what is the per capita income of costa rica

Costa Rica's GDP per capita has tripled since 1960, reaching an average growth of 4.5 percent between 2000 and 2013, compared to the. ECONOMY AMONG ITS CENTRAL AMERICAN neighbors, Costa Rica has the largest per capita income and the highest standard of living. In 2005 the gross domestic. And it manages all of this with a GDP per capita of only $10,000 (£7,640), less than one fifth that of the US. In this sense, Costa Rica is the.

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Want to avert the apocalypse? Take lessons from Costa Rica

Earlier this summer, a paper published in the journal Nature captured headlines with a rather bleak forecast. Our chances of keeping global warming below the 2C danger threshold are very, very small: only about 5%. The reason, according to the paper’s authors, is that the cuts we’re making to greenhouse gas emissions are being cancelled out by economic growth.

In the coming decades, we’ll be able to reduce the carbon intensity of the global economy by about 1.9% per year, if we make heavy investments in clean energy and efficient technology. That’s a lot. But as long as the economy keeps growing by more than that, total emissions are still going to rise. Right now we’re ratcheting up global GDP by 3% per year, which means we’re headed for trouble.

If we want to have any hope of averting catastrophe, we’re going to have to do something about our addiction to growth. This is tricky, because GDP growth is the main policy objective of virtually every government on the planet. It lies at the heart of everything we’ve been told to believe about how the economy should work: that GDP growth is good, that it’s essential to progress, and that if we want to improve human wellbeing and eradicate poverty around the world, we need more of it. It’s a powerful narrative. But is it true?

Maybe not. Take Costa Rica. A beautiful Central American country known for its lush rainforests and stunning beaches, Costa Rica proves that achieving high levels of human wellbeing has very little to do with GDP and almost everything to do with something very different.

Every few years the New Economics Foundation publishes the Happy Planet Index – a measure of progress that looks at life expectancy, wellbeing and equality rather than the narrow metric of GDP, and plots these measures against ecological impact. Costa Rica tops the list of countries every time. With a life expectancy of 79.1 years and levels of wellbeing in the top 7% of the world, Costa Rica matches many Scandinavian nations in these areas and neatly outperforms the United States. And it manages all of this with a GDP per capita of only $10,000 (£7,640), less than one fifth that of the US.

In this sense, Costa Rica is the most efficient economy on earth: it produces high standards of living with low GDP and minimal pressure on the environment.

How do they do it? Professors Martínez-Franzoni and Sánchez-Ancochea argue that it’s all down to Costa Rica’s commitment to universalism: the principle that everyone – regardless of income – should have equal access to generous, high-quality social services as a basic right. A series of progressive governments started rolling out healthcare, education and social security in the 1940s and expanded these to the whole population from the 50s onward, after abolishing the military and freeing up more resources for social spending.

Costa Rica wasn’t alone in this effort, of course. Progressive governments elsewhere in Latin America made similar moves, but in nearly every case the US violently intervened to stop them for fear that “communist” ideas might scupper American interests in the region. Costa Rica escaped this fate by outwardly claiming to be anti-communist and – horribly – allowing US-backed forces to use the country as a base in the contra war against Nicaragua.

The upshot is that Costa Rica is one of only a few countries in the global south that enjoys robust universalism. It’s not perfect, however. Relatively high levels of income inequality make the economy less efficient than it otherwise might be. But the country’s achievements are still impressive. On the back of universal social policy, Costa Rica surpassed the US in life expectancy in the late 80s, when its GDP per capita was a mere tenth of America’s.

Today, Costa Rica is a thorn in the side of orthodox economics. The conventional wisdom holds that high GDP is essential for longevity: “wealthier is healthier”, as former World Bank chief economist Larry Summers put it in a famous paper. But Costa Rica shows that we can achieve human progress without much GDP at all, and therefore without triggering ecological collapse. In fact, the part of Costa Rica where people live the longest, happiest lives – the Nicoya Peninsula – is also the poorest, in terms of GDP per capita. Researchers have concluded that Nicoyans do so well not in spite of their “poverty”, but because of it – because their communities, environment and relationships haven’t been ploughed over by industrial expansion.

