Costa Rica
1. Socio-economic and perceived impacts of the coronavirus (COVID-19) pandemic
Despite strong efforts to mitigate the impact of COVID-19, Costa Rica has been hard hit by the pandemic, particularly the tourism sector. The crisis is expected to reverse some of the country’s previous socio-economic achievements. In 2020, the poverty rate increased by more than two percentage points compared to 2019 and extreme poverty by one percentage point, based on the latest international comparable estimations. The total population in informal households among the lowest quintile of income was 75.6%, slightly lower than in LAC (78.0%). Between March 2020 and May 2021, schools were fully closed for 39 weeks, compared to 26 weeks in LAC and 15 weeks across the Organisation for Economic Co-operation and Development (OECD). Moreover, effective online learning was present in only 20.0% of schools.
Costa Rica entered the pandemic with relatively higher public expenditures on health care (7.5% of GDP) compared to LAC (6.8%). According to Gallup data, 64.8% of people were satisfied with the public provision of health care in 2020, eight percentage points less than in 2009. This figure is higher than in LAC (48.2%) but lower than in the OECD (70.7%). Perceptions of a corrupt government increased by more than six percentage points in the last decade, reaching 85.1% in 2020. This result is higher than in LAC (72.4%) and the OECD (58.8%).
2. National and international co-operation initiatives aimed to build forward better
Costa Rica has made significant efforts to address the COVID-19 crisis and to help protect the most vulnerable households, workers and enterprises. Concerning households, food and home care were provided to aid the most vulnerable, including the most affected families and senior citizens. Concerning workers, Costa Rica implemented the direct cash transfer programme (Bono Proteger) to provide temporary economic relief to both formal and informal workers who saw their income affected by the crisis. Last, to help mitigate the impact of the crisis on firms, the government implemented a short-term job-retention scheme for companies that reported annualised income losses and extended tax moratoriums for enterprises, particularly in the tourism sector.
Going forward, Costa Rica’s medium- and long-term goals are to boost economic growth and improve income distribution while maintaining its net-zero emissions by 2050 plan. With international support, Costa Rica launched a productive territorial strategy that outlines the path to have a decentralised, digitalised and decarbonised economy by 2050. This strategy includes key actions to accelerate the country’s development pathway, create jobs and close existing social equality gaps.
Costa Rica’s international co-operation projects within and beyond the region give priority to financial co-operation to address the pandemic’s impact while advancing its long-term route for development. Within LAC, during the pandemic, Costa Rica engaged in co-operation schemes for financial assistance to respond to the crisis. Additionally, Costa Rica participates in Inter-American Development Bank platforms that aim for the transparency and accountability of public expenditures associated with the COVID-19 policy measures (Rendir Cuentas/Mapa Inversiones + COVID-19). The goal is for citizens to be able to access the details of public institutions’ investments and efforts to respond to the pandemic. Beyond LAC, Costa Rica takes part in funds to lessen the impact of the crisis and finance the recovery. In particular, Costa Rica is one of the sponsor of the Fund to Alleviate COVID-19 Economics initiative, which on a solidarity basis, aims to provide funds from developed countries to finance the recovery in emerging and developing countries. Other initiatives aim to implement the country’s long-term productive strategies and to achieve its goals (e.g. a fund created by the European Union and the IV phase of triangular co-operation with Spain). These co-operation initiatives are intended to keep Costa Rica accountable for the long-term recovery plan, besides promoting the implementation of projects to achieve the United Nations Sustainable Development Goals.
References
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