Introduction to Costa Rica
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Destination content Christopher P. Baker, used from Moon Handbooks Costa Rica, 5th edition.


When Spanish explorers arrived in what is now Costa Rica at the dawn of the 16th century, they found the region populated by several poorly organized, autonomous tribes living relatively prosperously, if wanton at war, in a land of lush abundance. In all, there were probably no more than 200,000 indigenous people on 18 September 1502, when Columbus put ashore near current-day Puerto Limón. Although human habitation can be traced back at least 10,000 years, the region had remained a sparsely populated backwater separating the two areas of high civilization: Mesoamerica and the Andes. High mountains and swampy lowlands had impeded the migration of advanced cultures. Though these tribes were advanced in ceramics, metalwork, and weaving, there are few signs of large complex communities, little monumental stone architecture lying half-buried in the luxurious undergrowth, and no planned ceremonial centers of comparable significance to those located elsewhere in the isthmus.

The region was a potpourri of distinct cultures divided into chiefdoms. In the east along the Caribbean seaboard and along the southern Pacific shores, the peoples shared distinctly South American cultural traits. These groups--the Caribs on the Caribbean and the Borucas, Chibchas, and Diquis in the southwest--were semi-nomadic hunters and fishermen who raised yucca, squash, pejibaye (bright orange palm fruits), and tubers supplemented by crustaceans, shrimp, lobster, and game; chewed coca; and lived in communal village huts surrounded by fortified palisades. The matriarchal Chibchas and Diquis had a highly developed slave system and were accomplished goldsmiths. Amulets, awls, tweezers for plucking out facial hair, beads and baubles, pendants and religious icons decorated in fantastical animist imagery were among the many items of gold expertly worked through the "lost wax" technique. These people were famed for their simple clothwork, which was traded throughout the country. They were also responsible for the perfectly spherical granite balls (bolas) of unknown purpose found in large numbers at burial sites in the Río Terraba valley, Caño Island, and the Golfito region. Some are the size of grapefruit. Others weigh 16 tons. One and all are as round as the moon. Like other indigenous groups, the people had no written language, and their names are of Spanish origin--bestowed by colonists, often reflecting the names of tribal chiefs.

The most interesting archaeological finds throughout the nation relate to pottery and metalworking. The art of gold working was practiced throughout Costa Rica for perhaps one thousand years before the Spanish conquest, and was more advanced in the central highlands than the rest of the isthmus. The tribes here were the Corobicís, who lived in small bands in the highland valleys, and the Nahuatl, who had recently arrived from Mexico at the time that Columbus stepped ashore. The largest and most significant of Costa Rica's archaeological sites found to date is here, at Guayabo, on the slopes of Turrialba, 56 km east of San José, where an ancient city is being excavated. Dating from perhaps as early as 1000 b.c. to a.d. 1400, Guayabo is thought to have housed as many as 1,000 inhabitants. Rudimentary by the standards of ancient cities elsewhere in the isthmus, it is nonetheless impressive, with wide cobblestone walkways and stone-lined pools and water cisterns fed by aqueducts.

Perhaps more important (little architectural study has been completed) was the Nicoya Peninsula in northwest Costa Rica. In late prehistoric times, trade in pottery from the Nicoya Peninsula brought this area into the Mesoamerican cultural sphere, and a culture developed among the Chorotegas--the most numerous of the region's indigenous groups--that in many ways resembled the more advanced cultures farther north. In fact, the Chorotegas were heavily influenced by the Olmec culture, and may have even originated in southern Mexico before settling in Nicoya early in the 14th century (their name means "Fleeing People"). The most advanced of the region's cultures, they developed towns with central plazas, brought with them an accomplished agricultural system based on beans, corns, squash, and gourds, had a calendar, wrote books on deerskin parchment, and produced highly developed ceramics and stylized jade figures depicting animals, humanlike effigies, and men and women with oversized genitals, often making the most of their sexual apparati. Like the Olmecs, they filed their teeth; like the Mayans and Aztecs, the militaristic Chorotegas kept slaves and maintained a rigid class hierarchy dominated by high priests and nobles. Human sacrifice was part of the cultural mainstay. Littleis known of their spiritual belief system, though the potency and ubiquity of phallic imagery hints at a fertility-rite religion.

