Y V.L L U_J4JdLLU_J..LL5 exports to the United States. With the help of additional banlc credit, sugr -l capacUy. has0 beenL UeLPCLJLId andU Wthe area ut:der Ucanet incL;reasedOt Exports which totalled only 1,200 tons in 1958 rose to 17,600 tons in 1960 and are expected to OreachC 23,° tons h - y- r. 6. Th± e 4totlalI valus of eAjrLs fell shar-ply in 19Y9 *l1i(I±y as Ue result of the decline in banana production, but with increases in exports ofl meatU, suga;r andU sMeminUor 11 t itm UIIa U n 'UUUVt_ .' LdTlld aUTyput,) trIe value of exports in 1960 was 16% greater than in 1959, though still below The 1958 level, as shown in Table I. - 3 - TABLE I: Composition of Edsports (millions of U.S. dollars) 'J U L'L Year Coffee Bananas Cocoa and Other Tota' 1957 40.6 32.2 400 2.2 4-et 83.), 1958 50.5 26.5 5.8 3.2 5.9 91h9 1959 40.0 19.1 7.4 3.6 6.6 76.7 1960 43.4 25.0 5.8 h.7 9.6 88 5 7. With a relative stagnation of export incomes and a rapidly grow- ing population, increased efforts have been made in the past tE7o years to promote the expansion of production for the domestic market. In agricul- ture the raising of the support prices for rice and beans and the provision of greater agricultural credit has since 1958 stimulated increases of 57% and 33% respectively in the production of these two crops. Production of corn has also risen substantially in the past two years and small surpluses of corn and beans were exported in 1960, while production of rice in that year was fully sufficient for domestic requirements. In 1958 and 1959 large quantities of rice had been imported. 8. The authorities have put equal emphasis, however, on stimulating the growth of manufacturing industry. A program to finance through the banking system imports of capital goods for industry was started by the Costa Rican government almost ten years ago. After a modest beginning, the program was gradually expanded, partly with the help of three TBRD loans. The program has been further stepped up in the past two years whers the banks increased investment credits to industry by 28% and 35% in 1959 and 1960 respectively, and total bank credit to industry increased by 5h%. In September 1959 new legislation was enacted to provide greater tariff protection and exemptions from import and export duties and from direct taxation for snpteified neriods to new and e m anding industrial enterprises The benefits of the law have been accorded to about I'0 firms so far. 9. Expansion has been most rapid in the industries producing food- stuffs,be+.vvergs textiles, cl.othing anA f-ncwena. No co -rehensive statistics of industrial production are available but some indicators of the growth of production are shonM in Table II. - h - TABLE II : Indicators of Industrial Growth October 1st Quarter 1957 1959 1960 1961 Industrial employment 100 110.9 113.3 123o,9* lWages paid by industry 100 115.5 126.5 1 1h.0D Electric power consumed by industry 100 141.9 170.9 198.5 * Preliminary 10. The increases in agricultural and industriai production and in the output of service industries made possible a further growth in real national income in the past two years. In 1959, with a substantial inflolw of capital, gross investment continued to represent almost 20% of the gross national product in spite of a decline in domestic savings to 14% of GlTP from almost 20% in 1954. Although investment remained at a high level, the further adverse change in the terms of trade in 1959, meant that the increase in real income in that year vas only 2.1l%, and, with a graoth in population of almost 4v17o, average per capita income continued its sloT de- cline. In 1960, with a 16% recovery in exports, no change in the terms of trade, and substantial increasesin the production of goods and services for the domestic market, it is likely that the increase in real income T7as considerably higiher than in 1959, and for the first time in five yea-s average per capita income may have increased. Financial Developments 11. After pursuing conservative monetary policies during most of the 1950's, the monetary authorities adopted a more liberal policy in 1959 and 1960 in an effort to offset the effect of the decline in exports on income and employment. In each of these two years the credit expansion exceeded 100 million colones, by comparison with an annual averaRe of 37 million in the preceding eight years. Credit to the Government accounted for only a small part of this expansion; by far the greater part consisted of new credit to the private sector. These changes are shown in Table ITTE -5- TABLE !II: Changes in Domestic Credit 1950 - 1960 (millions of colones) Annual Average Changes in Period 1950 - l95b 1959 1960 Domestic Credit To public sector - l.2 lLe9 7.7 To private sector 33.3 91.4 98.1 Other assets (net) 4,6 - 3.7 6.1 TOTAL 36.7 102.6 111.9 12. More than four-fifths of the expansion of credit to the private sector in 1959 and 1960 was directed to agriculture, livestock production and manufantnring induistry. Credit extended to finance the coffee crop in particular showed a substantial increase in 1960, partly because of a record crop in the 1960/61 season and partly because coffee growers made fuller use than in earlier years of the credit facilities available to them (c f' Table 29). A subta+n+inl pat+ of +he additional -1-firdv-nredr to the private sector was used to finance investment, 51% in 1959 and 86/of J^ 1960, with lnesr-tent credits b eng directed -anly to catt+le raising and manufacturing industry (c.f. Table 21). 13. About 10% of the resources for additional credits were provided from drawings on foreign- lons in 1959 and more than 50 ln 1 O0 -hen the Banco Central contracted a $10 million loan from the Chase Manhattan Pank. A 4ddiition- 1 non-inflationa4ry resources -ed n- 4 increases in bunk capital, time and savings deposits and from the sale by the banks of bond.s 4-o 4 11 e P I-t> 'I -15 AA I -- 4- - 41,A - - .4 r v - - - : : _ ___ 4 s L,V tAil pUU -L-. iICUOC I U L U O . Vr,%a A ULIJ.L VWU 1t 11) U , I UWCVV I, Vt LLL.LXLCLI UVLA) finance the whole of the increased lending, and, in 1959 particularly, the ZIPJ ,LU~LIIILU USJL ~ C~4U1~LiCL ±1 [1±_I4dUIIII OU -L 42L eff~ort tuo st-ir1.ulate output biy expanding credit flro,m inflationary 'source-s atLL a time of sharply declining exports brought a growth in imports and a dron in foreign exchange - reservesof 28 ^.. ' vi thUe conti.uation of 4the moneta-y expansion in 1960, imports rose again; speculation against the colon developed, the public's cash noidings increased very little; and, not-* withstanding the recovery in exports and the drawing of the whole of the Chase Manhattan Loan, foreign exchange reserves fell by a further l8%7^ Prices, however, increased very little. The monetary movements are shlown in Table IV. TABlE IV: Financing of Credit Expansion 1950 - 1960 (millions of' colones) Changes in Period Annual Average T19o 0-719-7- 1959 1960 Increase in Domestic Credit 36.7 102.6 111o9 Financed by: Increases in bank capital 11.2 11.2 6.6 Increases in time and savings deposits 9.2 1603 9.6 Increases in bond sales 2.9 15G5 9.1 Drawings on foreign loans 1.9 10n0 59.1 TOnTAT 25T2 53,0 8 Ar Tncre2se in I4.oney Supplyr 2.l.7 28,2 6A Incrneasne in 7--h-an-ge Amesevr () =3e 1oi2@ TOTAL 36.7 102.6 111.9 / * These figures are not quite consistent with those shown in Table 16; a reconciliation is not yet available 7. -7- Fiscal Developments 14. As the growth of the economy slowed after 1955, so also did the growth of Central Government revenues, and in the past three years, Govern- ment revenues incrcased very little, as shoun ir Table V. TABLE V: Central Government Current Revenues and Total Expenditures (millions of colones) 1956 1957 1958 1959 1960 1. Direct taxes: Income 32.5 b2.7 h6.l 38.0 37.1 Capital 8.6 10.5 11A2 13. 