A brief history of Costa Rica
When Columbus landed in what is now Costa Rica in 1502, he named it the “Rich Coast,” probably because some indigenous people were seen wearing gold. At the time about 25,000 indigenous peoplelived in the region. Costa Rica was largely ignored by the Spanish because it lacked the large labor force essential to Spain’s method of conquest. The few Amerindians living there escaped into the forest rather than succumb to a system of forced tributes called encomiendas. The first permanent Spanish settlement was not until 1564.
Unlike sugar cane, the principal products of the young colony, tobacco and cocoa, lend themselves to efficient production by small farmers. With assimilated Amerindians and a small number of slaves, a system of small land holdings developed that was unusual in Spanish colonies. This contributed to the growth of a democratic tradition and helped make Costa Rica today the most stable government in Central America. The region’s economic and political elite declared independence from Spain in 1821 and achieved it as a result of fighting in Mexico and Guatemala. Soon after independence the government began to encourage coffee production by offering free land to whomever would produce coffee.
The constitution of 1949 abolished the army and created a civil guard in its place. The lack of a regular army is one reason why Costa Rica came to be known as the “Switzerland of Central America.” Although Costa Rica was the only Central American country not to have an armed uprising during the turbulent 1970s and 1980s, it was involved in the conflicts in the neighboring countries, especially Nicaragua. Initially neutral when the “contras” began their war against the Sandinistas, Costa Rica collaborated with U.S. policy after generous financial aid was received from the Reagan administration. The rise of oil prices and the coincidental fall in coffee prices hit Costa Rica hard in the 1980s, leaving it with the highest per capita foreign debt in the world and taking the economy to the brink of ruin. Economic troubles persist. The per capita income has been declining, though it is still the highest in Central America. Costa Ricans today debate the future of the welfare state, which is being asphyxiated by structural adjustment programs.