Alas, the pre-Columbian cultures were quickly choked by the stern hand of gold-thirsty colonial rule--and condemned, too, that Jehovah might triumph over local idols.


The First Arrivals
When Columbus anchored his storm-damaged vessels--Captiana, Gallega, Viscaína, and Santiago de Palos--in the Bay of Cariari, off the Caribbean coast on his fourth voyage to the New World in 1502, he was welcomed and treated with great hospitality by indigenous peoples who had never seen white men before. Columbus' son Ferdinand recorded that the coastal indigenous people sent out two girls, "the one about eight, the other about 14 years of age. The girls always looked cheerful and modest. So the Admiral gave them good usage." In his Lettera Rarissima to the Spanish king, Columbus offered a different tale of events: "As soon as I got there they sent right out two girls, all dressed up; the elder was hardly eleven, the other seven, both behaving with such lack of modesty as to be no better than whores. As soon as they arrived, I gave orders that they be presented with some of our trading truck and sent them directly ashore."

The tribal dignitaries appeared wearing much gold, which they gave Columbus. "I saw more signs of gold in the first two days than I saw in Española during four years," his journal records. He called the region La Huerta ("The Garden"). Alas, the great navigator struggled home to Spain in worm-eaten ships (he was stranded for one whole year in Jamaica) and never returned. The prospect of vast loot, however, drew adventurers whose numbers were reinforced after Vasco Nuñez de Balboa's discovery of the Pacific in 1513. To these explorers the name Costa Rica would have seemed a cruel hoax. Floods, swamps, and tropical diseases stalked them in the sweltering lowlands. And fierce, elusive Indians harassed them maddeningly.

In 1506, Ferdinand of Spain sent a governor, Diego de Nicuesa, to colonize the Atlantic coast of the isthmus he called Veragua. He ran aground off the coast of Panamá and was forced to march north, enduring a welcome that was less hospitable than the one afforded Columbus. Antagonized indigenous bands used guerrilla tactics to slay the strangers and willingly burnt their own crops to deny them food. Nicuesa set the tone for future expeditions by foreshortening his own cultural lessons with the musket ball. Things seemed more promising when an expedition under Gil González Davila set off from Panamá in 1522 to settle the region. It was Davila's expedition--which reaped quantities of gold--that won the land its nickname of Costa Rica, the "Rich Coast." Alas, the local peoples never revealed the whereabouts of the fabled mines of "Veragua" (most likely it wasplacer gold found in the gold-rich rivers of the Osa Peninsula).

Davila's Catholic priests also supposedly managed to convert many indigenous people to Christianity with cross and cutlass. But once again, sickness and starvation were the price--the expedition reportedly lost more than 1,000 men. Later colonizing expeditions on the Caribbean similarly failed miserably; the coastal settlements dissolved amidst internal acrimony, the taunts of the local people, and the debilitating impact of pirate raids. When two years later Francisco Fernández de Córdova founded the first Spanish settlement on the Pacific at Bruselas, near present-day Puntarenas, its inhabitants all died within three years.

For the next four decades Costa Rica was virtually left alone. The conquest of Peru by Pizarro in 1532 and the first of the great silver strikes in Mexico in the 1540s turned eyes away from southern Central America. Guatemala became the administrative center for the Spanish Main in 1543, when the captaincy-general of Guatemala, answerable to the viceroy of New Spain (Mexico), was created with jurisdiction from the Isthmus of Tehuantepec to the empty lands of Costa Rica.

By the 1560s several Spanish cities had consolidated their position farther north and, prompted by an edict of 1559 issued by Philip II of Spain, the representatives in Guatemala thought it time to settle Costa Rica and Christianize the natives. By then it was too late for the latter. Barbaric treatment and European epidemics--opthalmia, smallpox, and tuberculosis--had already reaped the indigenous people like a scythe, and had so antagonized the survivors that they took to the forests and eventually found refuge amid the remote valleys of the Cordillera Talamanca. Only in the Nicoya Peninsula did there remain any significant indigenous population, the Chorotegas, who soon found themselves chattel on Spanish land under the encomienda system whereby Spanish settlers were granted the right to forced indigenous labor.