All of this turns the usual growth narrative on its head. Henry Wallich, a former member of the US Federal Reserve Board, once pointed out that “growth is a substitute for redistribution”. And it’s true: most politicians would rather try to rev up the GDP and hope it trickles down than raise taxes on the rich and redistribute income into social goods. But a new generation of thinkers is ready to flip Wallich’s quip around: if growth is a substitute for redistribution, then redistribution can be a substitute for growth.

Costa Rica provides a hopeful model for any country that wants to chart its way out of poverty. But it also holds an important lesson for rich countries. Scientists tell us that if we want to avert dangerous climate change, high-consuming nations – like Britain and the US – are going to have to scale down their bloated economies to get back in sync with the planet’s ecology, and fast. A widely-cited paper by scientists at the University of Manchester estimates it’s going to require downscaling of 4-6% per year.

This is what ecologists call “de-growth”. This calls for redistributing existing resources and investing in social goods in order to render growth unnecessary. Decommoditising and universalising healthcare, education and even housing would be a step in the right direction. Another would be a universal basic income – perhaps funded by taxes on carbon, land, resource extraction and financial transactions.

The opposite of growth isn’t austerity, or depression, or voluntary poverty. It is sharing what we already have, so we won’t need to plunder the earth for more.

Costa Rica proves that rich countries could theoretically ease their consumption by half or more while maintaining or even increasing their human development indicators. Of course, getting there would require that we devise a new economic system that doesn’t require endless growth just to stay afloat. That’s a challenge, to be sure, but it’s possible.

After all, once we have excellent healthcare, education, and affordable housing, what will endlessly more income growth gain us? Maybe bigger TVs, flashier cars, and expensive holidays. But not more happiness, or stronger communities, or more time with our families and friends. Not more peace or more stability, fresher air or cleaner rivers. Past a certain point, GDP gains us nothing when it comes to what really matters. In an age of climate change, where the pursuit of ever more GDP is actively dangerous, we need a different approach.

Источник: https://www.theguardian.com/working-in-development/2017/oct/07/how-to-avert-the-apocalypse-take-lessons-from-costa-rica

General profile: Costa Rica

GENERAL INFORMATION FOR 2020

Population
Exchange rates
GDP

59 546 Millions current US$

Land area
CPI growth (%)
GDP growth

INTERNATIONAL MERCHANDISE TRADE

More data on UNCTADstat

Merchandise exports growth rate in 2020

Merchandise trade balance

Export structure by product group in 2020

(exports, millions of US$)

INTERNATIONAL TRADE IN SERVICES

More data on UNCTADstat

Total trade in services²

Services exports by main category²

More data on UNCTADstat
More data on UNCTADstat

Gross domestic product growth rate in 2020

(millions of US$ unless otherwise specified)

GDP per capita, current US$

Real GDP growth, y-on-y, %

Current account balance, % of GDP

GDP by expenditure in 2019

FDI AND EXTERNAL FINANCIAL RESOURCES

More data on UNCTADstat

FDI outflows as % of GDP in 2020

(millions of US$ unless otherwise specified)

Personal remittances, % of GDP

TRADE IN GOODS AND SERVICES

More data on UNCTADstat

Trade balance indicators²

(sum of imports and exports as % of GDP)

Labour force by gender in 2020

(as % of total labour force, all sectors)

More data on UNCTADstat

Share of the total world merchant fleet in 2020

Maritime transport indicators

 

Merchant fleet, national flag (thousands of DWT)

Liner shipping connectivity index (maximum 2006 = 100 for China)

Container port throughput (TEU)

Information economy indicators

Share of ICT goods, % of total exports

Share of ICT goods, % of total imports

Share of workforce involved in the ICT sector

Notes:

1

Land area refers to the total area of a country excluding area under inland water bodies. It differs from the country area, that includes area under inland water bodies, but excludes offshore territorial waters.

