Costa Rica Becomes Less Competitive

The Supreme Court has ordered the cost of giving bonuses to employees of the state run monopolistic distributor to be incorporated into fuel prices.

Monday, June 13, 2016

EDITORIAL

The resulting increase in fuel prices forces the country's economy to directly pay for the privileges enjoyed by some public officials, aggravating a situation in the private productive sector which must find new ways of staying competitive in a local context which is becoming increasingly adverse, with an unfavorable exchange rate for the export sector and rising production costs.

In light of the decision of the Constitutional Court, the Costa Rican Union of Chambers and Associations of Private Enterprises (UCCAEP) has announced that it will examine the possibility of filing a constitutional motion to prevent costs that have no connection with the service of importing and distributing fuels from being included in the calculation of tariffs.

In a statement the Chamber of Industry said "...We are concerned about the consequences of this decision, because they were not discussing all of the expenses of RECOPE's collective agreement, they were unrelated to RECOPE's services and now many other public entities that have a Collective Bargaining Agreement will ask for those privileges. This comes at a time when collective agreements are being renegotiated opening the door to justifying wasting of resources, parties, privileges that other Costa Rican workers do not have, all shielded by collective agreements. How is the Government, who supported the employees of RECOPE on this particular issue, going to control public spending at a time when the country's main problem is the fiscal deficit. Quite simply, we were left speechless after the vote of four judges against three regarding overspending in RECOPE's collective agreement".



More on this topic

Privileges increase prices of gasoline

October 2017

A savings fund, housing loans, expenses for recreation and bonuses, scholarships for children, and restaurant services for employees of the state and the monopolist hydrocarbons distributor of Costa Rica, are financed through the prices paid by consumers, even by the poorest.

OPINION

Against the Privileges of the Few

November 2016

The union of private companies has submitted a constitutional challenge against the Collective Bargaining Agreement of the state run refinery Recope.

From a statement issued by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP):

Costa Rica: Oil and Diesel Will Keep Subsidizing Gas

January 2016

Concern over the serious impact on the productive sector of a 72% increase in gas prices has faded, while accusations of inefficiency and a monopolistic state oil company still persist.

Although the ARESEP is expecting to submit to a public hearing the new pricing methodology which would eliminate the subsidy from the cost of Liquefied Petroleum Gas (LPG), asphalt and bunker fuel, and increase the cost of a 25 pound cylinder from ¢ 6,410 to ¢8,470, the Government of the Republic has decreed a new sector policy for prices, in order to avoid the increases proposed by the regulator.

Political "Spring" in Costa Rica

September 2015

Outraged citizens are demanding the abolition of the state fuel distributor, which has a monopoly on the management and sale of all petroleum products.

EDITORIAL

Citizen demonstrations - unique because they are not specifically directed against the current government but against a state run company - are occuring at a time when news stories in Costa Rica are full of information about the privileges enjoyed by some sectors of the state bureaucracy, who earn the equivalent to twice and three times what is earned in the same roles in the private sector.

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