Costa Rica: Country Profile

Studying the history of Costa Rica, Isaac Felipe Azofeifa reached the conclusion that the country perceives itself as an island, ‘a country without problems, that must stay isolated from the insanity of the world’.

It has certainly stood out from its neighbours’ troubled history, priding itself on being one of the continent’s most stable democracies. This distinction has earned it the nickname of the ‘Central American Switzerland’.

Costa Rica’s democratic success can be traced to the Ochomogo Agreement at the end of the short-lived 1948 civil war, when the head of the Catholic Church, the Communist Party leader and a social-democrat caudillo (Jose Figueres Ferrer) laid the foundations for a modern welfare state that had already been proposed by then president Rafael Angel Calderon Guardia.

The new arrangments led to the proscription of the Communist Party but also established a transparent electoral system which remains an example to the world. One year after the war the government took the unprecedented decision to abolish the army – a rare exception in a region characterized by military dictatorships.

Figueres and Calderon are considered the ‘founders’ of modern Costa Rica, leaving as a legacy two dominant parties. While Figueres founded the hegemonic National Liberation Party, Calderon was forced into exile after the 1948 war. A fragmented set of ‘Calderonist’ parties sprouted, until his followers finally joined forces to create the Social-Christian Unity Party in 1984.

Until 2014 these two parties brokered power, increasingly embracing neoliberal reforms which meant that, by the end of the 1990s, the country’s historically low levels of inequality had begun to rise. It was during the administration of Laura Chinchilla (2010-14) that the country reached historic peaks in unemployment and inequality; her government was also mired in corruption scandals. This situation led voters to reject both the traditional parties in the 2014 and 2018 elections.

The beneficiary has been the Citizens’ Action Party, a left-leaning party that came to the fore campaigning against corruption and the Central American Free Trade Agreement (CAFTA) and for more popular democratic participation.

Costa Rica is also celebrated for its body of public policy aimed at preserving the environment: in a country containing five per cent of the world’s biodiversity, over a quarter of its territory is under protection and all of its energy comes from renewable sources.

These extraordinary achievements have happened largely independent of government action, with a population strongly driven by environmentally conscious education. The open-pit mining project Crucitas, for example, was stopped by legal challenges and popular mobilization, while Costa Ricans have in the past organized to stop bauxite mining and oil exploration.

Perhaps the largest social mobilization took place in 2000, against the privatization of the state-owned Electricity Institute, the main telecoms provider. Public support has allowed the company to survive in a market opened up to competition under CAFTA while avoiding privatization.

Even though the country directs over 23 per cent of its GDP to social-inclusion programmes and has reached record levels of direct foreign investment, poverty has stagnated at around 20 per cent.

Corruption is also a major challenge. The recent ‘Cementazo’ case unveiled a web entangling all three branches of government. There is also rampant tax evasion and the government is pushing a new tax reform that is likely to increase the cost of living for the middle class.

However, the election victory in April of the new president, Carlos Alvarado Quesada, who convincingly saw off his opponent, an evangelical Christian with a socially conservative platform, suggests there is significant popular willingness to tackle these issues.