2

Statistics presented correspond to the 6th edition of the IMF Balance of Payments and International Investment Position Manual (BPM6, 2009).

e

Estimated.

n

Estimated. Data refers to 2016.

Symbols for missing values:

0

Zero means that the amount is nil or negligible

..

Not available or not separately reported

_

Not applicable

...

Not available, including no quotation

#

Non-relevant calculation

-

Not publishable

***

Negative accumulation of flows; Value included in regional and global totals

Abbreviations & acronyms:

Foreign direct investment

Information and communication technology

Twenty foot equivalent unit

Disclaimer:

The designations employed and the presentation of the material on UNCTADstat do not imply the expression of any opinion whatsoever on the part of the secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries.
Where the designations "economy" or "country or area" appear in texts or tables, they cover regions, countries, territories, cities or areas.

UNCTAD strives for the highest level of accuracy and is committed to promptly correcting any errors on its part. It does not guarantee or make any express or implied representations regarding the accuracy, reliability, correctness, fitness for use for a particular purpose, or otherwise, whatsoever, of any of the tables in UNCTADstat.

Generation date: 22 July 2021

Источник: http://unctadstat.unctad.org/countryprofile/generalprofile/en-gb/188/index.html

If Americans spend more on healthcare, why do Costa Ricans live longer?

If Americans spend more on healthcare, why do Costa Ricans live longer?
with 102 posters participating

Citizens of the United States have a higher income than Costa Ricans, and they spend more of it on health care. In spite of this, Costa Rica has a higher life expectancy than the US—a new article published in PNAS attempts to explain why. The analysis focuses on the steep socioeconomic gradient in health that exists in the US, where the poor have considerably worse health outcomes than the wealthy.

The authors, Rosero-Bixby and Dow, argue that while the wealthiest people in the US have a higher life expectancy than anyone in Costa Rica, the poorest residents of the US have a considerably lower life expectancy.

In Costa Rica, the life expectancy is 78.5 years, though the per-capita GDP is quite low at $9,200. In contrast, the US has a GDP of $40,000, and a life expectancy of 77.4 years. Typically, economic development raises the national life expectancy, so it’s unusual that the US does not have a life expectancy commensurate with its income.

The authors point to one important difference between the US and Costa Rica that likely plays a factor in their different life expectancies: national health insurance. Costa Rica has a single national health insurance system that covers the majority of its residents. In comparison, though the US has drastically reduced the number of uninsured people in the US in recent years, the US healthcare system is still fragmented by private insurance companies. The authors of this article suggest that national health insurance helps Costa Rica to keep its healthcare costs low, whereas private, for-profit health insurance companies have failed to do so.

Rosero-Bixby and Dow also argue that access to lifetime universal health insurance in Costa Rica provides a safety net for poor Costa Ricans, who rely on the insurance for primary care and preventative care. In part, because it pays for medical care, Costa Rica has invested resources in strong public health interventions to prevent common diseases and illnesses. By comparison, in the US, the poor have high uninsured rates and have less-effective public health interventions since these interventions aren’t necessarily implemented nationally.

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The authors also posit that at least some of the overall difference between Costa Rican and US mortality rates can be attributed to differences in lung cancer and heart disease prevalence, which are four and six times more common in the US, respectively. Smoking could be a strong contributor to this difference, though the data on smoking is not as clear as the authors' assertion would suggest. Women in the US report more exposure to cigarette smoke, but otherwise the reported exposure to smoke is similar in both the US and Costa Rica.

