After several years of good economic growth during the early 1990s, the country’s economy was adversely affected by the global financial crisis during the late 1990s. Business is based on the electronics industry, tourism and agriculture.
According to countryaah, the country has for a long time been dependent on its agricultural production, mainly coffee and bananas. In the 1990s, this changed because foreign companies invested in the country’s duty-free zones. Most important for the country’s economy was the establishment of electronics factories that, among other things, produced microprocessors. Since the mid-1990s, the value of electronics exports has exceeded that of coffee and bananas. The tourism industry has also increased and is an important source of foreign capital.
Agriculture employs just over 10 percent of the labor force. The most important export crops are coffee, bananas, sugar and cocoa. For domestic consumption, rice, maize, beans and root vegetables are mainly grown. The most important agricultural area is the central plateau, Meseta Central. Here, for example, the best coffee is grown, mainly by small farmers.
Bananas are grown in coastal areas on large plantations built with capital from transnational US companies such as Chiquita and Standard Fruit. However, the former closed down its facilities on the southern part of the Pacific Coast (Golfito area) in the mid-1980s. In addition to social problems, this meant that banana exports decreased by 25 percent. The land was purchased by the state to be partially transferred to cocoa production. Elsewhere in Costa Rica, we are trying to reduce banana dependence through complementary cultivation of sugar cane, palm trees and exotic fruits. But during the first three years of the 1990s, new investments were made in banana production, which led to more than 3,000 ha of rainforest being cut down to make room for new banana crops. The cotton plantations are usually small but high-tech.
Livestock management was central to the country early on, but since the end of the 20th century its importance has diminished. Instead, the country has invested in large-scale cultivation of flowers and tropical fruits.
Costa Rica’s known mineral resources are small. In addition to insignificant amounts of silver, only gold is extracted. Iron ore and sulfur deposits exist, but the assets have not been considered commercially viable. On the other hand, work is being done on the exploitation of the relatively large bauxite resources in the southern part of the country. This project also includes the construction of an aluminum smelter and the use of hydroelectric energy.
Forestry does not play a major role as an industry. Although the proportion of forest land is between 1/3 and half of the land area, the boundary between forest, bushland and extensive pasture land varies in the statistics. Valuable woods such as rose wood, cedar and mahogany are felled.
The fishing industry has hardly had any significance. However, some development of fishing in the Pacific is ongoing; the most important catch is shrimp.
Energy consumption is low in Costa Rica. Water energy generated electricity accounts for 75 percent of the electricity demand, 15 percent is extracted from volcanoes and small amounts from wind and biomass. The opportunities to expand water energy are good, and the country has great potential for exporting electricity.
The oil deposits in Costa Rica are considered sufficient for their own needs, but commercial extraction is still at the experimental stage. Crude oil is imported from Mexico and Venezuela to the refinery in the port city of Limón. From here, an oil pipeline has been built via San José to the Pacific coast.
Although Costa Rica is one of the most industrialized countries in Central America, the industry played a limited economic role until the late 1990s when a number of major US electronics companies established themselves in the country. Microprocessors are the largest single product in the manufacturing industry. Alongside the electronics industry, there is also the food and plastic industry. The industry is mainly concentrated in the San José area.
Almost 15 percent of Costa Rica’s foreign trade takes place with the countries in the free trade area in Central America. According to Countryaah, the largest trade exchange (45 percent) takes place with the United States. The most important export goods are electronic products, bananas and coffee. Imports include: raw materials, machinery and crude oil. The trade balance is negative, but the strong increase in tourism gives the country a much needed foreign exchange supplement.
The country is visited annually by more than 2 million visitors, and tourism plays an increasingly important role for Costa Rica’s economy. Primarily, tourists from the United States and neighboring countries visit the country, but the number of tourists from Europe has increased in recent years. Costa Rica largely lacks historical monuments from, for example, past Native American cultures, but it is a mountainous country with varied and beautiful scenery. You are consciously and successfully investing in a qualitatively oriented ecotourism. In some coastal areas, hotels and other facilities for mass tourism are also being built.