Costa Rica? …Costa Lot!

my new 'hood

my new ‘hood in San Carlos

A road trip with FUNDECOCA

It’s hard to believe it’s been a month since I arrived in San Carlos and started working at my second MFI. FUNDECOCA is one of Kiva’s newest partners… and they are really excited about working with Kiva!

My fellowship here started off with a bang as I was whisked off on day trips to visit some of FUNDECOCA’s credit communities. FUNDECOCA offers loans to 53 communities in northern Costa Rica, near the Nicaraguan border. Each credit community has a junta directiva (a board of directors made up of 6 or 7 members of the community) that is responsible for meeting with clients, making all the lending decisions, and collecting payments, so community empowerment under FUNDECOCA’s model is extensive. In fact, the staff in the central office in Ciudad Quesada where I work are employed by these credit communities, and are mainly there to provide them with administrative and technical support.

the FUNDECOCA office in Ciudad Quesada

the FUNDECOCA office in Ciudad Quesada

So on Day 2, I found myself on a long drive to the town of Upala with Carlos, FUNDECOCA’s director, and Alejandra, who had recently joined the staff. We were going to observe the training sessions that two nearby communities, El Porvenir and Villa Nueva, were going through as part of a 12-week process that is required of all new members of FUNDECOCA.

These communities are so remote that we had a lady from El Porvenir meet us in Upala and direct us the rest of the way. Carlos also had Alejandra record the distances on the odometer and every turn we made along the way. From Upala it was another 45 minutes or so of driving past farmlands, fields, and forests until we finally reached the community center—a simple building with one main room and a few benches set up.

the community centre in El Porvenir

the community centre in El Porvenir

Not your typical meeting

We met Alex, one of FUNDECOCA’s asesores (officers), there. The theme for the meeting in El Porvenir was Team Building and Leadership. A group of about 20 community members were divided up into two teams and each team member was assigned a random number. As Alex called out a series of numbers, the members of each team who were assigned those digits had to run across the room and line up, in the correct sequence, with their teammates. The first team to line up correctly would win.

4 - number game

clockwise from top left: 1) Alex explaining the game; 2) Ready, set, run!; 3) I think we’ve got it, guys; 4) No, no, no, you’re supposed to be AFTER 7!

It was awesome to see the people of the community, their ages spanning multiple decades, run around and get more and more competitive as they got the hang of the game. They were having a blast! And it was neat to watch natural leaders emerge, with some people shouting orders and trying to get their teammates organized faster. Later, Alex had them do some role playing in smaller groups to get them thinking about the different leadership scenarios they might encounter in their junta directivas: The dictator, the passive leader, the supportive team player.

5 - more team building

photos courtesy of C. Rojas

What do people buy in Villa Nueva?

It was already getting late by the time we headed over to Villa Nueva. This community was even more impoverished than El Porvenir, and I saw houses that had little more than a rusty tin roof and four walls: A dirt floor, a basic toilet and sink, and a bench in an otherwise empty main room.

the community centre in Villa Nueva

people arriving for the meeting at the community centre in Villa Nueva (photo courtesy of C. Rojas)

Villa Nueva’s community center was also simpler, consisting of a roof supported by four wire cage walls. I was surprised to see that the room had power outlets and a light bulb hanging overhead. Villa Nueva’s theme for their training that week was Spending.

getting ready to start the meeting

getting ready to start the meeting (photo courtesy of C. Rojas)

About 40 people had gathered for this meeting, so in teams of 10 people, Alex had the groups write down what their day-to-day expenses are—everything they could think of. These lists of items were posted at the front of the room for everyone to see.

the items people buy

the things people buy in Villa Nueva (photo courtesy of C. Rojas)

It turns out people in Villa Nueva spend money on the same kinds of things we do in North America. OK, so they don’t buy café lattes and get their pets groomed, but the items did include things like food, clothing, shoes, newspapers, cell phones, sports activities, school books, manicures, cosmetics, jewelry, the dentist, medicine, bug spray, electricity bills, gasoline, car repairs, farm equipment, cigarettes, parties, birthday celebrations, and even karaoke. Sound familiar?

using balloons to visualize expenditures

using balloons to visualize expenditures (photos courtesy of C. Rojas)

The game continued. The groups were each given a bunch of balloons which they had to inflate and write their expenditures on, one item per balloon. It wasn’t long before the room was filled with colourful balloons. Alex then gave each team a garbage bag, which represented their income, and the teams filled their bags with their balloons (some of which overflowed). As a final step, they had to imagine a 50% reduction in their incomes, as represented by Alex cutting the garbage bags in half, and balloons inevitably spilled out: Gone were half the things they spend their money on.

Shocking prices in Costa Rica

The outing to Upala was a lot of fun, but it did get me thinking more about the cost of living here in Costa Rica. It was something I’d been noticing since I first arrived in the country: Things aren’t exactly cheap here, especially when it comes to food.

a typical supermarket here looks like something you’d find in North America… and unfortunately the prices are similar too

a typical supermarket here looks like something you’d find in North America… and unfortunately the prices are similar, too

In fact, the Economist’s latest Big Mac Index shows that at the beginning of 2012, a Big Mac in the US cost $4.20 (in US dollars) while in Costa Rica, you would pay $4.02 for this same delicacy. (Canada’s dollar in early 2012 put a Big Mac back home at $4.63 (USD), in case you’re wondering. Right now it is about par with the USD.)

