History of Costa Rica: Coast Rich with Trade
Costa Rica, a country located in the Central American region, has sprung up as a popular spot for tourists due to the sprawling rainforests and stunning beaches located across the country. It continues to dominate the region as the most visited nation. Additionally, the country has been ranked 39th in the overall Prosperity Index rankings in 2023. Many have heard of the country by now, but how did the country come to be? Was there blood spilt across numerous deadly wars across the land before it gained independence? Let’s take a look in the annals of history for this amazing country.
Name Origin
It is widely believed that
Christopher Columbus, who ventured to the eastern shores of Costa Rica during
his 4th and final Atlantic voyage in 1502, stayed there for 18 days
repairing his ships and replenishing his ship’s resources. During that time, he
managed to develop a healthy relationship with the indigenous people there that
they decided to gift him a couple of memorabilia made of gold. Columbus then
allegedly named the land “Rich Coast” which is a direct English translation for
“Costa Rica”. A slightly different spin on this tale is that he saw the
indigenous people wearing gold and assumed the surrounding land to be filled
with gold.
There is also another version of
this story that says the name came from colonists who were hoping to find gold
in the land’s hills. They did not end up finding any gold, so they decided to shift
their focus to agricultural development. There is a consistent stream of irony
from most versions of the name origin for this country in the fact that the
land was poorer than its neighbouring countries.
Humble Beginnings
Although the country was discovered in the early 1500s, it was not until 1561 when it received its first batch of colonists from Spain through the leadership of Juan de Cavallon. They would establish the very first permanent settlement in the country. Not long after in 1564, The first capital, Cartago, was founded. Unfortunately, the frequent rate of riots from the indigenous people made it a lot harder for Spain to fully establish control over the country until the end of the sixteenth century. It is certainly not aided by the scarcity of natural resources located within the country.
The country started out by taking part in colonial trade for daily necessities like food before switching to mule export in the seventeenth century. That plan was interrupted by competition from the neighbouring countries Honduras and Nicaragua, so they decided to switch to leather and lard exports after 1650. The first economic break for the country came from cacao (otherwise known as cocoa) as farmers all over the country started to plant these trees especially after the cacao trade started to flourish in the global market. The cacao trade would remain an important industry for the country’s economy to this day. Sadly, the industry was propped up by slavery where the slave owners had the right to demand free labour from their slaves. The slave trade started to slow down throughout the eighteenth century and slaves were able to obtain their freedom during that time. The eighteenth century was also when agriculture expanded from Cartago towards the west to places like San José, Alajuela and Heredia. Most families at this time lived off growing crops and raising livestock like pigs, fowl and cattle.
In 1821, Central America finally
gained its independence from the Spanish monarchy and Costa Rica could finally expand
upon its free trade. As if that was not enough, the country also saw another
industry rise to the challenge to ease the economic struggle faced by citizens
in the country – the export of the “Golden Bean” coffee. This industry truly
kickstarted the economy as more and more families find themselves at the heart
of all this success and luxury in the nineteenth century.
Independence Free of Blood
The one thing that Costa Rica does
differently than most other countries in the world is the way that the country
gained independence. For a country’s citizens to obtain the ability to govern
their own people, they will usually have to undergo a series of trials and
tribulations, either through negotiations with their colonists or forcefully
remove their colonists by defeating them at war. Costa Rica on the other hand, had
a generally peaceful transition into independence. As previously mentioned, when
Mexico declared its independence from Spain in 1821, Costa Rica and the other neighbouring
countries gained independence and tried to join forces together with Mexico in
an attempt to promote harmony within the region with the Federal Republic of Central America that was founded in 1823. However, the republic was
short-lived as it lasted only until 1840. After almost two decades of fighting
between towns of the Central Valley, San José emerged victorious and became the
capital of State and later the capital for Costa Rica when the country fully
gained its independence in 1848. Miraculously, the country managed to avoid all
of the civil wars in Central America at the time. A factor that might have
contributed to the phenomenon was the minimal presence of professional armed
forces and the negligible relevance of military status along with the
diplomatic efforts by people within the country.
Busy Streets Rich with Coffee
The coffee industry continued to dominate
the economy of Costa Rica as its main source of income in the 19th century. This can be best observed in the capital of the country – San José. The
city was filled with two-storey buildings, street lamps, pavement, cabs and
stores. The first printing press was founded in the city in 1830 while
schooling was sponsored by the municipalities. The Teatro Nacional (National
Theatre) was inaugurated in 1897 with a concert of Charles Gounod’s Faust, an
opera in five acts composed by Gounod to a French libretto called Jules Barbier
and Michel Carré. As the country began to develop in specific areas, the
ideologies among citizens started to polarize. In urban areas, Enlightenment,
Liberalism and Modernism were embraced while the rural villages preserved their
local identities with ties to Catholicism and colonialism.