Rosero-Bixby and Dow also mention that the prevalence of obesity is lower in Costa Rica than in the US and that obesity is less linked to socioeconomic status in Costa Rica. In the US, poorer people are considerably more likely to be obese—this is not necessarily the case in Costa Rica. They conclude that the higher mortality of poorer people in the US compared to Costa Rica is likely due to lifestyle factors, such as smoking and obesity. However, the data the authors use to support this conclusion is not necessarily the most robust, and it relies entirely on data from existing surveys of population health. While existing population data sources are often used for public health analysis, targeted studies with carefully worded questions that address a hypothesis are more reliable.

Costa Rica has an overall higher life expectancy than the US because the health gradient is less severe, the researchers conclude—the lower socioeconomic groups in Costa Rica do well compared to their equivalents in the US. The authors also conclude that this difference in life expectancy for the US and Costa Rica could partially be due to differences in obesity and smoking in these two countries. While these authors present some compelling information, further inquiry might identify other factors that cause difference and might be easier to change.

PNAS, 2015. DOI: 10.1073/pnas.1521917112 (About DOIs).

Источник: https://arstechnica.com/science/2016/01/if-americans-spend-more-on-healthcare-why-do-costa-ricans-live-longer/
Official Name: Republic of Costa Rica

GEOGRAPHY

Area: 51,032 sq. km. (19,652 sq. mi.); about twice the size of the state of Vermont.
Cities: Capital -- San Jose (metropolitan area population of 1.2 million).
Other major cities -- Alajuela (250,000), Puntarenas (300,000), Limon (150,000), Cartago (150,000).
Terrain: A rugged, central range separates the eastern and western coastal plains.
Climate: Mild in the central highlands, tropical and subtropical in coastal areas.

PEOPLE (July 1995)

Nationality: Noun and adjective -- Costa Rican(s).
Population: 3.3 million.
Annual growth rate: 2.4%
Ethnic groups: European and some mestizo 94%, African origin 3%, indigenous 1%.
Religion: Roman Catholic approx. 85%, Evangelical Protestant approx. 15%, Others: Less than 1%.
Languages: Spanish, with Jamaican dialect of English spoken around Puerto Limon.
Education: Years compulsory -- 9. Attendance--nearly 100%.
Literacy -- 94%.
Health: Infant mortality rate -- 13/1,000. Life expectancy -- men 72 years, women 76 years.
Work force (1995, 1.2 million): Services -- 45%. Agriculture -- 22%. Industry - 17%. Construction -- 6%. Transportation -- 5%. Banking and finance -- 4%.

GOVERNMENT

Type: Democratic Republic.
Independence: September 15, 1821.
Constitution: November 7, 1949.
Branches: Executive -- President (Head of Government and Chief of State) elected for one four-year term, two Vice Presidents, Cabinet (19 ministers). Legislature -- 57-Deputy unicameral Legislative Assembly elected at four-year intervals. Judicial -- Supreme Court of Justice (22 magistrates elected by Legislative Assembly for renewable eight-year terms).
Subdivisions: Seven provinces, divided into 81 cantons, subdivided into 421 districts.
Political parties: National Liberation Party (PLN), Social Christian Unity Party (PUSC), Democratic Force (FD) Agricultural Union Party of Cartago (PUAC), National Agrarian Party (PAN).
Suffrage: Obligatory at 18.

ECONOMY

GDP (1995) $9.3 billion.
Real growth rate (1995) 2.5%.
Per capita income (1995): $2,964.
Natural resources: Hydroelectric power.
Industry (22% of GDP): Products-food processing, textiles and clothing, construction materials, fertilizer, petroleum refining. Agriculture (19% of GDP): Products -- bananas, coffee, beef, sugarcane, rice, vegetables, ornamental plants and fruits.
Commerce and tourism (40% of GDP): hotels, restaurants, tourist services, banks and insurance.
Foreign Trade (1995): Exports -- $2.6 billion: bananas, coffee, beef, textiles and clothing, fruits, sugar, flowers and ornamental plants. Major markets -- U.S. 42%, Europe 32%, Central America 16%, Japan 1%.
Imports--$3.3 billion: machinery, vehicles, consumer goods, chemicals, petroleum products, foods, fertilizer. Major suppliers -- U.S. 48%, Europe 28%, Japan 15%, Central America 5%.
Currency exchange rate: (Aug. 1996) 210 colones = $1.

