A.M. Costa Rica

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(506) 223-1327        Published Thursday, Jan. 5, 2006, in Vol. 6, No. 4          E-mail us    
Jo Stuart
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Tariffs reduced and government spending down
Economy slightly freer here, study reports

By the A.M. Costa Rica staff

Costa Rica improved slightly in 2005, according to a measure of economic freedom. The country's trade and taxation policies were better last year, placing the country in 46th place of the 157 nations rated, according to the study.

Costa Rica was listed as "mostly free," better than any of the Central American nations except El Salvador.

Overall, Latin America and the Caribbean became economically freer last year, according to the 2006 Index of Economic Freedom, released Wednesday. The authors called this a welcome change from the 2005 Index, which found that economic freedom remained static. Still, the improvement is marginal, they said.

The index is published each year by The Wall Street Journal and The Heritage Foundation. The index showed that 15 countries in the region improved, while 10 declined and one, Jamaica, stayed the same.

As in previous years, the index ratings reflect an analysis of 50 different economic variables, grouped into 10 categories: banking and finance; capital flows and foreign investment; monetary policy; fiscal burden of government; trade policy; wages and prices; government intervention in the economy; property rights; regulation; and informal market activity.

Countries are rated 1 to 5 in each category, 1 being the best and 5 the worst. These ratings are then averaged to produce the overall Index score.

Of all the countries studied, Hong Kong was No. 1 and North Korea was last at 157. Four countries were not graded.

Costa Rica was tied with Uruguay and Cape Verde in the 46th spot with overall scores of 2.69.

The study praised Costa Rica's reduction of from 5.8 percent to 3.8 percent in tariffs levied on imports but said, citing a report from the Office of the U.S. Trade Representative: "Nonetheless, procedures remain complex and bureaucratic. Sanitary

Chart courtesy of Heritage Foundation
and phytosanitary requirements can often be cumbersome and lengthy."                   
The index also cited the International Monetary Fund report that said Costa Rican government expenditures decreased nearly a percentage point to 21.7 percent of the gross domestic product. That compares to a 1.3 percent increase in 2002, it said.

"Costa Rica offers one of Central America's better investment climates, and foreign investors are treated the same as domestic investors," said the explanation of the rating, adding that the legal system is significantly backlogged, and civil suits take over five years on average from start to finish.

Elsewhere in Latin America Guatemala, Nicaragua, Brazil and Guyana are rated among the “mostly unfree” economies, while Haiti, Cuba and Venezuela are rated “repressed.” The editors single out Haiti as a “case study of how inept, corrupt governance can destroy an economy,” while noting that Cuba (despite a slight improvement this year) remains weighted down by a wide array of economic anchors, including high non-tariff barriers to trade, high taxes, weak property rights and wage and price controls.

El Salvador, although still ranked “mostly free” at 2.35 has fallen behind Barbados and the Bahamas, while Nicaragua (3.05) declined enough to fall from “mostly free” to “mostly unfree.”

Guatemala is in 74th place with a 3.01 score. Honduras is 102nd at 3.28 points, and the Dominican Republic is 116th with 3.39. They are members of the Central American Free Trade Agreement, as is El Salvador. Costa Rica has signed the agreement but not ratified it.

Panamá, Costa Rica's neighbor to the south, is in 49th place with a 2.70 score.

The conservative Heritage Foundation and the Wall Street Journal newspaper are considered pro-business and pro-free trade.

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San José, Costa Rica, Thursday, Jan. 5, 2006, Vol. 6, No. 4

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Weatherman promises
that summer is here

By the A.M. Costa Rica staff

The weather bureau reported that Friday will see the stabilization of the Costa Rican summer.

January is characterized by rain in the northern zone and the Caribbean slope, dry on the Pacific coast and windy in nearly all of the country, said the Instituto Meteorológico Nacional. The wind and the change in seasons is a product of the cold fronts and polar systems that invade the tropics from the north, it noted.

By Friday these conditions will be firmly in place in the country, the institute said, noting that this will mean warm temperatures along the Pacific with highs above 32 degrees Celsius (90 Fahrenheit)

On the Caribbean side, the weather institute is predicting rain to break the long period without precipitation and lower temperatures.

