Economy of Costa Rica - Exports, Jobs, and Energy

Exports, Jobs, and Energy

Costa Rica used to be known principally as a producer of bananas and coffee. Even though coffee, bananas, pineapple, sugar, lumber, wood products and beef are still important exports, in recent times electronics, pharmaceuticals, financial outsourcing, software development, and ecotourism have become the prime industries in Costa Rica's economy. High levels of education among its residents make the country an attractive investing location.

The country has successfully attracted important investments by such companies as Intel Corporation, which employs nearly 3,500 people at its custom built $300 million microprocessor plant; Procter & Gamble, which is establishing its administrative center for the Western Hemisphere in Costa Rica; and Abbott Laboratories and Baxter Healthcare from the health care products industry likewise. Manufacturing and industry's contribution to GDP overtook agriculture over the course of the 1990s, led by foreign investment in Costa Rica's free trade zones. Well over half of that investment has come from the U.S. In 2006 Intel's microprocessor facility alone was responsible for 20% of Costa Rican exports and 4.9% of the country's GDP.

Trade with South East Asia and Russia has boomed during 2004 and 2005, and the country obtained full Asia-Pacific Economic Cooperation Forum (APEC) membership by 2007 (the country became an observer in 2004). In 2011 the Financial Times Intelligent Unit awarded Costa Rica with the fDi’s Caribbean and Central American Country of the Future 2011/12 for its successful record in attracting FDI into the country, and being the number one destination country in the region in terms of foreign direct investment (FDI) project numbers since 2003. In the previous assessment for the 2009/10 ranking the country had ranked second after Puerto Rico.

Tourism is booming, with the number of visitors up from 780,000 in 1996, through 1 million in 1999, to 2.089 million foreign visitors in 2008, allowing the country to earn $2.144-billion in that year. Tourism now earns more foreign exchange than bananas and coffee combined. In 2005, tourism contributed with 8,1% of the country's GDP and represented 13,3% of direct and indirect employment.

The country has not discovered sources of fossil fuels—apart from minor coal deposits—but its mountainous terrain and abundant rainfall have permitted the construction of a dozen hydroelectric power plants, making it self-sufficient in all energy needs, except oil for transportation. Costa Rica exports electricity to Central America and has the potential to become a major electricity exporter if plans for new generating plants and a regional distribution grid are realized. Mild climate and trade winds make neither heating nor cooling necessary, particularly in the highland cities and towns where some 90% of the population lives.