Economic Recovery: A Ship with No Captain

At the height of the pandemic and economic crisis, the Costa Rican president announced, on a national chain, an economic recovery plan with no clear direction, no assigned leaders and no concrete actions.

Monday, July 13, 2020

In the message broadcast on the night of July 12, President Carlos Alvarado vaguely explained part of the plan to be adopted to overcome the health and economic crisis generated by the spread of covid-19.

Although members of the Costa Rican business sector had generated expectation for the message and the details that could be provided about the actions that are planned to be taken to address the crisis, the announcement did not meet the expectations.

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Álvaro Saenz, president of the Costa Rican Union of Chambers and Associations of the Private Business Sector (UCCAEP), explained through a video transmitted by the union's social networks that "... the message to the country from President Alvarado generated a lot of expectation but we were left with a debt because it does not explain how he will execute these ideas and those responsible, the deadlines to be able to get out of the crisis, or how the State will support the companies."

According to President Alvarado, as part of the recovery plan, the Minister of Finance will present proposals to the Legislative Assembly on Monday that will reduce public spending by about ¢355 billion ($612 million), equivalent to 1% of the GDP.

Given this proposal, Saenz said the business sector expected cuts of more than ¢500 billion ($854 million).

The president's statement states that in this context of crisis "... the government will continue to implement the ambitious infrastructure plan for roads, bridges, schools, aqueducts and hospitals, which generates welfare, employment and greater productive competitiveness."

Alonso Elizondo, executive director of the Chamber of Commerce, told Crhoy.com that "... as a guild we feel that the government needs to develop clear and concrete proposals aimed at mitigating the difficult economic situation faced by businesses, as well as promoting legislative options to protect the employment of Costa Ricans. It was an incomplete announcement that covers information that we all already knew". See full article (in Spanish).

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More on this topic

Construction Requests a Recovery Agenda

June 2020

Given the crisis in the construction industry, which is expected to last several months, the business association is asking the Costa Rican government to take urgent measures, with quantifiable results in the short term and in accordance with the gravity of the situation.

Before the start of the health crisis that led to the spread of covid-19, the construction industry in the country had already been showing a downward trend, as in 2019 the sector reported the worst performance of all economic activities, with a 11% year-on-year fall compared to December 2018. See full report.

How to Generate More Jobs?

June 2020

Eliminating "tax harassment", suspending threatening messages to the private sector, such as lifting bank secrecy, and stopping persecuting the formal employer is part of what Costa Rican entrepreneurs are proposing to generate more jobs in the next two years.

In Costa Rica, the business sector presented the Alvarado administration with a proposal of 113 actions to generate new jobs in the next two years.

Essential Structural Changes

May 2020

Costa Rican businessmen propose that given the economic crisis and the new normality that the country will face, the government should promote key strategies such as the sale of state assets, the transformation of public employment and the elimination of privileges in terms of pensions and salaries.

The Union of Chambers and Associations of the Private Business Sector (UCCAEP) presented to President Carlos Alvarado a document called "Pandemic Shock and Economic and Social Policies to Mitigate its Effects", which seeks to provide a way out of the health and economic crisis resulting from the outbreak of covid-19.

Commercial Sector Suggests Resumption of Activities

April 2020

Applying cleaning and prevention protocols in workplaces and shops, such as those stipulated by the health authorities, are the proposals of Costa Rican businessmen to resume the commercial activity that has been restricted since mid-March.

Following the spread of covid-19, in Costa Rica and the other Central American countries, governments have decreed mandatory quarantines and have also restricted the movement of consumers at certain times.

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