EDITORIAL

The president of Costa Rica prefers short-term actions to address the fiscal crisis, while leaving open the tap of privileged public wages by which the future of the nation drowns through.

It is clear that immediate measures need to be taken such as reducing tax evasion and smuggling, and cutting abusive pensions. And it is quite possible that in order to maintain the rule of law taxes also need to be raised. But not closing, RIGHT NOW the growing cascade of state payroll costs that is multiplying every year, means mortgaging the future of the Costa Rican economy. However, president Solis postpones dealing with the topic, because its impact would be felt "only after 15 or 18 years."

Unions of public officials, advocates of privileges that clearly exceed what is rational and even counteract the constitutional provision that says "wages will always be equal for equal work under identical conditions of efficiency." (Article 57 of the Constitution of Costa Rica), made ​​a show of force and threatened to "take to the streets" if anyone insists on a review of these privileges, and even want to prevent further discussion about them.

There is no doubt that removing the absurd reality of the excessive remuneration of a large part of state officials -not all- will have a political cost for the government that approaches the job, but that is precisely the duty of a ruler: to assume and resolve the country's problems, in particular taking care of the impact of their actions-and omissions- on the future of those governed. And it is how these serious problems are tackled which marks the difference between statesmen and improvised politicians .

In management terms, President Solis is not taking into account the fact that the sooner the costs of exit from a crisis are assumed, the less time will be spent suffering from the measures taken to overcome it .The best example of this is modern day Greece.

When in the eighteenth century Louis began his early reign they called him "The Beloved" but he ended up being repudiated. They say it was at the end of his days, with France ruined and with revolution imminent, when he expressed his disregard for the tragic times to come, with the phrase "After me, the deluge."

See the article in Nacion.com "Luis Guillermo Solis argues that public wage reform would take effect within 18 years".

More on this topic

Costa Rica: Another Warning Over Fiscal Deficit

October 2016

Standard & Poor's cites persistent difficulties in approving a fiscal reform in the short term, given the political fragmentation that exists in the Legislature.

Analyst Joydeep Mukherji said "... two previous governments have tried to make a fiscal reform and failed and that the government of Luis Guillermo Solis has had difficulty convincing the Legislative Assembly ...".

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As in old fashioned patriarchal homes, if there must be suffering, the first to suffer are the stepchildren, and only afterwards, if necessary, the legitimate children.

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Luis Alberto Moreno's teetotum

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The President of the IADB has advised Costa Rica to make a tax reform to raise taxes arguing that today the teetotum indicates "everyone gives".

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The use of the old fashioned game of a faceted spinner by the head of the hemispheric institution as example, deserves to have the whole story told: the person who spun the teetotum was the Costa Rican government, the same participant of the "game" who on their previous turn benefited from the teetotum when it landed showing "TAKE ALL". Luis Alberto Moreno is saying that the serious fiscal crisis which the country now finds itself in means that now everyone must contribute to its solution. That means aproving more taxes.

A Cry in the Fiscal Night for Costa Rica

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"The defense and strengthening of the rule of law requires, as a starting point, enabling sound public finances. The rest is verbal pyrotechnics." Otton Solis.

EDITORIAL

Costa Rica is subject to a rare political situation, where the founder of the party in power and his first deputy, defends rationality as a tool of governance and for managing public finances, in the face of voluntarism in the matter on the part of the Executive, which adds more risk to the serious threat of the fiscal deficit inherited from previous governments, presenting a budget that increases state expenditures by 14%.