PRINCIPAL GOVERNMENT OFFICIALS

President--Jose Maria FIGUERES Olsen
Foreign Minister--Fernando NARANJO Villalobos
Ambassador to the United States--Sonia PICADO Sotela
Ambassador to the OAS--Fernando HERRERO
Ambassador to the UN--Fernando BERROCAL

Источник: https://clintonwhitehouse4.archives.gov/WH/New/LAT/costa.html

10 Facts About Life Expectancy in Costa Rica

10 Facts About Life Expectancy in Costa Rica
Costa Rica is home to 4.98 million people, with the second-highest per capita income in Central America, after Panama. Innovative initiatives like CCSS, a national health care system, not supporting a military since 1949, relying heavily on renewable energy and preserving natural land sets the country apart. Costa Rica’s spends almost 20 percent of GDP on social programs in an effort to meet their goals established in the 1970s of universal education, health care, clean water, sanitation and electricity.

The consistent political stability also distinguishes Costa Rica from neighbors in Central America. This context has produced measurable growth in health outcomes and reduced mortality. These 10 facts about life expectancy in Costa Rica highlight the impacts of Costa Rica’s policies.

10 Facts about Life Expectancy in Costa Rica

  1. On average, life expectancy is slightly greater for Costa Ricans (79.8 years) than for U.S. citizens (78.6 years). In addition, Costa Rica ranks 29th in terms of longevity in the world.
  2. In Costa Rica, women live longer than men. According to WHO data published in 2018, Costa Rican men live on average to 77, while women on average to 82.2. Costa Rican women edge out men in terms of lung cancer and heart disease mortality but are at greater risk of stroke, external injuries and chronic respiratory diseases.
  3. Infant mortality has fallen since the 1960s. “Primary health care—especially in rural and community programs — seems to be responsible for 40 percent of the reduction…” from 68/1,000 to 20/1.000 in the 1970s to 5.7/1,000 in 2018.
  4. The top 10 causes of death in Costa Rica mirror wealthier countries. These are as follows:
    • Cancer – 20 percent
    • Heart Disease – 16 percent
    • Stroke – 7 percent
    • Chronic Obstructive Pulmonary Disease – 5 percent
    • Chronic Kidney Disease – 4 percent
    • Road Injuries – 4 percent
    • Cirrhosis – 4 percent
    • Lower Respiratory Infections – 3 percent
    • Diabetes -3 percent
    • Interpersonal Violence – 2 percent
  5. Road traffic fatalities are an epidemic in Costa Rica. According to 2017 WHO data, 13.9 per thousand people die in traffic accidents. Epidemiological data suggests that younger drivers, faster roads, motorcycle lane changing and the growing pains that occur as rural people struggle to walk to work and school on faster, newly-paved roads—are all contributing factors. Although international NGO’s concerned with road safety recommend systemic approach uniting business, education and policy approaches, Costa Rica is working toward greater road safety with policies like requiring reflective tape on garments and state-sponsored vehicle insurance.
  6. Increases in life expectancy at birth between 1990 and 2015 grew, but unevenly across the 79 counties. Socioeconomic growth and decreasing fertility have contributed to increasing life expectancy. Average births per mother have fallen from about seven in the 1960s to 3.5 in the early 1980s to below replacement level (2) today. Access to medical care varies from rural to urban locations.
  7. Physicians are fairly accessible in Costa Rica with 1.15 physicians per thousand people—among the highest in Central America. Only Panama (1.59) and El Salvador (1.92) have higher ratios. The overall high-quality medical infrastructure in Costa Rica has birthed a growing, medical tourism industry, providing more low- and high-skilled jobs.
  8. Caja Costarrisence Seguro Social (CCSS) is the national health care agency. Funded by a 15 percent payroll tax, luxury goods taxes and retirement savings, the CCSS mandates free health service to all categories of citizens: wage-earners, mothers, children, indigenous people, the elderly and people living with disabilities, regardless of insurance coverage.
  9. Incidents of parasite-borne diseases like Malaria Dengue Fever and Chikungunya Virus, Chagas Disease and Zika rise seasonally but generally are on the decline. Vaccinations, insect eradication programs and education in how to avoid getting sick are working to stem the growth of arboviruses. The International Emerging Infections Program in Central America and Panama (IEIP-CAR) begun a program in 2007 to respond to new infectious disease threats by supporting the Ministries of Health (MoHs). Communicable-disease mortality declined from 65 per 100,000 in 1990 to 4.2 per 100,000 in 2010.
  10. The Nicoya Peninsula in western Costa Rica boasts some of the highest life expectancy rates for men in the world. “For a 60-year-old Nicoyan male, the probability of becoming centenarian is seven times that of a Japanese male, and his life expectancy is 2.2 years greater.” This advantage is not the case for women. Lower levels of cardiovascular risk, being lean and tall, eating an abundant diet of traditional foods low in the glycemic index but high in fiber and accessible health care are all possible contributing factors.