0 1h. 8 2- Tndirert taxes: Tmport duties ib5.1 160o. 173.8 179.6 189.6 Ot.her indirectrt taxes 4204 513 59.3 60.6 53.6 3. Other Revenues 32.8 38.7 34Y.7 32.b o005 Total Current Revenues 262,4 303.6 325.1 323.6 335.6 4. Total Expenditures 291.0 328.7 3b2.1 351.6 376w1 Balance -28.6 -25.1 -17.0 -28.0 -Lo.5 15. A procedural change was made in 1960 by which the proceeds of a tax yielding about 10 ml lion colones were assIgned directly to the Secial Security FLmd and were not recorded in the budget. Even after an adjust- ment for thls, the increase in revenues wTas sti1 srraller than in t-he years preced.ing 1959. Tax collections from the United Fruit Company's subsidiary were reduced from 16 million colones in 1958 to b million in 1959 and zero in 1960, mainly as a result of production losses due to nlowdowns" and of low banana prices. On the other nand, revenues from customs duties rose with the continuing rise in imports. 16. On. the side of expenditures, the growth of population has necessitated. increased outlays on the social services, particularly on education, wihere spending grew by 20% between 1958 and 1960. Despite efforts to hold down expenditures, costs of administration have also risen, The Government has been committed by law to make predetermined contribu- tions to the capital of state enterorises, notably the Electricity Institute and the T.Jational lHousing Institute, and the demand has groiw.n for new capital works, especially schools and highways. Nevertheless, investment expenditures have declined in recent years, and the rate of growth of to-tal expend.itures has fallen, though not as fast as the rate of growth of revenues, so that the deficit has widened, reaching LO million colones or 12) 'f (-rrent, revenuies in 1960. 17= To cover these deficits- thpe novernment has resorted to 1borrom.rving and other non-tax sources of income. Bond issues have averaged 18 mlillion rol nesa e ar in +he past four yearsq but. re-arhd n naiak o^'f mil l i^n i n 1959, In that year, only 15 million colones of new bonds were issued, but some 20 illlion orf bondAc w.re re- isse mros+ rof' -rh rh haid bcen brhtn'H+_ byT the Central Bank with its exchangle profits d-uring 1958 and 1959 and returred to the Treasury. These issues, vbhlch coincided with a lar,e refllnrng operation of the Government, greatly depressed the bond market, and by the by directly appropriating the exchange profits of the Central Bank and part ofLWl the. prof-ts _L)of somi-e other stuate inst-LitutLUions, kithe C4-overnme-nt- was able- Uto limit the bond issue to 20 million colones. 18. Although bond issues have been substantial in recent years, there 1- - - t±. -_C'2 … C' XI ) 22 .. .fl- 3. hias Ueen ittle in±±autionary L-±an±cziI of fiseai deficit. 30nds1 havu been issued to state enterprises as Doart of the Govermment's cayital contrioutions and to suppliers in place of cash payments. In 1957 and 1958 the banking system did not subscribe to bond issues, but in each of the next two years, the commercial banks bou.Knt 15 million colones of the new Government issues. However, only the bonds b,ught in December 1959 were held by the banks, for the 1960 purchases were completely repaid by the end of Ml'arch 1961. Wet borrowings for the banks, after taking account of changes in Treasury derclsits and of sales and redemptions of government securities held by the banks, were less than bond placements in the two years, amounting to 9.8 million colones in 1Q59 and 7.8 million colones in 1960. 19. The budgets for 1961 provide for total expenditures of 391 million colones, 15 million colones more than in 1960. The major increases are for debt service, education and public health, thus continuing the trend of a rising proportion of expenditures on the social services. The revenues in t1h ordinary budget were estimated at 346 million colones, u-p by 19 million ovrer collections in 1960 as a result mainly of an expected resurpotion of tax nay- ments by the Banana Company and of expected increases in revenues from other income taxes and customs duties. The "extraordinary" budgets provide for the use by the Government of the Central Bank's exchange profits, for a bond .s_ve of 20 million colones, which is to be talcen up by the banks and for 22 mill.on colones of additionial revenues from new taxes, wNThich the Government has nro- posed in connection with its project for a partial devaluation of the colon a means of rectifying the short-term disequilibrium in Government finaunceS. This project and the considerations leading up to it are considered in the next section. Devaluation and Related Measures 200 The serious decline in the prices of Costa Rica s export8i in recent VceRrs has r-reatlv reduced the retdrris to prodLicers t-nd .-c rentirned above, has b3rought the growth of exoorts t.o a hel t, 'he effolt tv iaintaiLn the pace ol. i;1GOmeT ;-re--` 1in t:ese cirr.-matanner has h,e-P accc,ni e' by -9- 3 c tnvul-lld growth of i;riports and a fa-l in foreign reserves to a inJeo ivnich at the end of 1960 was equivalent to only six weeks imports. The loss of reserves in 1960 was sustained, notwithstanding the drawing of the 510 million loan from the Chase IManhattan Bank. This loan had originally been expected to be disbursed over two years but with the seasonal pressure on the reserves during the second half of 1960 it became necessary to draw the whole amount over a period of only five months. 21. As a result of slower coffee sales from the 1960/61 crop and possibly of speculation against the colon, exchange reserves recovered hardly at al:L in the first part of 1961 and, by the end of April, normally at or close to the high point, were only$L2.8 million. On the normal seasonal pattern this level of reserves would be almost exhausted by the end of the year. Faced with this prospect the Costa Rican authorities have taken steps to arrange standby credits of ;15 million with the IM and $6 million with the U.S. Treasury, and a short-term loan of 52 million from the Federal Reserve Bank of New York. At the same time they have proposed various measures designed to correct, at least in part, some of the more basic disequilibria in the economy. 22. The most important of these measures is a partial devaluation of the CO oDn which wonlnl i take the form of a 1inifinatinn of the nresent official and free market rates of exchange (¢5.61 and /6.65 to US.$100) at the free market rate. This change wourld benefit mainl> the bannn2 companies and the producers of coffee and sugar, products which have been eported at the official rate in the past. Producers of a variety of minor exports including some manufactures, which have until now received 6% of oexchange earnings at the free market rate wouldals A o benefit, though to a lesser extent IJhile assistance in some form has been considered necessary for the coffee industry after the long- period of declining prices and rising costs, the Government believes that the iLndustry shou-IL'dnot bDenefitLL uto the f l extent of thle dlev,_ 'ua,tion and has proposed new taxes which would allow producers to retain about 50% 01 Ulte benefuI-Iie.'tL.. Th1e Zd4le r-u±e woLU 'd Wja..pply to Uthe CLtuSa. IinULdusy adUL dai exchange tax of 10% would be imposed on the banana companies. The net benefit to producers of coffee anrd sugar would be an increase in receipts of about 10%; the returns to the banana companies would increase by less hin 5/ri anU thL rL-tUU to expUoters oJi ±UI(ite WsiIcli w lhave been Ireceivi.Lng1 65 of exchange earnings at the free market rate by approximately 6%e. 23. The_ unification of exchange rates, if adopted, will affect the costs of about 60%o of imports, which until now have been accorded the official rate. These imports have been essential commodities and producers' goods, and the change in the exchange rate would increase the costs of these items by approximately 20% in the absence of compensatory measures. A redu'c- tion in import duties on many essential imports has been proposed, however, and although the costs of some of the more essential producers' and consumers' goods would rise, the devaluation has been calculated to increase the cost; of living of the poorer classes by no more than 3%. 