Costa Rica Real Estate : Economic, Political, and Social Stability

Costa Rica Real Estate : Economic, Political, and Social Stability

by Victoria M. Brown

Amidst the political and social turbulence that plagues many of the Latin America countries, Costa Rica has been able to sidestep that. The economic, political and social stability of Costa Rica is one characteristic that has distinguished it through its entire contemporary history and as one of its most important strengths, has enabled it to reach great success in luring foreign investors.

Costa Rica's government has been a stable democracy since 1949. The country's success was recognized in 1987 when President Arias Sanchez was awarded the Nobel Peace Prize. The award was granted for the president's high ethical standards and the image that he portrayed as a representative of the Costa Rican people. The people share in his high ethics and morals. They are recognized to be among the top educated and socially aware people in the world.

Political Stability

Costa Rica was the first country in the world to constitutionally abolish its army. Following civil war in the 1940's, Costa Rica ended rule by armed forces and established a democratic republic. Since 1949, the Costa Rican government has been a stable democracy that is governed by a strong, democratic constitution. Even before the current democracy was established, the Costa Rican government stemmed from a political tradition of rule by the majority. Its government has also been able to work towards pacification and successfully avoid the widespread violence that occurs throughout most of Latin America. Costa Rica is one of the most stable governments in the region.

Economic Stability

For the past twenty years, Costa Rica has not experienced any economic crisis. For a developing country, that is a great accomplishment. Poverty has been reduced from 40 percent of the population to below 20 percent of the population, which is over a 50 percent reduction. The average economic growth rate of the country is approximately 2.5 percent each year. Costa Rica has increased their participation in world trade as well. Exports rose from 30 percent of the GDP in 1980 to 50 percent in 2000. The increase in trade has led to an expansion of the economy and greatly reduced the economy's vulnerability to financial crisis. As the Central American Free Trade Agreement (CAFTA) was implemented, Costa Rica was further integrated into the world economy and economic stability was further established.

With a $1.9-billion-a-year tourism industry, Costa Rica stands as the most visited nation in the Central American region. Most of the tourists come from the U.S. (54%) which translates into a relatively high expenditure per tourist of $1000 per trip. In 2005, tourism contributed with 8.1% of the country's GNP and represented 13.3% of direct and indirect employment. Ecotourism is extremely popular with the many tourists visiting the extensive national parks and protected areas around the country. Costa Rica was a pioneer in this type of tourism and the country is recognized as one of the few with real ecotourism. The protection of the environment has also become a top priority to Costa Ricans and their government.

Social Stability

As Costa Rica has succeeded in implementing political and economic stability, many of the country's policies focus on social stability. Economic and political policies have helped to ensure that the basic needs of the people are being met and the standard of living is continually improving. The Costa Rican people are well-educated and nearly the whole population is literate. The literacy rate in Costa Rica is of 96% (CIA World Factbook, February 2007). Elementary and high schools are found throughout the country in practically every community. Universal public education is guaranteed in the Constitution. Primary education is obligatory, and both preschool and high school are free. There are both state and private universities.

According to the United Nations Study conducted in 1980s, Costa Rica's medical system was first in Latin America and ranked near the United States and Canada among the 20 best in the world. There is access to clean water and health services and the life expectancy rate is high. The World Health Report (1995) placed Costa Rica third in life expectancy in the world. All of Costa Rica's social indicators are among the best in Latin America.

All of the achievements that the Costa Rican government has made in the past 50 years have led to political, economic, and social stability. It is no reason why Costa Rica Real Estate Investments are increasing at an alarming rate each year. According to the U.S. Embassy's website, over 20,000 private American citizens reside in the country. While property prices still remain extremely reasonable, the great attraction to Costa Rica, on all levels, is raising property prices and many investors are enjoying double-digit appreciation annually.