San José, Costa Rica, since 1956

Report Concludes Country Stalled

What’s the difference between Costa Rica and a stalled car?

No, there’s no punch line. That’s the comparison the analysts in charge of this year’s State of the Nation report – the annual Bible of Costa Rican politics, economy, environment, government and society – used this week to describe modern Costa Rica. The country’s leaders can’t decide which way to go, and have burned out the brakes and gas, they said.

Poverty levels have been stagnant for more than a decade. The gap between rich and poor continues to grow. Conservation efforts have received short shrift. Roads are still in poor condition.

The economy has grown significantly, but the benefits aren’t reaching everyone, according to the report, whose director, Miguel Gutiérrez, said this country has “missed many important opportunities.”

In addition, the collapse of the bipartisan system, in the works for years but made official in February’s national elections, have made the government weaker and less able to take on the challenges the country faces, Gutiérrez said. There’s some good news, though, Gutiérrez and his team told reporters in presenting their 12th annual report Monday at the National Council of Rectors (CONARE) in the western San José suburb of Pavas. Costa Ricans’ life expectancy is the highest ever (76.1 years for men and 81.4 for women), infant mortality has dropped significantly (to 9.78 deaths per thousand), and education coverage has increased.

In addition, the gross domestic product (GDP) rose by 5.9% in 2005, almost two points more than the previous year, said Eduardo Alonso, coordinator of the 475-page report’s “Economic Opportunities, Stability and Solvency” section. However, increases in the economy’s star sectors –exports and tourism – are reaching very few Costa Ricans, he added.

During the past 20 years, the average income of the country’s poorest homes has decreased by 13.9%, while the average income of the richest homes increased 67.9%, said Isabel Romano, coordinator of the “Equity and Social Integration” chapter.

The country has been successful in attracting foreign investment, “but that growth isn’t being distributed in the best way.”

She quoted three-time head of state José “Pepe” Figueres, who said the government should “produce with efficiency and distribute with justice.” “How do we recover that?” she asked.

Gutiérrez suggested a change in the nature of tourism in Costa Rica is partly to blame.

“The switch to ‘glamorous’ and residential tourism…has its dangers,” he said, responding to a question about the boom in high-end hotels and condominium complexes, particularly in the northwestern province of Guanacaste. He added that such tourism places a high demand on resources, but doesn’t return much to the country.

A tourist who drinks a locally made fruit juice at a corner restaurant may not spend as much as one who orders a bottle of Dom Pérignon, but small Costa Rican businesses don’t benefit from the latter, Gutiérrez explained.

Asked whether the administration of oftcriticized President Abel Pacheco (2002-2006) represented four “lost years” for the country, the analyst said Costa Rica has certainly fallen behind, but “not for the reason you’re suggesting – not because of the administration.” The political system as a whole is to blame, he added.

In the area of health, the increase in dengue cases is the top concern. Though Costa Rica is successful in preventing such cases from resulting in deaths, it has shown “enormous vulnerability” to dengue and potentially fatal hemorrhagic dengue, Romano said.

The report describes the country’s efforts to protect the environment as half-hearted. Though the Environment Law, passed in 1995, gave the country its first unified legal framework for conservation, the regulations for the law were only partially completed, and the environment has ceased to be a top priority for the government, according to the document.

One piece of evidence: in the 2005 budget for the Environment and Energy Ministry (MINAE) and the organizations it oversees, telecommunications, energy, wastetreatment and the state-run oil refinery received the whopping lion’s share of the funds: 98.7%.

Gutiérrez said a growing “urban stain” of unplanned development has contributed to pollution. Construction increased 12.1% between 2004 and 2005, but this expansion is disorganized, with 27 different laws and 22 institutions involved in territorial oversight.

What’s more, the staggering increase in the country’s gas bill (from $699 million in 2004 to $998 million last year) did nothing to decrease oil consumption, nor did government efforts such as restrictions on cars’ access to downtown San José during the week.

The roads those cars are traveling need attention, too, analysts say. Only 32.4% of Costa Rica’s road system is in good condition.

The country’s system, one of the densest in Latin America with 0.7 kilometers of road for every square km of land, would be worth $1.9 billion if it were in good condition, but poor maintenance has decreased its value by 52.5%.

Other Findings from the State of the Nation Report

•Costa Rica spends ¢51 billion ($99 million) per year – 0.5% of the gross domestic product (GDP) – on students who drop out or fail.

•The high-school dropout rate increased from 10.4% in 2003 to 12.5% in 2005. Public Education Minister Leonardo Garnier, a contributor to State of the Nation, has indicated this figure could be even higher this year, study director Miguel Gutiérrez said.

•The richest 20% of Costa Ricans average 12.1 years of schooling while the poorest 20% average 5.2 years.

•Remittances to Costa Ricans from family members abroad tripled from 2000 to 2005, when they totaled $399.8 million, or 1.7% of the GDP. (That figure pales in comparison to the importance of remittances in other Central American countries: in Nicaragua, for example, remittances make up 17.8% of the GDP.) Of those payments, 75% came from the United States.

•Unemployment decreased by 123,024 people in 2005. However, one-fourth of this decrease is due to “domestic services in private homes.”

•Technical inspection of cars appears to have reduced carbon monoxide emissions, which dropped 9.4% between 2003 and 2005 despite a 14% increase in the number of vehicles.

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