2)e The reductions in duties on essential imports are expected to reduce customs revenues by about $1) million a year. This loss will be morP than compensated by the increased revenues from the additional export taxes and from tariff surcharges of 1/% and 3C' to be imposed on a range ^f less essential and luyary imnorts. rPhe surcharges are proDosed as a te2nnorary - 10 - measure pending the revision of the customs tarif-. ine net improvement in the fiscal position, after al1owinff for the additional cost in colones of servicing the Governrment's external debt and meetin- other ''overnment expenditures abroad, is estimated at XLO million, w-,hich woLild probably enable the Jovernment in the next fiscal year to meet its obligations without resorting to a bond issue. 25. The Government's Droposals are now before the Costa Rican Conaress and a decision is expected in the near future. If these proposals are adopted, they would modestly assist the major exoort nroducers, provide sorme stimulus to the expansion of minor exports, damp doiwn demand for imports and through the associated taxation proposol.s do -:itch to reduce, if not eliminate, the imbalance in Government finances. It has been recomnized that some of the benefits of these measures cDuld be offset if the credit expansion in the future were to be as -rapid as in the past two years. and the Costa Rican authorities have a7reed with the IN7 on the limits to be imposed on credit increases over the next twelve mDnths, sublect to an unward adiustment in the event that new foreii:n credits of not less than five years maturity are obtained. The Central Gank is seekin7 additional loans pron abroad to heln maintain the flow of credit to the private sector. - 1. - III, FUTURE PROSPECTS Prospecto for Production and Exports 26. The structure of the Costa Rican economy is unlikely to change radically in the foreseeable future and the progress of the economy will be closely geared to the progress of the export sector. Notwithstanding the prospective growth of minor exports, export earnings vill continue to depend mainly on coffee 4nd banapas.The marketing prospects for both commodities are at present poor: coffee prices in the absence of an effect4ve international price stabilization agreement are expected to decline further. though at a slower rate than in the past. and the weakr ne8s of t4e market for Costa Rican bananas in the United $tates is lik4y to continue in view of the volute of shilments coming from Ecuador. 2?. Nevertheless. the devaluation of the colon mav stimulate a further expansion of coffee production and of export volumes provided that quch an expansion is not nreeluded upder anv new international coffee agree- ients, At present the-banana companies, whi;e anticipatinW a rise in ,M"nA11i+Anrn inm t.a mhnrt. +.mr- Ain nnt. nlAn t.n nlqnt. nAdlittnnal anrease gnd, with the spread of disease on the Pacific Coast, the volume of ba.nana atpnrtC ,m,: declina- Prlicen prospects :'or aerao are nnor anA a more stringent quality control on imports into the U.S. market is to be 4inn^czac early inr 41. IQA*A . ii-e fn R :are likAenlu t-n rpqlllq in n decline in the volume of cacao exports, The expected decline in expqrts 1 ~n--,r .-.A .a 4 a4. aV,.-,w nh.r,Gw,+ +Uf *1anaen+ P 4+tvf irnS,4 v4 banaras& flLM4 %a' hcaoLa' 4418 in shatrp. 41USw v- he fu . 4 yS ago when the last economic report was written. At that time it appeared lely ~ U --- -ha A-Ca poutor. would rec-ver v4o +%,o high,% 1-evIl %.e thv tCLO1Q1a.i P.L-W"LA, ISJ.J, W JL4Li %. iwv u uI ,OI a . early l950's and that the production of cacao, after a dramatic ripe in 15,would aubsequently- corntiuelu-v to ir1,ease0 4B.~ ~J To offset "aE probal' Sw e;>e in -91nng -%ll J ,. oPl ~.7~7p WUL4.L ~uU~U~tI J. 1SI.05 OLL M WJ il -J.1iJ t s Lc4.L _tt; JuA bananas and cacao, exports of sugar are expected to increase provided tU44 zwie 'Jni. ted S°ates ar,k -t IUotWtUlLJ1AO toV beO oper.A UV Cosva J".iC%. W^oU- V re.,and 9 with the expansion of the cattle industry, it should be possible tomaiulntain an.d raduaXl.-y raise the level of 'wat eapots, Jr spite of a drop in tAie availability of imported cattle. ?9V Exports of manufactures are likely to increase though the opportunities ior expansion will be quite limited au long as Costa Mica remains outside the Central American Common Market. The Goverrnent has Mt!l! now 'qelieved that integration would aamage some Costa Tacan industries, established with the assistance of substantial tariff protection, more than it would benefit otner industries which woula gain access to veighboring sarkets, For thie reason, Costa Rica has not beep a party to the agreement or El Salvador, Guatemala, Nicaragia and Honduras tp establish free trAde in domestic products within five years, ..Neverw theless selected industrVis are likely to be established in Costa Rica to verve the vwhole Central American market, even if Costa Rica doea not participate fully in the integration movement, One of these is the fertilizer industry, which is expected to be established within the next eighteen months and which will make a sulbstantial contributior to - 12 - Costa BHicals export earnings. All raw materials will, however, have to be imiorted. 30. At a later stage, bauxite may be exported, but the Aluminium Company of America which holds the ri:hts to the known de-posits does not expect to exploit them during- the next few years. Former hopes of oil dis- coveries have! not been realized despite extensive exploration. 31. On iDresent expectations, therefore, it seems probable that Costa Rica will be able to increase forei-zn exchange earnings over the next five years at an avera-e rate of approximately 3,- - 47% annually. This rate of growth would be higher than that achieved during the past five years nut less than half the crowth rate from 1950 to 1955. 32. At the same time. it will be possible to expand productiDn for the domestic market. Althoufh manufacturing indiustry has growJn rapidly in the nast few years. there remain favorable onrortunities for expanding the *oro- duction of a ranee of manufactures for the local market: tex-tiles, clothing, soap nnint, fPrtilizersj cpmpnt and concrete nrodcbt,s nre sonme of the iftems for which the demand is now largely or Twholly met from imports and of wfhich a major part could be produced inCosta Rica. Iention has been made of the fertilizer project; a cement project is now in its initial stages; the textile and clothingn industries are in process of er--nsion. I -n T ne irce-nt -are+I being made or olanned in expanding the production of paints, soaps and de- ter£ents A sr.'l Al ,,ne,ry is. c'srI 1T-e-l + o- be etabli - I T_ _ : - - -- -' .Ik._ - - - e _ - . .1- _1 -~ 4 -_ uAO LJS.j C$,I U'.) AU dS -4.. I. ure, the -1U) - U. OJ - f I. ;~ ks%J L JC~ U C) UiUL4 .C)[I.C'LUACL a11 J cLL d UL UU. W[ltl : LCIU 'J' 1tLl U 11t d D UJi WUld) ut, output of staple food crops can be rapidly increased, and wJith armle land stil l unueveloped, Uost a Llca sho-uld be aUuLe to increase production b1oth UL export crops and of food crops, meat and dairy products to meet the needs of - - - I _ I - -- ic- _ II , - -- I---- tile expanlding population,growing by almost 4719 a year1 for some tLIme to com. 3a. 1h.ne exploitatiDn of existin.