Marcos Herrera while being arrested Wednesday

Resident here since '98
held in U.S. drug case

By the A.M. Costa Rica staff

A Cuban-American who has been a fugitive in Costa Rica since 1998 is now behind bars.

The Fuerza Pública and agents of the International Police Agency (INTERPOL) identified the man as Marcos Herrera, 67. They said he has been on the run from  cocaine trafficking and conspiracy charges in the United States.

Herrera, a Cuban who was naturalized as a U.S. citizen, came into police hands Wednesday at his rented apartment in Guadalupe, Goicoechea, said the Ministerio de Gobernación, Policía y Seguridad Pública.

Officials said the arrest was made without any resistance.

Herrera, officials here said, was arrested Oct. 21, 1997, in Miami with a load of some 101 kilos of suspected cocaine. A year later while his criminal case was being transferred from state to federal jurisdiction, he came to Costa Rica where he worked selling curtains and blinds. The warrant for his arrest is a federal one issued by the U.S. District Court of South Florida.

Canadian suspect returned

By the A.M. Costa Rica staff

Immigration authorities have returned a Canadian police officer wanted there to face a sex abuse charge.

The man is William Robert Lawrence, who arrived in Costa Rica Tuesday. He is from Cambridge, Ontario, Canada, and he serves on the Waterloo police. He faces an allegation of sexual abuse involving his daughter.

Our reader's opinion

Something is lacking
in Corcovado story

Dear A.M. Costa Rica:

The article regarding the deaths of monkeys, macaws, sloths and toucans appears to be lacking something.
The above mentioned animals and birds have varying diets, thus the loss of developing fruit wouldn’t be a complete factor for the equation.  Many other locations throughout the country also suffered extensive rains that would have had a similar affect.

Were there reported huge losses of wildlife in other parts of the country?  There are other areas outside of Corcovado, but still on the Osa Peninsula that have extensive wildlife populations.  Did they also witness a loss of these species?  These are also questions that need to be addressed.

Toucans, squirrel monkeys and white-faced monkeys have a varying diet of insects, vertebrates and fruits.

Sloths feed almost exclusively on leaves.  Did the majority of the leaves on the trees fall off in Corcovado?  I don’t think so.  Someone else should review the studies and come up with a more precise conclusion. 

I feel there is a possible underlying issue. Is someone afraid of losing tourists from visiting the park.  I am sure tourists would not hesitate going to Corcovado if the deaths were caused from starvation.  On the other hand, a mystery illness would cause tourists not to venture into the park.

Henry Kantrowitz
Interpretive naturalist for 15 years in Costa Rica
(nature guide 3 years in the Osa Peninsula Area)
Past curator of Zoo Ave (wildlife
breeding and release center)
Co-founder of the Birding Club of Costa Rica

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Third news page

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San José, Costa Rica, Thursday, Jan. 5, 2006, Vol. 6, No. 4

This is one of the ballots that Costa Ricans will receive at the polling places Feb. 5

Ticos have a field of 14 from which to pick president
By the A.M. Costa Rica staff

When Costa Ricans go to the voting polls Feb. 5, they will have the choice of 14 presidential candidates and slates of deputado candidates and regidores candidates specific to the canton in which they are voting.

The political scene is crowded with 15 national parties, 15 provincial parties and 24 cantonal parties, some 54 in all.

But the whole election, which is under the direction of the Tribunal Supremo de Elecciones, has been meticulously planned with hundreds of rules and regulations.

Unlike in North America, the ballots here are paper. One rule determined their size months ago: 13.75 inches by 8.5 inches.

The ballots themselves are called papeletas in Spanish, 
and workers at the Imprinta Nacional have just finished producing them. The ballot for each office is of a different color. The presidential ballot background is white.

The ballot for deputies to the Asamblea Nacional is cyan or blue and the ballot for cantonal regidores is magenta.

Each voter will get one of each, and the back bears a space for 12 signatures by election officials.

Some of the provincial parties are new and some carry names that incorporate their platform like the Partido Verde Ecologista in Cartago or the Nueva Liga Feminista in the Provincia de San José.