These 10 facts about life expectancy in Costa Rica paint the government as a nimble in its ability to enact policies that meet needs and consistently build better health outcomes for their people.

– Heather Hughes
Photo: Flickr

/by Kim ThelwellTags:Causes of Death in Costa Rica, Health Care in Costa Rica, Life Expectancy in Costa RicaИсточник: https://borgenproject.org/10-facts-about-life-expectancy-in-costa-rica/

Costa Rica Passport Ranking

The Costa Rica passport ranking relative to other global passports is calculated by adding up the number of countries that allow Costa Rica passport holders to enter without a visa (i.e. visa-free countries) and those that allow Costa Rica passport holders to enter by obtaining a visa on arrival (i.e. visa-on-arrival countries) or an electronic travel authorization (eTA). There are currently a total of 116 Costa Rica passport visa-free countries, 34 Costa Rica visa-on-arrival countries, and 2 eTA destinations.

Altogether, Costa Rica passport holders can enter a total of 152 destinations—either without a visa, through a visa on arrival, or via an eTA. As a result, the Costa Rica passport ranks 28 in the world.

Separate from these Costa Rica visa-free countries and visa-on-arrival countries, there are 77 additional destinations which Costa Rica passport holders either need a physical visa to enter or an eVisa (i.e. visa required countries).

About Costa Rica

The Republic of Costa Rica is a former Spanish colony consisting of 7 provinces. The most important provinces are San José, Alajuela and Cartago. It is situated in Central America, bordering Panama and Nicaragua. The country has a surface area of 51,100 square kilometers. Its terrain is defined by coastal plains and rugged volcanic mountains. Its climate is tropical and subtropical with a dry season from December to April and a rainy season from May to November.

The overall population is over 4.9 million people. The capital of the country is San José, which is also the most populous city with more than 324,188 inhabitants. Other major cities are Alajuela and Cartago. The country’s largest airport is Juan Santamaría International Airport (SJO) with over 5.3 million annual passengers. This makes it the 2nd busiest airport in Central America. It is named after the national hero Juan Santamaría. The airport provides access to worldwide destinations.

Until today, Costa Rican culture is strongly influenced by the Spanish colonial heritage. The majority of the population is Catholic. The official language is Spanish. Costa Rica’s legal system is based on the Spanish civil code. Legislative acts are reviewed in Supreme Court. The government form is a presidential republic. The posts of the chief of state and the head of government are filled by the elected President Carlos Alvarado Quesada.