-. ooportunities to increase eorts and to exp)and domestic production may nrovide sufficient nel! jobs for the -rowincg lab)or force and some increase in ner canita income over thie next several years. Nevertheless, the row-vth of exports will be aodest and the smailness of the market sets a limit to the expansion oi. dorestic productio-n, This limit could quite quickly be reached, and the expansion of the economy would then depend primarily upon the further growth of exports. It is iampor- tant, therefore, that, while existing omportunities are being exploited, efforts should be made to discover and develop new exports, to determine whether greater returns can be obtained from existing exports, and to strength- en the compet:itive position of local nroducers for the time ;hen the lbenefit- of access to the larger Central American market make it worthwhile for Costa Rica to Join fully the integration movemente - 13 - ?ublic Sector Development Plans 35. The expansion and diversi'ication of production nDw in prospect will necessit.ate the further development of basic econoDiic services. A groiwth in oroduction of food croos and cattle will require the opening uD of new lands, the construction of penetration roads and the imorovenent of existinsg highwavs. The expansion of manufacturin_ industry TwTill bring increased demands for electric power and necessitate the f'urther expansion of generatins capacitv. The developoment of manufacturin,7 will bringz larger concentrations of population in urban centers and particularly in the metro- politan area of San Jose. This will in turn require increased nrolTision of services such as power, water, sew^erage and housing. In additiDn, the growt.h of noniliation will renivire .n Pxnansion of the social services, particularly of health and education. 36. The responsibility for providing basic economic and social -!a --ri na zv-cdc m ;nirl ir n n + 1i q+ +StP nrr n 7m;pnr,i. on-, f-. , irl)l r cpr+.nr embraces, inter alia, part of the railway system, one of the twoD maJor ports, the hri .ay system the major electric-ity u- rtak in, urban water and seweraae services, some housin- and most health and education services. 37. While Costa Rica has not yet formulated a development prorram -Lor I,llG VITLIV Jt;n PLILJ.L-L.;> .- VJr , lliS< CJl ± UJ.Jlls I Cl KJll,UVUO Dnsib -U- ilvz r.1 Mfinistries or1 autonomous agencies -- are imolernentin:, or preparing develop- ment plans. In fur!-nLLatin:. thir± Ulans thle Costa Rican aUtu1vls ties hiav in general been realistic and have -oaid due regard to priorities. The greatest progress has been made in recent years in ex,anding power supplies and educatiornal services. The construction of the Inter-kmerican Hi,hway through Costa L.ica has opened un newT areas of the country but there has been little other major road construction in the past ten years. 'oth the publicly-owned and privately-owned rail1ways have added to their capacity in order to handle traffic offered. f!fajor imnorovements to the tw,,To principal Dorts have not, however, been made for many years, and an exoansion of port capacity will. probably soon be necessary. T.e develorm.ent of water su.nolies and sewera- e services in urban centers, particularly in the metropolitan area of San Jose has been relatively ne..;lected, but a start is now obein: made on a new water scheme for the capital. 38. In the past few years, investment in the p;ublic sector has declined, partly in resnonse to a decline in nublic sector savin7s and partly bDecause, with the comrwletion of the most urgent development projiects, the planning of new projects, particularly in highways, Tnower, and w,ater supplies, has taken time. Plans for a number of major projects have now been prepared, but Costa Rica at present is less able than f'ormerly to finance them from her own re- sources. During most of the 1950's savings in the public sector, which covers both the Central Government and also autonomous a-encies and Government enter-. prises, exceeded public investment exoenditures and the balance was channeLed to the private sector. 1iith the decline in coffee prices during the past five years, savings in the private sector have fallen increasin.ly short of investment needs, and the surplus of savin-s in the public sector has been insufficient to fill the gap. The 'overnment and state entities have borrowed from abroad; and. have channeled the bulk of these borrowings - 14 - I. -i , e ,anks to tn e private sector. -'i t he nrospect ot r- o:-izca=e in Tu;lic investment, it is likely, that the surolus of public sec-tor savings available to the private sector will diminish, but it is uLnlikely that the needs of the private sector will decline. In these circumstances, the ;'overnment migjht step up 1;he rate of saving in the !)u'>lic sector from the present level of about b1-5 of GNP or borrow riore from abroad. "Tarious steps have already been taken or are -oroposed to increase savin,s of the Government and of state enterprises, but it is likely that Costa Rica will have to rely on official capital imnorts to a greater extent than in the recent past in financin, its development orograms, 39, A loan of $8.8 million from the I9RD is helping to finance the first sta.-e o.f the development nrogram of the Electricity Institute; the IBRD is being asked by the rhovernment for $11.0 m.illion towards -the first stage of the nelw, hig7hway plan, which comprises nrincipally the betterment of the existin:. highway network; loans of Sli.5 million and $3.5 million from t;he Eximbank and the DLF respectively have recently been made to finance the new water suppDlv system for San Jose. and $3.5 million has been loaned to the National Hous:inc: Institute by the IDB. The I3RD has received a preliminary renuest for a loan to exnand the nort of Puntarenas. and additional roreiPrn loans will be sought within the next eiwhteen months or tw..ro years to assist, in f'lnannin., lhe 1 ) late' 'r sae the npower n-n- hi gh-uTr rdevePI -)nrnnt. rv7r-m as well as for the cornoletion of' t.he Costa Rican section of the Inter-Ameri- onn n cs' - . i -l, T41 C t *-iC3 J a iS esn A n arr- + i 1,,. - s+,.t-r , + 1 srl,s fo abroad to finance the exoansion of basic services, she will make major cDntri 4 L'uJions± from domesici~~ savin,, lmdh iie joVernme1nitIiU isL UVI a to sU.b- scribe almost 03.0 mnillion annually to the capital of the Electricity and ioiU Ui Insti, tutes, andJd 'Ith n1wI T.lUte aet-V±ie w±±i.J-ll rIei±ve a cartai. cUti rs.- bution from the State of well over $1.0 r;illion a year. The Government is also s5ending- each year ao-but $3.0 IUmillion on higrhways a-ld almost $2.0 million on school buildings. The Electricit- Institute is intending to finance from retained earnings about u5, of tne canital costs of its exapnsion -pro-ram fDr which the I3RD has made one loan. To helio finance the local currenicy costs of the new h.i ;'' n lan the ."overnment has as:i~.;ned tax revenues of more than 1.0 mij-llion annually, in addition to the $3.0 million mentiDned above. The Wivater :-ervice is required by law to charge conasumers l)R; more than the costs of operation in order to prrovide for future expnansion. New hospitals and clinics will be rinanced mainiy by tne Social Security .und. Under 1 egislaticii extending the social security coverage, the Fund expects a substantial increa2e in contri>utio:ns and hence in the resources available to it ior investmient. These at present exceed $3.0 rrillion a year, a substantial part of which may be made available for investment in the public sector. 41. In summary, the contribution of the central government alone to financing government develooment projects in the next few y-ears seems un- likely to be less than $10 million a year, and the contrii.utions of state entities will also -orobably be substantial. Against this tlLe rate of dis- bursement -of new foreign loans and of those now in prospect for projects in the public sector seems likely to be between $ 9 million and $10 million a year. Thlus, Costa Rica's contributionstowards financing public - 15 - sector development projects will probably be not less than one half. In addition, some 5uJlic sector savings should continue to be available to help finance investment in the private sector, which may also absorb new foreign credits thrournh the banking system at the rate of $6-7 million a year, Conclusion L,2. To sum up, with the prospects for production and exoorts out- lined above and .