REPUBLIC OF COSTA RICA


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GENERAL INFORMATIONS: Economy

Economy

The economy is based on agriculture. The main two cultivations are coffee and bananas, and besides them sugar cane, cacao and tabacco. Banana plantations produce around 50 million boxes of bananas per year, making Costa Rica the second biggest exporter of bananas in the world behind Ecuador. 12% of the land area is planted with crops, 45 % is given to pasture and only 27 % is forested. The majority of farmlands is small.

In latest years the increase of nontraditional export good is marked such like textiles (because of the preferential tariffs on them from USA. The other nontraditional export goods belong: strawberries, flowers, papajas and pharmaceutical.

The vital role in Costa Rica economy plays The United Central America Market. It lies in customless trade of industial products, the tax reduced rates for industrial companies and low customs between countries of that region.

In 1999 Costa Rica economy raised up to an unprecedented 8.3 percent increase of the Gross Domestic Product -the highest in Latin America. It has signed the free trade agreements with Chile, Mexico, Panama, Dominicana and Canada. Trade negotiations are ongoing or planned with Jamaica, Taivan and Trinidad and Tobago. According to Association of American Chambers of Commerce, Costa Rica labour has been rated as the most productive and fast learning in Latin America.

According to the most recent annual world report of investment of United Nation Conference for Trade and Development (UNCTAD), Costa Rica is among six countries in the world that are examples regarding of attraction of direct foreign investment. The study points out Costa Rica ability to attract a steady flow of foreign investment based on a national strategy that invest on education and training of labour within a framework of political stability.

Central America Common Market (CACM)
On December 13th 1960, in a conference in Managua: Guatemala, El Salvador, Honduras and Nicaragua signed the treaty about economic alliance of Central America. They ratified the treaty membership the following year. Costa Rica joined it in 1963. It was made to encourage economic development and cooperation between the smaller Central American nations and to attract industrial capital. It removed duties on most products across member countries. By 1969 trade between member nations had risen more than tenfold over 1960 levels. During the same period, imports doubled and a common tariff was established for 98% of the trade with nonmember countries. In 1967, at the conference of American presidents at Punta del Este, Uruguay, it was decided that CACM, together with the Latin American Free Trade Association would be the basis for a comprehensive Latin American common market. In 1969 CACM collapsed with the football war between Honduras and El Salvador and was reinstalled in 1991.

 
2004; SLUPSK; Rafal Cezary Piechocinski