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U.S. DEPARTMENT OF STATE
COSTA RICA: 1994 COUNTRY REPORT ON ECONOMIC POLICY AND TRADE PRACTICES
BUREAU OF ECONOMIC AND BUSINESS AFFAIRS


          
          
          
                                      COSTA RICA
          
                               Key Economic Indicators
                  (Millions of U.S. dollars unless otherwise noted)
          
          
                                               1992      1993      1994
          
          Income, Production and Employment:
          
          Real GDP (in current USD)         6,737.3   7,563.1   8,325.1
          Growth Rate (pct.) (1966 colones)     7.7       6.1       4.7
          By Sector:
            Agriculture                         3.9       2.2       0.0
            Industry                           10.3       6.5       5.5
            Electricity/Water                     6         7         6
            Construction                        2.6       4.7       7.5
            Commerce                           12.5       8.2       4.0
            Transportation/Communications      14.0      11.3       8.7
            Financial/Insurance                10.8      12.4      10.7
            General Government                  1.0       2.0       2.5
            Other Personal Services             4.2       4.5       5.5
          Real GDP Per Capita
            1966 Colones                      4,302     4,464     4,590
            Current U.S. Dollars              2,292     2,317     2,543
          Labor Force (OOOs)                  1,087     1,109     1,131
          Unemployment (pct.)                   4.1       4.1       4.1
          
          Money and Prices:
          
          Money Supply (M1, daily avg.)
            (millions current col.)          90,390   107,022   126,714
          Interest Rate (lending pct.)           28        37        38
          Interest Rate (deposit pct.)           20        25        27
          Gross Domestic Investment
            (pct. of GDP)                      23.4      25.9      26.0
          Consumer Price Index
            (pct. change Dec to Dec)             17         9        19
          Colon to USD Rate
            (avg. balance of payments)        134.3     142.4     155.0
          Colon to USD Exchange Rate
            (December, parallel market)         138       152       168
          
          Balance of Payments and Trade:
          
          Total Exports (FOB)               1,814.3   2,044.6   2,300.0
            Exports to U.S. (FOB)             789.8     850.0     915.0
          Total Imports (CIF)               2,455.8   2,900.7   3,400.0
            Imports from U.S. (CIF)         1,148.5   1,300.0   1,470.0
          Assistance from U.S.                17.4 1/    20.5     3.317
          Assistance from Other Countries       N/A       N/A       N/A
          Foreign Public Debt               3,263.8   3,158.4   3,192.8
          Annual Debt Service Paid            496.6     481.6     181.5
          Gold Reserves                           9         9        13
          Net International Reserves        1,096.0   1,076.7     900.0
            IMF Methodology                   354.0     457.5     277.5
          Current Account Balance              -357      -470      -600







1/ Included ESF obligated but never disbursed.

Source:  Central Bank of Costa Rica, for table and text.



1.  General Policy Framework

    The Government of Costa Rica continues trade and economic
policies in favor of open markets, international competition and
freer trade.  These policies are supported through active IMF and
World Bank programs.  Significant setbacks to this general policy
have resulted from European Community restrictions on banana
exports, domestic pressure to restrict foreign competition,
constitutional protection of state-owned monopoly enterprises,
disagreements with major trade partners within the GATT
framework, and domestic political pressures resulting from uneven
economic growth.  Many reforms are lacking permanent legal
backing or are still too new to gauge their efficacy, and some
recent reforms have become political issues.