In 1562, Juan Vásquez de Coronado--the true conquistador of Costa Rica--arrived as governor. He treated the surviving indigenous people more humanely and moved the few existing Spanish settlers into the Cartago Valley, where the temperate climate and rich volcanic soils offered the promise of crop cultivation. Cartago was established as the national capital in 1563. The economic and social development of the Spanish provinces was traditionally the work of the soldiers, who were granted encomiendas, landholdings that allowed for rights to the use of indigenous serfs. Coronado, however, to the regret of his subordinates, never made use of this system; in response, the indigenous people, led by chief Quitao, willingly subjugated themselves to Spanish rule. Coronado's successor allowed the Spanish to enslave the local population. Soon, there were virtually no indigenous people left alive in the region.

After the initial impetus given by its discovery, Costa Rica lapsed into a lowly Cinderella of the Spanish empire. The gold was soon gone, shipped to Spain. Land was readily available, but no indigenous labor to work it. Thus, the early economy lacked the conditions that favored development of the large colonial-style hacienda and feudal system of other Spanish enclaves. The colonists were forced to work the land themselves (even the governor, it is commonly claimed, had to work his own plot of land to survive). Without gold or export crops, trade with other colonies was infrequent at best. The Spanish found themselves impoverished in a subsistence economy. Money became so scarce that the settlers eventually reverted to the indigenous method of using cacao beans as currency.

A full century after its founding, Cartago could boast little more than a few score adobe houses and a single church, which all perished when Volcán Irazú erupted in 1723.

Gradually, however, prompted by an ecclesiastical edict that ordered the populace to resettle near churches, towns took shape. Heredia (Cubujuquie) was founded in 1717, San José (Villaneuva de la Boca del Monte) in 1737, and Alajuela (Villa Hermosa) in 1782. Later, exports of wheat and tobacco placed the colonial economy on a sounder economic basis and encouraged the intensive settlement that characterizes the Meseta Central today.

Intermixing with the native population was not a common practice. In other colonies, Spaniard married native and a distinct class system arose, but mixed-bloods and ladinos (mestizos) represent a much smaller element in Costa Rica than they do elsewhere on the isthmus. All this had a leveling effect on colonial society. As the population grew, so did the number of poor families who had never benefited from the labor of encomienda indigenous people or suffered the despotic arrogance of criollo (Creole) landowners. Costa Rica, in the traditional view, became a "rural democracy," with no oppressed mestizo class resentful of the maltreatment and scorn of the Creoles. Removed from the mainstream of Spanish culture, the Costa Ricans became individualistic and egalitarian.

Not all areas of the country, however, fit the model of rural democracy. Nicoya and Guanacaste on the Pacific side offered an easy overland route from Nicaragua to Panamá and were administered quite separately in colonial times from the rest of Costa Rica. They fell within the Nicaraguan sphere of influence, and large cattle ranches or haciendas arose. Revisions to the encomienda laws in 1542, however, limited the amount of time that indigenous people were obliged to provide their labor; the local people were also rounded up and forcibly concentrated into settlements distant from the haciendas. The large estate owners thus began to import African slaves, who became an important part of the labor force on the cattle ranches that were established in the Pacific northwest. The cattle-ranching economy and the more traditional class-based society that arose persist today.

Some three centuries of English associations and neglect by the Spanish authorities have also created a different cultural milieu all along the Caribbean coast of Central America. On the Caribbean of Costa Rica, cacao plantations became well established. Eventually large-scale cacao production gave way to small-scale sharecropping, and then to tobacco as the cacao industry went into decline. Spain closed the Costa Rican ports in 1665 in response to English piracy, thereby cutting off seaborne sources of legal trade. Smuggling flourished, however, for the largely unincorporated Caribbean coast provided a safe haven to buccaneers and smugglers, whose strongholds became 18th-century shipping points for logwood and mahogany. The illicit trade helped weaken central authority.


Independence of Central America from Spain on 15 September 1821 came on the coattails of Mexico's declaration earlier in the same year. Independence had little immediate effect, however, for Costa Rica had required only minimal government during the colonial era and had long gone its own way. In fact, the country was so out of touch that the news that independence had been granted reached Costa Rica a full month after the event. In 1823, the other Central American nations proclaimed the United Provinces of Central America, with their capital in Guatemala City, while a Costa Rican provincial council voted for accession to Mexico.