-iven the very substantial increase nroiected in nublic investment, it should be nossible to maintain a rate of ,rrowth of output in excess of the ve-,lr fast rate of growth of ponl a tinm- This will, hoI.w- ever, require an intensification of the efforts of the Costa Rican author.- ities to divirrifir the economyX, and 1.Till derend on an increase in foreign capital inflows in the years immediatel.y ahead. - 16 - IV. CREDITWORTHINESS 43. As of December 30, 1960, the external public debt of Costa Rica totaLled .ta,6i mi I l ionn _ ;nce then, new lroanq ?-r-nqpa lei in forei gn Per.changP tont_l1 irnr ! - -_- - -' *7-- -r-E-'---- --' ~---- ----^ - ~ --~ al3.3 million have been obtained. The service on the existing debt reaches a riea rof 5pOn9 r.illinn in 10Q29 e-quiJva1Pn+.t to 911 nof estimaterd foreign exchange earnings. Service payments are scheduled to decline rapidly to $6.5 mllion in 1966, equivalent to only 5% of e mi medr forei gn evchange eam inrrs in that year. While the service on the external public debt is quite high i- 1962 so t;hat -t wou d be A rudent for Costa P;ca to avoid incurri ng new short-term obligations at this time, the country should be able to support subtni'L mor ln --e e, ernal et LLcL.) 1 nU-L=dLL 11UUJ.tU -LI±, L~±41L -,~. LO.UZU LL uo 1. A. el Jd C Rla'L . . f±LIU 4. it 'I lcJ, £I-wever, lo suppo. -4 an in,rease in her external debt of the size implied by her tentative borrowing program over the next eighteen months or two years, if all loans were to bue made available on conventional terms. In addition to the loans required for thle expansion of b asic services in the public sector, the Costa Rilcan aUthoiL- ties expect to seek new foreign loans to finance imports of capital goods, agricultural and industrial credit and farm colonization. It is possible that new external borroiiings over the next t wo years could amount to approxiL- mately 260 million, which would permit disbursements on foreign loans to reach the levels projected.in paragraph 41. 45. Although the total of prospective new foreign borrowings is large, the loans wiould finance projects of high priority and .would help Costa Rica maintain thle relatively high rate of investment of recent years. Until 1256, Costa Rica was able to finance about five-sixths of gross investment from domestic savings, but subsequently, with declining profit margins and srme.ller budget surpluses,capital imports financed a larger share, approximately one- fifth of gross investment. 14ith modest export prospects in the next few years and a continuing ispid growth of population, Costa Rica will need to attract substantial capital imoorts in the future if investment is to be hfigh enough to support an increaEe in per capita income. 46. If all loans were to be made available on conventional terms, the annual service payments on prospective new external borrowings would be between $6 and $7 million. VJithout taking account of pisible new borrcvin-.. after 1963, the total service on the external debt in 1966 would be of the order of 814 million, 40% above 1962 level and equivalent to approimat.ely 11% of estimated gross foreign exchange earnings in 1966, L7. Gosta Rica's Ilnger term prospects may improve sufficiently, as a result of the development efforts now under way, to justify the assumptic:i of suc-h an increased debt se…rvic.…. 1The are, h." csea uncertainties in the picture, including the continued uncertainty in thle s-1 l 1 + 1 |~~1 - 1- 4 . , A ~ > fL . A, _ I 1 n ;, nii+1r~~c&- frV 4VA. t_ V 7 VTT(s9 ,- J=+ - 1 V @' i i'- ex'ot an V>/d V _ i the competitive position of local producers bear fruit and can be adequately assessed, such a sharp increase in debt ser-vice -so-uld seem lmpraudentl. 'x> rr part of Costa Rica's external capital requirements might thus be appropriatelY supplied Uon specix;a LAbrm5. A TPTTTn I A EIIDi!i.]L.LA -L PROSPECTS FOR FOR7IGN EXCHANGE EARQNDIGS Merchandise Exports i. Earnings from Costa Rica's three principal exports -- cofiee, bananas and cacao -- are likely to constitute not less than 70QJ of total export earnings in the foreseeable future. N4evertheless, with the expan- sion of the never exports, particularlv meat, sugar and fertilizers, the share of the three principal products in total export earnings will slow- ly decline. 2e Prospects for banana production have been discussed in Chapter III. Price prospects in the United States, the principal market, are rather un- favourable and no recovelry from the present levels has been assumed. Pro- duction prospects for coffee and cacao have also been referred to in Chapter I1To The average export price of Costa Rican coffee is expected to decline gradually to about 35 U.S. cents a lb (f.o.b.) by 1965/660 In estibmating future export earnings, it has been assumed t,hat production will be sulficiecnt to allow a rise in the volume of exports during the next five years at an average rate of 3% per annum in line with the expected annual increase in Free World demand. For cacao, an average New York price round about 19 -- 22 cents a lb. has been assumed for the next five years. Costa Rica's export prices are about 25'% to 30% less than New York prices. 3, Of the remaining exports, the most important are meat and sugar. At a later stage exnorts of fertilizers will be substantial. Hteat exDorts have until now been based mainly on cattle imported from Nicaragua and Honduras for slaughter in Costa Riea and re-exnort. The numhers of Nicaraguan cattle available for export to Costa Rica are fewer this year tlhan in 1960n and i-i+th the eyansion of pTroessing carnacitir in Micara,gua, it is expected that the numbers will continue to decline. The surplus of Costa Ric.n cattle is not exprected to be large enough to maintJ4n meat exports at the 1960 level in the immediate future, but the surplus should rise nuite qnuinkliyr S1ugar erpnrts depend primarily on access to, th T U market, and, if this remains open, a considerable increase in exports shou]ld be possible. Production f fertilizers is scheduled to start tow^ards the end of 1961, and as the capacity of the plant is gradually developed, e.xorts are expected to rise too sapproximately ul mices of llion a been assumed for the period 1962-1966. - 2 - ESTIMATED VOLUME OF EXPORTS Bananas Coffee Cacao Year (Stems) (Boxes)* (QuintalsY (metric tons) (millions) (thousands) (thousands) 1961 6e4 2.5 1,100 100 1962 6w3 265 1 jO3 9e0 i96h4 506 30 1,180 8.0 1966 50 302 1,2d0 800 The St.andard F-rulit Gom.npnyv is box I-in.g i -ts - fruit for emnmrt. ESTThTED rEXPVTD PPC'Djr' TM CTVOnTA R~TCA Year Bananas Coffee Cacao Gros Michel Cavendish U per stem U. S. per bO -ox U.S. cents per lb. i961 3.2O 3.10 .o ' 1962 3.20 3.10 39 15 1964 3.20 3.10 37 15 1966 3.20 3elO 35 15 ESTIMATED VALUE OF EXPORTS U.S. ' millions Year Bananas Coffee Cacao Meat Sugar Other* Total 1961 28.2 4 3.3 4.0 3O4 6.0 885 1962 27.9 J__ 30 1.0 J2 6- 99 3 1964 27-2 44c1 2.8 5.5 5.6 12.0 96.7 1966 25.Q 8 2oi 2*,8 7e0 6.2 20.0 10327 * Including fertilizers. -3.- Invisib le s 5, T The most important single source of foreign exchange earni-ugs on non-merchandise account in recent years has been tourism. With improvEd communications both within Costa Rica and between Costa Rica and other countries, a continued rise in tourist receipts seems probable. Some increase in receipts from transport and insurance services is likely with the growth of foreign trade and a further rise in expenditures by foreign governments and missions in Costa Rica is probable. Investment income from abroad has been small and no substantial increase seems likely. iMiscellaneous receipts, including migrants' remittances, have not risen in recent years and no growth has been asumed. E'STIMTED RECEIPTS ON NON-IERCHANDISE ACCOUNIT U.S. S millions Transport Expenditures Year Tourism and Investment by Foreign Misc. Total Insurance Income Governments 1961 7.0 3.6 0.' 2.h 6.0 19.6 1962 765 3.7 0.6 265 6.0 20n 3 1961± 8. 