    The reforms have contributed to an improving economy.  The
economy of Costa Rica showed significant growth during 1993, but
slightly less than in 1992.  Gross Domestic Product (GDP)
increased 6.1 percent in 1993 (7.7 percent growth in 1992). 
Financial intermediation continued to be the fastest growing
activity in Costa Rica, growing 12.4 percent in 1993, followed by
communications, transportation and storage which grew 11.3
percent in 1993, and electricity and water which grew 7.0 percent
in 1993, largely the consequence of price increases in
state-supplied services.  Industry grew 6.5 percent, and
agriculture 2.2 percent, in 1993.  Commerce, restaurants and
hotels grew 8.2 percent in 1993.  The general price level, as
measured by the Consumer Price Index (CPI), increased 9 percent
in 1993, a significant improvement after an increase of 17
percent in 1992.  However, the CPI had increased 10.5 percent by
the end of August 1994, and is expected to be close to 20 percent
by the end of 1994.  1993's lower price levels were the result of
tight money controls by the Central Bank and continuing decreases
in tariff rates.  These reduced tariffs also caused
record-breaking increases in imports of cheaper goods.  While
increased taxation and public sector revenue reduced disposable
income in 1992 and 1993, the relative stability of the exchange
rate, plus the gradual reduction of tariffs, contributed to a
record 40 percent increase in imports from the United States in
1993.

    The Central Government's fiscal deficit reached USD 145.7
million in 1993, vs. USD 129.8 in 1992 and USD 173.9 million in
1991.  Despite the increase in nominal terms, the Central
Government deficit in 1993 remained equivalent to 1.9 percent of
GDP, the same share as in 1992, and much lower than the 3.1
percent of GDP share in 1991.  According to Central Bank data,
the consolidated Public Sector fiscal deficit totalled USD 66.5
million in 1993, equivalent to 0.9 percent of GDP, an improvement
over 1992 when the deficit was 1.1 percent of GDP.  While tax
income increased 15.8 percent in 1993, government 
bond sales (USD 686.2 million in 1993) increased 92.2 percent,
becoming a critical source of financing.  Monetary measures taken
by the Central Bank in the second half of 1993 and rising
interest and exchange rates made the cost of borrowing higher for
the GOCR.  On the revenue side, decreased tariff revenues (caused
by lower tariff rates) and reduced export tax revenues (due in
large part to low world coffee prices) resulted in lower tax
revenues.

    In 1993 the Central Bank continued to use a range of tools to
control the growth of the money supply, including open market
operations, restriction of public sector credit, and increases in
the reserve requirements to commercial banks.  Starting August 1,
1993, the Central Bank raised by 2 percent per month the reserve
requirement for local currency demand deposits.  By the end of
1993, the rate was 36 percent.  The reserve requirement for time
deposits in local currency (less than 180 days) increased from 14
percent at the end of 1992, to 17 percent at year-end 1993. 
Reserve requirements for foreign currency deposits were made
equal to those applied to deposits in local currency.  This
measure consisted of a 13 percentage points increase in reserve
requirements for dollar deposits of less than 30 days, and 5
percentage points for dollar deposits of more than 30 days but
less than 180 days.  The rate of interest paid by the Central
Bank for its bonds was increased gradually by 18 percentage
points from June to September 1993, in an effort to capture
excess liquidity.  On October 31, 1994, the Central Bank
announced forthcoming increased reserve requirements for on-sight
deposits from 36 percent to 43 percent, and from 17 percent to 30
percent for time deposit less than 6 months, effective at the end
of November 1994.  The reasons given for the increases were the
need to capture excess liquidity, and for the Central Bank to
cover some of the losses resulting from the closing of Banco
Anglo.  Also for reasons of excess liquidity, limits were put by
the Central Bank on amounts that could be used by public
institutions from donations previously made by USAID and
deposited in the form of bonds with the Central Bank. 


2.  Exchange Rate Policy

    The exchange rate policy in 1993 continued practices set in
March 1992 by the Central Bank, aimed at primarily allowing the
market to determine the exchange rate.  The single exchange rate
is set indirectly every morning by the Central Bank through its
sale or purchase of foreign currency.  Exporters are allowed to
keep 60 percent of incoming dollars, but must sell the remaining
40 percent to a commercial bank, which in turn must sell 25
percent to the Central Bank, facilitating the Central Bank's
acquisition of reserves.  Additionally, all foreign transactions
by state institutions are channeled through the Central Bank. 
Commercial banks are free to negotiate foreign exchange prices. 
However, the difference between the sell and buy rates cannot
exceed 1 percent, and from that limited spread, 0.39 colon per
dollar is a tax, and 0.68 colon is a fee paid to the Central
Bank.  Commercial banks must liquidate their foreign exchange
positions daily.


    This exchange policy resulted in an essentially unchanged
exchange rate during 1993, as freely traded dollars from tourism
and capital investment continued to flow into Costa Rica.  The
free and sufficient supply of foreign currency continued to be
the most significant factor in increasing imports during 1993,
particularly from the United States, aided by the relative
devaluation of the U.S. dollar vs. other major currencies. 
Between June and August of 1993, high demand for dollars forced
the Central Bank to depreciate the exchange rate.  By the end of
1993, the exchange rate had depreciated 9 percent with respect to
the end of 1992, resulting in an increase of 13.52 colones per
dollar.


3.  Structural Policies

    While consumer protection laws in Costa Rica fix prices,
regulate profit margins, and prohibit price speculation, most
price controls and all margin controls are currently suspended by
executive decree.  Pending legislation would remove most price
and all profit margin controls, impose antitrust rules and
protect consumers against product misrepresentation and price
fixing.  This change in pricing laws is a requirement for the
World Bank's Third Structural Adjustment Loan (SAL III), which
was signed by the Government of Costa Rica in 1993, but which has
not been ratified by the Legislative Assembly.

    Other laws and regulations affecting U.S. exports to Costa
Rica include the exclusive use of metric units, detailed labeling
requirements, including the required use of Spanish, and strength
requirements for car bumpers.  Phytosanitary and zoosanitary
restrictions on the import of fresh produce, as well as import
permit requirements for many agricultural products limit or act
as a de facto ban on U.S. exports of these products. 
Pharmaceuticals, veterinary drugs and chemicals, including
chemicals that are component parts, must be registered and
approved by the Ministry of Health before the chemicals or
finished products can be imported.  Chemicals and pesticides
exported to Costa Rica must be legally available in the exporting
country.

    Government purchasing and contracting are highly regulated
and often frustrating due to protracted appeals of contract
awards, and bid and performance bond requirements.  Despite this,
no special requirements apply to foreign suppliers and U.S.
companies regularly win public contracts.  Competition is fierce
among international suppliers and frequently the winner must
propose comprehensive packages that include performance
guarantees and financing.  All exporters must have a legally
responsible representative in Costa Rica in order to sell goods
or services in Costa Rica.


4.  Debt Management Policies

    Costa Rica had a net foreign reserve decrease of USD 19.3
million during 1993.  This was the result of a record USD 856.1
million deficit in the trade balance, resulting from an 18.1
percent increase in imports and a 12.7 percent increase in 
exports.  The trade deficit was offset by net foreign investments
of USD 275.0 million (USD 222.0 million in 1992) and services and
transfers mostly due to tourism of USD 486.1 million in 1993 (USD
384.5 million in 1992).  Costa Rica imported USD 1,300 million
from the United States in 1993, a 13.2 percent increase from
1992.  In 1993 Costa Rica exported USD 850 million to the United
States, resulting in a trade surplus for the United States of USD
450 million.  While the pending (since 1992) SAL III funds, for
USD 350 million, are a potential source of foreign exchange, it
is unlikely to be disbursed in the near future, if at all, due to
the unwillingness of the Legislative Assembly to approve loans
and pass quickly the laws that are conditions for its
disbursement.  Consequently, Costa Rica will continue to
experience pressure on its balance of payments, especially its
trade account, and will need to attract more foreign investment
and tourism, in order to avoid an eventual foreign exchange
shortage.

    Costa Rica paid USD 481.6 million in 1993 (USD 497 million in
1992) to service its official foreign debt, equivalent to 24
percent of exports.  The debt is now USD 3,158.4 million (Dec.
31, 1993), equivalent to 42 percent of GDP.  During 1993, the
Government of Costa Rica managed to renegotiate USD 56.7 million
of bilateral debts with the members of the Paris Club.  Debt
service payments decreased 3 percent in 1993, after an increase
of 42.9 percent in 1992 when a concerted effort to reduce the
country's debt was made in order to qualify for an eventual
partial debt forgiveness by the United States.  Servicing the
very large internal debt continues to be a more serious immediate
problem.  Almost a third of the government's budget is spent in
servicing its domestic debt, more than the amount spent in paying
public employees, leaving precious little for making capital
improvements and for importing U.S. goods and services.  The
Central Bank's anti-inflation policy of keeping interest rates
high keeps debt service costs extremely high for the Finance
Ministry.


5.  Significant Barriers to U.S. Exports

    Costa Rica requires import permits for dairy products, pork
and poultry meat, rice, beans, potatoes, onions, wheat, and
sorghum.  Some of these permit requirements can act as de facto
bans on U.S. exports.  That the requirements can be met is
evidenced by U.S. exports of wheat, which is not produced in
Costa Rica, and is almost exclusively imported from the U.S. 
However, it is expected that on November 24, 1994, in compliance
with GATT requirements, import permits will be replaced by
tariffs.  Solvents and precursor chemicals are carefully
regulated to prevent illegal use.  Surgical and dental
instruments and machinery can be sold only to licensed importers
and health professionals.  All food products, medicines, toxic
substances, chemicals, insecticides, pesticides and agricultural
inputs must be registered and certified by the Ministry of Health
prior to any sale.

    The Central Bank no longer licenses imports.  All imports and
exports are registered for statistical purposes only.  
Foreign companies and persons may legally own equity in Costa
Rican companies, including real estate.  However, several
activities are reserved to the state, including public utilities,
insurance, bank demand deposits, the production and distribution
of electricity, hydrocarbon and radioactive minerals extraction
and refining, and the operation of ports and airports.  (Note: 
Electricity can be produced, in plants up to 20 KVA capacity, by
private entities for sale to the state electricity grid, and
legislation is under discussion to increase the percentage of
foreign ownership allowed).  However, recognizing the
impossibility of public financing of large scale infrastructure
projects, the legislature recently passed a law, which, once its
implementing regulations are approved, would allow private
construction and operation of public projects on a concession
basis.  Such facilities would revert to the state after an agreed
upon period.

    Many service industries are so rigorously controlled that
foreign participation is practically impossible.  Medical
practitioners, lawyers, certified public accountants, engineers,
architects, teachers and other professionals must be members of
local guilds which stipulate residency, and examination and
apprenticeship requirements that can only be met by long-time
residents of Costa Rica.  Investment in such private sector
activities as customs brokerage firms is limited to Costa Rican
citizens.  In October 1994, the law limiting ownership of
newspapers and radio and TV stations to Costa Rican citizens was
repealed by the Constitutional Court.  The law, which had been
enacted in 1974 to prevent fugitive American financier Robert
Vesco from owning a newspaper, was deemed discriminatory and
therefore unconstitutional by the Constitutional Court of Costa
Rica.

    While the Government encourages the development of
nontraditional exports and tourism, and may provide incentives
for U.S. investment, it does not restrict foreign equity
participation.  The share of foreign workers in an enterprise is
limited by law, but the Ministry of Labor generally grants
permission for foreigners to work.  Permits for foreign
participation in management have always been granted.  No
requirement exists for foreign owners to work in their own
companies.  There are no restrictions on the repatriation of
profits and capital.

    The government and other state institutions make procurements
through open public bidding, but the law allows private tenders
and direct contracting of goods and services in limited
quantities or in case of emergency, with the consent of the
Contraloria (General Accounting Office).  Public bidding is
complicated and foreign bidders are frequently disqualified for
failure to comply with the detailed procedures.  The lengthy and
costly appeal process often causes losses due to interim price
changes while bidders cannot alter their bids.

    Customs procedures are legendary for their cost and
complexity.  Most large enterprises are forced to have customs
specialists on the payroll, in addition to buying the services of
customs brokers.  Customs brokers must be bonded Costa Rican
companies and enjoy a monopoly on the handling of imports.  All
importers and exporters, including U.S. companies, suffer from 
defective customs procedures, poor administration, theft, graft
and inadequate facilities.  The Government of Costa Rica, with
USAID and U.S. Customs Service assistance, is implementing a
profound reform of the system to automate and streamline to
lessen the possibility of corruption and improve efficiency. 
This project is expected to be completed by December 1995.  In
addition, the Government of Costa Rica, again with USAID
financial assistance, is setting up a one-stop window to speed up
the pre-import permit process.

    The government's expropriation policy is a disincentive to
U.S. investment in Costa Rica.  The government has expropriated
large amounts of land for national parks, biologic and indigenous
reserves, and squatters, and in a number of cases has yet to
provide adequate compensation.  Some unpaid U.S. expropriation
claims date back over 25 years.  While it is theoretically
possible to obtain compensation through the court system, the
time, cost and frustration of litigating against the government
greatly diminish the value of such efforts.  The government has
made some efforts to resolve expropriation cases.  However,
several U.S. citizens with long-standing claims have not yet
received prompt, adequate or effective compensation.  The U.S.
government, through extraordinary means, has been able to
encourage progress in some individual cases.  In theory,
claimants also have had recourse to international arbitration
through the International Center for the Settlement of Investment
Disputes since early 1993, although the Government of Costa Rica
has thus far not submitted any case to ICSID.  Local arbitration
has been employed since 1991.  Landowners in Costa Rica also run
the risk of losing their property to squatters, who are often
organized and increasingly violent.  Costa Rican land tenure laws
favor squatters, and police protection of landowners in rural
areas is poor to non-existent.

6.  Export Subsidy Policies

    The Government of Costa Rica has attempted to diversify its
export production and markets.  Until mid-1992, all goods other
than coffee, bananas, beef, sugar and cacao exported outside of
Central America and Panama qualified for export subsidies through
the issuance of negotiable tax rebate certificates (CATS).  These
subsidies proved costly and violated the requirements for Costa
Rica's GATT membership.  However, existing export contracts call
for the issuance of CATS until 1996.  Costa Rica is a member of
GATT but not the GATT subsidies code.  There are no
discriminatory import policies.  However under the terms of the
Central American Common Market Treaty of 1960, industrial
products produced in any of the five countries enter duty-free
into the other member countries.

       Costa Rica did not sign the services agreement or the
subsidies code under GATT.  Costa Rica has ratified the Uruguay
Round agreements and became a founding member of the World Trade
Organization (WTO) on January 1, 1995. 

    Export companies wishing to locate in duty free production
zones can benefit from exemption from import duties on raw
materials and products, from all export, sales and consumer
taxes, from taxes on remittance abroad, and from taxes on 
profits for a period of six years from the beginning of the 
operations, and a 50 percent exemption for the following four
years.


7.  The Protection of U.S. Intellectual Property

    Costa Rica is a signatory to most major intellectual property
rights (IPR) conventions and agreements, and is a member of the
World Intellectual Property Rights Organization.  However,
significant weaknesses exist in the country's IPR system,
particularly in enforcement and in patent protection.  Pending
legislation would ratify the Paris Convention on Industrial
Property and create a Trade Secrets law.  However, prospects for
passage of such legislation in 1994 are problematic.  The Uruguay
Round TRIPS agreement should improve the Costa Rican IPR regime. 

    Copyrights:  Costa Rica is a signatory to the following
copyright conventions:  Title 17 USC (October 19, 1899 and April
9, 1910); Mexico City Convention on Literary and Artistic
copyrights (1902); Rio de Janeiro Convention on Patents,
Industrial Designs, Trademarks and Literary and Artistic Property
(1906); Buenos Aires Convention on Literary and Artistic
Copyrights (1910), and as revised at Havana (1928);
Inter-American Convention on the Rights of the Author (1946);
Universal Copyright Convention (Paris 1971); Rome Convention for
the Protection of Performers, Producers of Phonograms and
Broadcasting Organizations (1961); Berne Convention for the
Protection of Literary and Artistic Works (Paris Act 1971);
Convention for the Protection of Producers of Phonograms (Geneva
1971); and Central American Convention (1982).

