Costa Rica

The Republic of Costa Rica is in the midst of a dramatic transition from a small, Central American nation known for its bananas and good coffee into a gateway for international commerce between Latin America and the rest of the world and a well traveled, if not over traveled, tourist destination–and rightfully so. Costa Rica is a highly attractive country filled with beautiful mountain ranges, undisturbed beaches and friendly natives or Ticos. In addition, Costa Rica offers a highly educated work force, a stable economic and political environment, and exceptional communications and transportation networks–especially in comparison to its neighbors, Panama and Nicaragua. All of these national characteristics, and others, have been fueling a movement of multi-national companies, American retirees and tourists from around the world into Costa Rica, in order to benefit from these treasures. One may adequately predict that Costa Rica, specifically the capital city of San Jose and the coastal regions on both the Pacific Ocean and the Caribbean Sea, have the potential of becoming the Silicon Valley and Ft. Lauderdale of Central America.

That is to say, the major U.S. and European firms in the personal computer and software industries, along with retirees and tourists, will continue this trend of moving into Costa Rica for the next twenty five years and maybe more. This trend and its longevity present geographers, environmentalists, politicians and economists with a seemingly insurmountable task of preventing the destruction of Costa Ricas environment, culture, society and natural resources while facilitating the expansion of both domestic and international businesses and economic growth. Facing the challenge of achieving sustainable development in Costa Rica is not specific to the public servants and scholars mentioned above, but also requires the intellectual input, physical effort and cooperation of every Tico and foreigner living or working in the county. Although there are many issues concerning sustainable development in Costa Rica requiring a wide range of solutions, the growing tourism industry and preventing the destruction of the environment through ecotourism should be the foremost priority of Costa Ricas policy makers and environmentalists.

Ecotourism is an alternative to mass tourism that is educational, conserves the environment and benefits local communities. In other words, ecotourism should incorporate economic development as a fundamental element of conservation.1 THE GEOGRAPHIC AND SOCIAL CHARACTERISTICS OF COSTA RICA Costa Rica is situated on the Central American Isthmus and is bordered by Nicaragua to the North and Panama to the South totaling 239 kilometers in border territory. The Central American country consists of 51,000 square miles, of which only 440 are water due to the extensive mountains dominating the majority of the countrys area. These mountain ranges, peaking at 12, 529 feet at Cerro Chirripo, provide Costa Rica a wide variety of climate zones ranging from cloud forests to rain forests to coastal plains.

The coastal plains in the East and the West stretch for 1,290 kilometers combined; The Pacific coast is twice a long as the Caribbean coast. Land use–6% arable, 5% permanent crops, 46% permanent pastures, 31% forests and woodland, 12% other–suggests the dominant interests of Costa Rica are agriculture and preservation and reflects a general disagreement over land use addressed later. The national park system, operated by the government, protects 14 percent of the national territory and is one of the main attractions for tourists.2 Guanacaste is the northwestern province of Costa Rica and the home of numerous developed and undeveloped (national parks) beaches and cattle ranches, the most expansive tenant in the region. Many of the Pacific beaches are isolated and are not accessible by road creating a challenge to many of those who flock to them to enjoy the excellent surfing conditions. The Gulf of Nicoya is an ideal location for sea kayaking, sport fishing and birdwatching along its undeveloped bays and coastal stretches. Many tour companies offer expeditions to these areas by boat and plane illustrating the potential of over development in a region already dominated by cattle ranches and coffee fields.

3 There are four major mountain ranges that form the central corridor of Costa Rica minimizing the amount of flat land to just the sea coast. Three of theses ranges have actively erupting peaks. The Cordillera de Guanacaste extends 65 miles southeast from Lake Nicaragua and houses the active Arenal Volcano at 6,000 feet. This volcano erupted in 1968 and 1985 killing few in the sparsely populated region (54 percent of the countries population lives in urban areas).4 Lake Arenal, popular for its ideal windsurfing conditions, was formed by a rift separating the Cordillera de Guanacaste and the rest of the mountain ranges to the southeast. Like the Cordillera de Guanacaste, the Cordillera de Tilaran has many rivers draining into the ocean that are completely inaccessible by road but remain enticing to adventuresome travelers seeking wild thrills. The massive Cordillera Central, housing two active and two potentially active volcanoes, remains a constant threat to the cities of San Jose and Alajuela and frequently reminds their citizens of the threat with dustings of volcanic ashes. These volcanoes, although potentially devastating, have provided the rich, fertile land required to produce one of Costa Ricas largest exports, coffee. Enclosed by the peaks and volcanic craters of this range is the Central Valley where two thirds of Costa Ricas population resides at 2,500 to 4,900 feet in elevation.

