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 tej kohli
13 November 2014

Why you should know the way to San José

Costa Rica’s catchy motto sums up the life and culture of this coffee-loving country: puravida or, ‘the pure life’. Over the course of a typical day, dozens of well-wishing Costa Ricans (or Ticos / Ticas as they prefer to call themselves) will remind you of this mantra. A tiny Central American country sandwiched between Nicaragua and Panama, Costa Rica is truly a fascinating place. Although the country is slightly smaller than Lake Michigan, Costa Rica nevertheless punches above its weight. Remarkably, thisminute, rainforest-laden nation hosts more than 5% of the world’s biodiversity even though its landmass only takes up 0.03% of the planet’s surface. Unsurprisingly, Costa Rica takes pride in its approach to ‘green’ issues: the vast majority of the country’s electricity generation comes from renewable sources, with 75.9 percent derived from hydroelectric power, followed by 17.7 percent from other renewables like wind power. Only 6.4 percent of the small country’s electricity comes from conventional thermal sources 1. Acknowledging this, The World Energy Council consistently ranks Costa Rica second for environmental sustainability (after Switzerland )2, and the government’s ambition is to become the world’s first carbon-neutral country by the year 2021.

But that’s not the whole story. Since 1991, Costa Rica’s real GDP has been increasing at a compound annualgrowth rate of 5.3%3. This has translated into important social achievements, for instance, reducing poverty from 40% to less than 20% in the last 20 years. Whilst coffee and bananas have been the principle exports historically, the country has a booming eco-tourism trade and, most importantly, has a forward-thinking government that offers tax exemptions for those willing to invest in the country. Pharmaceuticals, technology and financial services are now prime economic industries in Costa Rica. A number of global, high-tech corporations have established strategic hubs in the country. For example, in 2006, Intel’s microprocessor facility was responsible for 20% of Costa Rican exports – the equivalent of 4.9% of its GDP. This growth has in turn enabled support service industries to flourish: one example is GrafixSoftech, a global alternative payment processing, fraud and data management solutions provider. Founded in 1998 and headquartered in San José, Grafix now has over 500 employees worldwide, and securely processes millions of online transactions every year.

Reassuringly, the future looks bright for Costa Rica: Education is paramount for Costa Ricans, who are themselves a highly literate people. The country boasts 93% literacy for those over 10 years of ageand is the most literate population in Central America. The importance of education is not a new thing, in1869, the country became one of the first in the world to make primary school education both free and compulsory, funded by the State’s share of the great coffee wealth. At that time, only one in ten Costa Ricans could read and write. By 1920, 50% of the population was literate, rising to 89% by 1970. Many of the country’s early leaders, such as the first president, Jose Maria Castro, were former teachers who were concerned about the education in Costa Rica. In 1949, Costa Rica permanently abolished its army – the first of only a few sovereign nations without a standing army.

It is therefore not surprising that Costa Rica has twice topped the poll in the New Economic Foundation’ s Happy Planet Index because of its low environmental impact, relatively good life expectancy and high levels of contentment reported by Costa Ricans. Costa Rica’s location provides access to American markets by having the same time zone as the central part of the United States. Its close affiliations with the USA (the dollar is widely accepted as alternative currency to the Colón), means that it is increasingly prevalent on the global business stage. Investors from developed markets typically regard Costa Rica as the ‘gateway’ to Latin America, particularly in light of its direct ocean access to Europe and Asia.The opportunity to do business with Costa Rica is there for the taking.