What about creating fiscal space for development?

ESS-33 77 Costa Ricas GDP per capita figure 34 was estimated at US6,382 in 2009 US11,122 in terms of purchasing power parity, the second highest in the Central American region after Panama and 4.2 times the GDP per capita of Nicaragua the Central American country with the lowest income in PPP terms. Figure 34. Costa Rica: GDP per capita, 1960-2008 Source: World Bank, 2010. The long-term economic growth rate between 1961 and 2010 averaged 4.8 per cent per annum. Prior to the 2008-09 crisis the country grew at 4.6 per cent during the 2000s. This, however, was still lower than the 6.3 per cent rate experienced during the 1970s and the 5.5 per cent of the 1990s. Since the 1981-1982 economic crisis, the worst in the countrys history, Costa Rica experienced only one episode of negative economic growth, in 2009 2.8 per cent. In per capita terms, negative growth rates were observed on five occasions, in 1985, 1991, 1996, 2001 and 2009. From a fiscal perspective, chronic fiscal deficits are the rule in Costa Rica. With the exception of 2007 and 2008, the fiscal balance has been negative since 1970. Public sector fiscal deficits, on average, constituted 2.5 per cent of GDP during the 2000s figure 35. 78 ESS-33 Figure 35. Costa Rica: Government expenditure and revenue, several years Source: Ministerio de Hacienda, 2010; International Monetary Fund, 2010b. Overall, Costa Ricas public debt has been declining over the years. External debt, which stood at 28 per cent of GDP in 1995, fell to 19.8 per cent in 2000, then to 18.3 per cent in 2005 and to 12.2 per cent in 2009. This steady reduction is the result of a Government strategy aimed at replacing external debt by internal debt, given the more advantageous interest rates on the domestic market. This is reflected in a continued decline in debt service, measured as a percentage of exports figure 36. Between 1995 and 2009 internal debt fell from 24.5 per cent of GDP to 22.4 per cent in 2009. ESS-33 79 Figure 36. Costa Rica: Debt service as a percentage of total exports, 1977-2008 Source: World Bank, 2010. External aid has been declining rapidly since the mid-1980s and Costa Rica today is almost entirely independent of official development assistance ODA. Between 1983 and 1985, net ODA constituted 6 per cent of GNI, a figure that contrasted with the corresponding figure of 3.7 per cent for the rest of the 1980s, 0.9 per cent during the 1990s and 0.1 per cent during the 2000s figure 37. ODA per capita, which peaked at US103.5 in 1985, reached US14.6 per person in 2008. Figure 37. Costa Rica: ODA flows as a percentage of GNI, 1960-2008 Source: World Bank, 2010.