After the declaration, effective power lay in the hands of the separate towns of the isthmus, and it took several years for a stable pattern of political alignment to emerge. The four leading cities of Costa Rica felt as independent as had the city-states of ancient Greece, and the conservative and aristocratic leaders of Cartago and Heredia soon found themselves at odds with the more progressive republican leaders of San José and Alajuela. The local quarrels quickly developed into civic unrest and, in 1823, to civil war. After a brief battle in the Ochomogo Hills, the republican forces of San José were victorious. They rejected Mexico, and Costa Rica joined the federation with full autonomy for its own affairs. Guanacaste voted to secede from Nicaragua and join Costa Rica the following year.

From this moment on, liberalism in Costa Rica had the upper hand. Elsewhere in Central America, conservative groups tied to the church and the erstwhile colonial bureaucracy spent generations at war with anticlerical and laissez-faire liberals, and a cycle of civil wars came to dominate the region. By contrast, in Costa Rica colonial institutions had been relatively weak and early modernization of the economy propelled the nation out of poverty and laid the foundations of democracy far earlier than elsewhere in the isthmus. While other countries turned to repression to deal with social tensions, Costa Rica turned toward reform. Military plots and coups weren't unknown--they played a large part in determining who came to rule throughout the next century--but the generals usually were puppets used as tools to install favored individuals (usually surprisingly progressive civilian allies) representing the interests of particular cliques.

Early Liberalism
Juan Mora Fernández, elected the federalist nation's first chief of state in 1824, set the tone by ushering in a nine-year period of progressive stability. He established a sound judicial system, founded the nation's first newspaper, and expanded public education. He also encouraged coffee cultivation and gave free land grants to would-be coffee growers. The nation, however, was still riven by rivalry, and in September 1835 the War of the League broke out when San José was attacked by the three other towns. They were unsuccessful and the national flag was planted firmly in San José.

Braulio Carrillo, who seized power as a benevolent dictator in 1835, established an orderly public administration and new legal codes to replace colonial Spanish law. In 1838, he withdrew Costa Rica from the Central American federation and proclaimed independence. The Honduran general Francisco Morazán invaded and toppled Carrillo in 1842. Morazán's extranational ambitions and the military draft and direct taxes he imposed soon inspired his overthrow. He was executed within the year.

Coffee Is King
The reins of power were taken up by a nouveau elite, the coffee barons, who vied with each other for political dominance. In 1849, the cafetaleros announced their ascendancy by conspiring to overthrow the nation's first president, José María Castro, an enlightened man who initiated his administration by founding a high school for girls and sponsoring freedom of the press. They chose as Castro's successor Juan Rafael Mora, a powerful cafetalero. Mora is remembered for the remarkable economic growth that marked his first term and for "saving" the nation from the imperial ambitions of the American adventurer William Walker during his second term (see special topic, The William Walker Saga). Still, his countryfolk ousted him from power in 1859; the masses blamed him for the cholera epidemic that claimed the lives of one in every 10 Costa Ricans, while the elites were horrified when Mora moved to establish a national bank, which would have undermined their control of credit to the coffee producers. After failing in his own coup against his successor, he was executed--a prelude to a second cycle of militarism, for the war of 1856 had introduced Costa Rica to the buying and selling of generals and the establishment of a corps of officers possessing an inflated aura of legitimacy.

The Guardia Legacy
The 1860s were marred by power struggles among the coffee elite, supported by their respective military cronies. General Tomás Guardia, however, was his own man. In April 1870, he overthrew the government and ruled for 12 years as an iron-willed military strongman backed by a powerful centralized government of his own making.

True to Costa Rican tradition, Guardia proved himself a progressive thinker and a benefactor of the people. His towering reign set in motion forces that shaped the modern liberal-democratic state. Hardly characteristic of 19th-century despots, he abolished capital punishment, managed to curb the power of the coffee barons, and, ironically, tamed the use of the army for political means. He used coffee earnings and taxation to finance roads and public buildings. And in a landmark revision to the Constitution in 1869, he made "primary education for both sexes obligatory, free, and at the cost of the Nation."

Guardia had a dream: to make the transport of coffee more efficient and more profitable by forging a railroad linking the Central Valley with the Atlantic coast, and thus with America and Europe. Fulfillment of Guardia's dream was the triumph of one man--Minor Keith of Brooklyn, New York--over a world of risks and logistical nightmares.

