Costa Rica Eco-Tourism (COSTTOUR)

     CASE NUMBER:        327
     CASE MNEMONIC:      COSTTOUR
     CASE NAME:          Costa Rica Eco-Tourism

A.   IDENTIFICATION

1.   The Issue

     "Each year nearly 17 million hectares of rain forestþan area
roughly equal to that of Wisconsinþare lost world-wide as a result
of deforestation.  Because more than half of all the species on the
planet are found in rain forests, this destruction portends serious
environmental consequences."  The primary reasons for
deforestation have economic linkages, including the extraction of
hardwood for fuel and the clear-cutting of land for agriculture and
cattle ranching.  However, because of the disastrous consequences
of the past, many nations, including Costa Rica, have embarked on
projects to promote ecotourismþthe result of a reconciliation of
development and conservation strategies to achieve sustainable
development.  In short, ecotourism is defined as "purposeful travel
that creates an understanding of cultural and natural history,
while safeguarding the integrity of the ecosystem and producing
economic benefits that encourage conservation."  Costa Rica
embarked on implementing ecotourism programs for two primary
reasons:  first, because tourism is one of the fastest growing
sectors of many economies in Latin America and because of its
ability to generate needed foreign exchangeþwhich is critical for
developing countries.  Second, ecotourism has been argued to be a
win-win situation for local inhabitants, the environment, as well
as the economy in general as the country moves toward achieving
sustainable development.  This type of tourism comes in many forms
and has been successful in aiding the decline of deforestation;
however, with the rise in ecotourism we have seen the advent of
numerous other problems that are still harmful to the rain forests,
and thus, ecotourism is a concern for our interest in how trade and
the environment impact one another.

2.   Description

     In response to the rapid deforestation of the 1970s and 1980s
many environmental groups began to target their "efforts toward
developing commercially viable and sustainable uses of the rain
forest.  Their strategy is to encourage local inhabitants to
practice efficient stewardship over the standing forests."  In
theory, this is a win-win situation where the environment prospers
because it is no longer being clearcut, and the local inhabitants
prosper by using the local environment to their economic advantage. 
However, the challenge lies in the implementation and operation of
the program.

     As demonstrated by MERCK Case, the rain forests are beginning
to be used in more appropriate ways.  In short, the costs of
maintaining a rain forest are usually borne by the local
inhabitantsþwho are usually indigenous citizens that have used the
land for hundreds of years.  Moreover, in the last 20 to 30 years
we have seen increased exploitation by entrepreneurs of these areas
for their own personal gain.  In short, "Local inhabitants,
confronted with the tasks of daily survival, cannot be expected to
respond to appeals for altruistic self-sacrifice.  Consequently,
forests are cut and burned for short-term economic gains, such as
selling hardwood or creating grazing land for cattle."  This
brings us to the efforts in Costa Rica.

     Ecotourism has often been defined as "purposeful travel that
creates an understanding of cultural and natural history, while
safeguarding the integrity of the ecosystem and producing economic
benefits that encourage conservation."  Ecotourism in Costa Rica
began in the mid-1980s as a way to stop the deforestation and to
generate needed foreign exchange for the economy.  Tourism in
general in Costa Rica has been one of the most dynamic sectors of
the economy.  In 1992 tourism earnings totaled $421 million, making
it the second largest foreign exchange earner after bananas. 
Moreover, ecotourism has been rapidly expanding as wellþaccounting
for 36 percent of net tourism earnings in 1989.  In sum, according
to Stacy Small, Production Editor of Caribbean Travel and Life
Magazine, "Costa Rica's tourism industry has been increasing in
size for many years now, and one reason for this upsurge is the
appeal of and demand for ecotourism."

       The attraction of Costa Rica for tourists is heightened by
its political stability, relative economic wealth, and the rich and
vibrant ecological system that is abundant with flora (more than
2,000 plant species) and fauna (some 300 animal species).  Despite
Costa Rica's relatively small size (roughly 52,000 square
kilometers) it constitutes an enormous variety of topography,
climate, and wildlife.  Furthermore, Costa Rica is considered to be
the bridge between North and South America, with species migrating
between the two that has produced a spectacularly diverse
wildlife.