5 The largest of the mountain ranges is the Cordillera de Talmanca with the highest peak in the country at 12,529 feet. This range stretches southeast from Cartago all the way into Panama and leads into the Caribbean Lowlands on its eastern side. The northeastern Lowlands are sparsely populated but the foothills are populated by many farms and small villages along the Caribbean coast which lead into the developed region of Limon toward the south. The Limon region was originally settled because of its accessibility by water and land. It has been converted primarily to agricultural lands for banana plantations, which continue to expand causing concern because of deforestation and excessive use of agricultural chemicals.6 Despite having the appearance of a mountainous land mass of an inhibiting transportation network inconsistent with industrial growth, the San Jose, Desamparados, Puntarenas and Limon regions of the country offer very accessible transportation networks while the remote regions offering seclusion and adventure to travelers are accessible by air if not by water or a dirt roadway. There are 35,600 kilometers of roadways and highways, of which 5,945 km are paved; 950 kilometers of railroads; 115 airports with paved runways and 28 without; 730 kilometers of navigable waterways and six seaports that comprise Costa Ricas transportation infrastructure.

7 The Democratic Republic of Costa Rica constitutionally prohibits armed forces and therefore devotes a vast majority of its resources the education and health care sectors which have produced a very well educated and healthy society. Ninety four percent of the entire population of Costa Rica is literate and only 8.3% of the population has had no formal education. This highly educated, higher skilled population offers multi-national firms a huge incentive to capitalize on a stronger work force than Costa Ricas neighbors through direct investment projects. In terms of a healthy society, the life expectancy is 76 years for all Ticos and the infant mortality rate is 13.3 per 1,000 live births.

8 Health services are readily available to most Ticos and foreigners which serves to comfort most travelers and retirees settling in Costa Rica. The Costa Rican economy depends primarily on tourism and the export of bananas, coffee, sugar, timber and other agricultural products to generate a gross domestic product $19 billion in 1996. In 1995, the agriculture industry accounted for 18% of GDP, industry accounted for 24% of GDP and services accounted for 58% of GDP reflecting the countrys dependence on tourism. Economic growth has fallen since 1994 from 4.3% to 0.9% in 1996; inflation has begun to fall recently after a jump up to 22.5% in 1995; unemployment in 1995 was low at 4.2% and 5.5% in 1996 however, there is a problem with underemployment in the labor force.

9 Much more so than recent trends, the political and economic history of Costa Rica calls the attention of many firms exploring foreign direct investment in the region mainly because of stability–very few Central American nations can boast about political and economic stability. MULTI-NATIONAL COMPANIES IN COSTA RICA: In the midst of a volatile and explosive trend toward globalization, many international companies have found in Costa Rica what they had expected to find in Latin American giants such as Argentina, Brazil or Mexico: Good location, a strong and academic labor force, low cost of living, low operating costs, adequate infrastructure, strong telecommunications network, economic stability and political support. The election of Miguel Angel Rodriguez Echeverria as President of Costa Rica in April of 1998 has been a huge factor in recent deals between the government and foreign companies. Within days of his election, Rodriguez met with prominent business figures to discuss the nations economic future. The new President announced a modernization and privatization plan calling for reduced inflation and increased employment by increasing investment, tourism, infrastructure and small businesses.

10 The most significant recent development in Costa Rica economy is the announcement by Intel, the Pentium processor manufacturer, to construct a $300 million Pentium Chip complex in a suburb of San Jose. The significance of this project extends well beyond the benefits to the local economy: The new plant will employ 2,000 locally hired skilled workers to assemble and test the microprocessors designed by Intel in addition to the jobs created to build the new facility. Furthermore, Intels move to Costa Rica is expected to induce as many as forty of the companys international suppliers to follow suit and move into the San Jose region, creating even more jobs and concentrating the technology industry in the countrys Central Valley.