3.9 0.6 2.7 6.o 21.7 1966 9h.5 4.2 0.7 2.9 6.o 23.3 ESTITTLTED TOTALT. r.TjTPMT P-APTTxnTr. OF 1FOnlPTVT RIyr\TAfT\rl U. ~ 1 -S.1- - r,nlli-- -o-s Year Merehandise Invisibles Total -I OA -I 00 , .), -I l (Ct1n cf -7 ;D n 1962 89.8 20.3 1101e IO'4. 96 7 21 7 L i8.1. 1966 103.7 23.3 i27a0 I'd w |-I Table 130. Icau.Lt: PJNJ E;xternal Public 1A^bt) 1. Stmurnary of External PubL ic Debt 2. Service on External Public Debt, 1961 - 1975 Pc2uLat ion Growth 3. Population Growth, i950 - i960 Nalt.ional Income and Production Trends 4. National Income Trends, 1950-59 5. Expenditures on Gross National Product, 1950-1959 6O Industrial Origin of Gross Domestic Product, 1950-1959 7. Composition of Gross Domestic Capital Formation, 1950-1959 8O The Finance of Gross Domestic Capital Formation, 19g0-1959 9. Agricultural and Pastoral Production, 1950/51-1960/6l 10. Power and Transport Statistics, 1948-1960 Trade and Balance of Pa7nnents Statistics 11. Composition of Exports, 1950-1960 12. Composition of Imports, 195o-1959 13. Exports and Imports by Regions, 1937. 1953-196o 14. Export and Import Prices and Terms of Trade, 1937, 19148, 1950-196O 15. Balance of Paynments, 1950-1960 16. Foreign Exchange Reserves, 1950-1961 Financial. Fiscal and Price Statistics 17. Surmary Accounts sf the. Banking System, 195_-196n 18. Changes in the Money Supply, 1951-1960 19. Crediit Ceilings for Go)mmerein1 Banks, T.ons +.-r9;n, and Central Bank Rediscounts, 1951-60 20. Gnmm.9rcia IRnnk T,Lons hr Purpose; 1056-1Q60 210 Baink Loans to-Agr'icitute,Livestock and Industry by Purpose, 22. Government Ordinary Revenues, 195h-1961 23. Gover.nm-ent Extraordinary - Revenues, l9-l96 24. Government Expenditures by Purpose, 195h-1961 2 C- anoverrm-ient .revenues and EApendit urs, l95Wl=961 26. Interna'l Public Debt, 1951-1960 07. TDomes4ic. Pi Indic T sA-U , 195Uv i7.-1I 280 Irdices of Minimuml W.ages, 1950-1962 290 Prices of Costa Rican Bonds in New York and London TABLE 1: COSTA R1iCA: SUPII'ARY OF EXTERNAL PUBLIC DEBT OUTSTANDING PLUS UNDISBURSED AS OF DEC 3. ___69 National and Government Guaranteed Debt (In thousands of U.S. dollar equivalents) Debt Outstanding Major Reported Item Plus Undisbursed Additions December 31,1960 Jan. 1 - August 3 1961 TOTAL EXTEUNAL PUBICTT DEBT 6.p_ Undisbursed 8,768 13,300 Publicly-issued Bonds 10.553 - U.S. Dollar Bonds 5,751 Pound Sterling Bonds 4,802 Including Priva-tel,y-placeud Dlebt (-TSupLierst Cre11t4s)1,2- V~~+ 1 .. ~~ Th~4. lareu-L 1,0 42 Outstanding 18±0,442 Undisbursed - IBRD Loan (including Participation) 69568 Outstanding 5,022 unudLs'isburse'd 1,934 8,800 U.S. Government Loans Export-import Bank' 20,05 4.500 Outstanding 13,224 _ Undisbursed 6,834 4,500 IJ Does not inc:Lude an ICA Loan to Costa Rica of $2,000,000 repayable in U.S. dollars or colones at Costa Rica's option. .Source: IBRD - Economic Staff 'TAB].E 2: COSTA RICA: SUWIIARY OF lCSTL TD CTRAC'nA'L EJMTE?lE3T AMD A 1uRTIZATION PAYWI.NIS ON E. IT7'JJL .,BLIC DUE3T O!JTf,TAADITNG PLJUS U1DSIDIURSED AS OF DECFNMBER 31, 1960C WI'H KAJOR REi-ORTT) ADDITIONS TO AUG. 3 1961 National and Governme-nt Guaranteed Delbt (In thousands of U. S. dollar x iuivalents) T cl t at 1 Debt outstanding Service P.ayments by Type of Loan Plus Undisbursed Payments Duri.ng Year Publicly-:is sued Privat&:1y IBiD U.S. GOvt. Year January 1 Amortization Inter est Total Bonds Placed debt Loans Loans 1961 56,009 6,8)06 2,5510 9.,396 -L,22'7 4,913 1,642 1,61L4 19,69 62,347 7,2L11 2,969 110,210 937 4,862 1,956 2,1455:; 19 63 54,945 6,312 2,661 8,973- 937 3,321 2,209 2,506 1964 48,465 5,6 75 2,349 8,02)4 93'5 2,856 1,777 2,h566 19 65 42,615 5,92^0 2,0143 7,96:3 91( 2,590 1,763 2,700 19 66 36,5]i4 4,75I4 1,7)L7 6,541 91(D 2,002 1,000 2,629 196b7 31,533 3,929 1,4599 5,142 8 91( 986 987 2,5145 1963 27,1411 3,031 1,331 14,362 910 - 973 2,479 19?69 24,178 3,09)4 1,188 LI,282 91( - 961 2,411 1Q70 20,874 2,708 1,045 3,753 433 - 948 2,372 197i. 18,079 2,136 919 3,055 394 - 935 1,726 15,856 2,261 811 3,072 589 - 823 1,660 173 13,515 1,9214 7C1 2',625' 3214t 710 1,591 11,551 1,673 605 2,)278 141 _ 710 1,52)4 1''75 9,872 1,67'6 517 ,19 3 26 _ 710 1,457 urjllc.o o TPf T - Eo.rnomC Stff_ TABLE 3: COSTA RICA: POPULhTION GROWTH 1950-1960 Year Donulation Births ner 1000 Deaths ner 100() of the Population of the Population Tnt% 1 5 Tncr _ 1950 812,056 2.94 46.5 12.2 1951 838,084 3.20 47.6 11.7 1952 868,741 3.66 49.8 11.6 1953 898,329 3.40 48.5 11.7 1954 933,033 3.86 52.6 10.6 1955 969,640 3.92 51.4 10.5 1956 1,01.,170 4.59 52.1 9.6 1957 1,052,474 3.77 50.1 10.1 1958 1,099,962 4.51 50.1 9.0 1959 1,148,441 4.41 49.6 9.0 1960 1,199,114 4.41 50.7 8.6 Source: Offico of Census and Statistics: Annual Reports TABLE 4: COSTA RICA: NATIONAL INCOITE TRENDS, 1950-59 195o 195L ]952 1953 195L 1955 1956 1957 1958 1959 Export income / (mill, calornes) 348 388 467 505 537 531 477 596 65A 556 TDomestic income (mill. colones) 778 821 829 924 999 1,163 1,293 1,289 1,367 1,5'4, National income at current prices (mill. colones) -I 'Int 12 1 ,n20 1,2 1 1,,36 I r , I 694 1 V,770 I Odr 20 2,) 100o ..LOLAE:/ ±,J..4' -L ,r-7 .L, 4~7U -L,LI4'-7 ..L, );)'J L,V74+ ..,f V.)I - ±, UUL)) 'JA National income at 1953 prices (.nill. colones) 1,161 1,163 1,296 1,429 1,491 1,598 1,654 1,714 1,792 1L834 Year to year change (%) - U.2 11.4 10U. 4.3 7.2 3.5 3.6 4.6 'ID Fer capita in- come at 1953 pz-ces (coThnes) 1,430 1,388 1,491 1,591 1,598 1,647 1,631 1,629 1,629 1,597 Year to year change (%) - -2.9 7.4 6.7 0.4 3.1 -1.0 -0.1 - -2.0 .,' includes f.o.b. value of banana exports Sources: Central Bank of Costa Rica, National Income and Product 1950-57 and 1955-59 (San Jose); and International Monetary Fund, International Financial Statistics (Washington). TABLE 5: COSTA RIC4: EXPJJDVIURE ON GROSS NATIONAL FROaJCT 1950-59 At current market prices (in ijions of' coloneT …__ _ _ _ _ … _ 1950 195:1 1952 1953 1954 1955 1956 1957 1958 ;L959 1. Private cciriswuplion expendcture 977.4 1,076.7 IL,135.8 1,239.4 1,333.4 1,483.8 1,542.3 1,676.9 1750.6 1883.5 2. GeneraL govrexr ient consamption expenrditue 9144, 107.9 125.,1 126.3 15&.4 193.2 251.7 256.3 296.7 291. 2 3, Gross domestic fixed capitaL formation 205.2 239.1 279.1 344.o 359.2 394.1 417.B 434.13 404.o 451.4 h. :Increase in stocks 165.8 22.0 30,8 25.3 29.7 31.4 37.6 32.81 33.4 41.5 5. IE,ptts of goods and services ) 387.8 467.o 505.2 537.4 531.4 476.9 596.4 658.14 555.9? ) 39.9 6. Less imports of goods arx services ) 391.3 461,8 500.9 538.7 582.6 613.5 694.1L 678.:L 693.i7 Expenliture on gross domestic product 1,333.7 1,44'.,2 -L,576,.0 1,739.3 I,879.4 2,051.3 2,112.8 2,302.7 2,465.0 2 529. 8 7. Net factor inecoue from abroad - 35.5 - 33.0 - 60.0 . 40.4 - 33.2 - 19.6 9.0 - 15.5 - 15.0 0.2? Ecpaiditure on gross national product 1,298.2 1,409.2 :L,516.0 1,698, 9 1,8146.2 2,031.7 2,121.8 2,287.2 2,450.0 2,530.() Source: United Nations Year 13ooks cf NationELL Accounts Statistics 1957,1953,196( ThBLE 6: COSTA RICA I.NDUJSWRAL OtIGIr; OF GROSS DcAi TS7TC PikD1JCJ2l/ 1950-59 At current factor cost (Tnjl ioiis of' c61oles; 1950 191`j 1952 19533 1954 1955 1956 1957 1958 1959 1. AgricultLre, forestry, humting, fishing 5149.8 5E9.5 650.0 704.2 732.8 789.9 712.5 799.4 873.0 807.5 2. Mianngacl quarrying ) 137.8 1148.5 162.2 175.8 186.5 201.1 220.1 233.8 244.5 260.4 3 . Mlamnil acturing) 4 . Construction 39-3 142.1 46.1 5C)-o 53.2 57.3 62.8 67.1 71.8 75,6 5. Electricity, gas, watter and sa,nitary services 92 6. Transportation, storage and ccxnmunicaticn 141.1 165.8 50.6 55.3 5r .4 63.4 6a.6 714.2 79.8 90 1 7. Wholesale and.