     While recent developments in Costa Rica alone are promising,
there has also been great strides made in a regional effort to
attack the problems associated with deforestation.  One
multinational effort, the Paseo Pantera (Path of the Panther)þin
recognition of that animal's preponderance thereþis the most
notable.  The Paseo Pantera is a "five year, $4 million project
dedicated to preserving the biodiversity and enhancing wildlands
management in Central America."  The Paseo Pantera region is a
1,500-mile-long greenbelt stretching the length of Central
America.  The signatories to this agreement are the seven Central
American countriesþGuatemala, Belize, El Salvador, Honduras,
Nicaragua, Costa Rica, and Panama.  In signing this agreement all
the countries agreed to cooperate in an effort with the Wildlife
Conservational International (a division of the New York Zoological
Society) and the Caribbean Conservation Corporation, with funding
from the U.S. Agency for International Development, to create a
development program that works with conservation strategies to
achieve sustainable development for all the members.  In short,
Paseo Pantera has tried to persuade the countries of Central
America to stop looking at national borders when it comes to
questions about the environment, and thus, try to envision the
region as a whole when making decisions.  Moreover, the "Paseo
Pantera proffers ecotourism as Central America's salvation, a form
of sustainable development that will employ locals, introduce hard
currency, and put a monetary value on an intact ecosystem"
[emphasis added].

     As it stands now, ecotourism presents problems of its own and
cannot be seen as a panacea for all the problems of the past.  For
example, despite Costa Rica's efforts to establish rules and
regulations to ensure a minimal negative impact on the environmentþ
while still encouraging many multinational corporations to bring
their foreign exchange and clients to the vibrant rain forests of
Costa Ricaþthese "ambitious promotions send thousands of visitors
to parks without the barest of facilitiesþinterpretative centers,
parking lots, trails."  Furthermore, in some areas problems such
as trail erosion and increased trash have been noted.  Other
problems probably will arise from the increased use of the land in
question, and if not monitored properly, this situation could
become devastating to the local environment.  One reason for the
ambiguity over what other impacts of ecotourism might arise is that
"there have not yet been any comprehensive scientific studies of
the environmental impacts of nature tourism."

     Moreover, there are sociocultural considerations as well. 
What effect will the influx of a large numbers of "foreigners" have
on these communities that in the past have had relatively little
interaction with the outside world?  In short, how much of their
culture will be lost, and what will be the overall impact to
community life.  The answer to these questions is still a mystery. 
However, we must remember that as the globalization process
continues, all communities will be enlightened to new cultures and
ethnicities, thus the goal here is to preserve the characteristics
that makes each culture unique.

3.   Related Cases

Deforestation

USCANADA Case
THAILOG Case
USWOOD Case
BRAZIL Case
ECUADOR Case
BELIZE Case
MALAY Case
COLDEFOR Case

Tourism

VENICE Case
JAMTOUR Case
CUBA Case
GALAPAG Case
Egypt Case

     Key Words
    (1): Domain                    = ASIA
    (2): Bio geography             = TROPICAL RAINY FOREST [TROP] 
    (3): Environmental Problem     = Deforestation [DEFOR]

4.   Author (May, 1994)  Mark P. Stevens


II.  LEGAL CLUSTER

5.   Discourse and Status: Agreement and INPROGress

     Ecotourism, while regulated by the rules and regulations of
Costa Rica, is also impacted by the "Paseo Pantera, a five year, $4
million project dedicated to preserving the biodiversity and
enhancing wildlands management in Central America (see below)."
The stage of this agreement has been listed as a two because Paseo
Pantera is still waiting on rasing additional funding before it is
fully implemented.


6.   Forum and Scope: COSTA Rice and REgion

     The seven Central American countriesþGuatemala, Belize, El
Salvador, Honduras, Nicaragua, Costa Rica, and Panamaþall agreed to
the Paseo Pantera agreement to cooperate in an effort with the
Wildlife Conservational International (a division of the New York
Zoological Society) and the Caribbean Conservation Corporation,
with funding from the U.S. Agency for International Development.

7.   Decision Breadth: 7

8.   Legal Standing: TREATY
 
     It is a non-binding agreement among the seven countries of
Central America.  The agreement tries to persuade the countries to
look at the region as a whole, and not individual countries.  This
is an excellent example of the globalization process.  The NGOs are
involved because of their sponsorship of the Paseo Pantera
agreement.  The NGOs include Wildlife Conservational International
(a division of the New York Zoological Society) and the Caribbean
Conservation Corporation, with funding from the U.S. Agency for
International Development.

III. GEOGRAPHIC CLUSTER

9.   Geography

     a. Geographic Domain:    North America 

     b. Geographic Site:      Central America  

     c. Geographic Impact:    Costa Rica

10.  Sub-National Factors: NO

11.  Type of Habitat: Tropical

IV.  TRADE CLUSTER

12.  Type of Measure: Regulatory Standard

13.  Direct versus Indirect Impacts: INDirect

14.  Relation of Measure to Resource Impact

     Directly Related to Product:       Yes  Tourism

     Indirectly Related to Product:     Yes 

     Not Related to Product:            No 

     Related to Process:                Yes   Deforestation

15.  Trade Product Identification: Tourism

16.  Economic Data

     In 1992 tourism earnings totaled $421 million in Costa Rica,
making it the second largest foreign exchange earner after
bananas.  Moreover, ecotourism has been rapidly expanding as
wellþaccounting for 36 percent of net tourism earnings in 1989.

