Costa Rica : social equity and crisis

From the 1940"s to the end of the 1970"s it succeeded in combining steady economic growth and social equity. During the 1970"s, the Costa Rican economy showed a remarkable ability for distributing the benefits of growth, which averaged 5.6% per year. Real wages increased while disposable income rose by a real annual rate of 6.2% between 1970-75, and 10.4% between 1975-80. During the same period, the quality of life improved dramatically as government health expenditures increased by 75% between 1969 and 1979. Infant mortality plummeted - from 64 per thousand in 1968-69 to 21 per thousand in 1978-79. But a reversal in the terms of trade and unrealistic levels of public sector spending pushed the economy into recession from 1980-82. Unemployment neared 10% and inflation rose sharply, reaching 90% in 1982. As prosperity diminished, however, emergency government welfare initiatives such as the "Social Compensation Program" helped protect much of the population, particularly the poorest, from the effects of economic deterioration. Despite a significant decline in real wages during the recession, average per capita food intake expanded between 1978-82 and the number of children with second-degree undernourishment dropped from 8.2% to 3.3%. In the 1980"s, attempts have been made to better target and distribute social expenditures toward previously neglected coastal and frontier regions. Annexes present relevant social and economic data.