Poverty on Rise while Household Income Falls
By Rebecca Kimitch
Tico Times Staff
rkimitch@ticotimes.net

Costa Rica's quality of life is being threatened not only by a rising poverty rate, but also by a decrease in household income and a fall in social spending, according to the latest State of the Nation report, released Friday.

Workers' incomes have fallen by an average of 6%, according to the report. For poor people, who also depend on government support, this fall has been met by decreased social spending.

Last year, the poverty rate reached its highest point in 15 years, with 21.7% of the population considered poor – or approximately one million people, said report coordinator Marcela Román.

“In 2004 the fall in income hit all homes, so many fell into poverty,” she said.

Already existing slums are growing and new slums are emerging in precarious locations, geographically speaking, Román explained.

While this data is disconcerting in itself, other indicators show that Costa Rica is entering a new and increasingly dangerous phase, explained State of the Nation program director Miguel Gutiérrez Saxe.

For example, the average number of years a Costa Rican is educated is falling: in the late 1970s, Costa Ricans spent on average eight and a half years in school; that number has dropped to less than eight years.

The 430-page State of the Nation report (www.estadonacion.or.cr) annually evaluates hundreds of different indicators to determine, as the name suggest, the state of the nation, as a tool for decision makers.

The house of Costa Rica is falling apart, Gutiérrez said. The country is selling its windows to pay for food and burning floor pieces to stay warm. It is not a sustainable existence, he said.

The global context is exacerbating Costa Rica 's shortcomings, according to the report's conclusions. High petroleum prices are pressuring inflation; increases in international interest rates has meant an end to the age of cheap and abundant money; the rapid growth of China's export market is challenging Costa Rican exporters; and the Central American Free-Trade Agreement with the United States (CAFTA) is creating a new political context.

“This is a time of change and a large social transition is necessary… above all with the sectors that have received little support from the state” Gutiérrez said, referring to CAFTA.

However, despite the negative situation, Costa Rica is not on the edge of a cliff, and continues to show some positive tendencies, Gutiérrez said.

However, he warned that Costa Rica must immediately change from passive to active.

“Its not possible to give time limits anymore,” he said, referring to the challenges Costa Rica faces.

See Friday's print edition or online PDF version for the full story on the State of the Nation report.