Costa Rica not affected of the economic crunch

The Costa Rican government has announced that its economy will not suffer a downturn from the U.S. slump. For the first time in 50 years the Costa Rican government was left with a US$174million budget surplus. It is expected that the U.S. slump will do no more than limit Costa Rica's growth to 3.8%, down from 6.8% last year.

Costa Rica has one of the strongest economies in Central America. There are many factors that have contributed to help the country get to this point, but arguably, the origin lies in having had a few capable and forward-looking leaders in its early history. As part of their vision, these leaders had the foresight to eliminate the armed forces which in turn freed up a large amount of funds to be invested in education, social services, commerce and infrastructure. The end result is that today, Costa Rica has a high literacy rate of around 95%, a highly-skilled workforce, a competitive telecommunications infrastructure and a stable political environment which all makes for an attractive destination for foreign investment.

Traditionally dependent on coffee, banana and beef exports, Costa Rica has diversified its economy. Costa Rica now has flourishing hi tech and medical manufacture and export sectors, services sector, on top of a rapidly growing tourism sector and successfully diversified agricultural export sector.

The hi tech sector has attracted companies like Panasonic and Intel, the latter having invested some US$800million into Costa Rica's coughers, and plans to invest a further US$90million this year. 11,000 Costa Rican's are employed in the hi tech industry, and hi tech exports were valued at over US$2million in 2005. The fact that Intel has invested so heavily and continues to invest shows that it is still a growth sector, and working from developing countries like Costa Rica keeps costs down and profits up, a portion of which is then reinvested in said developing country thus keeping the growth cycle going.

The agriculture sector has had to diversify because of regional competition and a changing global economy, but Costa Rica's agricultural industry has stayed strong by changing with the market. Costa Rica has complimented its original coffee and banana exports with pineapples, watermelons, papaya and tropical flowers, as well as diversifying agricultural methods to capitalise on new fair-trade exports, and luxury organic produce.

Costa Rica's perhaps less talked about industry is its flourishing services sector, with companies like Western Union, Microsoft, Unisys and Oracle operating call centres in the country.

Tourism to Costa Rica grew by 10.6% 2006-2007, receiving over 1.6 million visitors last year. Costa Rica has also been clever enough to diversify its tourism industry to keep up with demand, and is now offering eco-tourism holidays and medical tourism (plastic surgery) holidays.

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