Costa Rica is beginning to suffer the consequences of a Keynesian policy applied by the government to lessen the effects of the economic crisis.
"If there are no jobs in the private sector, let the State offer them. It is a simple remedy and especially beneficial for political parties in power as a tool to win votes and stay in power.”
The problem is that these jobs, often artificial, must be paid by taxing the private sector which must in turn tighten their belts, reducing costs, which begins normally by reducing personnel.
Based on prior evidence, the much needed fiscal reform in Costa Rica may take a year and a half to become a reality.
The country experienced a fiscal deficit of $997 million in the first 8 months of this year, 70% more than the same period of 2009.
The approval of the fiscal reform promoted by the Chinchilla administration could become a very long process, taking between 10 and 44 months, according to experts.
The president, Laura Chinchilla, has set the economic target of achieving annual average growth of between 5% and 6%.
In addition, Chinchilla set goals for unemployment at 5%, accrued Foreign Direct Investment (FDI) worth $9,000 and the passing of laws related to water management.
These goals were announced together with the public accounts for the government's first 100 days.
Latin America's first multinational integrated infocommunication services provider has invested $2.2 million in the development of its corporate presence in the Colombian market.
The amount invested will increase to $5.2 million in 2011 and the number of ITS InfoCom “knowledge workers” is expected to go from 71 to around 150.
Costa Rica president, Laura Chinchilla, inaugurated the ITS InfoCom's new Bogota facilities on Friday.
The new electricity bill proposes the creation of a wholesale electricity market for private companies.
This market, to be supervised by Costa Rica's Public Services Regulator (ARESEP), will be guaranteed 35% of total national electricity demand over the next 10 years.
"The regulator must define the sale of electricity through a pricing scale determined by parameters such as the energy source and cost," comments Nacion.com.
Taking into account the ruling of the Constitutional Court in favor of the gold mining project and the risk of a multi-million pound law suit, Chinchilla will not cancel the concession.
The Mina Crucitas operations, which are in the preparatory phase, remain suspended as a precaution pending the reversal of the Contentious-Administrative Tribunal ruling, which stopped the mine from operating in response to a complaint from an environmental organization.
President Laura Chinchilla presented a $6.4 billion investment plan to international and domestic financial institutions, for 2010-2014.
An article by Leticia Vindas in Elfinancierocr.com presents some details of the plan, remarking that “Energy and Infrastructure will receive the most investment from the Government”.
Given the interest of the Costa Rican and international business community for finding more about this plan, CentralAmericaData.COM asked press representatives from the Presidency for more information. They answered that a summary will be delivered later today, but that the complete document, distributed today among financial institutions, will not be made available to the general public.
The presidents of 5 Central American nations supported the readmission of Honduras into the Central American Integration System (SICA).
The “Special Declaration on Honduras”, signed by the presidents, also proposes speeding up Honduras’ return to the Organization of American States (OAS) and calls on the country to respect the basic rights of its citizens.
Mauricio Funes has an approval rating of 76%; he is followed by Ricardo Martinelli (66%), Laura Chinchilla (64%), Porfirio Lobo (60%), Alvaro Colom (50%) and Daniel Ortega (38%).
CID-Gallup unveiled its Central American public opinion poll for July 2010. It remarks that Funes remains the president with the highest approval ratings, and that Honduran president Lobo slipped from the third to the fourth spot, mainly because he is disliked by opposition and unregistered voters.
The Summit of the Central American Integration System (SICA) has started in El Salvador; its participants will discuss regional integration and security topics.
The presidents of Guatemala, Panama, Costa Rica, Honduras and El Salvador will take part in the activity.
“During the summit, officials will discuss how to strengthen the region’s democratic institutions, joint policies to mitigate natural disasters and reactivate the regional economy”, reported Prensa Latina, adding that “they will also push for social policies to address poverty and crime”.
The emphasis of the collaboration projects to be negotiated will be on roads and security.
In preparation for the visit of China’s chief diplomat in August, the Costa Rican government is putting together a cooperation proposal.
“Projects such as the strengthening of the National Police Academy, improvements to the highway between Limón and the Central Valley, and a ‘dry canal’ railroad to link Caribbean and Pacific ports are a few of the ideas that authorities are considering,” reports Nacion.com.
The government is due to present its Transportation Master Plan soon.
In a press conference, the president, Laura Chincilla, disclosed that part of the plan is to review the inter-urban bus project (known as “Interlíneas”). This project struggled under the previous government.
Also being considered is extending the rail network managed by the Costa Rican Rail Transportation Institute (INCOFER) as well as revisiting the Metropolitan Electric Train project (TREM).
The president of South Korea expressed his intention of negotiating a Free Trade Agreement with the Costa Rica - Panama block.
This announcement was made by Costa Rican president Laura Chinchilla, after holding a meeting with Lee Myung-bak, president of South Korea.
Nacion.com reported that “the president explained her Asian counterpart that in other occasions, the country started FTA negotiation processes to which other nations joined later”.
The opening of the telecommunications market in Costa Rica could create 3.500 jobs in the short term.
This was one of the conclusions of a forum called “Opening of the Telecom Market: What is in store for us?”
Its participants also agreed that “once the activity is set loose, it could become one of the drivers of economic growth”.
Carlos Gallegos, telecommunications partner at Deloitte, commented that there is evidence that every 10% increase in broadband penetration translates into 0.5% of Gross Domestic Product in Costa Rica.