The economic, political and social stability of Costa Rica is one characteristic that has distinguished it through its entire contemporary history and one of the most important strength that have enabled it to reach great success in alluring foreign investors.
The Costa Rican government is ruled by a series of constitutional controls and balances. The executive responsibilities rest on the President, who is at the center of power, and is supported by two Vice-presidents and his cabinet. The President and Vice-presidents, plus 57 Congressmen, which conform the Legislative Assembly, are directly elected every 4 years. In addition, the country has a strong legal system that manages the 'judicial power', which ensures law compliance and covers nationals, as well as foreigners, within the country's territory.
The last World Bank survey for Global Governance Indicators puts Costa Rica in the first place within Latin America for political stability and absence of violence. This measure includes several indicators, among which it includes a measure for the perception of the likelihood that the government in power will be de-stabilized or overthrown by unconstitutional and/or violent means, including domestic violence and terrorism.
Costa Rica has a long tradition and stable democracy, which is recognized worldwide and has over 115 years of history. Such vocation of respect for political and peace processes have been enriched by the abolition of the military in 1949, and acknowledged internationally in 1987 when the then President of the Republic, Oscar Arias Sanchez, was awarded the Nobel Peace Prize.
Source: World Bank,2007
There is no doubt that one of the pillars of the Costa Rican economic development has been trade liberalization, which has allowed exports to surpass its 30% ratio of GDP in 1980 to a current 50% rate. Furthermore, this trade liberalization has been coupled with a series of structural changes, and has pushed towards a productive transformation that has lead to factor productivity growth, diversification of the economy, and a higher level of investment.
The Costa Rican economy has maintained a continuous growth, albeit the different international crisis that affected several countries like Mexico, Turkey and Venezuela in 1994-95; Thailand, Malaysia, Indonesia, Philippines, South Korea and Czech Republic in 1997, Russia and Brazil in 1998, and Argentina in 2002. As a matter of fact, within 1997 and 1998, Costa Rica registered growths above 7%.
These decades of peace and democracy, stability and economic growth have been translated into important social achievements. In this sense, a relevant fact was that in the last 20 years poverty was reduced from 40% to less than 20%. Costa Rica has passed on to occupy one of the highest levels in educational and health attainment in Latin America, which is also one of the best in the world. Furthermore, it has been able to provide broad access to services like health, social security, potable water and basic services for the entire population. Just as the International Monetary Fund Sub-director Agustin Carstens, said, "one basic principle that Costa Rica has made it its own is that, the ultimate goal of economic politics is to achieve human development."
Costa Rica is one of the most stable economies in Latin America. After the last economic crisis almost 25 years ago due to external debt circumstances, it has maintained a yearly current average growth rate above 7.9%, which has resulted in a per-capita income level of $5,031 for 2006. As a result, Costa Rica has benefited from an excellent access to global capital markets and a moderate country risk premium, as seen in recent Costa Rica's sovereign debt qualifications:
