Today, there are about 25 countries without an army.
But I’ll ask you, which was the first?
Which country do you think was the first to voluntarily give up its armed forces?
If you guessed a European country...
you’re not even on the right continent.
It was actually a Latin American country...
Costa Rica.
On December 1st 1948, after a civil war, under President José Figueres Ferrer’s administration,
Costa Rica put an end to its military career.
And you know what?
This wasn’t a bad move.
Since then the country hasn’t had a single war or coup.
In fact, Costa Rica can boast about being the country with the longest uninterrupted
period of democratic governments in Latin America.
Because, my friends, let's not forget the enormous weight that the military boot has
traditionally had on Latin America.
Nor the fact that this country, Costa Rica, is located in one of the most violent regions
in the world: Central America.
Well, despite this, my friends, this tropical country, located between the Caribbean Sea
and the Pacific Ocean, has managed to become a middle-income country with quite high levels
of prosperity.
The recipe?
Prosperity, peace and safety...
these are the ingredients that have made Costa Rica habitually known as the Switzerland of
Latin America.
Now, what’s true in all this?
In this video we’ll tell you a bit more about Costa Rica.
We will see it’s light… and shadows.
Let's see.
(THE HAPPY FACE)
However we look at it, Costa Rica is a very special country.
My friends, we’re talking about a country whose hallmark colour is green.
Because if Costa Rica is associated with anything, it’s biodiversity.
See, with an area that’s almost 10 times smaller than that of Spain, or 25 times smaller
than Peru, this country is estimated to have more than 5% of all the world's animal and
plant biodiversity.
And, in this country they understand this not just as a sign of identity... but also
as a potentially great competitive advantage.
For example... among other things, it can help develop a differentiated tourism industry
and position a strong country brand, that is to say one that gives a higher value to
local products, especially for international consumers.
Because, who wouldn’t be willing to pay a bit more for products considered – which
doesn’t mean they really are – to be produced cleanly in an environmental haven.
And, my friends, Costa Ricans take these policies very, very seriously.
Costa Rica strives to be an ecological power-- and it is.
Today more than 25% of national territory is protected and the vast majority of electricity
comes from renewable sources: hydroelectric, geothermal, and wind power.
And not only that, Costa Rica is the only country in the region, and one of the few
in the world that has managed to reverse deforestation.
The territory covered by forests has increased from 21% in 1987 to over 50% today.
Something that, by the way, they achieved thanks to a curious “payment system for
environmental services.”
Allow me to explain: in Costa Rica... a part of the taxes on fuels go to the Fund for Costa
Rican Forest Financing, a fund that pays farm and forest owners, who want to join the program
voluntarily, for conserving their natural space and implementing projects that help
strengthen it.
And that’s not all, many companies also pay into this fund to offset their impact
on the environment, something like corporate social responsibility promoted by the state.
I think this leads to a very interesting debate: for some, I’m sure, this policy is a monstrosity.
For others, it’ll a be way of recognizing the negative externalities of productive activities,
such as the pollution caused by factories.
And also, of course, the positive externalities on natural areas.
( “Half of our territory is covered by forest and we have an ample system of protected areas
that not only protect an important part of the planet's biodiversity, but also sustain
important sectors of our economy, as for example tourism.”
Carlos Alvarado, President of Costa Rica)
Personally, my friends, I believe that if these types of initiatives are accompanied
by policies that promote the creation of companies and new types of businesses, they could be
very... successful.
But... let's open it up to debate, tell us what you think in the comments.
But… let’s move on.
The fact is that this type of political approach doesn’t seem to have been at odds with the
country’s economic growth.
Since the year 2000, the Costa Rican economy has grown by around 4% per year, which even
if it doesn’t seem like much, has been a higher average growth rate than that of the
rest of Latin America and than the OECD countries.
And that’s not all, Costa Rica is undergoing something similar to what we saw with New
Zealand, if we measure variables besides GDP – for example, life expectancy, salaries,
the situation of companies, etc., etc. - then Costa Rica comes out even better.
We can take a look at the Legatum Prosperity Index and the ranking of countries by GDP
per capita in purchasing power parity, that is, taking price differences into account.
If we do, we’ll notice that Costa Rica’s GDP per capita is the 6th largest in Latin
America, that is, it’s below Chile, Panama, Uruguay, Argentina and Mexico, and 76th in
the world; in the global prosperity index, Costa Rica rises to the 29th place, being
the second country in Latin America, closely behind Uruguay.
But...
Do you want some clear proof?
The average life expectancy in Costa Rica is the third highest in the entire American
continent, being higher, for example, than that of the United States.
My friends...
Costa Rica looks like a prosperous, peaceful country committed to the preservation of the
environment.
Sounds good, right?
Well wait a moment... because the country has another face...
Costa Rica is facing very complicated challenges.
Listen up.
(CHALLENGES THAT THREATEN THE COUNTRY)
Costa Rica is a country that has achieved great things, especially if we compare it
with many of its neighbours.
However, right now, it’s facing political, economic and social challenges that threaten
its path to prosperity.
The first one, clearly, has a lot to do with the economy.
See, even though Costa Rica has had a solid performance, it still has a long way to go.
Currently, its GDP per capita is just over 40% of the average for the OECD countries.
And here’s the problem.
The last government was… how to say it… a but irresponsible with their fiscal policy,
which left Costa Rica in a very delicate situation.
Only in the last 10 years the public debt has more than doubled in terms of GDP, the
2018 deficit will approach 7%, and 1 of every 3 dollars of public spending will go towards
paying that debt.
(“While in 2008 taxes financed 70% of all Central Government expenditures, in 2017 they
were only enough to finance 50%, and the difference had to be covered with indebtedness.”
Jorge Corrales Quesada.)
Fortunately, there seems to be a political consensus: if this situation doesn’t change...
Costa Rica could face several problems.
But only focusing on raising taxes could be counterproductive.
This country’s tax on corporate profits is already one of the highest in the world.
And it’s not only taxes.
For example, the cost of electricity and fuel, which lie in the hands of public monopolies,
are among the most expensive in the region, which obviously affects competitiveness.
Due to issues like these, the labor participation rate, the rate of people who work, is quite
low.
Mr. President, Mr. Carlos Alvarado, open up the economy, allow competition and, if possible,
set a path so that the large public companies’ property can be shared by Costa Ricans.
The second challenge, my friends, has to do with violence.
In recent years it has grown a lot in a country that was traditionally very safe and quiet.
And it has an explanation: drug traffickers.
Yes, as you may know, drug traffickers are ravaging a large part of Latin America and
now they’re trying to extend their influence to Costa Rica, which is a good path for their
“merchandise”.
And third…
well the third challenge has a lot to do with politics.
The last elections were a good example of how radical and populist messages that target
civil liberties are a great threat.
See, the first electoral round, held in February, wasn’t won by Carlos Alvarado, but by Fabricio
Alvarado, an evangelist pastor who had a very radical discourse.
Among his obsessions was pursuing any societal model that differed from what he perceived
as convenient, especially anything related to equal marriage.
And of course, anyone can say whatever they want and lead their lives as they please,
but when a politician wants the government to devote itself to religion and persecute
those who don’t agree with their life model, it becomes dangerous.
Here is Laura Moscoa, Fabricio Alvarado’s wife, in the middle of the campaign.
Don’t tell me she isn’t scary.
Fortunately, in the second round this evangelical pastor, whose speech had a lot of hatred and
very little love, suffered a crushing defeat, even though he still won 30% of the votes...
Costa Rica will have to be careful with this trend.
But, my friends, that's the way things are.
Carlos Alvarado has just been elected president.
It is now in his hands is to get Costa Rica back on track.
To achieve this, he’ll have to change a lot of things... and don’t forget that the
best way to fight poverty is by promoting more dynamic, open and competitive economies.
Companies will definitely have to play a prominent role in all of this.
But now... it’s your turn, do you think that Costa Rica’s green model is one other
countries should follow?
Do you think that Costa Rica, itself, is a model to follow?
Leave your answer in the comments as well as in the survey.
I really hope you enjoyed this video, please hit like if you did and don’t forget to
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Also, don’t forget to check out our friends at the Reconsider Media Podcast - they provided
the vocals in this episode that were not mine!
And as always, thanks for watching!