COSTA RICA:
SOCIOECONOMIC DEVELOPMENT AND
PERSPECTIVES
Prof. Max Soto
Director
Institute of Economic Research
University of Costa Rica
OUTLINE
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Structural change and indicators
Macro stability
Production
Unemployment, poverty and inequality
Competitiveness
CR, Central America and the crisis
Challenges ahead
COSTA RICA: Basic Data
Four phases, four models
• 1850-1960: Development based on few
agricultural products (Agroexport model)
• 1960-1980: Import substitution model
• 1980-1990: Export promotion model
• 1990- on: Full insertion in international
economy
Long term growth
Long term growth
CR: Life expectancy at birth
Year
Total
Male
Female
1940
1950
1990
2000
2009
Change (years)
Change (%)
47
58
77
78
79
46
56
75
75
77
48
59
79
80
82
32
69%
31
67%
34
71%
Long term structural change
CR: sectoral participation in GDP and employment
2000
1963
2009
GDP
Employment
GDP
Employment
GDP
Employment
Primary sector
26%
49%
11%
20%
7%
12%
Secondary sector
14%
17%
24%
23%
27%
20%
Tertiary sector
60%
33%
65%
57%
66%
68%
Total
100%
100%
100%
100%
100%
100%
Macro stability: Public finances
Macro stability: Public finances
Macro stability:inflation
Macro stability: BOP
Year
GDP (US$M)
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: BCCR
15.797
15.946
16.404
16.844
17.518
18.596
19.961
22.529
26.322
29.848
29.303
Foreing Direct
Investment (US$)
External savings
(US$M)
External
Savings ( %
GDP)
619
409
460
659
575
794
861
1469
1896
2021
1323
650
691
603
857
880
791
981
1023
1646
2754
634
4,1
4,3
3,7
5,1
5,0
4,3
4,9
4,5
6,3
9,2
2,2
Average:
4,9
Macro stability: Exchange rate
Macro stability: Exchange rate
Macro stability: Exchange rate and
portfolio effect
Macro stability: Financial Sector
• 1980s: Deregulation, entry of private banks,
improved supervision
• 1990s: Proliferation of intermediaries and products,
entry of regional banks, partial dollarization of
deposits
• 2000s: Stricter supervision, concentration with
especialization, entry of international banks,
bimonetary economy
Macro stability: Financial Sector Structure
(amounts in million US$)
Dec. 1998
No
Assets
Banks
Public
Private
4
23
Cooperatives
36
226
Mutuales
4
Finance Companies
Collective savings
mechanisms
Investment Funds
Pension Funds
Total
% of GDP
%
4.213 65,6
1.615 25,1
Dec. 2009
No
Assets
%
4
11
12.784
7.617
39,2
23,4
3,5
32
4.214
12,9
298
4,6
2
928
2,8
18
72
1,1
6
243
0,7
n.d
n.d
n.d
n.d
6.423
45,5%
104
9
2.337
4.492
32.615
111,3%
7,2
13,8
Macro stability: Financial Sector
Significant increase of financial deepness
Production: export diversification
(Millions of US$)
Production: Agriculture
Production: Agriculture
Production: Agriculture
Production: Diversification of Manufacturing Exports
(Factor use , in % of total)
Production: DFI in technologically
advanced enterprises
Production: Services
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•
Tourism
Call centers
Software
Medical Services
Unemployment, poverty and
inequality
Unemployment, poverty and
inequality
Unemployment, poverty and
inequality: urban-rural
Poverty and inequality: 1987-2009
(%)
Total and extreme poverty: urban-rural 2009
(%)
30,0
25,0
20,0
15,0
10,0
5,0
0,0
Urbano
Rural
Total poverty
Central
Pacífico
Extreme poverty
Huetar
Competitiveness
THE GLOBAL COMPETITIVENESS INDEX 2009 - 2010
SUBINDEXES
Country/Economy
Korea
China
Chile
Overall Index
Rank
19
29
30
55
56
59
60
69
77
Basic
Efficiency
requeriments
enhancers
Rank Score Rank
23
36
32
62
91
55
59
83
66
Costa Rica
Brazil
Panama
Mexico
Colombia
El Salvador
Source: Global Competitiveness Report 2009-10
20
32
33
58
42
70
55
64
83
Innovation
factors
Rank
16
29
43
37
38
54
67
62
87
Competitiveness
PILLARS
Basic
1.
2.
requeriments Institutions Infraestructure
Country/Economy
Rank
Rank
Rank
Korea
23
53
17
China
36
48
46
Chile
32
35
30
Costa Rica
62
47
82
Brazil
91
93
74
Panama
55
69
65
Mexico
59
98
69
Colombia
83
101
83
El Salvador
66
91
51
Source: Global Competitiveness Report 2009-10
3. Macro
economic
stability
Rank
11
8
19
4. Health and
primary
education
Rank
27
45
69
101
29
109
46
28
72
61
79
64
65
72
86
Competitiveness
EFFICIENCY ENHANCERS 2009 - 2010
5. Higher
Efficiency education
enhancers and training
Rank
Rank
Country/Economy
Korea
20
16
China
32
61
Chile
33
45
Costa Rica
58
44
Brazil
42
58
Panama
70
80
Mexico
55
74
Colombia
64
71
El Salvador
83
95
Source: Global Competitiveness Report 2009-10
6. Goods
market
efficiency
Rank
36
42
26
47
99
54
90
88
50
PILLARS
8. Financial
7. Labor
market
9.
10.
market sophisticati Technologic Market
efficiency
on
al readiness size
Rank
Rank
Rank
Rank
84
32
41
36
80
89
115
78
68
58
81
32
79
51
22
73
78
70
15
79
42
62
46
59
71
66
81
12
2
44
77
10
81
11
31
80
Competitiveness
INNOVATION AND SOPHISTICATION FACTORS 2009 - 2010
Country/Economy
Korea
China
Chile
Costa Rica
Brazil
Panama
Mexico
Colombia
El Salvador
Innovation
11. PILLARS
and
Bussines
sophisticati sophistica 12. Innovation
Rank
Rank
Rank
16
29
43
37
38
54
67
62
87
21
38
39
41
32
45
62
60
63
Source: Global Competitiveness Report 2009-10
11
26
49
34
43
66
78
63
113
Key investment areas: Electric power generation
(in Megawatts)
Key investment areas:
Telecomunications
CR, Central America and the crisis
CR, Central America and the crisis
CR, Central America and the crisis
CR, Central America and the crisis
CR, Central America and the crisis
Challenges ahead
• Macro stability
– Credible and efficient exchange rate regime
– Fiscal reform
– Lower inflation to international levels
• Competitivity
– Education (quality and coverage)
– Infraestructure (roads, ports, airports, energy,
telecomunications)
– Technology and innovation
• Health and pension systems (efficiency and
sustainability)
• Ecological sustainability
THANK YOU