Claim: Central America contains agriculture.

Costa Rica -LRB- -LSB- kɒstə_ˈriːkə -RSB- -LSB- ˈkosta ˈrika -RSB- ; literally meaning `` Rich Coast '' -RRB- , officially the Republic of Costa Rica -LRB- República de Costa Rica -RRB- , is a country in Central America , bordered by Nicaragua to the north , Panama to the southeast , the Pacific Ocean to the west , the Caribbean Sea to the east , and Ecuador to the south of Cocos Island . It has a population of around 4.5 million , of whom nearly a quarter live in the metropolitan area of the capital and largest city , San José .   Costa Rica was sparsely inhabited by indigenous people before coming under Spanish rule in the 16th century . It remained a peripheral colony of the empire until independence as part of the short-lived First Mexican Empire , followed by membership in the United Provinces of Central America , from which it formally declared sovereignty in 1847 . Since then , Costa Rica has remained among the most stable , prosperous , and progressive nations in Latin America . Following a brief civil war , it permanently abolished its army in 1949 , becoming one of only a few sovereign nations without a standing army . Costa Rica is an observing member of the Organisation Internationale de la Francophonie -LRB- OIF -RRB- .   The country has consistently performed favourably in the Human Development Index -LRB- HDI -RRB- , placing 69th in the world , among the highest of any Latin American nation . It has also been cited by the United Nations Development Programme -LRB- UNDP -RRB- as having attained much higher human development than other countries at the same income levels , with a better record on human development and inequality than the median of the region . Its rapidly developing economy , once heavily dependent on agriculture , has diversified to include sectors such as finance , pharmaceuticals , and ecotourism .   Costa Rica is known for its progressive environmental policies , being the only country to meet all five UNDP criteria established to measure environmental sustainability . It was ranked 42nd in the world , and third in the Americas , in the 2016 Environmental Performance Index , was twice ranked the best performing country in the New Economics Foundation 's -LRB- NEF -RRB- Happy Planet Index , which measures environmental sustainability , and was identified by the NEF as the greenest country in the world in 2009 . Costa Rica officially plans to become a carbon-neutral country by 2021 . In 2012 , it became the first country in the Americas to ban recreational hunting .