    Costa Rica's copyright laws are generally adequate.  The
major problem for copyright holders is enforcement.  On May 10,
1994, the copyright law (No. 6683 of 1 October 1982), was
modified to extend protection to all forms of intellectual
creations, including music scores, paintings, software programs,
books, etc.  The modifications also increase protection by
directing the police to prevent non-authorized presentations of
protected works.  On May 24, 1994, the Government of Costa Rica
issued regulations to Law No. 6683 that provide better protection
and mandate police participation.  The cable television industry
now operates almost entirely under quitclaim agreements with
foreign producers.  However, a number of hotels are pirating
transmission signals.  Pirate videocassettes are widely
available.  According to industry sources and their legal
representatives, no authorized distributor of videocassettes is
currently operating in Costa Rica.  The new copyright law has
been challenged before the Constitutional Court by video
operators.  The Court has not yet decided whether it will hear
the challenge.

    Patents:  Costa Rica is a signatory to the following patent
conventions:  Convention of Paris (1883); and Rio de Janeiro
Convention on Patents, Industrial Design, Trademarks and Literary
and Artistic Property (1906).

    Costa Rican patent laws are deficient in several key areas. 
The patent protection term is far too short.  Patents are granted
for non-extendable 12 year terms.  In the case of products deemed
"in the public interest," patents are granted only for one year. 
This exception applies to all pharmaceuticals, items with
therapeutic applications, chemical and agricultural fertilizers,
agrochemicals and all beverage and food products.

    No patent protection is available for plant or animal
varieties, any biological or microbiological process or products,
although the government is working on a legislative proposal that
would protect such products.  Costa Rica also has broad
compulsory licensing requirements that force patent owners to
license inventions that are not produced locally.  The limited
patent protection available cannot be enforced until local
production has begun.  Costa Rican law also provides for
compulsory dependent patent licensing and for expropriation of
patents.

    Trademarks:  Costa Rica is a signatory to the following
trademark conventions:  Paris Convention (1883); Rio de Janeiro
Convention on Patents, Industrial Designs, Trademarks and
Literary and Artistic Property (1906); and Central American
Treaty on Industrial Property (1970).

    Trademarks, service marks, trade names and slogans can be
registered in Costa Rica.  There is no actual use requirement. 
Registration is for renewable ten-year periods from the date of
registration.  Counterfeit goods are widely available in Costa
Rica and compete with goods manufactured under trademark
authorization.  Another problem is registration of famous marks
by speculators, who demand to be bought out if and when the
legitimate rights holders come to Costa Rica.  Litigation to
remove such speculative registrations can be lengthy and
expensive.

    Trade Secrets are protected by existing laws, and Article 24
of the Constitution protects the confidentiality of
communications.  The penal code stipulates prison sentences for
divulging trade, employment or other secrets, and doubles the
punishment for public servants.  Some existing laws also
stipulate criminal and civil penalities for divulging trade
secrets.  The burden of enforcement is on the affected party.


8.  Worker Rights

    a.  The Right of Association

    Workers are nominally free to join unions of their choosing
without prior authorization, although barriers exist in practice. 
Unions are independent of government control and are generally
free to form federations and confederations, and to affiliate
internationally.  Various trade union organizations contend that
trade unionism's right of association has been hurt by Costa
Rica's "solidarismo" (solidarity) movement.  This movement
espouses cooperation between employers and workers, offering such
services as credit unions and savings plans in return for their
renunciation of the right to strike and 
bargain collectively.  However, in practice, solidarity
associations have been accused of acting as collective bargaining
agents.  In 1993, the Government of Costa Rica approved a package
of reforms that, in part, addressed the International Labor
Organization's (ILO) concerns about the effect of solidarity
organizations on workers' right to association.  Prominent among
these reforms was a provision explicitly prohibiting solidarity
associations from participating in collective bargaining or
direct agreements affecting labor conditions.  In June 1994, the
ILO's Committee of Experts ruled that, with the 1993 changes to
the Labor Code and the promise of further reforms made by the
Government of Costa Rica, progress has been made in assuring
worker rights.