11 The Central Valley of Costa Rica is now in the middle of a very exciting transition as more technology and communications firms establish a presence in the Silicon Valley of the Latin world. Large multi national firms such as Acer and Microsoft have joined forces in Costa Rica to offer customer support to its worldwide clientele.Acer is currently operating a $20 million, 350-employee facility while the cellular phone company, Motorola, has a deal to build a $15 million, 950-employee facility in the San Jose region. Other direct foreign investment projects contributing to Costa Ricas high tech profile have been negotiated by DSC of Texas, EMC Technology, Seagate and Hewlett Packard. The DSC project is of particular interest because of its location within the Metro Free Trade Zone which allows the firm to avoid tariff payments on everything but the final product and illustrates the governments willingness to help promote economic development and investment.

12 Costa Ricas stable business environment is also attracting real estate speculators, venture capitalists and retirees primarily from the United States and Europe. Many are moving to Costa Rica to enjoy the beautiful climate and scenery of the coast. Some move to retire while others move to open a bed and breakfast or a small farm. But the real estate market still remains somewhat uncertain because of land laws and problems with squatters legally assuming ownership of land after five years of occupation. However, this problem does not seem to prevent many people from offering and seeking opportunities in Costa Rica.

Within five minutes of searching on the Internet, I was able to locate a web site offering thirteen properties including commercial centers, restaurants, bars, gated residential communities, beach front cottages and undeveloped plots of jungle all for sale and/or development. In addition to the already existing banana plantations, coffee fields and cleared grazing land, the emerging real estate and technology markets are raising concern about Costa Ricas precious environment. With an area of only 51,100 square kilometers, there are serious limitations as to how much development, real estate or agricultural, can be sustained before Costa Ricas biodiversity is permanently destroyed. But before exploring the issue of sustainable development, one must also consider the exploding tourism industry and how ecotourism can play a large role in preventing Costa Ricas destruction.

PRESERVATION EFFORTS IN COSTA RICA Costa Ricas highly educated population not only benefits international companies seeking low cost, high skilled labor but also benefits the preservation efforts of environmentalists throughout the country and the world. Most Ticos are well educated and fully aware of the ecological importance and sensitivity of their homeland and have been educated in the field of preservation. This has created a political environment consisting of many organizations, funds and cooperative efforts promoting the responsible utilization of Costa Ricas land. Through these conservation efforts, the Costa Rican government can boast about protecting 90 percent of its existing forests and the largest percentage of land dedicated to national parks in the world. 13 In addition to the National Parks system, the government plays a large active role in joint efforts such as Project CARFIX with FUNDECOR. FUNDECOR is an environmental non-government organization…with funding provided by the US Agency for International Development, to assist community organizations in the sustainable management of biodiversity and forest resources in…Costa Rica

14 This project is concerned with the creation of a land management program surrounding the Braulio Carrillo National Park that will create a buffer zone around the park to minimize adverse affects of development in the region. Other projects directly address the problems that are arising due to increased industrial activity such as carbon dioxide pollution. The Costa Rican Ministry of natural Resources, Energy and Mines has confronted the challenge of providing alternative energy sources that drastically reduce pollution in an economical fashion. This has been near impossible considering the high costs of solar powered electricity generation and other natural energy resources. The Tierras Morenas Wind Farm Project exemplifies the cooperation of the government and private firms–New World Power Corp., Energia del Nuevo Mundo S.A. and Molinas de Viento de Arenal–the three companies working with the government on this project. The project will construct a 20 megawatt power plant consisting of 40 wind turbine generators. This wind powered electricity will be located in the province of Guanacaste and is expected to reduce carbon dioxide emissions by 100,000 short tons per year, a significant reduction for a small nation with an expanding technology industry.