Guardia's enlightened administration was a watershed for the nation. The aristocrats gradually came to understand that liberal, orderly, and stable regimes profited their business interests while the instability inherent in reliance on militarism was damaging to it. And the extension of education to every citizen (and the arrival of thousands of European immigrants bringing notions of liberalism) raised the consciousness of the masses and made it increasingly difficult for the patrimonial elite to exclude the population from the political process.

The shift to democracy was manifest in the election called by President Bernardo Soto in 1889--commonly referred to as the first "honest" election, with popular participation (women and blacks, however, were still excluded from voting). To Soto's surprise, his opponent José Joaquín Rodríguez won the election. The Soto government refused to recognize the new president. The masses rose and marched in the streets to support their chosen leader, and Soto stepped down.

During the course of the next two generations, militarism gave way to peaceful transitions to power. Presidents, however, attempted to amend the Constitution to continue their rule and even dismissed uncooperative legislatures. Both Rodríguez and his hand-picked successor, Rafael Iglesias, for example, turned dictatorial while sponsoring material progress. Iglesias's successor, Ascensión Esquivel, who took office in 1902, went so far as to exile three of the contenders for the 1906 elections, then imposed his own choice for president: González Víquez. Subsequently, Congress declared the winner of the 1914 plebiscite ineligible and named its own choice, noncontender Alfredo González Flores, as president.

Throughout all this the country had been at peace, the army in its barracks. In 1917, democracy faced its first major challenge. At that time, the state collected the majority of its revenue from the less wealthy. Flores' bill to establish direct, progressive taxation based on income and his espousal of state involvement in the economy had earned the wrath of the elites. They decreed his removal. Minister of War Federico Tinoco Granados seized power. Tinoco ruled as an iron-fisted dictator, but Costa Ricans were no longer prepared to acquiesce in oligarchic restrictions. Women and high-school students led a demonstration calling for his ouster, and Tinoco fled to Europe.

There followed a series of unmemorable administrations culminating in the return of two previous leaders, Ricardo Jiménez and González Víquez, who alternated power for 12 years through the 1920s and '30s. The apparent tranquility was shattered by the Depression and the social unrest it engendered. Old-fashioned paternalistic liberalism had failed to resolve social ills such as malnutrition, unemployment, low pay, and poor working conditions. The Depression distilled all these issues, especially after a dramatic communist-led strike against the United Fruit Company, which had attained inordinate political influence, brought tangible gains. Calls grew shrill for reforms.


The decade of the 1940s and its climax, the civil war, marked a turning point in Costa Rican history: from paternalistic government by traditional rural elites to modernistic, urban-focused statecraft controlled by bureaucrats, professionals, and small entrepreneurs. The dawn of the new era was spawned by Rafael Angel Calderón Guardia, a profoundly religious physician and a president (1940-44) with a social conscience. In a period when neighboring Central American nations were under the yoke of tyrannical dictators, Calderón promulgated a series of farsighted reforms. His legacy included a stab at land "reform" (the landless could gain title to unused land by cultivating it), establishment of a guaranteed minimum wage, paid vacations, unemployment compensation, progressive taxation, plus a series of constitutional amendments codifying workers' rights. Calderón also founded the University of Costa Rica.

Calderón's social agenda was hailed by the urban poor and leftists and despised by the upper classes, his original base of support. His early declaration of war on Germany, seizure of German property, and imprisonment of Germans further upset his conservative patrons, many of whom were of German descent. World War II stalled economic growth at a time when Calderón's social programs called for vastly increased public spending. The result was rampant inflation, which eroded his support among the middle and working classes. Abandoned, Calderón crawled into bed with two unlikely partners: the Catholic Church and the communists (Popular Vanguard Party). Together they formed the United Social Christian Party.

The Prelude to Civil War
In 1944, Calderón was replaced by his puppet, Teodoro Picado Michalsky, in an election widely regarded as fraudulent. Picado's uninspired administration failed to address rising discontent throughout the nation. Intellectuals, distrustful of Calderón's "unholy" alliance, joined with businessmen, campesinos, and labor activists and formed the Social Democratic Party, dominated by the emergent professional middle classes eager for economic diversification and modernization. In its own strange amalgam, the SDP allied itself with the traditional oligarchic elite. The country was thus polarized. Tensions mounted.

