After recognizing the serious liquidity problems faced, the government has announced it will borrow another $1 billion for a hearty lunch that others will pay for tomorrow.
The $1 billion that the Central Bank of Costa Rica (BCCR) has been negotiating since May with the Latin American Reserve Fund (FLAR) to strengthen its reserves will arrive in October of this year, according to the BCCR authorities.
The 2017 budget drawn up by the government of Costa Rica is the result of an arithmetic exercise, where the political will of the Solis administration has barely reduced maintenance and has increased privileges in the dominant state corporations.
EDITORIAL
Scandalous could be the best word to describe the magnitude of the increase of 12% which the Solis Rivera administration has made in the 2017 public budget.The 12% increase not only far exceeds the projected inflation for this year, but is disproportionate and far from reality, considering the serious and urgent fiscal problem facing the country.
"In Costa Rica civil servants earn the most out of all Latin American countries, which is disproportionate to the economic and fiscal reality of the country."
An increase in resources for debt repayment, education and pensions account for the 12% increase in the 2017 budget compared to the 2016 budget.
According to a statement by the Ministry of Finance,"... the Bill for Fiscal Year 2017 is in the amount of ¢8.9 billion and is 12.1% higher than in 2016 ... due mainly to an increase in the debt settlement, resources for education and for the Ministry of Public Works and Transport. "
Between January and April this year, the state payroll increased by 11,161 people, mainly in the Social Security Department and the ministries of Education, Health and Finance.
The increase in staff also raises the total value of wages, which rose in monthly terms of $210 million when there were 194,855 employees to $227 million after an increase to 206,016 workers.
"... State overregulation has made business legality a privilege that can only be accessed with economic or political power. "
EDITORIAL
In these countries, poor since time immemorial, state bureaucrats whose regular salaries allow them to live in a first world fantasy land have as their primary concern checking that things are done as they should be, that is to say, as they are done in the first world.
The academic corporatism which has come to power in Costa Rica brings a "vision of the world of the Social Democrats of the sixties and seventies."
An analysis carried out by Juan Carlos Hidalgo on his blog on Elfinancierocr.com on the proposed Costa Rican state budget points to a decalogue of macroeconomic horrors that besides contradicting election promises on cost containment and austerity, show an outdated vision of the new government regarding the alleged benefits of increased public spending in the functioning of a modern economy.