    Costa Rican law restricts the right of public sector workers
to strike, but two articles of the Penal Code that mandated tough
punishment for striking government workers were repealed in 1993. 
There are no restrictions on the rights of private workers to
strike, but the Labor Code contains clauses that employers have
used to fire employees who try to organize or strike.  Very few
private sector workers are union members.

    b.  The Right to Organize and Bargain Collectively

    The right to organize is protected by the Constitution. 
Specific provisions of the 1993 Labor Code reforms provide
protection from dismissal for union organizers and members during
the period of union formation.  Previously, employers used a
clause in the Labor Code, permitting employees to be discharged
"at the will of the employer" provided the employee received
severance benefits.  The payment of severance benefits to
dismissed workers has often been circumvented in practice. 
Public sector workers cannot engage in collective bargaining
because the Public Administration Act of 1978 makes labor laws
inapplicable in relations between the Government and its
employees.  Collective bargaining is allowed in the private
sector but, due to the dearth of unions, is not a widespread
practice.

    c.  Prohibition of Forced or Compulsory Labor

    The Constitution prohibits forced or compulsory labor, and
there are no known instances of either.

    d.  Minimum Age of Employment of Children

    The Constitution provides special employment protection for
women and minors and establishes the minimum working age at 12
years, with special regulations in force for workers under 15.  A
child welfare agency, in cooperation with the Labor Ministry, is
responsible for enforcement.  Enforcement in the formal sector is
reasonably effective.  Nonetheless, child labor appears to be an
integral part of the large informal economy, although data on
this is lacking.

    e.  Acceptable Conditions of Work

    The Constitution provides the right to a minimum wage.  A
National Wage Board sets minimum wage and salary levels for all
sectors.  The monthly minimum wage ranges from USD 115 for 
domestic servants to USD 557 for certain professionals.  Public
sector negotiations normally follow the settlement of private
sector negotiations.  In addition, the Constitution sets the
workday hours, remuneration for overtime, days of rest, and
annual vacation rights.  Maximum work hours are eight during the
day and six at night, up to weekly totals of 48 and 36 hours,
respectively.  Ten-hour days are permitted for work not
considered unhealthful or dangerous, but weekly totals may not
exceed 48 hours.  Nonagricultural workers receive an overtime
premium of 50 percent of regular wages for work in excess of the
daily work shift.  Agricultural workers are not paid overtime,
however, if they work beyond their normal hours voluntarily.  A
1967 law governs health and safety at the workplace, but there
are too few labor inspectors, especially outside of the San Jose
metropolitan area, to ensure that minimum conditions of safety
and sanitation are maintained.

    f.  Rights in Sectors with U.S. Investment

    Generally, in industries with significant U.S. investment
(primarily food and related products and other manufacturing),
respect for worker rights is good.  This holds for those plants
and operations under U.S. management and capital and does not
necessarily hold for the industry as a whole.  Outside of these
U.S. companies, working conditions and respect for worker rights
vary enormously, often to the detriment of workers seeking to
organize trade unions.



  Extent of U.S. Investment in Selected Industries.--U.S. Direct
Investment Position Abroad on an Historical Cost Basis--1993

                     (Millions of U.S. dollars)
     
  Category                      Amount

Petroleum                           2
Total Manufacturing               339
  Food & Kindred Products         134
  Chemicals and Allied Products    97
  Metals, Primary & Fabricated     21
  Machinery, except Electrical      0
  Electric & Electronic Equipment  35
  Transportation Equipment          0
  Other Manufacturing               53
Wholesale Trade                     67
Banking                             0
Finance/Insurance/Real Estate       0
Services                            6
Other Industries                  -30
TOTAL ALL INDUSTRIES              385      

Source: U.S. Department of Commerce, Bureau of Economic Analysis

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