Sunday, 25 October 2020

Costa Rica, A Country of Luxuries That Are Necessities

Changes have impacted on inequality. Costa Rica is the only country in Latin America that in the last ten years has increased social inequality.

Insurance, health and private education set trends

The consumption habits have changed and the dynamics of the country has led to the fact goods and services that in other parts of the world, region or in past decades of the country were considered luxuries, are now a necessity.

Private education, health, insurance, vehicles, and housing are part of the modern “market basket or commodity bundle” (canasata basica in Spanish) of consumers in Costa Rica.

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In spite of this, not all the population is in a position to face the expenses of this new basket, which implies a deepening of the gap between those who have more and those who have less.


Among the issues that stand out is health, mostly due to delays to get appointments in the public health system, where in certain specialties the wait can be in years.

The CIMA, a private medical center in Escazu

The long waits to see a specialist has led to may purchasing health insurance or seek health care in private medical centers.

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Employers are aware of this, so in many cases, health insurance becomes a stimulus when recruiting qualified staff.

“The deterioration of the public health system has had a direct and strong impact on the demand for private care plans, which have become a fundamental incentive to offer benefits to employees. Every day, companies complement their motivation packages with private life and health insurance,” said Marvin Umaña Blanco, director of Asprose insurance broker.


The low results of the public education system and the increasingly savage labor market force anyone who can to send their children to private schools in better preparing them for the future.

Pictured is the Connell Academ private school in Santa Ana

The results of the international PISA tests show no improvement, as well as the average grade of high school exams that has remained static in the last years, account for the situation.

Transportation & Infrastructure

Transportation and infrastructure also add to the tendency to make luxury a necessity.

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In most of the developed countries the solution the problems of urban mobility is with public transport as a backbone and the use of the car is punished by high taxes and tolls.

The situation in Costa Rica is in contrast.

With an inefficient public transportation system, one without interconnections, mostly uncontrolled, dangerous and uncomfortable, drives many towards the purchase of a vehicle.

Easy access to credit, with the ability to purchase a late model vehicle without a down payment and with monthly payments equivalent to US$10 per day, has resulted in an increase in daily road congestion.


However, the situation in terms of infrastructure is so delicate that having a car is no longer a solution to move quickly and comfortably, which is changing the idea of where to live and work.

“Deficiencies in transportation infrastructure and times lost in traffic congestion affect not only the decision of individuals when choosing their homes but also of companies when analyzing where they locate their facilities,” said Priscilla Argüello, senior associate of Cushman & Wakefield.

Now in the balance of life the weight is placed in sacrificing space for time, which translates to the growth of high rises (towers) in the most central areas of the Greater Metropolitan Area (GAM) and, of course, in prices: an apartment of 80 M2 (900 SF) can cost more than a house twice the size, but away from the most central areas.

In fact, the market is mutating into what are known as mixed-use projects or mini-cities, where housing, offices, and businesses are mixed as a way of having everything at your fingertips.


Avenida Escazu (pictured) is an example of a  mixed-use project cropping up in the greater metropolitan area in less than a decade.

“This way of living seeks for people to achieve a better balance between professional and personal life, reducing the travel time  of to and from work, and without having to travel far for shopping and entertainment,” Argüello added.


The other side of the coin

But this is only one side of what is happening in the country. For those who can not afford the investment in this “new model of life,” day-to-day living becomes “complicated”.

This leads to greater social inequality.

Costa Rica is the only country in Latin America that in the last ten years has increased social inequality and, despite the decline in poverty in the first months of the year, the middle class has weakened, bringing its income level closer to that of the lower class.

Source: La Republica

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