During the three decades following the civil war, Costa Rica made great advancements in social welfare policy, while experiencing political stability and economic prosperity. Despite noble efforts to increase their self-reliance, however, Costa Rica became more dependent on imports of pesticides and fertilizers, raw materials, machinery, and oil. Like many of the developing countries of the time, Costa Rica accepted large loans from the Western world to bolster infrastructure. When the worldwide market prices of coffee, bananas and sugar (Costa Rica's largest exports) plummeted, inflation skyrocketed, the currency devaluated, and the isthmus entered the 1980's in complete economic despair.
Unrest in Nicaragua
During the late 1970s, the right-wing Somoza dynasty of Nicaragua was the target of an attack by its own Sandinista National Liberation Front (FSLN). Costa Rican President Rodrigo Carazo had little sympathy for the Somoza regime and supported the Sandinistas by permitting them to establish a base in northern Costa Rica. On July 19, 1979, the Sandinistas attacked Managua, and the Somoza exiles fled to Guanacaste. Costa Rica had become a shelter for soldiers, harboring rivals of a war that they did not want to be a part of.
The exiles of the Somoza regime joined together as the right-wing Nicaraguan Democratic Front (FDN), otherwise known as the "Contras". When Somoza was removed from office, Costa Ricans quickly became disillusioned with the new Sandinista regime's policy of militarization and Communism. Despite Costa Rica's doctrine of neutrality, with the economy in distress and with pressure from the U.S. to side with the Contras, PLN President Luís Alberto Monge (1982-1986) allowed the CIA to build airstrips along the Nicaraguan border and militarize the Costa Rican police force. The Sandinista airforce took to bombing Contra bases while acts of terrorism were carried out by groups supported by right-wingers in Monge's government.
In February of 1986, Oscar Arias, a liberal lawyer and a scholar of Costa Rican economics, was elected for president. He dedicated himself as a crusader of peace in Central America. His first objective was to enforce Costa Rica's neutrality policy and oppose those who were supporting Contra activity in Costa Rica. Arias' persistent and tireless efforts to fulfill his campaign promises won him the 1987 Nobel Peace Prize. The Sandinistas met their defeat as a result of the peace plan, which brought forth the first democratic elections (held 1990) in Nicaragua's history.
Rafael Angel Calderón Fournier, son of Rafael Angel Calderón Guardia, won the election for the presidency in 1990. He was succeeded by Jose Maria Figueres, "son of Don Pepe", in 1994. Like his father, he started out his tenure by initiated some new, unique policies. He built on Costa Rica's reputation for having a well-educated and literate populace to attract software giant Intel, which opened a 400,000-square-foot plant in 1998, providing almost 2,000 new jobs. His popularity dropped when he enforced a restrictive fiscal policy in an attempt to manage the economy and cut the debt. The policy did, however, seem to have some positive effects.
Environmental Policy Weakens
Miguel Angel Rodriguez, a wealthy and well-educated economist and businessman, won the 1998 election. The Rodriguez administration started out with promises to put a ban on logging in Costa Rica's nature treasure, the Osa Peninsula. But by 1999 his administration had granted permits to cut 10,000 forest trees there. Later that year, a study conducted by biologists, forestry engineers, and geographers found significant irregularities in the logging permits that had been issued.
In addition, the Rodriguez administration has terminated the vehicle emissions testing program, deregulated environmental building controls, and granted oil exploitation rights to a US company. In surveying the ocean for oil, this company has blasted the Talamanca coast with intense sonar probes, potentially putting marine animals and coral reefs in danger.
Former president Oscar Arias would like to run for president again, but the Costa Rican constitution prohibits the reelection of presidents. A movement is underway to change this for the 2002 election.