The Tribunal is the fourth branch of the Costa Rican government. When there are no elections, this is where Costa Ricans go to obtain their cédulas de identidad and to register births and marriages.

Did someone say 'financial intermediation?' Amen!
By the A.M. Costa Rica staff

Guess who else is running an informal bank?

Channel 7 Teletica reported Wednesday that the Episcopal Conference of the Roman Catholic Church has been collecting money from dioceses, priests, nuns and lay people, pooling the proceeds and investing the cash in a series of commercial funds.

The system described by the television news show seems similar to the operation headed by Luis Enrique Villalobos and his brother Oswaldo, except that the church seems to still have the money.

The television station estimated that some $84 million might be involved, a figure much smaller than the estimated $1 billion that the Villalobos brothers had on their books when they closed down the high-
interest operation in Mall San Pedro in October, 2002.
The television station said that the Superintendencia General de Entidades Financieras, a government agency, told the bishops to liquidate the funds.

Among other legal problems, Oswado Villalobos faces an allegation of illegal financial intermediation, in other words receiving money from people and investing it with third parties. His fugitive brother would face the same allegation if he ever turns up. And this is exactly what the church has been doing.

There was no indication how much interest the bishop's fund paid the faithful investors. However, the television station said the rate was higher than the normal market. The Villalobos paid 3 percent or more per month.

Enrique Villalobos also maintained a religious tone to his operation. However, less than $10 million in assets have been accounted for since he fled.

A.M. Costa Rica

Fourth news page

Good grief!

Are you still spending 70 percent 
of your advertising budget on paper?

You need to fill this space ASAP!

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San José, Costa Rica, Thursday, Jan. 5, 2006, Vol. 6, No. 4

Morales gets a $120 million hello in visit to Spain
By the A.M. Costa Rica wire services

MADRID, Spain — Bolivian President-elect Evo Morales says Spain has agreed to forgive most of Bolivia's $120 million debt.

Following a meeting with Spanish Prime Minister José Luis Rodríguez Zapatero here Wednesday, Morales said the debt would be forgiven in exchange for investment in education programs. Morales said his country welcomes foreign investment, but will not relinquish control of its natural resources.
He also reiterated plans to nationalize the natural resources, but said that does not mean the government will confiscate assets.

Morales was in Spain for meetings with top government officials and King Juan Carlos.
Spanish Foreign Minister Miguel Angel Moratinos told Morales that Spain wants to see a strengthening of political, economic and social stability in Bolivia.

Morales is on a 10-day world trip that will include stops in China and Brazil. He will take office Jan. 22.

Radioactive capsule missing from oil company site in Venezuela
By the A.M. Costa Rica wire services

Venezuelan authorities say a capsule containing radioactive material has disappeared from an oil company's facility in northeastern Venezuela.

Public safety officials Wednesday announced that oil company B.J. Servicios last week reported the capsule missing from its facility in Anzoategui state.

Investigators say the capsule contains a dangerous
radioactive substance called Cesium-137. The U.S. Centers for Disease Control (CDC) says exposure to large amounts of the material can cause burns, radiation sickness or death. The capsule was meant for geological studies.

This is the second time in the last month that radioactive material has disappeared in Venezuela.  In mid-December, a truck carrying a container of Iridium-192 was stolen in the Yaracuy state.  That capsule was recovered.

Police greet striking copper workers seeking bonuses with tear gas
By the A.M. Costa Rica wire services

SANTIAGO, Chile — Police used tear gas to scatter hundreds of striking contract workers near a giant state-owned copper mine.

Local media report police detained about 40 strikers near the El Teniente mine, some 88 kilometers southwest of this Chilean capital.

Contract workers at Chile's state-owned copper mining company, Codelco, began their strike
Wednesday to demand bonus payments.

Strike leaders say the 28,000 contract workers deserve a bonus because Codelco has profited from the increased copper prices on world markets.

However, the Chilean government has ruled out making bonus payments.

It is unclear whether the strike will affect Chile's copper production, a main source of the country's foreign exchange.

Jo Stuart
About us

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