Overview

  • In many aspects, Costa Rica is a success story in terms of development. It is considered an upper middle-income country, which has shown a steady economic growth over the past 25 years. This growth resulted from an outward- oriented strategy, based on the openness to foreign investment and gradual trade liberalization.

    Costa Rica is also a global leader for its environmental policies and accomplishments, which have helped the country build its Green Trademark. The pioneering Payments for Environmental Services (PES) program has been successful in promoting forest and biodiversity conservation; making Costa Rica the only tropical country in the world that has reversed deforestation.

    The combination of political stability, a social compact, and steady growth has resulted in one of the lowest poverty rates in Latin America and the Caribbean.

    According to data from the 2017 National Household Survey of the National Institute of Statistics and Census, the percentage of poor households in Costa Rica went from 20.5  to 20 percent between 2016 and 2017, which is not a significant change; while extreme poverty dropped from 6.3 percent to 5.7 percent.

    The country’s success over the past decades is also reflected in its sound human development indicators, which have contributed to move the country up the global ranks, higher than the other countries in the region.

    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 regional average of 3.8 percent for the same period.

    During the global crisis, real GDP contracted 1 percent in 2009, but rapidly rebounded following the crisis, reaching one of the highest average real growth rates in Latin America between 2010 and 2016 (4 compared to 2.5 percent regional average). Notwithstanding, growth has slowed down in recent years and it is expected to continue dropping in 2018.

    Two pressing development challenges stand out: the deteriorating fiscal situation and persistent inequality. These challenges affect the basic pillars of the Costa Rican development model: inclusion, growth, and sustainability.

    The government has strived to address these problems and is committed to an inclusive society that guarantees the welfare of its people, supported by transparent and accountable public institutions.

    Last Updated: Oct 04, 2018

  • The World Bank and the Government of Costa Rica established a Country Partnership Framework (CPF) for 2016-2020 to strengthen the World Bank-Costa Rica relationship. This CPF reflects analytical underpinnings from the Systematic Country Diagnostic, and is the fourth prepared for Costa Rica.

    The preceding CPFs established a framework for a closer partnership between the World Bank Group (WBG) and Costa Rica based on mutual learning and knowledge sharing.

    The current CPF features a highly selective program that is organized around the following two strategic pillars:

    • Reducing constraints to productive inclusion; and
    • Bolstering fiscal, social and environmental sustainability.

    Based on this CPF, the WBG is supporting the Government’s efforts to bolster fiscal sustainability, increase the efficiency of its fiscal management, and strengthen its capacity. Cooperation includes a health loan in the amount of US$420 million to support the efforts of the Government to improve the availability and quality of the universal health insurance system.

    The WBG is also working toward a green and inclusive growth of the rural territories through mainstreaming sustainable management practices and decision-making support systems in “productive landscapes”; in other words, those territories that are productive both for their natural beauty and also for the activities developed in them (agricultural, forestry, fisheries, tourism, and others). Support also aims to improve competitiveness of rural supply chains.

    The active portfolio in Costa Rica includes two projects totaling US$620 million in net commitments, by October 2018.

    Environmental and climate change interventions continue to be supported through trust funds, such as the Forest Carbon Partnership FacilityCosta Rica’s REDD+ strategy, and Partnership for Carbon Market Readiness (PMR). In addition, support is provided to enforce a Sustainability Protocol at the Reventazón hydroelectric plant of the Costa Rican Institute of Electricity, an international example that proves it is possible to develop hydroelectric projects applying the industry´s best environmental and social practices. Support is also given to the country through the Disaster Risk Management Financial Strategy, which is expected to be approved in the next months.  

    Regarding energy and transportation electrification, the World Bank supports the initiative to transition towards an energy model that optimizes the use of native resources.

    The decarbonisation of the industrial and transport sectors is sought through the progressive electrification and diversification of the energy matrix, in an environment of greater regional integration and opening of international energy markets. The following trusts support this undertaking: the Spanish Fund for Latin America and the Caribbean, the Korean Fund for Sustainable Growth, the Alliance for the support of the National Determined Contributions (NDCs) achievement and the Energy Sector Management Assistance Program (ESMAP). The training of technical teams and the design of financial instruments and sector plans outstand among the activities to achieve improvements, both in the regulatory framework for the electrification of public transport and in the integration of renewable energies in the electricity grid.

    Last Updated: Oct 04, 2018

  • Pro-Productive Inclusion

    Through the Higher Education ProjectCosta Rica’s public higher education system benefitted by an improvement in access and quality. Enrollment in undergraduate programs has reached the target of more than 102,000 students; and in graduate programs more than 7,000. The total number of officially accredited programs in the four universities participating in the Project has also surpassed the target of 106.  In infrastructure, there are more than thirty construction projects finalized, including new schools and university buildings, research laboratories and dormitories. The benefits provided to the indigenous people stand out, where the number of indigenous students enrolled in the four universities doubled between 2014 and 2017.

    Through Reimbursable Advisory Service (RAS) for the health sector, the WBG helped develop a roadmap to increase the efficiency and quality of health services over the short and medium term. The results of this RAS are used by the Government to develop a medium and long-term strategy to enhance sustainability and equitable access to services provided through the social health insurance.

    An array of analytical work has been completed in recent years, among others, a case study known as Primary Health Care Achievements and Challenges within the Framework of the Social Health Insurance, the Costa Rica Social Sector Expenditure and Institutional Reviewresearch series on green and inclusive growth, a working paper titled A Behavioral Approach to Water Conservation, and a gender assessment.

    Pro-Fiscal, Social and Environmental Sustainability

    Through the project "Strengthening of the Universal Health Insurance", the availability and quality of the universal health insurance system was improved, and the strengthening of the institutional efficiency of the Costa Rican Social Security Fund (CCSS). Under the Program for Results mode, objectives such as the reduction of waiting lists and the care of chronic diseases have been met. For example, the goal of 41 percent of patients with type II diabetes identified and with optimal clinical control was exceeded. The improvement in colon cancer screening also exceeded the goal by reaching 15 percent of the target population. In addition, expectations were exceeded in the percentage of surgeries performed on an outpatient basis where the goal of 43 percent was exceeded. One of the greatest achievements is in the expected percentage of the total number of health areas equipped with the Single Digital Health File (80 over 60 percent expected).

    Through Disaster Risk Management (DRM) programsCosta Rica’s preparedness to respond to disasters has further improved with risk reduction and prevention programs. The regulatory and institutional DRM framework was strengthened with the introduction of a legal framework that requires all new public investments to follow DRM best practices and include a hazards assessment. This enhanced capacity of Costa Rica to implement its DRM program was supported by the WBG’s CAT DDO (Catastrophe Deferred Drawdown Option), which provided a source of immediate liquidity in case of disasters.

    The Ecomarkets II Project increased Costa Rica’s Payment for Environmental Services (PES) contract coverage and land areas under PES coverage. The number of small and medium sized landholders participating in the PES program increased significantly by 120 percent between 2008 and 2014, exceeding both the original and revised target values of 50 and 85 percent, respectively. Also, since 2014, 300,000 hectares of land are maintained annually under PES contracts, which represent an increase of 19 percent compared to the baseline value of 250,000 hectares in 2008, providing environmental services of local and global importance.

     

    Last Updated: Oct 04, 2018

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LENDING

Costa Rica: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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Additional Resources

Country Office Contacts

San José de Costa Rica
+506 25394345
cfloresmora@worldbank.org
1818 H Street NW, Washington, DC 20433
USA +1 202 473-1000
cfloresmora@worldbank.org