Is Costa Rica a Third-World Country – A Complete Breakdown

Have you ever thought to yourself: Is Costa Rica considered a Third World country?

Today, we will learn more about Costa Rica and explore what “Third World” means. We’ll also examine some indicators and see the factors driving the country’s development. So, if you’re curious whether Costa Rica can be called a Third World country, read on!

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Understanding the Term “Third World”

What does the term “Third World” actually mean? Well, here’s a simple explanation. Back in the days when the world was caught up in the Cold War, they started using the term “Third World.”. The First World was made up of rich countries, primarily Western. The Second World was for the Soviet Union and its allies.

American Relief Administration operations in Russia, 1922
American Relief Administration operations in Russia, 1922

The Third World was now for countries that didn’t fit into those two groups. They were often less wealthy and sometimes struggling.

However, the term “Third World” is old-fashioned. It’s better to examine how well a country is doing regarding money, health, and education. There are several helpful indicators like GDP (Gross Domestic Product), GNP (Gross National Product), HDI (Human Development Index), and others.

Addressing the Question: Is Costa Rica a Third-World Country?

Now that we’ve discussed what the term “Third World” means, let’s determine whether Costa Rica falls in this category.

The short and snappy answer to this question is:
Yes. It is indeed a Third World country. Costa Rica, often celebrated for its safety and stability, faces some economic challenges that have caused it to earn a place in the “third world.” Despite its many strengths, the country struggles with significant disparities in wealth distribution.

Most of its population falls into the lower-income bracket, far outnumbering the middle class and the wealthy. Most people do not have a lot of disposable income.

While Costa Rica maintains a stable economy, it faces some serious issues, notably high public debt and limited domestic revenue. These financial challenges contribute to its “third world” classification.

Costa Rica Sunset Pacific Ocean
Costa Rica Sunset Pacific Ocean

A Look at Some Key Indicators

When measuring a country’s well-being, Costa Rica shines brightly in the Central American region. Its Gross Domestic Product (GDP) per capita, which is around $12,500, is among the highest in the region.

This means Costa Ricans enjoy a relatively comfortable life compared to their regional neighbors. The Gross National Product (GNP), which counts the income earned by the country’s citizens, stands at approximately $12,700 per capita, reflecting a robust and flourishing economy.

Costa Rica beautiful view

Costa Rica takes good care of its people, as seen in its Human Development Index (HDI). With an HDI score of 0.810, it ranks higher than its neighbors. This index looks at factors like health, education, and living standards, and Costa Rica excels in these areas.

Regarding keeping things transparent and honest, Costa Rica scores well on the Corruption Perceptions Index. With a score of 56 out of 100, it has a reputation for being one of the least corrupt countries in Latin America.

All these indicators suggest that Costa Rica is doing remarkably well, not just in the region but on a global scale.

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Analyzing Costa Rica’s Economic Development

Looking at Costa Rica from an economic perspective, it becomes evident that it has made significant progress over the years. In many aspects, It is no longer considered a typical Third World country. Instead, it falls into the “developing” or “emerging” economies category. Several factors have driven this transition:

Political Stability

Costa Rica has a long history of democratic stability, which has played a crucial role in its development. Costa Rica’s journey to becoming an economically advanced nation began with stable politics. While some countries have faced political turmoil and uncertainty, Costa Rica has had a long history of peaceful and stable governments.

Political Stability
Political Stability

This stability has been the foundation for the country’s progress.

For many years, Costa Rica has proudly honored and protected democratic values, meaning the people have a say in how their country is run.

This commitment to democracy has created a sense of trust within its citizens and those looking to invest in the country. Thanks to political stability, Costa Rica has focused on important things like education, building better infrastructure, and protecting its environment.


Education and literacy are essential in Costa Rica. The country strongly emphasizes education, with a literacy rate of over 97%, contributing to a skilled workforce.

Almost everyone in Costa Rica can read and write. This investment in learning has created a skilled and knowledgeable workforce, ready to take on the challenges of the modern world.

School books and papers

Costa Rica’s education system opens up numerous doors for its citizens, giving them opportunities to pursue dreams and careers. With these well-educated minds, the country is better equipped to thrive in various fields, from technology and healthcare to business and tourism. This investment in education is actively helping the country progress and move away from the “Third World” label.

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Leadership in Eco-Tourism

Costa Rica is renowned as an eco-tourism haven, attracting nature enthusiasts with its well-preserved natural landscapes.

The country’s dedication to environmental conservation has significantly contributed to its economic growth and a global reputation for ecological concern.

Vietnam Tourism

Eco-tourism in Costa Rica focuses on enjoyable yet environmentally responsible travel, with efforts to safeguard its lush rainforests, diverse wildlife, and pristine beaches.

Visitors can experience close encounters with nature, learn about sustainable living, and witness the harmonious coexistence of humans and the natural world.


Costa Rica has taken major steps to create a strong and reliable infrastructure. This includes improving its roads, airports, and ports. These investments are like building the backbone of the country. They make it easier for businesses to operate smoothly and efficiently, which helps the country boost its income.

Plus, they’re a very convenient option for travelers exploring the diverse landscapes of Costa Rica. Whether venturing into the heart of the rainforest or relaxing on a pristine beach, the country’s well-developed infrastructure ensures everyone can get there easily.


Costa Rica takes its citizens’ health seriously. The country boasts a robust healthcare system that provides universal coverage. All Costa Ricans have access to quality healthcare services.

The healthcare system has been a major contributor to the nation’s overall well-being. It has earned Costa Rica a reputation for having one of the best healthcare systems in Latin America.

stethoscope with laptop
Health and Safety

Costa Rica’s commitment to healthcare is evident in its impressive life expectancy, which is around 80 years. Additionally, the country has a low infant mortality rate, which means they take the well-being of mothers and babies seriously. 

For visitors, this means that you can enjoy your trip to Costa Rica with peace of mind, knowing that you have access to healthcare services if needed.

Foreign Investment 

Costa Rica has attracted foreign investors, particularly in the technology sector, thanks to its well-educated workforce, political stability, and incentives for foreign businesses. 

Many young Costa Ricans are proficient in English, making it easier for international companies to operate here. Over the years, Costa Rica has transformed into a technological hub, with numerous multinational companies establishing operations there.

Companies like Intel, Amazon, HP, IBM, and Microsoft have established a significant presence in Costa Rica, providing employment opportunities for thousands of Costa Ricans. This influx of international firms has bolstered the country’s economy and played a vital role in its ongoing development and progress. 

Renewable Energy

Costa Rica is a global leader in clean, green energy. They use the power of rivers, wind, and volcanoes to generate electricity. Rivers and waterfalls provide lots of energy through hydroelectric power. Wind farms catch the breeze, turning it into electricity.

hydroelectric power costa rica

Thanks to its location, Costa Rica has many volcanoes, and they use their heat for geothermal power. Plus, solar panels are everywhere with all that tropical sun, soaking up the rays to make energy.

Costa Rica not only takes care of its energy needs but also cares for the environment. This commitment to green energy contributes to environmental sustainability and lower energy costs.

Social Programs

Costa Rica looks out for its citizens with various programs that aim to make life better for everyone. Some of these programs provide money to families who don’t have much, giving them extra help when times are tough. The government also works to ensure that houses are affordable so people can have good places to live.

These efforts help reduce poverty and ensure everyone has a fair chance at a good life. The government is actively investing resources to build a community where people help each other, and this makes Costa Rica a great place to live and visit.

Global Partnerships & Trade

Costa Rica’s active global engagement has expanded its economy beyond traditional exports like coffee and bananas to include advanced medical devices, high-tech electronics, and clean energy equipment. This international collaboration has fostered knowledge exchange, enhancing its role in the global community. Additionally, Costa Rica’s commitment to sustainability and its stunning natural landscapes make it an appealing destination for tourists and investors.

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Final Thoughts

With its lush landscapes, commitment to sustainability, and impressive socioeconomic indicators, Costa Rica has come a long way from the old “Third World” country label. The country has made great efforts to prosper, grow, and transform the lives of its citizens.

Therefore, after learning about all their progress and development, we can conclude that while it may be known as a “Third World” country right now, it will soon earn a place in the list of the world’s most developed countries!

Areeba Naveed
Areeba joined the Hopdes team in June 2023, ready to make a significant impact. Her dedication to storytelling and capturing the essence of captivating narratives sets her apart.Her keen eye for detail and ability to create engaging content have garnered recognition within the industry. Areeba's passion lies in uncovering hidden gems and sharing unique perspectives!

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