The official currency is the Costa Rican Colón (CRC), with a current exchange rate of CRC 613 to the USD. The country has an open economy, generating a GDP of approximately $95.7 billion. This makes it the 14th largest economy in the Caribbean and Latin American countries. Its citizens have a per capita income of $18,651. The GDP is mostly made up of the services, industry and agricultural sector. Tourism plays an increasingly important role as GDP contributor. Agricultural products such as coffee and bananas are the backbone of Costa Rican exports.

Costa Rica is an incredibly popular tourism destination. The country is filled with a variety of urban and natural tourist attractions. It is known for its vast beaches and nature. There are 4 UNESCO world heritage sites scattered across the county. Some of the major destinations include the Manuel Antonio National Park, the Arenal Volcano, the Monteverde forests and the capital of San José. Costa Rica has a total of approximately 3 million tourists visiting every year with the majority originating from North America.

Источник: https://visaindex.com/country/costa-rica-passport-ranking/
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By Alberto González Pandiella, Patrick Lenain, Mauro Pisu and Enes Sunel

On 15 May 2020, Costa Rica was invited to join the OECD as its 38th member, marking the successful completion of a thorough review by the organisation, including three OECD Economic Surveys (OECD, 2016; OECD, 2018a; and OECD, 2020). This “journey” towards accession involved multiple reforms to boost the country’s economic growth and distribute its benefits to all Costa Ricans. Thanks to these ongoing reforms, Costa Rica is better prepared to confront the COVID-19 crisis and to boost its long-term growth.

Steady and resilient growth

With a strong commitment towards trade openness, Costa Rica has attracted large inflows of foreign direct investment, helping to move up the value chain and upgrade the composition of its exports. The country has also been a magnet of international tourism thanks to its rich natural capital, especially its biodiversity and rainforest, and policies to protect it. These factors, together with rising real incomes, have sustained steady and resilient growth, with quick rebounds following exogenous shocks (Figure 1). Real GDP per capita has consequently tripled over the past 30 years and reached nearly USD 20 000 in 2019, close to the Latin American average (OECD, 2018a).

The COVID-19 outbreak has however inflicted a severe hit to economic activity, jobs, and the well-being of Costa Ricans. Innovative policy measures introduced to provide cash and liquidity support to households and firms will help to avoid long-term damages. However, the return to a normal situation is mired with very large uncertainties and depend on epidemiological developments and the speed of the global recovery.

Recent reforms will boost the productivity of local firms

Apart from the coronavirus outbreak, Costa Rica faces several challenges to continue its past performance.  The process of income convergence in emerging economies typically involves increasing productivity towards the “frontier” prevailing in advanced economies. However, in Costa Rica labour productivity growth has lagged peers for many years. Low productivity levels explain to a large extent the income gap with OECD countries (Figure 2). In 2016, GDP per hour worked was only USD 18.6 compared with an OECD average of USD 51.9 (OECD, 2018b).

Openness to foreign direct investment can help to revert these trends. Research published by the OECD shows a positive correlation between the presence of foreign firms and the productivity of local Costa Rican firms in both the manufacturing and the services sectors (OECD, 2018c). Research has also found that public policy to boost linkages between foreign-owned and local firms helps knowledge diffusion (Alfaro-Urena et al., 2019). Nonetheless, Costa Rica remains a dual economy, with a modern sector in free trade zones and traditional enterprises outside them. To boost aggregate productivity the government policy should therefore continue to stimulate the productivity of local firms.

Recent reforms have sought to stimulate business dynamism by enhancing product-market competition and levelling the playing field between state-owned firms and the private sector. As a part of the OECD accession process, legislation adopted by Congress has strengthened the competition authorities and curtailed political interference in state-owned enterprises. Tentative estimates suggest that these two reforms, when fully implemented, could boost the level of GDP per capita by nearly 10% within 5 years – a very significant improvement (OECD, 2020). Closing existing gaps in transport infrastructure, particularly roads, would also have a large productivity pay-off (Pisu and Villabos, 2016).

