Costa Rica

Abstract

The degree of progress made towards the Millennium Development Goals (MDGs) has been uneven in Latin America and the Caribbean (See Chapter 2 and ECLAC, 2005). Costa Rica has shown notable progress towards most of the goals, and this has been possible in large part because the country’s social policies historically have gone hand in hand with economic policy making. This policy approach contributed to the country’s good economic performance. Real GDP per capita grew by 1.8 per cent per year in the 1960s and by 3.4 per cent per year in the 1970s. Improvements in prosperity were temporarily interrupted by the foreign debt crisis in the period between 1980 and 1983. when real GDP per capita fell by 4.3 per cent per year. Stabilization policies were introduced in response to the crisis, followed by a series of structural adjustment reforms that allowed the country to resume growth of per capita output at a pace of 1.7 per cent per year between 1983 and 1989. During the 1990s, this pace was stepped up to slightly above 3 per cent per year, less than the growth achieved in the 1970s and below the outcome expected from the structural reforms. During 2000-05, growth of per capita output decelerated to 1.9 per cent per year, close to the rate of income improvement of the 1960s, but under circumstances of a more unequal income distribution.