^etail. trakle 16.9 115.2 12,.1 131,.9 11!21 l54.2 169.4 18h.6 197.7 213 5 8. Bank-ing, insurance and raL es tate 16 9. Ownership of dwellings W 514.8 58.8 63.7 68.6 73.0 78.4 P5.0 88.0 90.0 93.0 10. Public administratioln andl defence 5 & 2/ 71.7 83.9 99.0 117.1 139.6 1518.2 184.5 205.3 229.3 251.1 11. Services 2/ 1123.0 156.7 170.3 184.0 195.2 210.14 231.1 245.5 256.1 275.9 12. OthEr 1 Q1/ 61.3 65.3 71.1 780.5 95-7 117.4 152.3 133.5 138.6 156.4 Gross domestic product a. factor cost 1,205.7 1,305.9 1,438.1 1,568.4 1,676.5 1,830.3 1,886.2 2,031.4 :2,220.5 2,266..4 rFroduc t originating in the industries classified under items 1-9 and Itemllrefer to the private! sector only. Item 12 comprises thea total product of State enterprises, e.g., public utilities, State banks, railways, postalL and telegraph. Eaectri dcty includecl in Item 11, water and sanitary sersvices in Item 10. / State financial services only; included in Item 12. Itea 9 includes urban dwellings only; rent of rural dwellings and buildings is iricluded in Item 1. All servf ces of general government. Source: United Nations Year Booksi of National Accounts Statistics 1957/1960 TABLE 7 CC6TA RICA: CUIPCOITION OF GROSS DOIESTIC CAPE'AL _FOBvIi'TIAITO 19,50-52 (millions of colones) 1950 1951 1952 1]953 1]954 1L955 :L956 L957 1958 1959 By type of purchaser Ie Fixed Capital Formation 205.2 239.1 279.1 3L4. 0 35'9.2 394.1 417.8 434.3 404,0 451.4 (a) Jri-r-. tc -cerr, 184.4 211.4 227.4 254.8 276.9 3(4,7 318.3 343.1 330.0 386.2 (b) Governmant Enterprises,l 6.3 4.1 6.2 19.5 22.4 27.4 41. 8 35.3 36.6 20.7 (c) General Government 2/ 14.5 23.6 45.5 69.7 59.9 62.0 '57.7 56.4 37.4 44.5 2. 'Increase in Stocks 16.8 22.0 3,38 25.3 29.7 '31.4 37.6 32.4 33.4 41.5 (a) ariate etor 17.3 21.1 22.7 25.5 27.7 '30.5 :31.3 34.3 29.0 38.5 (b) Government Enterprises 1/- 0.5 0.9 8.1 - 0.2 2.0 0.9 5.8 - 1.9 4.4 3.2 (c) General Government .,/ - - - - - - - - - - Grozss dormestic capital formation 222.0 261.1 309.9 369.3 338.9 425.5 455.4 467.2 437.4 492.9 Including the S-tate Bankss, the Hational Insurance Institute, the National Production Coluncil, the Flectricity .Lnstitute, tlie Pacific Railway, -os-tal Telegrarh and Radio Services, the National 1;Iress, and other smaller oodii1es. ! / [ncl uding the Central Government, hauniciT,alities, the ,Social Security Fund, Social r,ssistance Boards, the * yv5;rc 1960 eastoral Products Dattle slaughtered 000 head 67.9 75.1 73.3 81.8 85.1 92.0 97.3 913.7 102.4 2W4.I4 135.0 Pigs slaughtered 0OC head 61.o 55.0 53.3 63.2 61.2 60.9 61.4 6L.4 74.5 77.( 70.0 Milk productiorn Index: 1955; = 100 n.a. n.a. n.a. n.a. n.a. 100.0 116.0 127.6 137.1 163.( 170.0 i/ Prelinina*y N.B., Quintals are Spanish quintals of 101 lbs. i/ lE,qorts in calendar years 1951-59 n.a. Not available Sources: Centr-al Bank of Costa Rica: Annual Reports; IEnternational Financial Statistics; Direccion General de Estadistica: Anuarlo ,stadistico, 195o° and Ceniso Agropecuario 1955; Consejo Nacional de Produccion, Departmerto de Investigaciones Economicas: direct information; Internatiorial Cotton Advisory Committee. TABLE 10: COSTA RICA: PFOW;ER AND TRANSPORT STATISTICS 1948 1950 1954 1955 1956 1957 1958 1959 1960 Electric Power Generation (mill. of k.w.h.,) - 231.9 265.1 294.0 309.0 329.8 347.5 403.0 % increase - - - 14.3 10.9 5.1 6.7 5.4 16.0 Road T'ransport Kilometers of all- weather highways 1,560 " 1,970 - - - 2,400 - 3,245 Number of motor vehicles (000's) - 7.0 14.1 16.7 18.6 21.3 22.2 23.6 25.0 % increase - - 19.1* 18.4 11.4 14.5 4.2 6.3 6.0 ConsimDtion of gEas (mill. gallons) - 8.0 15.4 14.2 16.2 19.4 20.2 21.2 22.4:' % increase - - 17.4* 7e1 14.1 19.7 4.1 5.0 5.7 Pailway Transport Northern and Pacific RaiI.rnYe: Fr-rr+el traffic (000 metric tons) - 439.3 550.2 630.9 6o335 648.7 694.5 709.9 82A6. % increase - - 5.9 14.7 0.4 I 2.6 7.1 2 161 Port Traffic Fre, I,+~., .fL- ht mOViing OUgh Limon & Puntarerlas (000 1metric tOnS 225.9 326 39.2 429.1 439.2 461.1 48.7 o 6 %V inCr-eaSe - - 10.L. .Li. .Lv.. 4.4 5.0 4.5 1.04 j../ estimated * average annual increase over four-year period Sources: Instituto Costarricehise de Electricidad i4inisterio de Obras ^ublicas: Plan Vial, 1959-1960 Ferrocarril Electrico al Pacifico: Informe Anual, 1958 horthern RaJlway Company: direct informiation Direccion General de Estadistica y Censos. TPABLE 11: COSITA RICA: COMi'iPOSIT SI0 OF 0' 7?RTS,, 1950-60 (Value in rmiillicons of U.S. dollars) Ca-ttle Ot!e:r Coff ee Bananas Cacao &8 meat Products Total /-- - ~~~~~~~~~~~~~~~Value Value Voltnue- Value Volume- Value Volume/ Value Value _ V __ 1950 17.8 41'.0 31.5 10.2 2.0 :3.6 L. I .3 55.6 :951 22.2 413;.0 31. lO4 10.0 1. :3.2 44.9 63.4 195? 24.3 461.0 38.4 11.6 14.2 8.4 (0.1 6.14 73.4 1953 33. 5 611.2 35.8 10.1. 4.0 6. 8 (.3 6.5, 80.1 1954 35.1 510.4 35c.8 10.1 8.:3 9.4 (.4 5.1 84.7 1955 37.L 616.0 33.2 9.1 5.93 9.5 1L.o 3.1, 80.9 1956 33.8 4995.7 25.7 6.14 2.9( 6. 2 1.0 4.1 67.5 1957 40.-6 640.1 32.2 8.7 14.( 7.4 2.2 44.l, 83.14 1993 50.5c 1003.6 26.5 8.6 5.8 7.7 3.2 5.,9 91.9 1959 40.0 941.1 159.1 6.1 7.14 1:L.5 3.6 6.6 76.7 T96o* 43.b 1000 .0 2 5.0 7.9 5. 8 11.7 14.7 9.6 88.5 * 9c i.minar'y 1/ Thousands of Sp anisl quintals of 46 kgni., i.e. approx. 101 lbs. m,n o/ st em s iS / Tc)I,-.sor.ds of -metric tonls 14/ fIncluded unc'er "Ot,-er r,rodi.'ots;' 'Sc*rcc2: Gent ral 3a-m- of Costa Rica; Direccion Gererl de ista6iAt:J ca COSTA PICA: _COMB'OSITITON, OF IlIOTTS 1951-1959 (c.i.f.) I 1 --P TT Q 4' - fl - 1 nn r, ). £47 )X 7% iS -1 ,r, /, CS7-) -r 7 i.. OQSb9 LUII 1 (. 195 1).. 5 4U.u 11.5 149. 11.4 195. ID 2, Beverages and tobacco 0.4 0.6 0.7 0.7 0.7 0.8 0.7 o.8 0,9 3, Raw 7'aterials 1.0 1.1 0.6 0.7 0.7 0.7 0.6 0.6 0.6 4. Fuel and Lubri- cants 3.7 4.2 4.5 5.4 5.3 5.9 7.2 6.8 6.0 5. Fats and Edible Oils 0.3 0.5 0.4 0.6 0.5 0o,6 0.6 0.6 0.5 6. Chemical Pro- ducts 8.4 10.7 9.6 11.5 13.2 13.4 16.3 15.2 15.7 ?. Principal Manu- factured articles 20.9 22.8 24.8 24.5 24.8 25.7 30.6 30.6 29.7 8. Mlachlinery and Transport Equipment 9.2 13.1 16.4 18.7 23.2 22.1 27.3 24.8 26,.2 9. Other Manufactured Articles 3.9 6.2 6.9 7.9 7.1 7.6 7.9 8.o 7,8 2.', Other ',Merchan- 0.4 0.5 0.7 0.6 0.1 Ol 0.1 0.2 - dise TOTAL 55.7 67.9 73.6 80.7 87.5 91.2 102,8 99.3 102,7 Source: Direccion General de Estadistica, Comercio Exterior de Costa Rica TABIE 13 COSTA BICA: EXPCF{'S AND DlT1PCRTS PY REGIONS - 1937, 1953-]L960 (PercEntages) Ex po r t s I nL po r t s 1'937 195.3 1954 1955 195 1957 1958 1959 1i90/7 1937 1953 19,54 1L955 1956 :L957 195- 19 U.S. and Canada 44 74 69 59 56 60 56 53 56 42 63 62 63 57 58 53 57 Other IvIiestern Hemisphere 3 5 6 6 5 7 8 7 8 6 8 8 8 11] 9 11 1, U.K. 20 - - 1 -- 1 1 1 1 S 3 7 7 , 5 6 6 Other 'Western iurope 29 20 25 34 '38 32 34 37 35 31 13 20 19 22 23 23 22 Rest of' World 4 1 -- 1 - 1 2 -- 13 4 3 3 3 5 7 e J- Pre liminary. Somuces 1.937 and 1953 - ]-BRD Current Economic Position and Prospects of' Costa Pb-.a, August 10, 1954. 1954 - 1960 - Comercio Exterior de Costa Rica; Banco Central de Costa Rica. 'TABLE 1h: COSTA PICA: EXPOPT AND ID9ORT PRICES ATD TEThMS OF TRADE 1937, 1948 AND 1950-1960 ( 1953 = 100 ) Export Import Tlerms Year Prices!/ Bananas Coffee Cacao PricesZ/ of Trade 1937 33 47 19 32 51 65 1948 64 69 51 132 98 65 1950 86 91 78 108 88 98 1951 98 97 98 102 101 97 1952 94. 94 96 83 100 94 1953 100 100 100 100 100 100 1954 114. 100 125 148 99 115 19!55 106 103 110 102 100 106 1956 116, 113 124 78 103 113 1C'¢7 109 105 116 90 107 106 1,58 91 87 92 128 106 86 9'S59 AZ 89 78 107 106 79 1960 8c; 90 79 83 108 79 1,/ ITncludes pric-es of bananas, cf nr an e-a ro.cTmnhinP.ld with 193 value weights using Laspeyre's index. The export price data are unit values derlved from quani+ty and dollar value after adjustment of the banana values to estimated f.o.b. values. 7./ The U.S. index of export prices. Source: IFS TABRLE 15: COSTA RICA: BAIJT75NSCY 0P PAEN-S 1950-1960 (in millions of U.S. dollars) 1950 1957L 195:9 1953 1954 1955 1956 1957 1958 1c59 _ r1L iQ .. Goc,ds aund Servces 2.'5 0.1 -5. 3 -1.b -0.3 -8.2 -19.6 -20.0 -9.1 -260 -2 3 Exports, f£.o.b. 573 61.2 72.1 79.4 7 O- T4e7 8207 9351 -77) - 75-55 Imports, f . o.b. *.41 .L -47 .' -59.e2 -64.8 -71.1 -77.7 -81.6 -92.0 -88.9 -93 5 -96..7 Transportation & Insur. -4.14 -_4.( -6.:L -6.8 -7.2 -8 .3 -8.1 -O.9 -9.7 -9.7 -98 InVestment I]ncoome *-13 .5 -12.1 -14 4.7 -11.o -1 1.7 -7.6 -1.2 -6.9 -8.9 3.'7 -6.8 Other (net) 5.2 3.6 2.L 2.5 4.o 4.6 6.6 6.1 5.3 14.9 5w B. Private Donations -0. 