Costa Rica Economy – Why things are

After reading an overview of the topic our guest lecturer Dr. Juan Diego Sánchez Sánchez was going to speak about, I was really looking forward to it. I found it incredibly interesting to learn about the economical approaches that the economy in Costa Rica has been utilizing. The ideologies applied to the Costa Rican economic and financial models were quite different than I had expected. I understood prior to this lecture that they were used for economic development and stability, but what I didn’t realize was how incredibly different some approaches can be. Prior to, and throughout the lecture some questions arose including: Why did Costa Rica decide not to use a brand label in the 70’s when exporting raw materials for coffee production? Why did Costa Rica decide to keep only the “worst” or third tier coffee for themselves during the 70’s? Why did Costa Rica decide to create country brand coffee, begin roasting themselves, as well as keeping some high quality coffee within country in the 80’s and 90’s? Finally, why did Costa Rica decide to place more focus on ecotourism as opposed to other sectors of economical income?

During the 70’s, Costa Rica took a very governmental approach when discussing their economic model. At this point in time, the industrialization policies were based heavily on import substitution and were funded by foreign sources of investment capital. Costa Rica chose to sell coffee as raw material without a country brand name instead of roasting it themselves. They also chose to export in totality the first and second tier coffee that they grew, keeping only third tier coffee for themselves. (which does not taste very good at all) I believe that this was done primarily because of their desire to export. They thought that by selling the best coffee, and allowing for the roasting and brand to be decided by the buyer that this would be more profitable. However, this was not the case as the country soon realized this in the 80’s and 90’s. I disagree with this way of thought, and I think it contradicts the Tico’s value of nationalism. They take a lot of pride in their country, and when you don’t express this value it can be detrimental for the country as a whole.

The government went through a change of power in the 80’s which presented the opportunity for substantial change. State restructuring occurred as the government allowed for more freedom. The first international incursion transpired as they took a raw materials approach and created a country brand coffee. During the 90’s the first free trade agreement was made with Mexico. At this time, the economy took on an added value approach as the country decided to now roast coffee themselves, and keep some gourmet coffee within the country. I believe that the country at this point in time realized that how they were previously viewing and running the economy was not working. They saw their potential strength as a brand, and saw the added value that can be created when they focus on their quality all around. The new power was extremely beneficial because the country was able to take a new perspective on the issues that had risen, and make drastic changes to benefit the economy. I agree with this way of though as it really shows the Tico’s values. The Costa Rican pride now is evident and those who are outsiders to the country can view this.

In addition to creating this country brand, they also in more recent years have created an environmentally friendly brand of tourism. There has been a shift of focus to tourism as a major source of income for the economy. This is because Costa Ricans saw the opportunity that tourism presented to them. Costa Rica began creating sustainability and reforestation programs to promote this ecological approach to tourism. I think that this aligns with the Tico’s values of hospitality and environmental sustainability. This allows for the country to promote sustainable development and increase economic income at the same time. I recently wrote a paper about the importance of ecotourism in Costa Rica, and after many hours of research I was able to clearly see how beneficial this type of travel really is. I agree with the reasoning behind the switch to focus more of the economy on tourism because of the immense benefits that can be a result of this switch.

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