15 On the other hand, many of the conservation initiatives in Costa Rica are privately funded or involve non-government organizations and private, special interest associations. Educational and preservation foundations, such as the Bosque Lluvioso Foundation, are privately funded and dedicated to preserving and restoring forests while expanding scientific and educational programs aimed at the understanding of the intrinsic value of tropical rain forests.16 The Monteverde Biological Corridor Carbon Sequestration is an example of how the US Joint Initiative on Joint Implementation, the Arenal and Monteverde Conservation Associations and the San Luis Development Association joined forces to effectively protect the environment. Their common goals, through purchase and lease agreements concerning 16,000 hectares between the Monteverde Cloud Forest Preserve and the Gulf of Nicoya are: 1) long term conservation of the Arenal-Monteverde area; 2) improvement of the socioeconomic status of corridor residents; 3) protection of existing forest and regeneration of forest on unproductive pasture land; 4) improvement of and 5) further development of low-impact ecotourism.17 Facing high costs of research and implementation of such programs–the aforementioned Monteverde alternative energy project is priced at $5,916,22518–many conservation initiatives are exploring ecotourism projects as an a viable option considering its ability to generate revenue for funding and profits due to increased tourism in Costa Rica.

ECOTOURISM IN COSTA RICA The partnership between the Fundacion Cuencas de Limon and the Selva Bananito Lodge exemplifies the success ecotourism can achieve when combined with conservation efforts of environmental groups, government projects and private foundations. The Limon Watershed Foundation is a non-profit organization that was founded in response to indiscriminant logging in southeastern…Costa Rica and to the deterioration of water quality in the areas rivers. Since the 1997 establishment, the Foundation has promoted cooperation between local farmers, agricultural corporations, government agencies and non-government agencies in curtailing illegal logging and wood extraction from protected lands.19 The foundation is facing one of the most difficult challenges of ecotourism and sustainable development: Influencing attitudes among local farmers, loggers and other natives who depend on exploiting the land to survive.

However, the foundation seems to be managing this conflict of interests well and has seen increased activity and involvement in the program of local Ticos. The foundation has yet to prove itself to be successful in reaching many of its goals simply because it is not event two years old. But with the financial support from the Selva Bananito Lodge, the Fundacion Cuencas de Limon should be able to: 1) protect rain forest vegetation along the watersheds of the Banano, Goban, Estrella, and Bananito Rivers; 2) Educate local residents; 3) monitor and prevent illegal activities in the regions parks and reserves and; 4) expand the biological buffer zone along the La Amistad Biosphere Reserve spanning over 1 million hectares.20 The Selva Bananito Lodge was opened in 1995 by an America family and is situated 20 kilometers south and 15 kilometers inland of Puerto Limon in a secluded rain forest. The 850 hectares borders the La Amistad Biosphere Reserve near the Cahuita National Park generates all of its income from tourism. The adverse affects of tourists is minimized by limiting the number of visitors permitted at any given time, the use of solar heated water, the absence of electricity and the seven small cabins placed within a small area.

Educational rain forest study programs are offered to students and scientific researchers will soon be welcomed to the park. Some of the programs highlights include: 1)day time experiments in the forests; 2) evening discussions about ecotourism, deforestation and forest management and; 3) a visit to the Agriculture Research Institute (EARTH). The families 1250 hectares of land is devoted to low impact, sustainable agriculture and cattle management (416 hectares) and forest preservation (834 hectares).21 The management of the Selva Bananito Lodge, its surrounding reserves, the educational program and financial support of Fundacion Cuencas de Limon has thus far been successful. This early success is primarily due to the tight control of the families land, its proximity to government protected forests and its partnership with the watershed foundation. Many of the problems usually associated with an ecotourism and land preservation project, such as socio-economic and socio-political challenges, have been avoided because of the familys wealth and the division of responsibility of between the two partners. Many of the challenges ecotourism presents were, in fact, characteristic of a project in Rio Blanco Ecuador.