A fiscal reform to address budgetary challenges

The COVID-19 crisis will increase budget deficits around the world. This along with large drops in nominal GDP will result in higher public debt ratios. Costa Rica is not an exception, with its budget deficit projected to reach 9% of GDP in 2020. This is a large deficit but is, to a large extent, attributable to the deteriorated fiscal position inherited from the past (Figure 3), which has limited the government’s capacity to respond to the COVID-19 shock. Before the pandemic struck, high public debt and low ratings from credit agencies put Costa Rica’s borrowing costs above those of peer Latin American countries. With fast-rising interest payments and large borrowing requirements (projected to reach 15% of GDP in 2021), government policy will need to focus once again on reducing the budget deficit. 

The ambitious fiscal reform approved by Congress in December 2018 will provide the necessary framework to bring down public debt. The approval of this reform, which had been in the works for nearly two decades, has been a major step toward restoring fiscal sustainability. The legislation introduced a VAT system, more progressive income tax rates, and a spending rule constraining government outlays when public debt reaches specific thresholds. If fully implemented, the reform is expected to yield cumulated savings of 3.9 % of GDP over 2019–23. Policy efforts will need also to rationalise the remuneration of public sector workers, which has been growing above private sector wages for a long time, contributing to a high level of income inequality (González-Pandiella and Gabriel, 2017).

Costa Rica’s journey towards OECD membership has already involved many important reforms, which have the potential to boost long-term economic growth and inclusiveness, and improve fiscal sustainability.  But, achieving the OECD membership is not the end of the journey. As a member of the OECD, Costa Rica will be in a better position to design and implement better policies by exchanging views, policy lessons and best practices with other member countries. This can inform the national dialogue and political debates on policies to boost economic performance and share its benefits among all Costa Ricans. Other countries will also learn from Costa Rica’s valuable experiences in areas such as attracting foreign direct investment, diversifying the exports basket, preserving natural resources or ecotourism, making it a really good journey for all.

REFERENCES

Alfaro-Urena, Alonso and Manelici, Isabela and Vasquez, Jose P. (2019), The Effects of Joining Multinational Supply Chains: New Evidence from Firm-to-Firm Linkages, http://dx.doi.org/10.2139/ssrn.3376129.

González Pandiella, A. and M. Gabriel (2017), “Deconstructing income inequality in Costa Rica: An income source decomposition approach”, OECD Economics Department Working Papers, No. 1377, OECD Publishing, Paris, https://doi.org/10.1787/77759015-en.

OECD (2020), OECD Economic Surveys: Costa Rica 2020, OECD Publishing, Paris, https://doi.org/10.1787/2e0fea6c-en.

OECD (2018a), OECD Economic Surveys: Costa Rica 2018, OECD Publishing, Paris, https://dx.doi.org/10.1787/eco_surveys-cri-2018-en.

OECD (2018b), “Setting the scene: An overview of Costa Rica’s productivity performance”, in OECD Economic Survey of Costa Rica: Research Findings on Productivity, OECD Publishing, Paris, https://doi.org/10.1787/9789264298774-2-en.

OECD (2018c), “FDI spillovers in Costa Rica: boosting local productivity through backward linkages”, in OECD Economic Survey of Costa Rica: Research Findings on Productivity, OECD Publishing, Paris, https://doi.org/10.1787/9789264298774-3-en.

OECD (2016), OECD Economic Surveys: Costa Rica 2016: Economic Assessment, OECD Publishing, Paris, https://dx.doi.org/10.1787/eco_surveys-cri-2016-en.

Pisu, M. and F. Villalobos (2016), “A bird-eye view of Costa Rica’s transport infrastructure”, OECD Economics Department Working Papers, No. 1323, OECD Publishing, Paris, https://doi.org/10.1787/5jlswbwvwqjf-en.

Источник: https://oecdecoscope.blog/2020/07/15/a-successful-journey-costa-ricas-economic-reforms/

: What is the per capita income of costa rica

What is the per capita income of costa rica
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what is the per capita income of costa rica

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