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Costa Rica - Systematic country diagnostic (English)

Costa Rica is a small country, with ambitious economic, social, and environmental goals. The country covers a land area of 19,700 square miles (51,100 square kilometers), with a population of 4.7 million, of which about two-thirds live in urban areas. An upper-middle income-country, with GDP per capita of US$13,876 (current PPP), it is under consideration for membership to the Organization for Economic Co-operation and Development (OECD), with discussions scheduled for this year. Costa Rica’s development model centers on four key pillars: its long-standing democracy, an ambitious Social Compact, an outward-oriented economy, and its celebrated Green Trademark. This model has achieved many successes, including sustained healthy growth rates, improvements in social indicators, environmental gains, and one of the lowest poverty rates in the Latin America and Caribbean region. This outward-oriented development model has been successful in attracting FDI and moving Costa Rica up the global value chains over the past two decades. The development model has transformed the country from a rural agriculture-based economy in the mid-1950s to one with high value-added industries that contribute to several global value chains. By 2014, FTZs accounted for 53 percent of exports, and Costa Rica’s economy is very intensive in FDI (4.2 percent of GDP). Finally, Costa Rica has built a world-renowned ‘Green Trademark,’ centered on conservation, reforestation, and protected areas. It is the only tropical country in the world that has reversed deforestation, increasing the area covered by forests from 26 percent in 1983 to 52 percent today. Reforestation is attributed, in part, to the Payments for Environmental Services (PES) program, which provides incentives to forest conservation and rehabilitation, reaching an average of 310,000 hectares per year of privately owned lands over the past decade. Costa Rica has also set aside 26 percent of its land area for protected areas, including national parks, which have become an important destination for tourists (53 percent of tourists visited those parks in 2012).6 Tourism has become a dynamic sector, contributing 4.6 percent of GDP and 14.2 percent of total exports in 2013. Costa Rica also stands out as the first country to adopt the goal of achieving carbon neutrality by 2021.


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    Systematic Country Diagnostic

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  • Country

    Costa Rica,

  • Region

    Latin America & Caribbean,

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  • Doc Name

    Costa Rica - Systematic country diagnostic

  • Keywords

    small and medium enterprise development;information and communication technology;central american common market;conditional cash transfer program;quality of transport service;travel and tourism industry;access to basic service;skill and jobs;social protection system;health care system;return to education;taxes on gasoline;central government budget;quality of infrastructure;access to ict;banking sector liberalization;complete primary education;share of credit;agriculture and industry;product market regulation;higher education system;global value chain;public sector institution;labor productivity increase;access to water;public education spending;public health system;integrated health care;consumer price index;inequality and growth;impact on poverty;measure of inequality;quality and relevance;household risk management;tertiary education system;decline in poverty;high inequality level;public service delivery;supply of skill;social security administration;basic social service;quality of education;exchange rate misalignment;high poverty incidence;secondary education spending;managing natural resources;infant mortality rate;complete secondary school;privileges and immunity;evolution of inequality;Poverty &Inequality;Job Creation;medical device;Public Spending;social spending;Labor Market;unskilled worker;public debt;rising inequality;high wage;open economy;middle class;Indigenous Peoples;fiscal policy;Fiscal policies;Armed Conflict;Civil War;median income;food subsidies;budget process;Universal Service;test score;governance challenge;household survey;inclusive growth;protected area;poverty increase;costa ricans;high unemployment;labor income;business service;fiscal consolidation;production cost;electricity cost;agricultural land;corporate governance;skilled workforce;public university;chemical use;electric utilities;territorial planning;upper class;Public Services;indigenous communities;environmental sustainability;border area;Social Sciences;fiscal account;comparator country;indigenous community;social program;bureaucratic procedure;native worker;pension system;health outcome;general taxes;land use;tax policy;basic pillar;integrated management;Clean Energy;skill need;Wage Bill;water pollution;financial practice;infrastructure quality;learning assessment;education outcome;systemic effort;effective governance;paying job;parental education;children's education;immigrant woman;household head;sensitive data;transactions cost;pay taxes;currency area;accountability level;external competitiveness;real exchange;female head;logistics cost;upward pressure;quality accreditation;test result;young adult;reservation wage;Technical Training;Business Regulation;labor supply;international economics;Poverty measures;clear economic;goods export;low-skill worker;low skill worker;government effectiveness;skilled labor;consultation process;welfare legislation;foreign investor;collaborative process;credit growth;original work;public bank;infrastructure access;country ranking;aggregate index;electricity tariff;shipping network;trading partner;pension coverage;copyright owner;safe water;economic model;labor earning;live birth;police force;democratic regime;sole responsibility;income growth;social indicator;upward mobility;sewage treatment;school meal;universal coverage;budget allocation;carbon neutrality;Political Economy;income quintile;legal framework;social assistance;income inequality;Tax Exemption;taxation structure;tax revenue;secondary level;fiscal space;fiscal situation;commercial purpose;annual budget;younger cohort;life science;high-tech sector;Export Diversification;corrective measure;manufacturing plant;tourism sector;government revenue;production system;social pension;carbon emission;unequal country;domestic service;low-skilled worker;fiscal pressure;personal service;Tax Reform;internationally comparable;median country;Forest Conservation;reform process;bottom quintile;income gap;institutional framework;sectoral planning;political landscape



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Costa Rica - Systematic country diagnostic (English). Washington, D.C. : World Bank Group.