ECOTOURISM–RIO BLANCO ECUADOR Ecotourism is an alternative to mass tourism that is educational, conserves the environment and benefits local communities. In other words, ecotourism should incorporate economic development as a fundamental element of conservation.22 The case of Rio Blanco, Ecuador offers a vast amount of insight and information regarding the challenges to the development of a successful ecotourism industry in a small Latin American village and possible solutions to overcome them. What the project ultimately reveals is the necessity of local control of ecotourism activities, national oversight and partial financial support along with careful planning and organization. The indigenous Quichua community in Rio Blanco is situated in the Ecuadorian Amazon and was founded in 1971. The economy was dominated by hunting and cultivation of cash crops such as coffee, rice and cacao but the relatively high population condensed into a small region has adversely effected the local ecology. High growth and rising cost of living standards has resulted in deforestation and expanded land under cultivation. The community has responded to these problems by developing and ecotourism project to generate income and, according to environmentalists wishes, substitute the preservation of land for tourism for the destruction of forests for cultivation.

The challenges and conflicts that the Quichua community has faced since implementation if the project are applicable and relevant to most ecotourism programs. The goal of this project was to improve the standard of living in the Quichua community while simultaneously preventing further deforestation. This presents the first and most difficult challenge: How does the community shift its emphasis on agriculture to a combination of agriculture and tourism? First of all the benefits of the change must be tangible to every member of the community and they must be retained by the community. That is to say, the profits and other benefits from ecotourism must not leak out to other regions or countries. This is achieved by maintaining local control over the project. If foreign investors are permitted to control the tourism industry in a community, few local residents will share in the profits.23 In Costa Rica, the Selva Bananito Lodge is foriegn owned, however, profits are shared by the family and the foundation which presents successful alternative to complete local control.

Another problem Schaller mentions in his study of the Quichua community is the lack of government cooperation and inability of locals to obtain national. He sites that governments may unwittingly hinder local tourism…[and] too often local people have neither the political power or business connections to compete at an international level with mass tourism.24 Interestingly, it may be the national government that can overcome the shortfalls of their policies and local power by implementing a national program to promote ecotourism. As mentioned earlier, the Government of Costa Rica plays a large role in environmental preservation which should serve as an example to other governments such as that of Ecuador. A simple program that the US Government has practiced is the issuance of block grants to each state for welfare programs. Block grants to provinces and local communities for development of ecotourism could be based on performance which would provide incentive to preserve the ecology and innovative tourism programs. This would reduce economic leakages–through government regulation–and reduce economic pressures to clear more land for cultivation.

Furthermore, the government subsidies provided to the ecotourism industry has the potential of creating a level playing field of competition between mass tourism and smaller scale ecotourism. The absence of economies of scale in the ecotourism industry may eventually be the demise of the industry itself because of its economic inefficiency. However, government subsidies–if the funds are available–can alleviate this problem in the long run. Similarly, Schaller argues that Increased demand encourages larger scale projects to move in, leading to mass tourism, a loss of local control, and the end of any hopes for ecotourisms sustainanbility.25 His statement is incontestable a solution lies within the management strategy of a Swiss-Swedish electrical engineering multinational firm, Asea Brown Boveri. The CEO of this firm recently described his management strategy for an article published by World Trade Magazine.

Three of his main objectives: 1) Common values must be established and then shared by every branch of the company; 2) create links through mentors between like divisions in different countries and; 3) operations in each country must adapt the companys global vision to local market and operation needs.26 can be applied to large scale management of ecotourism development through the creation of an American-style trade association. The establishment of a trade association representing local communities like the Quichuas and individual owners developing ecotourism in a nation or region that applied these objectives would almost guarantee the survival of small-scale ecotourism ventures throughout Latin America.

The resulting objectives of the trade associations management policy would be: 1) Common values concerning the preservation of cultural identities and maintenance of local control between each project; 2) Create links between similar communities within a particular region or country so prevent conflict, inflated competition and to foster the sharing of ideas and; 3) projects in each country must adapt the global vision of environmental preservation and sustainable development to the region. Trade associations and block grants are not the only solutions to the many economic, cultural, social, political and environmental challenges characteristic of ecotourism and sustainable development but they do provide an essential stepping stone. Many Latin American nations are experiencing the growth in industry and tourism much similar to Costa Rica and there are numerous projects like the Selva Bananito Lodge/Fundacion Cuencas de Limon and the Quichua ecotourism development project throughout the region. Hopefully they will all contribute to the preservation of their natural resources and diverse ecological systems while developing their economies and much needed industries.