Street violence finally erupted in the run-up to the 1948 election, with Calderón on the ballot for a second presidential term. When he lost to his opponent Otilio Ulate (the representative of Acción Democrática, a coalition of anti-calderonistas) by a small margin, the government claimed fraud. The next day, the building holding many of the ballot papers went up in flames, and the calderonista-dominated legislature annulled the election results. Ten days later, on 10 March 1948, the "War of National Liberation" plunged Costa Rica into civil war.

Don Pepe--Savior of the Nation
Popular myth suggests that José María ("Don Pepe") Figueres Ferrer--42-year-old coffee farmer, engineer, economist, and philosopher--raised a "ragtag army of university students and intellectuals" and stepped forward to topple the government that had refused to step aside for its democratically elected successor. In actuality, Don Pepe's "revolution" had been long in the planning; the 1948 election merely provided a good excuse.

Don Pepe, an ambitious and outspoken firebrand, had been exiled to Mexico in 1942--the first political outcast since the Tinoco era. Figueres formed an alliance with other exiles, returned to Costa Rica in 1944, began calling for an armed uprising, and arranged for foreign arms to be airlifted in to groups trained by Guatemalan military advisors. In 1946, he participated with a youthful Fidel Castro in an aborted attempt to depose General Trujillo of the Dominican Republic. (Figueres and Castro remained close friends. Years later, following the success of the leftist Sandinistas in Nicaragua, Castro initiated a Costa Rican guerrilla army to topple Costa Rican democracy and prepare for the "Vietnamization" of Central America. Surveying Costa Rica from across the Río San Juan, he is said to have scoffed, "A nurse's strike could bring that down.")

In 1948, back in Costa Rica, Figueres formed the National Liberation Armed Forces in the mountains of Santa María de Dota. Supported by the governments of Guatemala and Cuba, Don Pepe's insurrectionists captured the cities of Cartago and Puerto Limón from calderonistas (the government's army at the time numbered only about 500 men) and were poised to pounce on San José when Calderón, who had little heart for the conflict, capitulated. (The government's pathetically trained soldiers--aided and armed by the Somoza regime in Nicaragua--included communist banana workers from the lowlands; they wore blankets over their shoulders against the cold of the highlands, earning Calderón supporters the nickname mariachis.) The 40-day civil war claimed over 2,000 lives, most of them civilians.


Foundation of the Modern State
Don Pepe became head of the Founding Junta of the Second Republic of Costa Rica. As leader of the revolutionary junta, he consolidated Calderón's progressive social reform program and added his own landmark reforms: he banned the press and Communist Party, introduced suffrage for women and full citizenship for blacks, revised the Constitution to outlaw a standing army (including his own), established a presidential term limit, and created an independent Electoral Tribunal to oversee future elections. Figueres also shocked the elites by nationalizing the banks and insurance companies.

On a darker note, Don Pepe reneged on the peace terms that guaranteed the safety of the calderonistas: Calderón and many of his followers were exiled to Mexico, special tribunals confiscated their property, and, in a sordid episode, many prominent left-wing officials and activists were abducted and murdered. (Supported by Nicaragua, Calderón twice attempted to invade Costa Rica and topple his nemesis, but was each time repelled. Eventually he was allowed to return, and even ran for president unsuccessfully in 1962.)

Then, by a prior agreement that established the interim junta for 18 months, Figueres returned the reins of power to Otilio Ulate, the actual winner of the '48 election. Costa Ricans later rewarded Figueres with two terms as president, in 1953-57 and 1970-74. Figueres dominated politics for the next two decades. A socialist, he used his popularity to build his own electoral base and founded the Partido de Liberación Nacional (PLN), which became the principal advocate of state-sponsored development and reform. He died on 8 June 1990, a national hero.

The Contemporary Scene
Social and economic progress since 1948 has helped return the country to stability, and though post-civil war politics have reflected the play of old loyalties and antagonisms, elections have been free and fair. With only two exceptions, the country has ritualistically alternated its presidents between the PLN and the opposition Social Christians. Successive PLN governments have built on the reforms of the calderonista era, and the 1950s and '60s saw a substantial expansion of the welfare state and public school system, funded by economic growth. The intervening conservative governments have encouraged private enterprise and economic self-reliance through tax breaks, protectionism, subsidized credits, and other macroeconomic policies. The combined results were a generally vigorous economic growth and the creation of a welfare state which had grown by 1981 to serve 90 percent of the population, absorbing 40 percent of the national budget in the process and granting the government the dubious distinction of being the nation's biggest employer.