2 0 .'L - 0. 05 0A. 0 0.9 1.2 1.2 C)0 9 1.1 C. Private' Ca)ital -9.9 -2.8 -0.6 2.7 1.0 13.5 2.5 2.7 0.1 7.2 3. 2 Long-term capital (net) o0.6 -27T l.L 06:1 1.0 T9 g1o o.?- 3.2 Short-tejrm capital(net).-10.15 -5.2 -1.7 2.6 - 4.0 -2.9 2.3 -0.5 -o.6 D. Off'icial Donations 0.3 0.5 1.1J O 6 1.9 2.5 2.3 6.1 8.5 5 .9 4_ E. Of ficial Long-term capital -0.1 -O.L -0.1 -0.3 -1.0 1.0 1.8 3.6 1.s7 3,1 10.2 _ s~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i-7 -rn Foreign loan drawings - - - - - 77T2 37 h.1 , o orejign loaxn repayments -0..1 -0.L -0.1 -0.3 -1.0 -o.6 -2.4 -2.6 -3.,3 -3 .4 -4. 2 F. Ne. Errors and Omissions 6.3 6.14 11.9 1.1 -4.3 -6.1 -4.0 8.5 7X0 14.9 2,,0 G. Reserveb Movemerits (Tincmasea) 1J1 -4 43 -6.8 -3.0 2.3 -3.1 8.1 -2.1 -9.4 14.o 2. 6 Short-term liabilities - - - -0.3 i.U 1- -0.1 -1.9 -0.6 -1.1 Short-term assets (-;ncrease) Government - -0.2 0 .:2 - - - -0.1 0.2 -0.2 (.1 Cent;ral Baik 1.0 -14.5 -6.14 -3.1 2.0 -3.39 7.8 -1 -7.8 6.2 1P14 Cormmerci-al banks 0.1 0.14 -0.6 0o 4 -1.1 -0.7 0.5 -0.14 -0.8 -1.2 1;2 Sourse: T,T', Balanc e of Panymenits Yearbooks; Centra'l Bank of Costa Rica CRSTA RTCGA: FORPIlGN EXC1iA\GE ITihSE?V2:S Nept. 'rtPrnqM-onI MnrPtnrir rvsn the,, Rpnki , LSr t _ _90- 1 Ratio of Reserves to Imports E nda of1v Ya r TTS $ Milln (t.o.b.) ___________ _ ________________________ _ _ Per Cent 1950 4.6 11.2 'Iv1 8 v'l C7 15520 1 1952 15.7 26.6 'I r% r "~~ -1 r I - d -L 7 J) --) -±0.4 CO .4 1954 16.9 23.7 1956 11.6 14.2 1957 i2.4 i3 @5 1958 19.9 21.8 i959 14.1 15.1 1960 11)+5 End of Month 1958 1959 1960 1961 January 14.8 21.0 13.8 11.4 February 14.8 22.9 17.4 12.5 March 16.1 25.2 17.8 12.7 April 19.2 26.3 17.4 12,8 May 20.6 26.5 15.3 12.1 June 21.6 24.5 14.2 July 2C.6 24.0 14.4 August 17.2 21.6 14,1 September 15.8 18.0 13.2 October 15.3 15.5 12.1 November 18.3 13.9 11.4 December 19.9 14.1 12.5 Soirce. Central Bank of Costa Rica - Annual Report and Monthly Statistical Bulletins. rTABLTJ 17: COSA RIC,h: S,Tll ila'tRY hACCODJNTS OF 'Th F B3ANKDIG SYSTI1' 1950-1960 milli ofn colones ) E;nd of year 1950 :1951 1'352 1953 1954 1955 1956 1957 1908 1959, 1969 I. CEITIRAL BANIK A. Fori(ngn Assets (Net) 2009 148.8 8200 98¢9 84.7 103.4 59.6 614.9 109.3 714.6 6706 D. Dornestic Credit (Net) i78.9 65. 1 48 .9 45.3 77.6 57.0 99M9 123.5 96.7 1146.14 222.0 * To Govemmnit 7 - 899 - 1' 5. - 3.3 1 10.3 b.2 11.4.12 2. To officiaLl agencies - 4.1 - 4.4 - 14.7 - ).16 2.5 1.5 7.9 9.4 114.5 114.4 3, To commercial banks 314.0 141.7 37.3 44.1 49.7 22.1 46.8 78.8 54.2 95.2 170,2 4. Unclassified 31.7 36.7 36.1 26.4 32.1 34.1 31.8 26.5 26.9 25.3 27.2 C. Non-mcneterxy Liabilities 5.0 5.5 5.6 6.3 6.9 7.6 8.4 25.3 35,6 9 6.C, 1. Capital and Reserves 5. 0 6.365 7.6 8.4 9.3 9.9 10.2 11.5 2, IBRD Loan - - - 10.0 15.4 25.14 28.5 3 Chase Manhattan BEnk Loan - - - - - 56 _0 D. Cu.rency in Circulation 914.8 108.4 125.3 137.9 155.4 152.8 151.1 169.1 180.7 185.14 193.6 II. CONIKERCIAL BAVIKS A. Foreign Assets (Net) 6.3 6.1 9.3 8.8 13.8 i4.4 12.0 19.6 23.9 30.5 16 14 B. 52nk Reserves 47.3 :33.5 12.5 46.0 4e.o 55.3 5i,.5 63.3 69.5 73.1 79.8 C. BQ,'est,ic Credit 2. o3 257.3 2814. 6 316.1 3148.6 385.1 14358 1499.1 530.f0 $ec.I35¢, ~~Th.~~'emnient (Nt1 32.4 3.9 8 - .6 4.0 C!]3 0 C -1 e o Govnmt (Ne-; 1-2.1 3* * ~04~04 C 39 0.2 '06 4J 13u 2,.. 'i private sector - 22'eb3 2334.8 2614.1 293.1 322.7 356.2 397.8 463.4 491.2 5,82.6 680.7 Unclassified (Net) - 2.1 :9.1 '.7 23.4 26,3 2'.5 34.1 35.5 39.14 37.3 141i.5 D. nr-btedness t,o Central Bank 81.3 75.2 79.8 90.1 97.7 77.4 105.3 1142.1 123c7 168.3 2>50,0 COSTA RICA: I ACCOUifT'S OF THE 13V\TKINVG SYST1Fm 1950-1960 iiillion of coloneT -Kad of year 1950 1951. 1952 1953 1954 1955 L956 1957 1958 19IC 1960 II. COr!UTKCIAL BANTKS (Cont-Lnued) E. llon-mfonetar. .Liabilit:ies 100.6 1o5C,9 117.2 128.2 142.,8 190.8 2LOr.1 239.2 282.3 3 , fiTie, s avings foreign exchange deposits 28.2 29.1 36.1 42.5 4l7.'5 60.8 70.7 :2.Li 102.0 :118.3 127.9 2; Capital and reserves 72.4 76.8 81,1 86.7 950,3 116.7 129e3 142.6 157.2 :161.4 16627 3, Development bonds - - 13.3 LO1 142 23.1 38.6 35.8 4,l Revalidated borrds - - - - - 11 a9 F. Demand_Deposits 16.0 115.8 139.4 152.6 169.,9 18 6.6 190.9 200.7 217.4 :2LO.9 239.1 III. BPAilIUNG SYSTIDI CO)NTSC0,I19ATZ'E A., Forein Assets (Net) 27.2 54.9 91.3 107.7 98.,5 117. 8 71.6 84I.5 133.-2 105.1 5 O0 B., Domestic Credit 279.5 283.2 298.5 320C8 377.5 420.0 4 8.9 543.8 572.5 gLL __ '}To T ovenunent (Net) 2- 19.0 - 2 ; 37 23.7 23.2 2D3 TA; I CA: C''TTIPL GOV7,3 `T7 ITT, . 7 AiTD < Q DI Tu 73 S : 195 -1961 (in millions of colones) Budget =___________=______ 1954 1955 1956 1957 1958 19595 1960 1961 1. Ordinary revenues 233,5 261.8 257.2 297.9 320.3 320.7 326.8 345.8 2. Other culrrent, revenues 5.3 18.4L/ 5.2 5.7 4.8 2.9 8.8 22.1 Total Revenues 2V3.8 280-2 262Z.4 303.6 325.1 323.6 335.6 367.9 3. Exnenditures 25.0 306.4Z 291-0 322.7 342.1 311.6 376.1 391. Balanee - 6. -22 _2(2 -2 A _P -251- 1 -i7.n 2 --,5 _23 - authorized - 29.0 _ 31.0 - 15.0 20.0 20,0 5. Other loans r LI-ag _prof'its di-4 V .2 ~AU ICd.1Ir j2±V..UI ± U L U verted to the Treasury r I± 1 3 .7-I 3.1.4 7. ±rea_ ury surpluses an' unused appropriations from preceding year 9/ 19.3 15. 2 3).4 1.4 i6.6 0.3 1.7 - Surplus 13.1 18.5 1.2 13.0 - 0.4 0.1 5.1 - i/ I cluding -'l7,. million tax paid in advance by the Banana Conpany in respect of the year 1956. 2/ Including uriissuei portlions of authorized bond is3ues. Source: IBRD on basis of Tables 22, 23, and 24 TABLE 26: COSTA PICA: INTTERTIAL PUBLIC DEBT (millinns n,r nol ones) Consolidated End of Year Bnn6p.8 or lMonth Redeemable Other Floating Total 1951 172.2 15.7 14.6 202.5 1952 162.2 15.9 22.2 200.2 1953 151.8 17.4 22.7 192.0 1954 149.9 17.4 25.0 192.3 1955 176.8 17.4 28.9 223.1 1956 180.6 17.4 21.9 219.9 1957 203.2 17.5 38.7 2r9c4 1958 188.8 17.5 31.9 238.2 1959 1] 254.9 17.6 29.4 301.9 1960 259.8 11.9 41.7 313.4 1/ The increase in the total in 1959 reflects both new bond issues and the revalidation of 57 million colones of bonds held by the banks and previously withdrawn from circulation. Source: Central Dank of Costa Rica. TABLE 27: COSTA RICA: DOU1'STIC PIuFS: i95u - 196 1953 = 100 Year Wholesale Price Indices Cost of Living Index Home and Impo,t Hove Goods Goods 1950 113 100 97 1951 116 108 104 1952 105 103 100 1953 100 100 100 1954 104 106 103 1955 107 108 106 1956 108 109 107 1957 108 109 110 1958 108 109 113 1959 107 109 113 1960 109 108 114 1961 (April) 115 114 116 2/ From 1950-1952, import prices in colones declined as a result of a reductio n inj thei effctive aj - ara nex"ncchaz~- nge rat for+ ;m.port afrom approximately 7.5 to 6.2 colones per dollar. Source: International Financial Statistics TABLE 28 COSTA PICA: i'TNiICES OF -IT7IUM WI.AGES (Dec. 1, 1950 - Sept. 30, 1952 = 100) Laborers on Banana Laborers on Unskilled anrd Cacao Plantations Coffee Farms Industrial VJorkers 1950-52 100 100 100 19Q2-5/j 1 /. 171 110 1954-56 154 171 125 (171 I/ I 125 z/ 1956-58 (182 / (138 s ( 193 0,/ 1960-62 153 193 167 pOtober 1, 1957 to September 30, 1957 4/ October 1, 1956 to June 30, 1957 2J/ July 1, 1957 to Septetber 30, 1950 Source: Central Bank of Costa Rica TABLE 29: COSTA RICA: PRICES OF COSTA RICAN BOTNDS IN' NEW YORK AND LONDON NEW YORK LONDON 1h3R =1953-1972 2 1-31% - 1911/56-78-- 2 at 100 at 100 High Low High Low 1957 62 49.1,/4 91 69.1/2 1958 61.3/4 50.1/L4 110.1/2 73 1959 77 61.1/8 118.3/8 105 1960 78.3/4 65 1O9P-/ 97 1961 73 65 99 90.1/4 End of Price Yield to MaturitY Price Yield to MIaturity 1961 January 68 7.05 94.1,/2 8.18 February 67.13/16 7.10 94.1/2 8.25 March 63.,/ 7.0 r91.1 /2 0.6 April 68 7.12 95.1/2 8.27 Vsir 6,"7 7.4 I r 017 'I 0 11/0 .- June 68.3/4 7.00 96.1/2 8.30 / uniuer une Settlement Plan inuerest was payable at gradually increasing rates, starting at the lower rate shown here and increasing to the higher ratue. 2 D s are redeemabie at m±74 but quotations are in percentage oI old par value of U100O S :urce: IBRD