Although the Alvarado administration reversed the initial proposal to ask the IMF for $1.75 billion in financing and called for an inter-sectoral dialogue, Costa Rica is semi-paralyzed by the blockades that are taking place on various roads in the country.
In order to access the $1.75 billion credit that it intends to request from the IMF, the Costa Rican government proposed to tax financial transactions, increase the tax on the profits of companies and individuals, and increase the tax on real estate.
With the aim of demonstrating against the negotiations with the IMF, days ago multiple blockades began to take place that prevented the free circulation of vehicles.
Given the discontent evident in the protests, on October 4, President Carlos Alvarado called for a national dialogue and announced that he will not continue with the initial proposal made to the IMF.
Answering the call of political parties represented in the Legislative Assembly, as well as cooperatives, unions, entrepreneurs, the agricultural sector, solidarity, academia and religious sectors, the President called this Sunday for the different sectors that support institutional ways to open a national dialogue to resolve the economic emergency facing the country, explains the statement issued by the Presidency of the Republic.
For the Costa Rican Union of Chambers and Associations of the Private Business Sector (UCCAEP), the president must immediately indicate where and when the meeting is to build a balanced proposal and create the basis for the economic and social stability that the country needs.
The UCCAEP condemned the calls for civil disorder and blockades, and stated that the dialogue is urgent, must be sincere, serious and effective. For this, there must also be valid interlocutors and impartial facilitators to guarantee it.
During the morning of October 5, at least 30 active blockades were reported throughout the country.
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Given the agreement reached by the Alvarado administration and the IMF for Costa Rica to access a $1.75 billion loan, the business sector is calling for a reduction in public spending and for detailed information on the scope of the agreement signed by both parties.
In an attempt to ease the fiscal and economic crisis the country is going through, last year the Alvarado administration began negotiations to access a loan for $1.75 billion to be requested from the International Monetary Fund (IMF).
The Costa Rican government is facing a complex scenario, since by not achieving consensus to access international loans, it will be forced to seek domestic funding sources, which would put pressure on the exchange rate and interest rates to rise.
The economic crisis that the country is going through due to the outbreak of covid-19 ended up sharpening the country's fiscal situation.
After the UCCAEP in Costa Rica began to negotiate the lifting of the blockades with the self-proclaimed group Rescate Nacional, promoter of the protests, several business chambers distanced themselves from that decision and others have expressed their support.
Given the wave of protests and blockades that have been reported in the country, which arose after it was reported that to access a loan from the International Monetary Fund for $1.75 billion, the government planned to tax financial transactions, raise the tax on the profits of companies and persons, and increase the tax on real estate. The Costa Rican Union of Chambers and Associations of the Private Business Sector (UCCAEP) decided to negotiate the lifting of the blockades.
Faced with increasing chaos in Costa Rica due to demonstrations and blockades, a part of the business sector decided, unilaterally, to negotiate with representatives of the movement that incites to protest, and to reject the official call by the President of the Republic.
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