17.  Impact of Trade Restrictions 

     Clearcutting the forests was generating approximately $2
million per year for Costa Rica.  However, if one was to factor in
the "environmental costs" (e.g., resources lost or species lost)
the cost would have been much greater.  By stopping the clear-
cutting practices and turning the forests into protected wildlands
and national parks, the government has stopped deforestation. 
Removing the clearcutters from the picture created a slight
increase in the price of fuel (wood) and hard-wood for commercial
and personal uses however.

18.  Industry Sector:  Services

19.  Exporters and Importers: MANY and Costa Rica 

     Leading Exporters ($US): United States ($13 billion)  
     (World Tourism)          Spain ($12.2) 
                              Italy ($10) 

     Leading Exporters (%):   United States (41%) 
     (Tourists to Costa Rica) Central America (34%) 
                              South America (7%) 

     Leading Importers ($US): Panama ($200 million) 
     (Central America)        Costa Rica ($118) 
                              Guatemala ($67) 

PART V.   ENVIRONMENT CLUSTER

20.  Environmental Problem Type: Habitat Loss

21.  Species

     Flora (more than 2,000 plant species)
     Fauna (some 300 animal species) 

22.  Impact and Effect: Low and Product

23.  Urgency and Lifetime: Low and 100s of years

24.  Substitutes: Eco-tourism  

VI.  OTHER FACTORS

25.  Culture:  YES 

     Culture does play a role here because this activity was
created in one sense to help the indigenous populations to develop. 
While the broader concern was the ecological impact of
deforestation, providing a way for the indigenous populations to
survive seems to have played a part in developing this approach
toward sustainable development.  Moreover, the sociocultural
implications for the indigenous populations must be taken into
account.  In short, there is a trade-off between culture anonymity
and the need for income.

26.  Human Rights: NO

27.  Trans-Boundary Issues: NO

28.  Relevant Literature

"Arrivals at Frontier of Tourists from Abroad."  World Tourism
Organization: Yearbook of Tourism Statistics.  1992.  Vol. 11, 44.

Boo, Elizabeth.  Ecotourism:  The Potentials and Pitfalls. 
Washington, D.C.:  World Wildlife  Fund, 1990.

Carr, Thomas, A., Pendersen, Heather, L., and Ramaswamy, Sunder. 
"Rain Forest Entrepreneurs."  Environment.   1993.  35, 7: 13-38.

Economist Intelligence Unit.  Costa Rica and Panama, 1993-1994. 
London: Economist   Intelligence Unit, 1993.

King, S.  "The Source of Our Cures."  Cultural Survival Quarterly. 
1991.  21.

Miller, Shirley.  "Costa Rica, A Magical Land."  Costa Rican
Outlook [Fact Sheet].  No release date.  Contact Ms. Miller, (800)
365-2342, for more information.

Peters, C. M.,  Hentry, A. H., and Mendelsohn, R.O.  "Valuation of
an Amazonian Rainforest."
     Nature.  1989.  339: 655-56.

Pierres, Susan.  "Ecowatch:  Path of the Panther."  Caribbean
Travel and Life Magazine.  January/February 1993. 38-41.

Rovinski, Yanina.  "Private Reserves, Parks, and Ecotourism in
Costa Rica."  In Whelan, Tensie.  Nature Tourism.  Washington,
D.C.: Island Press, 1991.

Rovinski, Yanina, and Barzetti, Valerie.  Toward a Green Central
America:  Integrating    Conservation and Development.  West
Hartford, Connecticut: Kumarian Press, 1992.

Royte, Elizabeth.  "Imaging Paseo Pantera; Will a Green Corridor
Through Central America Preserve its Native People and Resources?" 
Audubon.  November/December 1992.  74-  80.

Ryel, Ronald, and Grasse, T.  "Marketing Ecotourism:  Attracting
the Elusive Ecotourist."  In Whelan, Tensie.  Nature Tourism. 
Washington, D.C.: Island Press, 1991.

Small, Stacy, H. Production Editor, Caribbean Travel and Life
Magazine.  Personal interview. 25 February 1994.

The Ecotourism Society.  "Ecotourism Statistical Fact Sheet." 
Alexandria, Virginia: The Ecotourism Society, 1993.

Trade and Tourism Data.  Arizona: Euromonitor Publications Limited,
1989.

Whelan, Tensie.  Nature Tourism:  Managing for the Environment. 
Washington, D.C.: Island Press, 1991.

World Resources Institute. World Resources 1992-1993.  New York:
Oxford University Press, 1992.