Although the country was doing well economically in this period, the leaders and citizens knew they had to branch out and look for other industries to further develop their country’s economy, and that was exactly what they did. In the early 20th century, Costa Rica’s economy began to diversify and gradually expanded its industrial sector. The country mostly relied on the export of natural resources which mainly consisted of coffee and bananas. The reason for the rise in popularity of banana exports could be traced back to 1899 when the United Fruit Company was established, allowing banana companies to gain influence in the Caribbean coast. Following the boom in banana culture within the country, many immigrants from Jamaica and China flocked to the country to work in the banana plantations and build the railroads that lead to San José to allow for fast and simple transportation for products and people across the country. Bananas and coffee were not the only natural resources that the country had to export, sugar cane plantations in the Central Valley and cattle breeding in Guanacaste started to sprout up as well.
Setting Records Straight
As per tradition for newly formed countries, the land and power within the country were dominated among a select group of white farmers who shared political and economical power between themselves. The aspect that separates Costa Rica from other Latin American countries is its progressive political system as the country abolished the death penalty in 1877 and introduced direct voting in 1913. However, there was trouble brewing in their own backyard. As the coffee and banana businesses grew exponentially, the small group of self-supplying farmers found themselves struggling to retain their own land which they needed to survive. This culminated in an increase in labour movements after the global economic collapse of 1929 when the value of exports fell dramatically, from 18 million dollars to just 8 million dollars. Workers in the banana businesses started to go on strikes under Communist leadership which occasionally ended in violent fashion. The Institute for the Defence of Coffee was created in 1933 in an attempt to sort out the strained relationship between merchants and farmers. A law to set a minimum wage for agricultural workers was established in 1935 and 8-hour working days were introduced in 1940. Finally, a social security system was established in 1941 where then President Rafael Ángel Calderón Guardia laid the foundations of a welfare state when social guarantees were written into the constitution.
Costa Rica's Social Security building, where the Caja Costarricense de Seguro Social (Costa Rican Social Security Fund) makes and implements policies regarding the state's national health
What Goes Up, Must Come Down
The economy began to thrive from
1950 to 1978 and an important industrial and agricultural diversification
finally took place. Employment in the public sector rose to 10% and the state
invested significantly in schools, roads, hospitals, and other infrastructure.
Literacy increased to about 90% and the unemployment rate decreased to 5%. The
country’s population grew from 800 thousand to 2 million and San José
transformed from a small colonial town into a chaotic metropolis.
In 1980, the country’s economy was
hit hard by the depreciation of coffee prices and the oil shock. While the
prices for essential items increased, the country’s revenue was faced with an
all-time low. Unemployment rose to 10% and there was a hyperinflation of almost
100% annually. Following the withdrawal of the United Fruit Company from the
Pacific lowlands, the country had to borrow heavily from the World Bank to
maintain its infrastructure and has a high foreign debt since. This coincided
with the establishment of US military bases in Central America to support the
Contra-war in Nicaragua, which was successfully prevented by President Monge
when he declared the country’s neutrality over the matter. Despite the enormous
economic setbacks within the country during these trying times, it remained the
only Latin American country whose democratic system did not break down at any
time between 1950 and 1996. The key to this solid system was the abolition of
the army, a force which will inevitably force its interests onto the political
system after it accumulates sufficient power as was the case for most
developing countries at the time. The country has always preferred to solve its
conflicts through mediation since the first rural oppositions in the Central
Valley in the 18th century.
Getting Back on Track
The country
began to develop its tourism sector in the 1980’s as they saw the potential of
the industry with the number of geographical landmarks the country has. They started
this movement in 1955 when they passed a law which declared areas within a
radius of 2 kilometres of volcanic crators to be national parks and founded the
Costa Rican Institute of Tourism (ICT). The National Park Services (SPN) was
created in 1977 while the organisation of all natural reservations was
reorganised under the National System of Conservation Areas (SINAC – Sistema
Nacional de Areas de Conservación) in 1998. As a result, the country’s rich
biodiversity was being uncovered as a hidden goldmine for the country’s economy
and plans for its protection were compiled. There were 1.9 million visitors in
Costa Rica by 2007, where the eco-tourism sector alone contributed 8% of the gross
national product (GNP) of the country and around 13% of the country’s
employment.
All’s Well That Ends Well
Costa Rica
persists as one of the safest countries in Latin America with its economy
flourishing under the bustling industry of eco-tourism. Although the country
still has a long way to go to clear the budget deficit left behind in the old
days, it has been making efforts to improve social welfare within the country which
made it the least impoverished Spanish speaking country in the world currently.
From coffee to bananas to rainforests, the country and the people in it sure is
filled with a “rich” sense of life. They might not have found real gold, but
perhaps the gold is hidden within the country's marvelled history.
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