Not all food is expensive, especially if you buy your produce at the feria (farmer’s market), but I’ve met a lot of people who have traveled to neighbouring Nicaragua and tell me that prices there are about one-third what they are here. My weekly grocery bill in Costa Rica comes out to roughly the same as what I spend back at home.

the farmer's market in Ciudad Quesada is open on Thursdays and Fridays

the farmer’s market in Ciudad Quesada is open on Thursdays and Fridays

Furthermore, clothing and accommodations can be very expensive here—although there is quite a spectrum of prices and quality to choose from. On average, homestays (a room in a house) cost around $25-30/day, a rate which can get easily you a month’s rent for a one-bedroom apartment back home.

this cute ankle boot costs 28,000 colones (approximately $56)

this cute ankle boot costs 28,000 colones (approximately $56)

Also worth noting is that domestic taxes are incredibly high on electronic goods. My colleague tells me the new Wii Mini that was just released in Canada retails for about $100, whereas in Costa Rica it goes for $300. Ticos will often buy their electronics overseas, because even with shipping fees and taxes, they still come out ahead.

Finally, there is the high price of gas. Gas is regulated by the government in Costa Rica, so while prices do fluctuate slightly, every gas station charges the same price. Apparently the tax the government levies on fuel goes towards improving the road infrastructure (…). Last week I noticed that one litre of gasoline cost 0.769 colones, or about $1.57.

By contrast, in Toronto, the current price of gas ranges from about $1.14 to $1.28 per litre. I don’t know how much it costs to own and operate a car here, but I think would be fairly safe to assume that maintenance costs for car owners run pretty high, based on what put their cars through.

In terms of getting around, however, I should mention that bus fares are incredibly cheap: I can get across Ciudad Quesada for 220 colones ($0.45), while a 2.5 hour bus ride to San José costs 1,800 colones ($3.60).

The price of living in North America

So that begs the question: How do they do it? How people manage in a country where the average income is a fraction of what it is in Canada, and yet their food and other daily expenses run as high as they do for me back home?

This bugged me for a while. Then I began thinking about what enabled me to do an unpaid Kiva fellowship in the first place: Saving. Years of saving for things in a North American lifestyle (not the average, but one that is somewhat typical of my demographic) that cost us a small fortune, but to a Tico would simply be inconceivable. Saving, for example, for that condo that “all” twentysomethings seem to buy these days as an investment, because everyone knows renting is like flushing your money down the toilet.

I’ve tried to explain to people here that moving out of our parents’ houses to go away for university or college is a pretty typical thing to do in North America. For our Tico counterparts, that’s hard to believe: Social life revolves heavily around the family, and the custom is to live at home until they get married. And when they do move out, they might build a 2-3 bedroom house for about $50,000. Compare that to the average cost of a home these days in Canada.

an elegant wedding in Costa Rica

an elegant wedding reception in Costa Rica

And speaking of which, weddings are another thing. The topic seems to come up a lot around here, so I’ve taken the opportunity to do some crude research. In Costa Rica, you can have a nice wedding with a ceremony and a fancy reception for $2,000 to $2,500. Back home? Obviously it depends on your tastes and preferences, and will vary largely depending on the number of guests. But as a rough estimate, a typical wedding could easily run you upwards of $20,000.

Another major expense for North Americans is our education. How many students graduate with a degree and tens of thousands of dollars’ worth of debt? With a semester’s tuition for an undergraduate program at a respectable Canadian university costing upwards of $2,000, and professional degrees like law, medicine, and business costing a heck of a lot more, this is hardly surprising. Likewise, students in Costa Rica also struggle with their school fees: They are set back about $120 per course in undergrad.

Maybe we could all use a little more saving…

So, while some prices are obviously relative, and not everything that you buy in Costa Rica is shockingly expensive (or has to be), I can see how getting by day-to-day can be challenging, especially in communities like El Porvenir and Villa Nueva.

no turkey here—but we do have some great bargains you should check out!

no turkey here—but we do have some great bargains you should check out!

Last week, the streets of downtown Ciudad Quesada swelled with people like I had never seen before. Although Costa Rica does not celebrate Thanksgiving, they have recently begun celebrating Viernes Negro, a.k.a. Black Friday. The streets and shops were filled with eager shoppers out to buy gifts for Christmas, or just to indulge themselves. The savvier Ticos, however, informed me that the wares on offer were hardly a bargain: Many stores used the age-old trick of raising prices just before the sale begins and then offering items at a ‘discount.’ Or in some cases, an item may indeed be on sale, but literally just the one item, so that shoppers would be drawn into the stores only to find the discount item was already sold out. (But at that point they’re already in the door…)

In addition to having access to credit, saving is an important aspect of financial health for any household. In more recent years, the idea of microsavings has gained prominence, although I don’t think it’s an either or question, as it’s often been framed. And yes, poor people do save, for much the same reasons anyone else does: Smoothing out consumption, paying for unexpected expenses, and hedging against uncertainty.

Saving often begins with education—making people understand that saving a little bit each time you earn money can make a big difference, and how they can adjust their spending habits accordingly. That is FUNDECOCA’s next goal: To provide training workshops on saving to all of their credit communities. I am sure this will go a long way to helping people in their communities, and will be an excellent complement to the loans they already provide there.


About the author


Jane grew up in a town near Toronto, Canada. Born to Japanese parents but raised in Western society, she gained an early appreciation for learning languages and bridging cultures. She speaks English, French, Spanish, and Japanese, and is currently studying Portuguese. These language skills have led her to work in a variety of places, such as an investment bank in Tokyo, an NGO in Quito, and a development bank in Washington, DC. Her professional interests are in international economic development, poverty reduction, and capacity building. While she has learned a lot working as an analyst and economist over the past 10 years, she is eager to continue her work in the field in Mongolia, and to witness firsthand how access to capital can help people transform their ideas and creativity into economic prosperity. Last year, Jane began her own creative business designing and making greeting cards and invitations by hand. Some of her favourite pastimes are cooking, swimming, and outdoor sports (including biking, canoe camping, and cross-country skiing).