Updated January 3, 2022
Costa Rica: An Overview
Costa Rica historically has been an outpost of political and
Costa Rica’s next presidential and legislative elections are
economic stability in an often-turbulent region. The United
scheduled for February 6, 2022. Alvarado is not eligible for
States has worked closely with Costa Rica to address
immediate reelection. A December 2021 UCR poll found
challenges in Central America and to advance shared
former President José María Figueres (1994-1999) of the
values, such as democracy and human rights, worldwide.
PLN and former Vice President Lineth Saborío (2002-
2006) of the PUSC leading a large field of presidential
Political Situation
candidates, with 17% and 15% of vote intentions,
Costa Rica has sustained continuous civilian democratic
respectively. More than 40% of voters remained undecided.
governance since 1949, when the country adopted a new
If no presidential candidate receives at least 40% of the
constitution in the aftermath of a short civil war. The
vote, a runoff is to be held on April 3, 2022.
center-left (now centrist) National Liberation Party (PLN)
and a center-right opposition that ultimately became the
Figure 1. Costa Rica at a Glance
Social Christian Unity Party (PUSC) dominated post-war
politics. The two-party system has collapsed over the past
20 years, however, as many Costa Ricans have grown
disenchanted with the country’s political class and have
abandoned the traditional parties. This shift has allowed
newer political forces to contest power, such as the center-
left Citizens’ Action Party (PAC), which has won the past
two presidential elections. It also has contributed to
legislative gridlock, making governance more challenging.
President Carlos Alvarado of the PAC took office for a
four-year term in May 2018 after winning 61% of the vote
in a second-round runoff. He has had to forge multiparty
alliances to advance his agenda through the unicameral
Legislative Assembly, in which the PAC holds 10 of 57
seats. During Alvarado’s term, Costa Rica has legalized