By 1980, the bubble had burst. Costa Rica was mired in an economic crisis: epidemic inflation, crippling currency devaluation, soaring oil bills and social welfare costs, plummeting coffee, banana, and sugar prices, and the disruptions to trade caused by the Nicaraguan war. When large international loans came due, Costa Rica found itself burdened overnight with the world's greatest per-capita debt. In addition to tens of thousands killed, a decade of war in the region (and Monge's support for U.S. policy) had eroded international confidence in Costa Rica. Regional trade had declined 60 percent. There had been a capital flight from the country; by 1984, the national debt had almost quadrupled. And as many as 250,000 Nicaraguan exiles and refugees fled into Costa Rica, whose political stability had been seriously undermined.

In May 1984 events took a tragic turn at a press conference on the banks of the Río San Juan held by Edén Pastora, the U.S.-backed leader of the Contras. A bomb exploded, killing foreign journalists (Pastora escaped). A general consensus is that the bomb was meant to blame the Sandinistas; the CIA has been implicated.

In February 1986, Costa Ricans elected as their president a relatively young sociologist and economist-lawyer, Oscar Arias Sánchez. Arias' electoral promise had been to work for peace. Immediately, he put his energies into resolving Central America's regional conflicts. Arias' tireless efforts were rewarded in 1987, when his Central American peace plan was signed by the five Central American presidents in Guatemala City--an achievement that earned the Costa Rican president the 1987 Nobel Peace Prize.

In February 1990, Rafael Angel Calderón Fournier, a conservative lawyer and candidate for the Social Christian Unity Party (PUSC), won a narrow victory with 51 percent of the vote. He was inaugurated 50 years to the day after his father, the great reformer, was named president. Restoring Costa Rica's economy to sound health was Calderón's paramount goal. Under pressure from the World Bank and International Monetary Fund, Calderón initiated a series of austerity measures aimed at redressing the country's huge deficit and national debt. Indications were that the attempts were succeeding, although not without social cost.

In March 1994, in an intriguing historical quirk, Calderón, son of the president ousted by Don Pepe Figueres in 1948, was replaced by Don Pepe's youthful son, José María Figueres, a graduate of both West Point and Harvard. The Figueres period was bedeviled by problems, including the collapse of the Banco Anglo Costarricense in 1994, followed in 1995 by inflation, a massive teachers strike, and an antigovernment demonstration of 100,000 people. A slump in tourism and Hurricane César, which ripped through the Pacific southwest in July 1996 causing $100 million in damage, worsened the country's plight. A month later the nation was rocked when a female German tourist and her tour guide were kidnapped, generating heaps of unwanted media exposure. Tourism from Europe plummeted. The kidnappers were caught, but the affair took a strange twist when photographs appeared showing the woman French-kissing one of her captors. Ticos took solace in the gold medal--the first ever for the country--won at the 1996 Olympics by Costa Rican swimmer Claudia Poll. And President Clinton's visit to Costa Rica in May 1997 during a summit of Central American leaders heralded a new era of free trade and enhanced regional accord.

The Figueres administration was considered a bit of a flop by a majority of the electorate, who in February 1998 voted for the Social Christian Unity Party. Figueres was replaced by Miguel ángel Rogríguez, a wealthy businessman and economist whom Figueres had defeated in a run for president in 1994.

Talks with Nicaragua in 1999-2000 to resolve a flare up over their ongoing border dispute (Nicaragua denies Costa Rica's claim that existing treaties give them rights of usage to the Río San Juan, which is wholly Nicaraguan) proved futile. In April 2000, a series of strikes by government employees erupted into the worst civil unrest since the 1970s, as an attempt by the government to break up the country's 50-year-old power and telecommunications monopoly resulted in nationwide street protests, some violent, that lasted two weeks brought the country to a halt. That summer, the government sold rights to oil companies to explore along the Caribbean coast, including in the ocean bordering Cahuita and Gandoca-Manzanillo National Parks. And two days of mob riots broke out between gangs of youth thugs and the police in October 2000 in San José's drug- and crime-riddled working class Rincón Grande barrio.

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