same-sex marriage, enacted structural reforms required for
Sources: CRS Graphics, Instituto Nacional de Estadística y Censos;
admission into the Organization for Economic Cooperation
Universidad de Costa Rica, Centro de Investigación y Estudios
and Development, and begun implementing a plan to
Políticos; International Monetary Fund; Trade Data Monitor.
reduce net carbon emissions to zero by 2050. Other portions
of Alvarado’s agenda have stalled due to fiscal constraints
Economic and Social Conditions
and the Coronavirus Disease 2019 (COVID-19) pandemic.
Costa Rica pursued state-led economic development
throughout much of the 20th century but began to adopt a
Costa Rica has been more successful than many Latin
more market-oriented economic strategy in the 1980s. Over
American countries in containing COVID-19. Nevertheless,
the past three decades, Costa Rica has attracted a cluster of
Costa Rica experienced two large infection waves between
high-tech manufacturers, such as medical device
April and October 2021, which analysts attributed to the
companies, and has developed a dynamic tourism sector,
spread of the Delta variant and a relaxation of public health
contributing to the diversification of the country’s once
restrictions. According to Johns Hopkins University, as of
predominantly agricultural economy. These newer
January 1, 2022, Costa Rica had recorded more than
industries provide higher wages, but many Costa Ricans
570,000 cases and 7,300 deaths from COVID-19 and 69%
remain employed in traditional industries, which struggle to
of its population was fully vaccinated.
compete with imports and provide lower pay and precarious
employment conditions. This divergence has reinforced
With the exception of a short period early in the pandemic,
Costa Rica’s relatively high level of income inequality. It
Costa Ricans have expressed low levels of approval for
also has contributed to high rates of unemployment and
Alvarado throughout his term. A November 2021
informal employment, eroding the tax base necessary to
University of Costa Rica (UCR) poll found that 12% of
sustain Costa Rica’s social welfare system.
Costa Ricans viewed Alvarado’s performance in office
positively, 72% viewed it negatively, and 16% held neutral
Socioeconomic conditions in Costa Rica deteriorated
opinions. Those surveyed identified corruption,
considerably in 2020. Although the government enacted
unemployment, and the cost of living as their top concerns.
emergency measures to support businesses and households
through the pandemic, the economy contracted by 4.1% and
the poverty rate increased from 24% to 30%. The
International Monetary Fund (IMF) estimates the Costa
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Costa Rica: An Overview
Rican economy bounced back with 3.9% growth in 2021,
100,000 residents. Costa Rican authorities have linked
helping to reduce the poverty rate to 26%. Nevertheless,
much of the violence to drug trafficking organizations,
more than 15% of Costa Ricans remained unemployed in
which use the country as a transit and storage point for
the third quarter of 2021.
South American cocaine destined for the U.S. market. Drug
trafficking organizations also have sought to infiltrate Costa
The economic downturn also exacerbated Costa Rica’s
Rican institutions, contributing to increased corruption in
fiscal challenges, as the budget deficit widened to 8.7% of
the justice sector, according to the U.S. State Department.
gross domestic product (GDP) in 2020. The Alvarado
administration negotiated a three-year, $1.8 billion
The United States provides foreign assistance to Costa Rica
financing arrangement with the IMF intended to support
to help the country combat transnational crime and other
Costa Rica’s economic recovery while stabilizing the
security threats. In the Consolidated Appropriations Act,
country’s debt burden. Costa Rica’s budget deficit fell to an
2021 (P.L. 116-260), Congress appropriated $40.7 million
estimated 6.4% of GDP in 2021, but the government’s
of security assistance for Costa Rica. That total included
fiscal policies have sparked repeated protests and the
$8.2 million in bilateral military aid and $32.5 million
implementation of additional austerity measures could
through the Central America Regional Security Initiative.
generate further unrest.
The U.S. Department of Defense has provided additional
support to Costa Rica, including $3.7 million for maritime
U.S.-Costa Rican Relations
interdiction in FY2020. U.S. assistance has helped Costa
The Biden Administration has sought to bolster ties with
Rica expand community-based crime prevention programs,
Costa Rica. During a June 2021 visit to the country, U.S.
train security and justice sector personnel, and acquire
Secretary of State Antony Blinken highlighted bilateral
equipment used to monitor and control its national territory.
economic and security cooperation as well as U.S.-Costa
Rican collaboration to address shared challenges such as the
COVID-19
COVID-19 pandemic, irregular migration, and climate
President Alvarado has repeatedly called on the
change. The Administration also has expressed support for
international community to help developing countries
the Alliance for Development in Democracy—an informal
obtain COVID-19 vaccines and recover from the pandemic.
arrangement among Costa Rica, Panama, and the
In July 2021, the United States donated 500,000 doses of
Dominican Republic intended to accelerate post-pandemic
the Pfizer/BioNTech vaccine to Costa Rica. The United
economic recovery, foster sustainable development, and
States also has provided more than $4 million of pandemic-
defend democracy and human rights in the region.
related aid to Costa Rica, including field hospitals and other
medical supplies.
Trade and Investment Ties
The United States and Costa Rica are parties to the
Migration and Refugee Flows
Dominican Republic-Central America-United States Free
As a comparatively prosperous and stable country, Costa
Trade Agreement (CAFTA-DR), which was signed in 2004
Rica has long served as a destination for migrants and
and entered into force for Costa Rica in 2009. Bilateral
asylum-seekers from other Latin American nations. The
trade more than doubled between 2008 and 2012 but
country has experienced a recent surge in asylum requests,
declined 43% between 2012 and 2020, largely due to a
however, primarily due to the ongoing political crisis in
steep drop in U.S. imports following Intel’s 2014 closure of
neighboring Nicaragua. According to the U.N. Refugee
a microprocessor manufacturing plant in Costa Rica. U.S.-
Agency, more than 85,000 Nicaraguans have sought asylum
Costa Rican trade totaled $11 billion in 2020, a 3% decline
in Costa Rica since 2018. Costa Rica also has experienced
compared with 2019. U.S. goods exports to Costa Rica
increasing inflows of migrants and asylum-seekers from
amounted to $5.7 billion and U.S. goods imports from
Venezuela, El Salvador, and Honduras.
Costa Rica amounted to $5.4 billion in 2020, giving the
United States a $331 million trade surplus. Top U.S.
The Costa Rican government has sought to provide
exports to Costa Rica in 2020 included mineral fuels,
protection and humanitarian aid to those in need but has
machinery and parts, medical instruments and equipment,
called on the international community for additional
and plastics; top U.S. imports from Costa Rica in 2020
support. According to the U.S. Agency for International
included medical instruments and equipment, fruit, electric
Development, the United States provided nearly $14.2
machinery and parts, and coffee.
million to humanitarian organizations in FY2021 to support
migrants, asylum-seekers, and refugees in Costa Rica.
CAFTA-DR includes a chapter on investment that is similar
to a bilateral investment treaty. According to the U.S.
In addition to those who have sought refuge in Costa Rica,
Bureau of Economic Analysis, the accumulated stock of
many migrants pass through Costa Rican territory on their
U.S. foreign direct investment in Costa Rica was $2 billion
way to the United States. In recent years, such transitory
in 2020, with 45% invested in the manufacturing sector.
flows have included large numbers of Cubans and Haitians,
as well as extra-regional migrants from Africa and Asia.
Security Cooperation
Costa Rica has worked with the U.S. government to
Costa Rica’s institutions have proven more resilient than
conduct background checks on those transiting the country
those of its Central American neighbors, but the country has
and to identify and respond to potential security threats
experienced an increase in organized crime and related
before they reach the U.S. border.
violence over the past decade. Costa Rica recorded 588
homicides in 2021, giving it a homicide rate of 11.4 per
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Costa Rica: An Overview

Peter J. Meyer, Specialist in Latin American and Canadian
Affairs
IF10908


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https://crsreports.congress.gov | IF10908 · VERSION 6 · UPDATED

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